ALL choices of DATE: APR.1, MAR17,MAY1,JULY1,AUG15,AUG22,OCT1,DEC31 Chen Wholesa

Question

ALL choices of DATE: APR.1, MAR17,MAY1,JULY1,AUG15,AUG22,OCT1,DEC31

Chen Wholesalers Ltd. incurred the following transactions related to current liabilities: 1. Chen's cash register showed the following totals at the end of the day on March 17: pre-tax sales $51,000; GST $2,550; and PST $3,570 2. Chen received its property tax bill for the calendar year for $48,600 on May 1, payable July 1 3. Chen's gross payroll for the week of August 15 was $78,200. The company deducted $3,770 for CPP, $1,470 for EI, $6,600 for pension, and $16,230 for income tax from the employees' pay. The employer portions of CPP and EI for the week were $3,770 and $2,058 respectively. 4. On August 22, all amounts owing for employee income taxes, CPP, and EI pertaining to the payroll in transaction 3 above were paid. 5. On October 1, Chen borrowed $70,000 from First Bank for a six-month period; 4% interest on, the bank loan s payable on Apr 1

Explanation / Answer

Answer 1. Journal Entry S. No. Date Particulars Dr. Amt. Cr. Amt. 1 17-Mar Cash    57,120.00    Sales    51,000.00    GST Payable      2,550.00    PST Payable      3,570.00 (To record the cash sales) 2 1-May No Entry 1-Jul Prepaid Property Tax    48,600.00    Cash    48,600.00 (To record the property tax paid) 3 15-Aug Salaries & Wages Expense    78,200.00    CPP Payable      1,470.00    EI Payable      6,600.00    Income Tax Payable    16,230.00    Salary & Wages Payable / Cash (To record the salary expense) 15-Aug Payroll Tax Expense    CPP Payable      3,770.00    EI Payable      2,058.00 (To record employee benefits) 4 22-Aug CPP Payable      5,240.00 EI Payable      8,658.00 Income Tax Payable    16,230.00    Cash    30,128.00 (to record the amount paid) 5 1-Oct Cash    70,000.00    Notes Payable    70,000.00 (to record the amount borrowed from First Bank) Answer 2. Journal Entry S. No. Date Particulars Dr. Amt. Cr. Amt. 1 31-Dec Property Tax Expense    48,600.00    Prepaid Property Tax    48,600.00 (Record the Property tax Expense for the period) 2 31-Dec Interest Expense          700.00    Interest Payable          700.00 (To record interest) Interest Exp. = $70,000 X 4% X 3/12 = $700 Answer 3. Journal Entry S. No. Date Particulars Dr. Amt. Cr. Amt. 1 1-Apr Notes Payable    70,000.00 Interest Expense          700.00 Interest Payable          700.00    Cash    71,400.00 (To record the note paid

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