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Tony Mercato operates a small construction business specializing in home renovations and additions. In the...

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Accounting

Tony Mercato operates a small construction business specializing in home renovations and additions. In the winter, a slow period for construction, Tony uses some of his equipment to operate a snow removal service. The typical customer is charged $600 to have a driveway and sidewalk cleared of snow throughout the winter.Tony offers a 5 percent discount to customers who pay in cash. For cash cus-tomers, there is no record of the transaction. No invoice is issued and neither is a record made on the books of the company. The 13 percent Harmonized Sales Tax (HST) is not charged nor is it paid to the government. The cash payments are not deposited in the company bank account but are kept in a safe in Tony's home. He uses this cash for personal expenses and travel! Questions 1: Tony has 100 cash customers. The HST is 13 percent. How much should Tony be remitting to the government for HST? Question 2. Comment on the legality of Tony's handling of the cash transactions Question 3: Who is affected by these actions?

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