Aloha Company provided the following information on December 31, 2020: Carrying amount Tax base Accounts receivable 1,500,000 1,750,000 Motor vehicle 1,650,000 1,250,000 Provision for warranty 120,000 0 Deposits received in advance 150,000 0 The depreciation rates for accounting and taxation are 15% and 25% respectively. The deposits are taxable when received and warranty costs are deductible when paid. An allowance for doubtful accounts of P250,000 has been raised against accounts receivable for accounting purposes but such accounts are deductible only when written off as uncollectible. The entity showed accounting income before tax of P8,000,000 for 2020. The income tax rate is 30% Thre are no temporary differences at the beginning of the current year: Required: Determine the deferred tax liability on December 31,2020. Determine the deferred tax asset on December 31, 2020. Determine the net deferred tax expense or benefit. Dtermine the current tax expense for 2020. Determine the total income tax expense for 2020.
Aloha Company provided the following information on December 31, 2020:
Carrying amount Tax base
Motor vehicle 1,650,000 1,250,000
Provision for warranty 120,000 0
Deposits received in advance 150,000 0
The
The deposits are taxable when received and warranty costs are deductible when paid.
An allowance for doubtful accounts of P250,000 has been raised against accounts receivable for accounting purposes but such accounts are deductible only when written off as uncollectible.
The entity showed accounting income before tax of P8,000,000 for 2020. The income tax rate is 30%
Thre are no temporary differences at the beginning of the current year:
Required:
- Determine the
deferred tax liability on December 31,2020. - Determine the
deferred tax asset on December 31, 2020. - Determine the net deferred tax expense or benefit.
- Dtermine the current tax expense for 2020.
- Determine the total income tax expense for 2020.
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