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Hello,
there is a debit balance relating to income tax of 500 included in the trial balance. It is estimated that the income tax liability for the year is 8000. What amount should be included in SOFP and SOPL?
A debit balance means that the state owes us money and it must reduce our liability by 500 = 7500 which must appear in SOPL as an expense. The answer is 8500..
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