Shaddick Corp began its 2011 fiscal year with a debit

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Shaddick Corp. began its 2011 fiscal year with a debit balance of $11,250 in its Income Taxes
Receivable account. During the year, the company made quarterly income tax instalment
payments of $8,100 each. In early June, a cheque was received from the CRA for Shaddick's
overpayment of 2010 taxes. The refunded amount was exactly as Shaddick had calculated it
would be on its 2010 income tax return. On completion of the 2011 income tax return, it was
determined that Shaddick's income taxes based on 2011 income were $37,800.Instructions (a)
Prepare all journal entries that are necessary to record the 2011 transactions and events.(b)
Indicate how the income taxes will be reported on Shaddick's December 31, 2011 balance
sheet.(c) Assume that the cheque from the CRA in early June is for $2,750. The difference
arose because of calculation errors on Shaddick's tax return. How would the difference be
accounted for and where would it be shown on Shaddick's financial statements?View Solution:
Shaddick Corp began its 2011 fiscal year with a debit

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