Question
What year end adjustments s/b done for GSTHST Payable (I use quick method) for amount that left after allocating GST Tax amount?
RE: How do I properly record GST/HST (quick method) and close it at the year end?
Hello everyone.
I tried to research for a few days with no success. So I have to ask for community/support help.
I have a very small incorporated business, using QuickBooks Online for books. Cannot figure out how to properly record transactions related to the year end and GST/HST. I use ‘quick’ method for GST/HST tax calculation.
Here is the challenge.
During a tax year I record income and expenses properly allocating GST/HST, it goes to ‘GSTHST Payable’ account and there is no problem with that. In example below I use numbers just to illustrate the issue, do not pay attention to actual value.
- Let’s say during a year I paid $1000 HST as part of purchases. (Credited to GST Payable)
- $400 of HST paid for Capital Assets (CCA) and this amount I will use as ITC (because of quick method, so I can use as ITC only HST for such significant items)
- My understanding that the rest $600 of HST paid for regular stuff goes to expence acct, I use ‘Other Expenses’ and put a clear memo what is this. I do it at the last day of my year end. Please correct me if I am wrong.
- I issued invoices during the year and collected $1500 as HST (debited to HST Payable)
- Now, in this case I have balance at GST Payable ($2000 - $400 = $1600 debit)
- Let’s say that after calculating and filing GST/HST I have to pay $1200 as GST (amout will be not exact as currently on GST Payable account).
- Ok, I will move $1200 to GST Liabilities to be paid so GST Payable acct balance becomes $400.
At this point I completely stuck and cannot find any information what to do. What to do do with this $400 balance? Where it goes? What is the adjusting journal entry to zero out this GST Paybale?
I really appreciate help & guidance in this. I tried to research but cannot find anything even close.
Hello everyone.
I tried to research for a few days with no success. So I have to ask for community/support help.
I have a very small incorporated business, using QuickBooks Online for books. Cannot figure out how to properly record transactions related to the year end and GST/HST. I use ‘quick’ method for GST/HST tax calculation.
Here is the challenge.
During a tax year I record income and expenses properly allocating GST/HST, it goes to ‘GSTHST Payable’ account and there is no problem with that. In example below I use numbers just to illustrate the issue, do not pay attention to actual value.
- Let’s say during a year I paid $1000 HST as part of purchases. (Credited to GST Payable)
- $400 of HST paid for Capital Assets (CCA) and this amount I will use as ITC (because of quick method, so I can use as ITC only HST for such significant items)
- My understanding that the rest $600 of HST paid for regular stuff goes to expence acct, I use ‘Other Expenses’ and put a clear memo what is this. I do it at the last day of my year end. Please correct me if I am wrong.
- I issued invoices during the year and collected $1500 as HST (debited to HST Payable)
- Now, in this case I have balance at GST Payable ($2000 - $400 = $1600 debit)
- Let’s say that after calculating and filing GST/HST I have to pay $1200 as GST (amout will be not exact as currently on GST Payable account).
- Ok, I will move $1200 to GST Liabilities to be paid so GST Payable acct balance becomes $400.
At this point I completely stuck and cannot find any information what to do. What to do do with this $400 balance? Where it goes? What is the adjusting journal entry to zero out this GST Paybale?
I really appreciate help & guidance in this. I tried to research but cannot find anything even close.