Question 1

Which of the following scenarios will not be allowed to elect to eliminate the GST/HST on the sale of Tree Co.to Leaf Co.?

Accepted Answer

A) Tree Co.and Leaf Co.are both GST/HST registrants. 
B) Neither Tree Co.nor Leaf Co.are GST/HST registrants. 
C) Tree Co.is a GST/HST registrant, and Leaf Co.is not a GST/HST registrant. 
D) Tree Co.is not a GST/HST registrant, and Leaf Co.is a GST/HST registrant. 
A) Tree Co.and Leaf Co.are both GST/HST registrants. 
B) Neither Tree Co.nor Leaf Co.are GST/HST registrants. 
C) Tree Co.is a GST/HST registrant, and Leaf Co.is not a GST/HST registrant. 
D) Tree Co.is not a GST/HST registrant, and Leaf Co.is a GST/HST registrant. C

Question 2

Jan Jolly operates a service business in New Brunswick.The company's 2020 financial information includes the following:
 $\begin{array}{|l|r|}
\hline \text { Revenue } & \$ 55,000 \
\hline \text { General and administrative expenses } & \$ 25,000 \
\hline \text { Meals and entertainment } & \$ 3,000 \
\hline \text { New furnishings } & \$ 8,000 \
\hline
\end{array}$
Required:
Determine Jan's net HST remittance using the simplified method.
Round all amounts to zero decimal places.

Accepted Answer

$\begin{array}{|l|r|r|}
\hline & & \text { Suggested marks } \
\hline \text { HST collected } \$ 55,000 \times 15 / 115 & \$ 7,174 & 1 \
\hline \text { General and administrative expenses and new } & &\ \text { furnishings } & & \
\hline(\$ 25,000+\$ 8,000) \times 15 / 115 & -\$ 4,304 & 2 \
\hline \text { Meals and entertainment ITC }(3,000 \times 50 \% \times 15 / 115) & -\$ 196 & 2 \
\hline \text { Net HST remittance } & \$ 2,674  \
\hline&& 5\\hline
\end{array}$

Question 3

When closely related groups for tax purposes elect not to charge GST/HST to members of the group, which of the following applies?

Accepted Answer

A) There is an actual tax saving for the group. 
B) There is an actual tax saving for the member only. 
C) An actual tax saving does not take place until the following year. 
D) An actual tax saving does not take place. 
A) There is an actual tax saving for the group. 
B) There is an actual tax saving for the member only. 
C) An actual tax saving does not take place until the following year. 
D) An actual tax saving does not take place. D

Question 4

With respect to GST/HST on residential property, which of the following statements is incorrect?

Accepted Answer

A) GST/HST is charged on the sale of brand new homes. 
B) GST/HST is not typically charged on the sale of used homes. 
C) GST/HST is charged on residential rent if the rental is for a term of more than one month. 
D) GST/HST is charged on the sale of homes which have undergone substantial renovations to become 'new' again. 
A) GST/HST is charged on the sale of brand new homes. 
B) GST/HST is not typically charged on the sale of used homes. 
C) GST/HST is charged on residential rent if the rental is for a term of more than one month. 
D) GST/HST is charged on the sale of homes which have undergone substantial renovations to become 'new' again.

Question 5

With respect to the GST/HST, supplies fall under different categories with different sets of rules.Which of the following is false with regard to zero-rated supplies?

Accepted Answer

A) Zero-rated supplies are not included in the determination of the mandatory reporting period. 
B) GST/HST is charged at a rate of 0%. 
C) Prescription drugs and medical devices are examples of zero-rated supplies. 
D) Input tax credits may be claimed on expenditures made to provide the zero-rated supplies. 
A) Zero-rated supplies are not included in the determination of the mandatory reporting period. 
B) GST/HST is charged at a rate of 0%. 
C) Prescription drugs and medical devices are examples of zero-rated supplies. 
D) Input tax credits may be claimed on expenditures made to provide the zero-rated supplies.

Question 6

Carmel Co.earned $20,000 in revenue and paid $15,000 in expenses (that do not include meals and entertainment).How much GST will Carmel remit using the simplified ITC calculation? (Carmel is in a province with 5% GST.)

Accepted Answer

A) $0 
B) $238 
C) $250 
D) $652 
A) $0 
B) $238 
C) $250 
D) $652

Question 7

Casey Raja was required to pay for numerous employment expenses in 2020.The expenses deducted on Casey's tax return totaled $12,000 which included $2,000 CCA.The expenses all included a 15% HST component, other than the CCA which had a deemed inclusion since HST was originally paid on the vehicle.If Casey applied for an HST rebate in 2021 when preparing the 2020 return, what impact would the rebate have on the 2021 return?

Accepted Answer

A) Increase in employment income of $1,304 and increase in UCC of $261 
B) Increase in employment income of $1,304 and decrease in UCC of $261 
C) Increase in employment income of $1,565 
D) Decrease in employment income of $1,565 
A) Increase in employment income of $1,304 and increase in UCC of $261 
B) Increase in employment income of $1,304 and decrease in UCC of $261 
C) Increase in employment income of $1,565 
D) Decrease in employment income of $1,565

Question 8

Island Tours Inc.earned $80,000 in revenue and paid $45,000 in operating expenses.If Island Tours elects to use the quick method, how much is the net HST remittance? (Island Tours is in a province with 13% HST and an 8.8% remittance rate.)

