Mark Weaver is a licensed paralegal that started up a paralegal firm called Uptown Paralegal. Uptown Paralegal carries on business in Ontario where the relevant HST rate is 13%. During the current period, Uptown Paralegal has taxable sales of $125,000. Its purchases of office supplies and stationary items for the period was $6,500 and travel expenses incurred for client matters amounted to $4,500. Other expenses for the period included salaries and wages of $12,000, interest expense of $5,000, and amortization expense of $3,000. The LSO membership dues amounted to $1,300. Capital expenditures amounted to $10,000. None of the amounts indicated include HST.Determine the HST payable or HST refund for the period using both the regular method and the simplified method. |
Instructions Please complete the Chapter 11 Problem with the templates provided. Please read Chapter 11 and review the lecture materials before attempting the assignment. As this is a tax assignment, you may need to do some research on the internet to complete this assignment. Please state any assumptions to support your answers. Feel free to insert any rows or columns in any of the sheets in case it is needed for your solution. Please submit this group assignment to the Assignment Chapter 11 dropbox by the deadline specified by the instructor. Chapter 8 Comprehensive ProblemGrades AvailableGrades EarnedFeedback HST Problem20 Income Tax Problem20 Total40 Chart of Accounts Balance Sheet AccountsIncome Statement Accounts NO. NameTypeNO. NameType 100Current Assets400Income (Revenue) 100General Bank AccountCurrent Asset400Fees EarnedIncome 105Petty CashCurrent Asset410Expense RecoveryIncome 115Trust Bank AccountCurrent Asset430Interest IncomeIncome 120Accounts ReceivableCurrent Asset499Miscellaneous IncomeIncome 121General Disbursement RecoveryCurrent Asset500Expenses 125Prepaid InsuranceCurrent Asset502Accounting and BookkeepingExpense 128Prepaid ExpenseCurrent Asset503AdvertistingExpense 130Office SuppliesCurrent Asset505Motor Vehicle ExpenseExpense 150Fixed Assets506Bad Debt ExpenseExpense 150BuildingFixed Asset507Bank Charges and Credit Card ExpenseExpense 151Depreciation - BuildingFixed Asset511Salaries ExpenseExpense 155Computer Equipment (Hardware)Fixed Asset517Employee Insurance (EI) ExpenseExpense 156Depreciation - Computer EquipmentFixed Asset518Canada Pension Plan (CPP) ExpenseExpense 158Office Furniture and EquipmentFixed Asset520Employer Health Tax (EHT) ExpenseExpense 159Depreciation - Office Furniture and EquipmentFixed Asset522Depreciation ExpenseExpense 160Intangible AssetsFixed Asset523DonationsExpense 161Depreciation - Intangible AssetsFixed Asset524Equipment LeaseExpense 200Liabilities525General Disbursement ExpenseExpense 200Accounts Payable/General LiabilitiesLiability526General Disbursement RecoveryExpense 205Personal LoanLiability527Insurance - Professional LiabilityExpense 210Credit Card DebtLiability528Insurance - OtherExpense 215Trust Fund OwedLiability529Interest ExpenseExpense 217Income Taxes PayableLiability530Library and SubscriptionsExpense 218Canada Pension Plan (CPP) PayableLiability531Library Research ExpenseExpense 219Employment Insurance (EI) PayableLiability532Maintenance and RepairsExpense 220Accrued Salaries PayableLiability533Meals and Entertainment ExpenseExpense 221Employee Tax Deductions PayableLiability534Membership/Professional DuesExpense 222Employee Health Tax PayableLiability535Office Supplies/General ExpenseExpense 227Vacation Accrual PayableLiability538Rent ExpenseExpense 240HST/GST PayableLiability540Stationary/SuppliesExpense 250Bank Line of CreditLiability541TravelExpense 300Owner's Equity542UtilitiesExpense 300Owner, CapitalEquity550Delivery ExpenseExpense 350Owner, DrawingsEquity551Delivery RecoveryExpense 355Income SummaryEquity553Fax ExpenseExpense 554Fax RecoveryExpense 555Photocopy ExpenseExpense 558Parking ExpenseExpense 560Photocopy recoveryExpense 561SearchesExpense 563Postage ExpenseExpense 564Postage RecoveryExpense 565Telephone ExpenseExpense 566Telephone RecoveryExpense 567Cash Short/OverExpense HST Problem Mark Weaver is a licensed paralegal that started up a paralegal firm called Uptown Paralegal. Uptown Paralegal carries on business in Ontario where the relevant HST rate is 13%. During the current period, Uptown Paralegal has taxable sales of $125,000. Its purchases of office supplies and stationary items for the period was $6,500 and travel expenses incurred for client matters amounted to $4,500. Other expenses for the period included salaries and wages of $12,000, interest expense of $5,000, and amortization expense of $3,000. The LSO membership dues amounted to $1,300. Capital expenditures amounted to $10,000. None of the amounts indicated include HST. Determine the HST payable or HST refund for the period using both the regular method and the simplified method. Regular Method: Net HST Tax Items Amount Total Fees Billed 125,000 Total Disbursement Billed4,500 Total GST/HST Charged 10,000 Simplified Method: Net HST Tax Items Amount Tax Problem Pierre Kemeni is a licensed paralegal that started a new practice named Kemeni Paralegal in Mississauga Ontario. He has provided you with the following information regarding his income and expenditures for the current taxation year. Include/ExcludeAmount a) Pierre has billable hours amounting to $120,000 of revenues but only billed $90,000 of this amount and he collected $80,000 in cash. Include 120,000 b) Pierre incurred insurance expense of $3,200 for the current year. Include 3,200 c) Pierre spent $7,420 advertising on a United States (U.S.) television station. The commercials were directed at Canadian resident viewers. Exclude7,420 d) Pierre hosts an annual barbeque for this staff and paid $2,500 for meals and entertainment. Include 2,500 e) Pierre deducted $10,400 for capital cost allowance (CCA). He determined depreciation to be $12,350 for accounting purposes. Include/Exclude10,40012,350 f) Pierre paid his wife a salary of $30,000 per year to act as a legal office administrator. This salary was considered to be reasonable. Include 30,000 g) Pierre paid $2,500 to attend a convention on ethics and professional practice for paralegals. His wife accompanied him and her travel costs were $500. Include 3,000 h) Pierre paid a $100 contribution to the Federal Green Party.Exclude100 i) Pierre paid a $50 speeding ticket incurred while delivering client files to his clients. Exclude50 j) Pierre found that $500 of his legal office supplies went missing or were stolen.Include 500 k) Pierre paid a plumber $500 for his labour and $150 for parts to repair the toilet in his office.Include 650 l) Pierre paid himself $75,000 for his services to the paralegal firm. Exclude75,000 m) Pierre paid $1,200 for life insurance premiums to protect his beneficiaries. Exclude1,200 n) Pierre incurred business operating expenses of $30,000. This amount included $2,500 for prepaid rent. Include/Exclude27,5002,500 Required: Determine the minimum business income for Kemeni Paralegal. Answer: Kemeni Paralegal Minimum Business Income Current Year Revenue: $ 120,000.00 Expenses: $ 77,250.00 Insurance - Other$ 3,200.00 Meals and Entertainment Expense$ 2,500.00 Capital Cost Allowance$ 10,400.00 Salaries Expense$ 30,000.00 Travel$ 3,000.00 Office Supplies/General Expense$ 500.00 Maintenance and Repairs$ 650.00 Cost $ 27,000.00 Minimum Business Income (Loss)$ 42,750.00