a. Šalaries Expense Salaries worked and paid Accrued salaries Total Salaries Expense P400,000 50,000 P450,000 b. Bad debts expense Accounts written off determined to be worthless P50,000 Estimated uncollectible amount Related party bad debts Worthless accounts not yet written off 200,000 20,000 50,000 Total bad debts expense P320,000 c. The retirement expense deducted was P150,000. Only P60,000 of which was from the contribution of the employer. d. Representation Expense, P50,000.
a. Šalaries Expense Salaries worked and paid Accrued salaries Total Salaries Expense P400,000 50,000 P450,000 b. Bad debts expense Accounts written off determined to be worthless P50,000 Estimated uncollectible amount Related party bad debts Worthless accounts not yet written off 200,000 20,000 50,000 Total bad debts expense P320,000 c. The retirement expense deducted was P150,000. Only P60,000 of which was from the contribution of the employer. d. Representation Expense, P50,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Mr. Queen, a naturalized Filipino Citizen is a registered owner of a
manufacturing business in the Philippines. Due to the Covid pandemic, he was
stranded in South Korea for 181 days in 2020. Thankfully, despite his physical
absence in the Philippines, he was able to manage his business using the help of
technology. In 2020, he reported a financial accounting income amounting to
P500,000 and cost of goods sold of P2,000,000. Other expenses that were
deducted reveal the following:
Transcribed Image Text:e. Rent Expense:
Rent Expense
P600,000
f. Taxes expense
Municipal and licenses
Quarterly Income tax
Total Taxes
P50,000
150,000
P200,000
g. Life insurance expense
Premium on employees group insurance
Premium on officer's insurance (Beneficiary is the Company)
Total life insurance expense
P150,000
80,000
P230,000
h. Interest Expense
Interest Expense (bank borrowings)
Interest Income (from notes receivable)
Net Interest Expense, deducted
P60,000
(10,000)
P50,000
i Contributions Expense
Donations to TESDA priority project
Donations to Government- Non-priority project
Total Contribution expense
P100,000
100,000
P200,000
REQUIRED: Compute for the following
a. Total Allowable Deductions if Mr. Queen registered his business venture as a:
1. Sole Proprietorship
2. One Person Corporation
b. Net Taxable Income from his Business in case he registered the same as a:
1. Sole Proprietorship
2. One Person Corporation
c. Tax still due and payable if Mr. Queen is a sole proprietor.
Transcribed Image Text:a. Salaries Expense
Salaries worked and paid
P400,000
50,000
P450,000
Accrued salaries
Total Salaries Expense
b. Bad debts expense
Accounts written off determined to be worthless
P50,000
200,000
20,000
50,000
Estimated uncollectible amount
Related party bad debts
Worthless accounts not yet written off
Total bad debts expense
P320,000
c. The retirement expense deducted was Pl50,000. Only P60,000 of which was from the
contribution of the employer.
d. Representation Expense, P50,000.
Expert Solution
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 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education