Twenty-One - 6

(Quick Method)

John, Alice, Alex, and Jerry Rangi are quadruplets. Their father financed an unincorporated business for each of them three years ago. They were each allowed to select their own line of business. As an incentive, their father has indicated that the child who owns the business that generates the most income in the first five years will receive a gift of $1,000,000 in cash.

All of the businesses are located in Ontario, with all of the revenues being generated in that province.

As all of the business were expected to have taxable supplies well in excess of $30,000, each business was registered for the Ontario HST at its inception.

The siblings provide you with the following annual information for their businesses. All amounts are reported inclusive of HST. None of the sales or purchases were zero-rated or exempt, and none of the businesses made any capital expenditures during the year.

Type Of Business Sales Purchases John Computer Sales, Repairs, And Tutoring $ 103,960 $ 26,160 Alice Bicycle Sales And Service 194,360 159,330 Alex Menswear Sales And Custom Tailoring 126,560 47,460 Jerry Tarot Card Reading And Cell Phone Sales 84,750 41,810 The HST rate in Ontario is 13 percent. The Quick Method remittance rates are 4.4 percent for resellers and 8.8 percent for service providers. When calculating the applicable remittance rate, assume the sales and purchases of the previous year were equal to those of the current year.

Required: Recommend whether any of the businesses should use the Quick Method to calculate net HST remittances. Show all of your calculations.