Morning pips!
I am unusually alert at this wee hour
Can anyone help me how to take in the Pg new law on hotel....the local government fee (LGF) of RM2 per night for hotel below 3 stars?
I am a freelancer. I encountered the hotel sales receipt that just show the total amount received including the LGF, the details is not clear. The hotel is responsible to collect the LGF then every 2 months pay to the government. Something like tax....
I am not sure which way is acceptable for audit.
So, please enlighten me if i am wrong.
As a sale is made, the entries are:
Dr. Cash/Bank 200
Cr. Sales 198
Cr. LGF (current liability) 2
By the end of the Month, the hotel will accumulated a sum of the LGF & pay to the gov.
So, the entries are:
Dr. LGF (current liability) 356
Cr. Cash/Bank 356
BUT, I plan to do like this to save time:
Dr.Cash/Bank 200
Cr. Sales 200
By the end of the month, I will extract the LGF based on a summary list of number of room sales for that month (No.of Room sales x RM 2)
My journal entries will be,
Dr. Sales 356
Cr. LGF ( current liability) 356
My Cash/bank entries,
Dr. LGF ( current liability) 356
Cr. Cash/Bank 356
So what do you guys think?
Penang Hotel Local Government Fee, How to do the accounting double entry