(Activity No. 3) PDF

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Summary

Problems: Bureau XYZ, a national government agency, purchased five (5) units of solar powered car from Crown Motors, Inc. for a total purchase price of P 4,950,000. At that time, crown Motors has a promotional sale of “Buy 5 take one free” that an additional unit of solar powered car costing P500, 0...

Description

Problems: 1) Bureau XYZ, a national government agency, purchased five (5) units of solar powered car from Crown Motors, Inc. for a total purchase price of P 4,950,000. At that time, crown Motors has a promotional sale of “Buy 5 take one free” that an additional unit of solar powered car costing P500, 000 will be given away as promotional item. Assume an applicable tax rate for this purchase is 6% (5% VAT and 1% EWT). Required: a. What is the cost per unit that should be reflected in the books of Bureau XYZ for the purchase of motor vehicles? Cost per unit

P4,950,000/6 units

P825,0 00

b. Prepare journal entries to record payment of accounts payable and eventual remittance of withholding tax to BIR, assuming the NCA used is for the agency’s operating requirements and includes NCA for Tax Remittance Advice (TRA) in the amount of P 297,000?

Accounts payable

2010101 0

4,950,000

Cash – MDS, Regular

1010404 0

4,653,000

Due to BIR

2020101 0

297,000

Payment of accounts payable.

Due to BIR Cash - TRA

2020101 0

297,000

1010407 0

Remittance of withholding tax through TRA.

297,000

2) Agency ABC, a national government agency, purchased six (6) sets office tables with chairs from Officeworks Co. at a total amount of P 12,000. In relation to this purchase, the agency received a computer printer, costing P850 with a fair value of P 1,200, as a promotional item. Required: a. What is the cost per unit of these furniture and fixtures in the books of Agency ABC? Cost per unit

12,000 – 1,200)/6 units

P1,80 0

b. Prepare journal entries to record the receipt of NCA, purchase of furniture and fixtures, the receipt of proportional item, payment of accounts payable, and the eventual remittance of withholding tax to BIR thru TRA. Assume the NCA used for payment is for the agency’s operating requirements and net of Tax Remittance Advice (TRA). Assume an applicable tax rate for this purchase is 6% (5% VAT and 1%EWT).

Furniture and fixtures Accounts payable

1060701 0

10,800

2010101 0

10,800

Purchase of furniture and fixtures.

Office equipment Accounts payable

1060502 0 2010101 0

Receipt of promotional item.

1,200 1,200

Accounts payable

2010101 0

12,000

Cash – MDS, Regular

1010404 0

11,280

Due to BIR

2020101 0

720

Receipt of promotional item.

Due to BIR Subsidy from national government

2020101 0 4030101 0

Remittance of withholding tax to BIR.

720 720...