Problem 2:KAY Co. reported net income for the current year 2021 at P4,180,000 before taxes. Included in the determinationof the said net income were:Current tax rate30%P 84,000P 205,000Non-deductible expensesNon-taxable incomeAt the beginning of the year:Cumulative temporary difference creating future deductible amountCumulative temporary difference creating Future taxable amountP 1,110,000P 567,000At the end of the year:Cumulative temporary difference creating future deductible amountCumulative temporary difference creatingP 720,000P 632,000Required:9. What is the total deferred tax asset to be presented in the 2021 Statement of Financial Position?10. What is the total deferred tax liability to be presented in the 2021 Statement of Financial Position?

A deferred tax asset is an asset to the Company that arises if the Company has overpaid taxes or…

KAY Co. reported net income for the current year 2021 at 4,180,000 before taxes. Included in the determination of the said net income were: Current tax rate Non-deductible expenses Non-taxable income At the beginning of the year: Cumulative temporary difference creating future deductible amount Cumulative temporary difference creating Future taxable amount At the end of the year: Cumulative temporary difference creating future deductible amount Cumulative temporary difference creating Required: 30% 84,000 ► 205,000 1,110,000 ℗ 567,000 ℗ 720,000 632,000 9. What is the total deferred tax asset to be presented in the 2021 Statement of Financial Position? 10. What is the total deferred tax liability to be presented in the 2021 Statement of Financial Position?

KAY Co. reported net income for the current year 2021 at 4,180,000 before taxes. Included in the determination of the said net income were: Current tax rate Non-deductible expenses Non-taxable income At the beginning of the year: Cumulative temporary difference creating future deductible amount Cumulative temporary difference creating Future taxable amount At the end of the year: Cumulative temporary difference creating future deductible amount Cumulative temporary difference creating Required: 30% 84,000 ► 205,000 1,110,000 ℗ 567,000 ℗ 720,000 632,000 9. What is the total deferred tax asset to be presented in the 2021 Statement of Financial Position? 10. What is the total deferred tax liability to be presented in the 2021 Statement of Financial Position?

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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Arndt, Incorporated reported the following for 2024 and 2025 ($ in millions): Revenues. Expenses Pretax accounting income (income statement) Taxable income (tax return) Tax rate: 25% 2024 $888 760 $128 $116 a. Expenses each year include $30 million from a two-year casualty insurance policy purchased in 2024 for $60 million. The cost is tax deductible in 2024. Answer is complete but not entirely correct. Deferred tax amounts ($ in millions) Classification Net noncurrent deferred tax asset ✔ $ Net noncurrent deferred tax liability X $ 2025 $980 800 b. Expenses include $2 million insurance premiums each year for life insurance on key executives. c. Arndt sells one-year subscriptions to a weekly journal. Subscription sales collected and taxable in 2024 and 2025 were $33 million and $35 million, respectively. Subscriptions included in 2024 and 2025 financial reporting revenues were $25 million ($10 million collected in 2023 but not recognized as revenue until 2024) and $33 million,…
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