High Class is a retail business situated in Ontario.  All of its revenues and expenses take place in the province of Ontario.  There are no associated persons and it files its HST return on an annual basis.  Ontario has a 13 percent HST rate.

The Income Statement of High Class for the current year is as follows (all amounts are shown without HST):

 

Revenues:

    Fully Taxable Goods                                               $265,000

    Exempt Services                                                         73,000               $338,000

Less Expenses:

    Cost Of Goods Sold (All Taxable)                       ($140,000)

    Amortization Expense                                            (  23,000)

    Salaries And Wages                                                (  17,000)

    Rent                                                                        (  18,000)

    Interest Expense                                                     (  50,000)

    Other Operating Expenses                                     (  21,000)               ( 269,000)

Income Before Taxes                                                                                   $ 69,000

Less:  Federal And Provincial Income Taxes                                              (  14,000)

Net Income                                                                                                   $ 55,000

 

Other Information:

1.   Inventories of taxable goods increased by $13,000 during the year.

2.   A capital expenditure was made during the year at an HST inclusive cost of $62,150.  The expenditure was for equipment that will be used 65 percent for the provision of fully taxable goods.  HST was paid on the acquisition of all assets on which amortization is being taken during this period.

3.   All of the Other Operating Expenses involved the acquisition of fully taxable supplies and were acquired to assist in the provision of fully taxable supplies.

4.   The rent was not subject to HST as it was paid to a non-registrant.  The proportion of the leased property that is used for the provision of exempt services is 30 percent.

5.   Of the Salaries And Wages, 35 percent were paid to employees involved in providing exempt services.  

 

 

Required:

A.  Please help me to Calculate the net HST payable or refundable that High Class will remit or receive for the current year using regular HST calculations.  Also please SHOW ALL YOUR WORK AND IT MUST BE PROPERLY LABELED.  IF THERE IS NO INPUT TAX CREDIT FOR A PATICULAR ITEM, YOU STILL NEED TO INCLUDE IT IN YOUR ANSWER, AND NEXT TO ITS NAME PLEASE PUT NIL.

Answer rating: 100% (QA)

A Net HST Payable or Refundable Total Revenues Fully Taxable Goods 265000 x 13 HST rat... View the full answer