Shaddick Corp., a public company following IFRS, began its 2017 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 Canada Revenue Agency for Shaddick's over-payment of 2016 taxes. The refunded amount was exactly as Shaddick had calculated it would be on its 2016 income tax return. On completion of the 2017 income tax return, it was determined that Shaddick's income tax based on 2017 income was $37,800.
Instructions
(a) Prepare all journal entries that are necessary to record the 2017 transactions and events.
(b) Indicate how the income tax will be reported on Shaddick's December 31, 2017 statement of financial position.
(c) Assume that the cheque from the CRA in early June is for $2,750, instead of $11,250. The difference arose because of calculation errors on Shaddick's 2016 tax return. How would you account for the difference of $8,500? Where would it be shown on Shaddick's financial statements?
(d) Would any of your answers for parts (a) to (c) be different if ASPE had been followed?