Question

jasper appliances is an ontario hst registrant. ontario has a 13% hst rate. as part of its black friday promotion, the store is advertising that, on that day, products can be purchased with no hst charged. on that day, a stove is sold for $2,800, its list price with no hst added to the amount owed by the customer. how much hst would jasper appliances owe the government as a result of this sale?

Answer 1

Jasper Appliances must remit $322.12 in HST to the government for a stove sold at $2,800 during their Black Friday no HST promotion because the actual price without HST is calculated as $2,477.88.

Step-by-step explanation:

A stove is sold by Jasper Appliances for $2,800 with a promotion of no HST (Harmonized Sales Tax) charged to the customer on Black Friday. However, Jasper Appliances, as an HST registrant in Ontario, is still responsible for remitting the HST to the government. Since Ontario's HST rate is 13%, we need to calculate how much of the $2,800 is HST. To figure out the HST portion of the total sales price, we can use the formula: Amount with HST / (1 + HST rate) = Amount before HST. So, $2,800 / 1.13 = $2,477.88, which is the amount before HST. The difference between the sale price and the amount before HST is the HST amount that Jasper Appliances owes to the government. The calculation would be List Price with HST: $2,800, Amount before HST: $2,477.88, HST Amount: $2,800 - $2,477.88 = $322.12. Hence, Jasper Appliances would owe the government $322.12 in HST for the sale of the stove on Black Friday.