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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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
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
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