5. On January 2, 20x1, Ross Co. purchased a machine for P70,000. This machine has a 5-year useful life, a residual value of P10,000, and is depreciated using the straight-line method for financial statement purposes. For tax-purposes, depreciation expense was P25,000 for 20x1 and P20,000 for 20x2. Ross' 20x2 income, before income taxes and depreciation expense, was P100,000 and its tax rate was 30%. If Ross had made no estimated tax payments during 20x2, what amount of current income tax liability would Ross report in its December 31, 20x2 balance sheet?
5. On January 2, 20x1, Ross Co. purchased a machine for P70,000. This machine has a 5-year useful life, a residual value of P10,000, and is depreciated using the straight-line method for financial statement purposes. For tax-purposes, depreciation expense was P25,000 for 20x1 and P20,000 for 20x2. Ross' 20x2 income, before income taxes and depreciation expense, was P100,000 and its tax rate was 30%. If Ross had made no estimated tax payments during 20x2, what amount of current income tax liability would Ross report in its December 31, 20x2 balance sheet?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please put all of the necessary information and computations for better understanding. Thanks ?
Transcribed Image Text:5. On January 2, 20x1, Ross Co. purchased a machine for P70,000. This machine has a 5-year
useful life, a residual value of P10,000, and is depreciated using the straight-line method for
financial statement purposes. For tax-purposes, depreciation expense was P25,000 for 20x1
and P20,000 for 20x2. Ross' 20x2 income, before income taxes and depreciation expense,
was P100,000 and its tax rate was 30%.
If Ross had made no estimated tax payments during 20x2, what amount of current income tax
liability would Ross report in its December 31, 20x2 balance sheet?
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