Question

Coronado Wholesalers Ltd. has a December 31 year end. The company incurred the following transactions related to current liabilities: 1. Coronado's cash register showed the following totals at the end of the day on March 17: pre-tax sales $59,000,GST$2,950, and PST \$4,130. 2. Coronado remitted $49,000 of sales taxes owing from March to the government on April 30 . 3. Coronado received its property tax bill for the calendar year for $76,800 on March 31, payable May 31. Coronado recorded no entries pertaining to property tax during the current year prior to the receipt of this bill. 4. Coronado paid its employees for the week of August 15 on August 20 . The gross pay was $83,000. The company deducted $4,128 for CPP, $1,312 for EI, $6,100 for pension, and $16,020 for income tax from the employees' pay. 5. Coronado recorded the employer portions of CPP and EI for the week of August 15 on August 20 for $4,128 and $1,837, respectively. 6. On September 15, all amounts owing for employee income taxes, CPP, and El pertaining to the payroll transactions above were paid. 7. On December 31, Coronado's legal counsel believes that the company will have to pay damages of $48,000 next year to a local utility company for failing to pay it on time during the current year. (Hint: This will affect the Utilities Expense account.) Record journal entries for the transactions above.

Answer 1

To record the journal entries for the transactions mentioned, please find the entries below:

1. March 17:

Cash $59,000

Accounts Receivable $59,000

(To record pre-tax sales)

Accounts Receivable $2,950

Sales Tax Payable $2,950

(To record GST)

Accounts Receivable $4,130

Sales Tax Payable $4,130

(To record PST)

2. April 30:

Sales Tax Payable $49,000

Cash $49,000

(To remit sales taxes owing to the government)

3. March 31:

Property Tax Expense $76,800

Property Tax Payable $76,800

(To record property tax bill received)

4. August 20:

Wages Expense $83,000

CPP Payable $4,128

EI Payable $1,312

Pension Payable $6,100

Income Tax Payable $16,020

Cash $55,440

(To record payment to employees and withholdings)

5. August 20:

CPP Expense $4,128

EI Expense $1,837

CPP Payable $4,128

EI Payable $1,837

(To record employer portions of CPP and EI)

6. September 15:

Income Tax Payable $16,020

CPP Payable $4,128

EI Payable $1,312

Cash $21,460

(To record payment of employee taxes, CPP, and EI)

7. December 31:

Utilities Expense $48,000

Utilities Payable $48,000

(To record estimated damages to a local utility company)

Please note that these journal entries are provided as examples based on the information given, and it's advisable to consult with an accounting professional or refer to the company's specific accounting policies and regulations for accurate recording of transactions.