14-8. Wall Services computed pretax financial income of P2,200,000 for its first year of operations ended December 31, 2020. In preparing the income tax return for the year, the tax accountant determined the following differences between 2020 financial income and taxable income. (a) (b) Non-deductible expenses Non taxable revenues Temporary difference - installment sales reported in financial income but not in taxable income P400,000 140,000 The temporary difference is expected to reverse in the following pattern: 2020-30% 2021-32% 700,000 2021-P140,000; 2022-P320,000; 2023 - P240,000 The enacted tax rates for this year and the next three years are as follows: 2022-34% 2023-36%
14-8. Wall Services computed pretax financial income of P2,200,000 for its first year of operations ended December 31, 2020. In preparing the income tax return for the year, the tax accountant determined the following differences between 2020 financial income and taxable income. (a) (b) Non-deductible expenses Non taxable revenues Temporary difference - installment sales reported in financial income but not in taxable income P400,000 140,000 The temporary difference is expected to reverse in the following pattern: 2020-30% 2021-32% 700,000 2021-P140,000; 2022-P320,000; 2023 - P240,000 The enacted tax rates for this year and the next three years are as follows: 2022-34% 2023-36%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
a. Prepare a schedule showing the reversal of the temporary differences and the computation of income taxes payable and
b. Prepare
c. Prepare the section of the statement of comprehensive income of Wall Services beginning with "Income from continuing operations before income taxes" for the year ended December 31, 2020.
Transcribed Image Text:144-8.
Wall Services computed pretax financial income of P2,200,000
for its first year of operations ended December 31, 2020.
preparing the income tax return for the year, the tax accountant
determined the following differences between 2020 financial
income and taxable income.
(a)
(b)
(c)
Non-deductible expenses
Non taxable revenues
Temporary difference - installment sales
reported in financial income but not in
taxable income
P400,000
140,000
2020 - 30%
2021-32%
700,000
The temporary difference is expected to reverse in the following
pattern:
2022 -34%
2023 – 36%
In
2021 - P140,000; 2022 - P320,000; 2023 - P240,000
The enacted tax rates for this year and the next three years are
as follows:
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