In 2020, R and R Company received an advance payment of Php1,000,000, which was subject to tax but not reported in accounting income until 2021. The income statement and tax return showed the following: 2020 2021 Income before tax per income statement 6,000,000.00 9,000,000.00 Income before tax per tax return 7,000,000.00 8,000,000.00 Income tax rate 30% 32%

In 2020, R and R Company received an advance payment of Php1,000,000, which was subject to tax but not reported in accounting income until 2021. The income statement and tax return showed the following: 2020 2021 Income before tax per income statement 6,000,000.00 9,000,000.00 Income before tax per tax return 7,000,000.00 8,000,000.00 Income tax rate 30% 32%

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter13: Tax Credits And Payment Procedures

Section: Chapter Questions

Problem 25P

See similar textbooks

Related questions

Q: Explain how a change in tax rates affects the measurement of deferred tax amounts.

A: Deferred Tax Asset Items on a company's balance sheet that may be used to reduce taxable income in…

Q: Describe the types of temporary differences that cause deferred tax liabilities and determine the…

A: Deferred tax liabilities It is a type of liability that arises due to the difference between the tax…

Q: PROBLEM 23: The records of Santiago were destroyed by fire at the end of the current year. However,…

A: Income Statement:- The income statement is defined as the financial statement that explains revenues…

Q: Pampie Company reported in the income statement for the current year pretax income of Php400,000.…

A: Tax expense is the amount of tax that the entity has paid on its taxable income.

Q: 2021? 3. What is the current income tax payable at Decem

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: FUTA TAX MUST BE DEPOSITED WHEN THE CUMULATIVE QUARTERLY TAX LIABILITY EXCEEDS?

A: FUTA (Federal unemployment tax) Tax is required to be paid by an employer for the first $7000 wages…

Q: EL Co. reported net income for the current year 2021 at P560,000 before provision of income tax…

A: Deferred tax asset is the amount that represents the overpayment or the advance payment of tax, the…

Q: T Company reports the following revenues and expenses in its pretax financial income for the year…

A: Taxable Income: It is the income earned by the company as per income tax laws. Deferred Tax: It…

Q: An entity reported pretax accounting income of P5,000,000 for the current year. The taxable income…

A: Solution: Total income tax expense for the current year = pretax accounting income * tax rate

Q: What is the total deferred tax liability at December 31, 20x6? 2. What is the total deferred tax…

A: Step 1 Deferred tax is the tax which is the arises due to difference in between the accounting…

Q: In computing the change in deferred tax accounts, which tax rates are used? O A. Current tax rates…

A: SOLUTION- DEFERRED TAX LIABILITY AS BEING THE AMOUNT OF INCOME TAX PAYABLE IN FUTURE PERIODS IN…

Q: What is a temporary difference related to deferred taxes?

A: Deferred Taxes: The timing difference of tax effect called Deferred tax. Its recognized on all…

Q: EL Co. reported net income for the current year 2021 at P560,000 before provision of income tax…

A: Particulars Amount Accounting income per book P560000 Permanent differences :…

Q: Warriors Company reported taxable income of Php8,000,000 in the income tax return for the first year…

A: The correct answer for the above mentioned question is given in the following steps for your…

Q: On Jan. 1, 2020, Heat Company reported a deferred tax liability of Php1,000,000 and a deferred tax…

A: A deferred tax asset is an item on a company's balance sheet that reduces its taxable income in the…

Q: What are the two basic requirements applied to the measurement of current and deferred income taxes…

Q: GUCCI Corp. in its first year of operations has the following differences between the carrying value…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: What formula is used to “gross-up” supplementalpayments in order to cover the taxes on the…

A: The term "gross-up payroll" indicates a rise in basic pay that is done on purpose in order to lower…

Q: What is the effect of deferred tax asset and deferred tax liability on the current year’s income tax…

A: Deferred tax assets and deferred tax liability arises because of the timing differences of the…

Q: Why deferred tax rate assets and liabilities are recorded in balance sheet?

