Bramble Lane Outfitters Ltd. sells a pack for 2,000 plus 13 % HST (260), receiving $2,260 in cash. Record the sale (ignore cost of goods sold).
Bramble Lane Outfitters Ltd. sells a pack for 2,000 plus 13 % HST (260), receiving $2,260 in cash. Record the sale (ignore cost of goods sold).
Answer
Dr Cash 2260; Cr Sales Revenue 2000; Cr HST Payable 260
Accounts - Cash - Sales Revenue - HST Payable - HST Recoverable - Accounts Receivable **Cash** (debit) 2,260 for what was received; **Sales Revenue** (credit) 2,000 — the price; **HST Payable** (credit) 260 — collected for the CRA. The trap is Cr Sales Revenue 2,260, which books the government’s money as revenue and hides a liability. HST Recoverable is for tax *paid*.
Authored — no ADAPT source (Dauderis & Annand §9.2 for the Canadian shape only); Hermanson Vol 1 ch 9 (US sales tax — shape only); verified-facts.md V4 (input tax credits), V10 (CRA: Ontario HST 13 %; employer EI 1.4×; CPP and EI amounts are given by the case) (concept map L3–L4)