13. How much is the current tax income tax expense for 2003? (b) P22,400 (a) P23,030 (c) P19,460 (d) P26,600 A seembe 21
13. How much is the current tax income tax expense for 2003? (b) P22,400 (a) P23,030 (c) P19,460 (d) P26,600 A seembe 21
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Please solve the LAST 2 ITEMS.
![Items 10 to 14:
T Company reports the following revenues and expenses in its pretax financial income for the
year ended December 31, 2003:
Revenues
Expenses
Pretax financial income
P229,600
(160,100)
P 69,500
The revenues included in pretax financial income are the same amount as the revenues
included in the company's taxable income. A reconciliation of the expenses reported for
pretax financial income to the expenses reported for taxable income, however, reveals four
differences:
a. Depreciation deducted for financial reporting exceeded depreciation deducted for income
taxes by P11,000.
b. Percentage depletion deduction for income taxes exceeded depletion deducted for
financial reporting by P15,600.
c. Warranty costs deducted for income taxes exceeded warranty expenses deducted for
financial reporting by P8,900.
d. Legal expense of P9,800 was deducted for financial reporting, it will be deducted for
income taxes when paid in a future year.
The company expenses its percentage depletion to exceed its cost depletion in each of the
next 5 years by the same amount as in 2000. At the end of 2000, the other three expenses
are expected to result in total future taxable or deductible amounts as follows:
Totals
Future taxable amounts
Depreciation expense difference
P63,000
Future deductible amounts
Warranty expense difference
Legal expense difference
48,400
9,800
At the beginning of 2003, the company had a deferred tax liability of P22,200 related to the
depreciation difference and a deferred tax asset of P17,190 related to the warranty
difference. The income tax rate for 2003 is 35%, but in 2002 Congress enacted a 30% rate
for 2004 and thereafter.
10. How much is the taxable income at December 31, 2003?
(a) P65,800
11. How much is the deferred tax asset at December 31, 2003?
(a) P17,460
12. How much is the deferred tax liability at December 31, 2003?
(a) P17,460
13. How much is the current tax income tax expense for 2003?
(a) P23,030
14. How much is the net income after income tax provision at December 31, 2003?
(a) P69,500
(b) P69,500
(c) P73,200
(d) P74,700 A
(b) P25,500
(c) P16,920
(d) P18,900 A
(b) P25,500
(c) P16,920
(d) P18,900 D
(b) P22,400
(c) P19,460
(d) P26,600 A
(b) P46,470
(c) P50,040
(d) P65,930 C](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7ce12b7f-2def-4225-b8ce-15dfe418e941%2F13f1ce89-91ff-4fcd-9aad-3648c3005d6d%2Fw771zar_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Items 10 to 14:
T Company reports the following revenues and expenses in its pretax financial income for the
year ended December 31, 2003:
Revenues
Expenses
Pretax financial income
P229,600
(160,100)
P 69,500
The revenues included in pretax financial income are the same amount as the revenues
included in the company's taxable income. A reconciliation of the expenses reported for
pretax financial income to the expenses reported for taxable income, however, reveals four
differences:
a. Depreciation deducted for financial reporting exceeded depreciation deducted for income
taxes by P11,000.
b. Percentage depletion deduction for income taxes exceeded depletion deducted for
financial reporting by P15,600.
c. Warranty costs deducted for income taxes exceeded warranty expenses deducted for
financial reporting by P8,900.
d. Legal expense of P9,800 was deducted for financial reporting, it will be deducted for
income taxes when paid in a future year.
The company expenses its percentage depletion to exceed its cost depletion in each of the
next 5 years by the same amount as in 2000. At the end of 2000, the other three expenses
are expected to result in total future taxable or deductible amounts as follows:
Totals
Future taxable amounts
Depreciation expense difference
P63,000
Future deductible amounts
Warranty expense difference
Legal expense difference
48,400
9,800
At the beginning of 2003, the company had a deferred tax liability of P22,200 related to the
depreciation difference and a deferred tax asset of P17,190 related to the warranty
difference. The income tax rate for 2003 is 35%, but in 2002 Congress enacted a 30% rate
for 2004 and thereafter.
10. How much is the taxable income at December 31, 2003?
(a) P65,800
11. How much is the deferred tax asset at December 31, 2003?
(a) P17,460
12. How much is the deferred tax liability at December 31, 2003?
(a) P17,460
13. How much is the current tax income tax expense for 2003?
(a) P23,030
14. How much is the net income after income tax provision at December 31, 2003?
(a) P69,500
(b) P69,500
(c) P73,200
(d) P74,700 A
(b) P25,500
(c) P16,920
(d) P18,900 A
(b) P25,500
(c) P16,920
(d) P18,900 D
(b) P22,400
(c) P19,460
(d) P26,600 A
(b) P46,470
(c) P50,040
(d) P65,930 C
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education