Question

Exercise 13-6 Sarasota Corp., a public company following IFRS, began its 2017 fiscal year with a debit balance of $13,000 in its Income Tax Receivable account. During the year, Sarasota made quarterly income tax instalment payments of 7,520 each. In early June, a cheque was received from the Canada Revenue Agency for Sarasota's overpayment of 2016 taxes. The refunded amount was exactly as Sarasota had calculated it would be on its 2016 income tax return. On completion of the 2017 income tax return, it was determined that Sarasota's income tax based on 2017 income was $37,300 Prepare all journal entries that are necessary to record the 2017 transactions and events. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Answer 1

Income tax liability Income tax paid during the year Net Income tax payable as on 31.Dec.17 37300 7220 ikPcu ir Cr Dr Cr 10480 Income tax receivable 10480 being income tax receivabletransferred to expense account assuming calculation error happen on our part) There wont be any difference in accounting as per ASPE & IFRS. As there is no temperory differences, so not need of deferred tax asset/liability.

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