Shaddick Corp., a public company following IFRS, began its 2023 fiscal year with a debit balance of $11,250 in its Income Tax Receivable account. During the year, Shaddick made quarterly income tax instalment payments of $8,100 each. In early June, a cheque was received from the Receiver General for Canada for Shaddick’s overpayment of 2022 taxes. The refunded amount was exactly as Shaddick had calculated it would be on its 2022 income tax return. On completion of the 2023 income tax return, it was determined that Shaddick’s income tax based on 2023 income was $37,800.

Instructions

a. Prepare all journal entries that are necessary to record the 2023 transactions and events.

b. Indicate how the income tax will be reported on Shaddick’s December 31, 2023 SFP.

c. Assume that the cheque from the Receiver General for Canada in early June is for $2,750, instead of $11,250. The difference arose because of calculation errors on Shaddick’s 2022 tax return. How would you account for the difference of $8,500? Where would it be shown on Shaddick’s financial statements?