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The agreed cost of an item to be purchased by a business on credit is $4,000. The applicable cost will be debited to advertising expense. The item is subject to 5% goods and services tax (GST) and 7% provincial sales tax (PST). When this transaction is recorded, what amount will be debited to advertising expense? a. $4,280 b. $4,480 c. $4,200 d. None of these answers is correct. e. $4,000
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