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

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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