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The Company

Gear Out There Inc., located in Prince George, B$.$C$.,$ is a company selling supplies and materials for climbing,

hiking, and other outdoor activities to retail supply stores in British Columbia.

Gear Out There Inc. is incorporated under the laws of British Columbia, and is required to remit GST$,$ Goods

and Services Tax, at the rate of $5\%$ on all its sales and must remit $($give$)$ taxes collected to the federal

government on a quarterly basis. GST amounts charged by its suppliers can be deducted from this remittance

$($these deductions' called ITC credit by CRA$).$ NO INCOME INCLUSION, only Balance Sheet, under related

accounts $($will show in class using template this and salaries calc below; if missed ask for a office

meeting$/$call$/$Zoom$).$

This is not the case for PST$.$ Provincial Sales Tax is always expensed. Gear Out There Inc. is required to remit

Provincial Sales Tax at the rate of $7\%$ on all sales. GST$,$ PST$,$ and all taxes collected due to business activity

occurring within the financial period. All businesses must remit taxes collected on behalf of the government on

a regular basis.

All regulatory source deductions should be accounted for; that is both employee and employer portion of

wages are recorded by the business. The WorkSafe BC assessment rate is $1\%$ of gross salaries. See next for

more details in computation of FS$.$The 'Chart of Accounts' of Gear Out There $($GOT$)$ Inc.

$\backslash$table$[[$ASSET ACCOUNTS $1000$ TO $1999,],[1060,$Cash$],[1200,$Accounts receivable$],[1205,$Allowance for doubtful accounts$],[1300,$Prepaids$],[1350,$Inventory$],[1400,$Investments$],[$Total$,$Current Assets$],[1820,$Store Equipment$],[1825,$Accumulated Depreciation $-$ equipment$],[1880,$Land$],[$Total$,$Long$-$Term Assets$],[$GRAND TOTAL,ASSETS$],[$LIABILITIES ACCOUNTS $2000$ to $2999,],[2100,$Accounts payable$],[2150,$Line of Credit$],[2160,$Corporate income taxes payable$],[2170,$Worksafe BC payable$],[2180,$PST payable$],[2215,$El payable$],[2220,$CPP payable$],[2225,$Employee Income tax payable$],[$Subtotal$,$Payroll deductions$],[2380,$GST collected on sales$],[2385,$GST paid on purchases$],[$Subtotal$,$GST payable$/$receivable$],[2400,$Interest payable$],[$Total$,$Current Liabilities$],[$Total$,$Long$-$Term Liabilities$],[$GRAND TOTAL,LIABILITIES$],[$EQUITY ACCOUNTS $3000$ to $3999,],[3350,$Common shares$],[$Total$,$Share capital$],[3500,$Retained earnings$],[$Total$,$Retained earnings$],[$GRAND TOTAL,EQUITY$],[$REVENUE ACCOUNTS $4000$ TO $4999,],[4210,$Sales revenue$],[4220,$Sales returns$],[$Subtotal$,$Net Sales$],[4300,$Dividend revenue$],[4460,$Other Gains and $($losses$)],[$GRAND TOTAL,REVENUE $($LOSS$)],[$EXPENSE ACCOUNTS $5000$ TO $5999,],[5010,$Cost of Goods Purchased$],[5020,$Merch. returns$],[5030,$Merch. discounts$],[$Subtotal$,$Costs of Goods Sold$],[5620,$Bad debts expense$],[5660,$Depreciation expense$],[5685,$Insurance expense$],[5740,$Interest expense$],[5750,$Rent expense$],[5760,$Salaries and benefits expense$],[5770,$Worksafe BC expense$],[5780,$Corporate Income tax expense$],[$GRAND TOTAL,EXPENSES$]]$The Transactions for June.

June $2-10$ large frame backcountry packs were sold to East Robson Inc. for $$10,000+$ GST $+$

PST; on credit; Invoice No$.1001$

June $3-,$ Bought and received glacier ice picks to be resold in store, from Everest Company;

invoice cost of $$15,000+$ GST; sold on credit terms; Purchase Order No$.5001$; No PST

charged since the manager provided the provincial vendor number to the supplier $($this

exempts GOT from collecting and remitting PST from merchandising items bought

and then reworked and sold to another business$).$

June $4-,$ Sold food items for backcountry camping to West Rupert Co$.$ for $$5,000+$ GST $+$ PST;

on credit terms; Invoice No$.1002$

June $5-,$ Received gear from Katmandu Ltd$.$ at an invoice cost of $$3,000+$ GST on credit;

Purchase Order No$.5002.$

June $6-,$ Sold skiing equipment for cash to Tabor Equipment for $$7,000+$ GST $+$ PST$.$

June $7-$ Received merchandise from Colton Manufacturing Company at a cost of $$2,000+$ GST;

paid cash. $10\%$ discount received to GOT when shipment is received.

June $8-$ Purchased a capital asset $($store equipment$)$ at a cost of $$30,000+$ GST $+$ PST; gave a

$90-$day, $6$ percent, interest$-$bearing note payable for the purchase price; assume date

was June $1$ for interest and depreciation calculations $($at adjustments stage$).$

June $9-,$ Sold a tract of land for $$10,000+$ GST which previously was used by the company;

collected cash.

June $10-$ Collected the account receivable from West Rupert Co$.$; Invoice No$.1002.10\%$

discount received.

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