A: The reasons for the recognition and reporting of deferred tax assets are as follows: The following…

Q: Question 6 Use this chart for 6-8. William eams $20,940 annually as an accountant. He is married and…

A: The answer for the multiple choice question and relevant explanation are presented hereunder. The…

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

*see attached problem

REQUIRED:

What is the deferred tax balance at year-end?

In 2020, R and R Company received an advance payment of Php1,000,000, which
was subject to tax but not reported in accounting income until 2021.
The income statement and tax return showed the following:
2020
2021
Income before tax per income statement 6,000,000.00 9,000,000.00
Income before tax per tax return
7,000,000.00 8,000,000.00
Income tax rate
30%
32%

Definition Definition Estimated future tax made while preparing accounts. Deferred tax is estimated based on past and present transactions from financial statements. It is not the actual tax that needs to be paid or is refundable from the revenue authority; it is an accounting entry. It is necessary to account for deferred tax due to difference between accounting profits and taxable profits.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

XYZ Corp provided you with the following information
1. What amount should Tokwa't Baboy Company report in its 2020 income statement as total provision for income tax? Assume a 30% tax rate.
The following table pertains to C. J. Company: Year Taxable Income Tax Rate 2020 ($1,000,000) 25% 2021 $680,000 25% 2022 $725,000 20% What is income tax expense for 2021? Select one: a. $136,000 b. $80,000 c. $170,000 d. $0
1. Prepare journal entries to record the income tax and 2. Present the income tax expense in the income statement Problem 16-3 (ACP) In 2021, Argentina Company received an advance payment of P1,000,000, which was subject to tax but not reported in accounting income until 2022. The income statement and tax return showed the following: 2021 2022 Income before tax per income statement Income before tax per tax return Income tax rate 6,000,000 7,000,000 9,000,000 8,000,000 25% 25% Required: 1. Prepare journal entries to record the income tax a deferred tax for 2021 and 2022. for 2021 and 2022.
What is the income tax payable for 2020? (Apply the pre-CREATE law rulings)
1. soru At the end of 2019, The Business with 20% Corporate tax rate has Expenses: TL3.150.000 and Revenues: TL3.375.000. How much is the Tax Payable if the business prepaid income tax of TL15.000 during the accounting period? a.TL30.000 b.TL15.000 c.TL45.000 d.TL60.000
Prey Ltd accountant has estimated current tax of P50 000 based on the current profit. The income tax value of the non- current assets are P75 000 and the carrying amount of non-current assets as at 31 December 2020 is P90 000.Tax rate is 22%.1 Using information given above, calculate the deferred tax for the year ended 31 December 2020.2 Calculate the figure of the tax expense that should appear in the statement of profit or loss.3 State how should the deferred tax and current tax should be classified in the statement of financial position.
Assume that the Kelso Company operates in an industry for which NOL carryback is allowed. The Kelso Company had the following operating results: O $22,800. Year 2019 2020 2021 25% What is the income tax refund receivable? O $24,300 O $28,800. Income (loss) 54,000 57,000 (72,000) O 23,550. Tax rate 35% 30% Income tax 18,900first year of operations 17,100 0
1. What is the income tax payable for 2020? (Apply the pre-CREATE law rulings)
A company makes the following journal entry for 2021: Dr. Income Tax Expense xxxx Dr. Deferred Tax Asset 80,000 Cr. Deferred Tax Liability 16,000 Cr. Income Tax Payable 200,000 On the income statement, the amount for deferred portion of income tax expense for 2021 appears as: _______________. (Very important: Just enter the amount. DO NOT put a plus or minus sign in front of the amount.)
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:…
Ivanhoe Inc. reports the following pre-tax incomes (losses) for both financial reporting purposes and tax purposes: Year 2021 2022 2023 2024 Accounting Income (Loss) $129,000 (a) 101,000 (304,000) 222.000 Tax Rate Date 25 % 25 % 30 % The tax rates listed were all enacted by the beginning of 2021. Ivanhoe reports under the ASPE future income taxes method. 30 % Assume that Ivanhoe uses a valuation allowance to account for future tax assets, and also that it is more likely than not that 25% of the carryforward benefits will not be realized. Prepare the journal entries for 2023 and 2024. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.) Account Titles and Explanation (To record benefit from loss carryback) Debit Credit