ABC Company (ABC), a manufacturer of hybrid engine vehicles, had pretax financial income of P30 billion for the year 20X1, its first year of operations. ABC has a current tax rate of 24% and a future enacted tax rate of 21%. The following differences between financial and taxable income were reported by ABC for the current year (all numbers in millions): I. Excess of tax depreciation over book depreciation 11,500 II. Interest revenue on municipal bonds 1,600 III. Estimated warranty expense over actual expenditures 9,000 IV. Fines paid 6,400 Unrealized gains on marketable securities recognized for V. financial reporting 3,000
ABC Company (ABC), a manufacturer of hybrid engine vehicles, had pretax financial income of P30 billion for the year 20X1, its first year of operations. ABC has a current tax rate of 24% and a future enacted tax rate of 21%. The following differences between financial and taxable income were reported by ABC for the current year (all numbers in millions): I. Excess of tax depreciation over book depreciation 11,500 II. Interest revenue on municipal bonds 1,600 III. Estimated warranty expense over actual expenditures 9,000 IV. Fines paid 6,400 Unrealized gains on marketable securities recognized for V. financial reporting 3,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question: Calculate ABC’s taxable income
Transcribed Image Text:ABC Company (ABC), a manufacturer of hybrid engine vehicles, had
pretax financial income of P30 billion for the year 20X1, its first year of
operations. ABC has a current tax rate of 24% and à future enacted tax
rate of 21%. The following differences between financial and taxable
income were reported by ABC for the current year (all numbers in
millions):
I. Excess of tax depreciation over book depreciation
11,500
II. Interest revenue on municipal bonds
1,600
II. Estimated warranty expense over actual expenditures
9,000
IV. Fines paid
6,400
Unrealized gains on marketable securities recognized for
V.
financial reporting
3,000
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