Journalling Canadian "Quick Method" GST

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debgreen
Posts: 2
Joined: 24 Jan 2008 05:19

Journalling Canadian "Quick Method" GST

Post by debgreen » 23 Oct 2009 09:19

I've just realized that my journalling to account for "Quick Method" GST isn't working the way it did in 2008. Now the GST Holding entry is ADDING the amount rather than reducing it to zero. I did my accounting by hand for years so I have a bit of knowledge, but I'm not an accountant by any means. I'm trying to figure out how I debit to zero the GST holding account when I have to balance by crediting Cash on the government payment and crediting the GST Retained amount because of the quick method.

With the quick method, I can't use the automatic journal feature because I don't pay the 5%. I'm a very small business, so the government lets me pay 3.6% and I don't have to account for every penny I pay out in GST. I know that Moneyworks does this for me, but it's actually to my benefit to use the quick method. However, I have to account for the 1.4% balance in a GST Retained account in order to balance.

Can anyone give me the journal entries I need to make this all balance out between GST PAID, GST COLLECTED, GST HOLDING and GST RETAINED. I've been struggling with this for days and all I've got is a migraine. ANY help is greatly appreciated. I live in Alberta so I don't have HST or PST.

Thanks for any help!
Deb

zelda
Posts: 6
Joined: 16 Feb 2010 12:33

Re: Journalling Canadian "Quick Method" GST

Post by zelda » 05 Oct 2012 06:21

I've just started collecting GST, and also using the quick method. Any answers to this question?

Sosu
Posts: 136
Joined: 13 Feb 2012 09:07
Product: Datacentre

Re: Journalling Canadian "Quick Method" GST

Post by Sosu » 15 Oct 2012 10:57

if you are having 1.4% in the GST holding account then this amount has to be moved to another account to make it zero. Basically, I presume, this amount would be an income for you, so you might want to create a journal to an income account, say - Income from GST adjustment or whatever suits you....please correct me if I am wrong

MDufresne
Posts: 5
Joined: 14 Oct 2012 13:06
Product: Express
Region: Canada

Re: Journalling Canadian "Quick Method" GST

Post by MDufresne » 17 Oct 2012 03:11

I'm also on the "Quick method". I do not use the GST report because I don't see its value with the Quick Method : only my sales amount is relevant, not the detailed postings to my GST accounts.

The accounting entry I do at the time of payment is the following :
Cr Bank (pay Revenue Canada) -> amount based on the Quick Method calculation
Cr GST paid (on my purchases) -> amount = account balance at the end of the GST reporting period
Dr GST collected (on my customer invoices) -> amount = account balance at the end of the GST reporting period
Cr GST variance (revenue account) -> amount = GST collected - (Quick Method GST amount + GST paid)

Hope this helps.

shayanjameel08
Posts: 9
Joined: 21 Oct 2013 17:37

Re: Journalling Canadian "Quick Method" GST

Post by shayanjameel08 » 24 Oct 2013 00:28

For GST purposes, annual taxable sales must be less than $200,000. QST requires that annual taxable sales be less than $217,000.
If 40% or more of your sales are from goods that were purchased for resale e.g. All objects or things that may be perceived by the senses and are movable at the time of supply: a vehicle, animals, furniture, etc. is 1.8% and the QST rate is 3.0% for a total of 4.8%
If your cost of goods sold are less than 40% than the GST rate is 3.6% and the QST rate is 6.0% for a total of 9.6%
For QST purposes, annual taxable sales must be less than $217,000
If 40% or more of your sales are from goods that were purchased for resale (see definition above) the QST rate is 3.0%.
If less than 40% than the QST rate is 6.0%

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