Question

Runners has purchases of $187,000 and sales of $217,100 in October 2022. Select whether Runenrs has a GST remittance payable or a GST refund receivable, and its amount. Your answer should be rounded to the nearest cent.

Runners has a ___ of $ ___

Answer 1

Runners has a GST remittance payable of $1,505, calculated by subtracting GST paid on purchases from GST collected on sales.

Step-by-step explanation:

To calculate if Runners has a GST remittance payable or a GST refund receivable, you need to consider the amount of GST collected on sales and the amount of GST paid on purchases. In Canada, as of my knowledge cutoff in 2023, the standard GST rate is 5%. This means you would calculate 5% of sales (which is the GST collected) and 5% of purchases (which is the GST input tax credit).

On sales of $217,100:

• GST collected = 5% of $217,100 = $10,855

On purchases of $187,000:

• GST paid = 5% of $187,000 = $9,350

Now, subtract the GST paid on purchases from the GST collected on sales to determine if Runners has a remittance or a refund.

GST amount = GST collected - GST paid
= $10,855 - $9,350
= $1,505

Since the amount is positive, Runners has a GST remittance payable of $1,505, which is the amount required to be remitted to the tax authorities.