Smile Limited is a manufacturing company with a 28 February year-end.

The following relates to the companys tax matters:

2022:

Estimated taxable income R878 700

Actual taxable income per SARS assessment: R870 200

Deferred Tax Asset 1 March: R125 200

Deferred Tax Asset 28 Feb: R155 400

2023:

Estimated taxable income R995 200

Actual taxable income per SARS assessment: n/a

Deferred Tax Asset 1 March: R155 400

Deferred Tax Asset 28 Feb: R147 800

Smile Limited received a tax refund from SARS of R3 200 on 28 August 2022.

Upon receipt of the refund, the accountant processed the following journal:

Debit Bank (SFP): R3 200

Credit Taxation payable (SFP) 3 200

(Account for SARS refund on 2022 assessment)

Assume a corporate income tax rate of 28%

Required: Discuss whether you agree with the accountant's journal to account for the refund received from SARS. Include in your discussion any correcting journals, if any, that you might deem necessary.