ABC Company reported in its 2019 current tax expense at P 5,530,000. The following changes in ABC asset's and liabilities are as follows: Deferred tax asset 12/31/2019-200,000 12/31/2018-500,000   Deferred tax liability 12/31/2019-420,000 12/31/2018-600,000 Income tax payable 12/31/2019-850,000 12/31/2018-200,000 \ The deferred tax liability was caused by accelerated depreciation and the deferred tax asset is for rentals received in advance. How much is ABC's total income tax expense?

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A:

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A: The answers have been mentioned below.

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.