For the year ended December 31, 2021, THREE Company reported pre-tax financial income of P7,500,000. The taxable income was P6,500,000. The difference is due to accelerated depreciation for income tax purposed. The income tax rate is 30% and the entity made estimated tax payment of P900,000 during the current year.

For the year ended December 31, 2021, THREE Company reported pre-tax financial income of P7,500,000. The taxable income was P6,500,000. The difference is due to accelerated depreciation for income tax purposed. The income tax rate is 30% and the entity made estimated tax payment of P900,000 during the current year.

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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Concept explainers

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.

Question

7. What amount of income tax payable should be presented at year end?

₱ 2,250,000

₱ 1,350,000

₱ 1,950,000

₱ 1,050,000

For the year ended December 31, 2021, THREE Company reported pre-tax financial income of
P7,500,000. The taxable income was P6,500,000. The difference is due to accelerated
depreciation for income tax purposed. The income tax rate is 30% and the entity made estimated
tax payment of P900,000 during the current year.

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