Accepted Answer

A) $3,080 
B) $4,550 
C) $6,740 
D) $7,040 
A) $3,080 
B) $4,550 
C) $6,740 
D) $7,040

Question 9

With respect to the GST/HST, supplies fall under different categories with different sets of rules.Which of the following statements is incorrect with regard to exempt supplies?

Accepted Answer

A) Exempt supplies are not included in the determination of the mandatory reporting period. 
B) GST/HST is not applicable. 
C) Childcare services and music lessons are examples of exempt supplies. 
D) Input tax credits may be claimed on expenditures made to provide the exempt supplies. 
A) Exempt supplies are not included in the determination of the mandatory reporting period. 
B) GST/HST is not applicable. 
C) Childcare services and music lessons are examples of exempt supplies. 
D) Input tax credits may be claimed on expenditures made to provide the exempt supplies.

Which of the following scenarios will not be allowed to elect to eliminate the GST/HST on the sale of Tree Co.to Leaf Co.?

When closely related groups for tax purposes elect not to charge GST/HST to members of the group, which of the following applies?

With respect to GST/HST on residential property, which of the following statements is incorrect?

With respect to the GST/HST, supplies fall under different categories with different sets of rules.Which of the following is false with regard to zero-rated supplies?

Carmel Co.earned $20,000 in revenue and paid $15,000 in expenses (that do not include meals and entertainment).How much GST will Carmel remit using the simplified ITC calculation? (Carmel is in a province with 5% GST.)

Island Tours Inc.earned $80,000 in revenue and paid $45,000 in operating expenses.If Island Tours elects to use the quick method, how much is the net HST remittance? (Island Tours is in a province with 13% HST and an 8.8% remittance rate.)

With respect to the GST/HST, supplies fall under different categories with different sets of rules.Which of the following statements is incorrect with regard to exempt supplies?

Taxationits Role in Decision Making

Fundamentals of Tax Planning

Liability for Tax, Income Determination, and Administration of the Income Tax System

Income From Employment

Income From Business

The Acquisition, Use, and Disposal of Depreciable Property

Income From Property

Gains and Losses on the Disposition of Capital Propertycapital Gains

Other Income, Other Deductions, and Special Rules for Completing Net Income for Tax Purposes

Individuals: Determination of Taxable Income and Taxes Payable

Corporationsan Introduction

Organization, Capital Structures, and Income Distributions of Corporations

The Canadian-Controlled Private Corporation

Multiple Corporations and Their Reorganization

Partnerships

Limited Partnerships and Joint Ventures

Trusts

Business Acquisitions and Divestituresassets Versus Shares

Business Acquisitions and Divestiturestax-Deferred Sales

Domestic and International Business Expansion

Tax Aspects of Corporate Financing

Business Valuations

Filters

Exam 22: GST/HST Overview

Which of the following scenarios will not be allowed to elect to eliminate the GST/HST on the sale of Tree Co.to Leaf Co.?

When closely related groups for tax purposes elect not to charge GST/HST to members of the group, which of the following applies?

With respect to GST/HST on residential property, which of the following statements is incorrect?

With respect to the GST/HST, supplies fall under different categories with different sets of rules.Which of the following is false with regard to zero-rated supplies?

Carmel Co.earned $20,000 in revenue and paid $15,000 in expenses (that do not include meals and entertainment).How much GST will Carmel remit using the simplified ITC calculation? (Carmel is in a province with 5% GST.)

Island Tours Inc.earned $80,000 in revenue and paid $45,000 in operating expenses.If Island Tours elects to use the quick method, how much is the net HST remittance? (Island Tours is in a province with 13% HST and an 8.8% remittance rate.)

With respect to the GST/HST, supplies fall under different categories with different sets of rules.Which of the following statements is incorrect with regard to exempt supplies?

Taxationits Role in Decision Making

Fundamentals of Tax Planning

Liability for Tax, Income Determination, and Administration of the Income Tax System

Income From Employment

Income From Business

The Acquisition, Use, and Disposal of Depreciable Property

Income From Property

Gains and Losses on the Disposition of Capital Propertycapital Gains

Other Income, Other Deductions, and Special Rules for Completing Net Income for Tax Purposes

Individuals: Determination of Taxable Income and Taxes Payable

Corporationsan Introduction

Organization, Capital Structures, and Income Distributions of Corporations

The Canadian-Controlled Private Corporation

Multiple Corporations and Their Reorganization

Partnerships

Limited Partnerships and Joint Ventures

Trusts

Business Acquisitions and Divestituresassets Versus Shares

Business Acquisitions and Divestiturestax-Deferred Sales

Domestic and International Business Expansion

Tax Aspects of Corporate Financing

Business Valuations

Filters