Please answer in good accounting form. Thankyou8. Compute for the deferred tax asset. NINE Company reported a pre-tax financial income of P8,584,950 for the year ended December31, 2021. The following items were also noted:Insurance premium on life of an officer with NINE Companyas the beneficiaryTax depreciationFinancial depreciation175,000785,900572,150Penalties due to late filing of income tax returns80,650Dividend received348,250Estimated litigation loss accrued for financial accountingpurposes deductible when settled in the futureEstimated doubtful accounts expense275,875197,745Estimated tax paymentsIncome tax rateCash received for rent of which P486,280 will be recognizedas income by the company on the next year500,50035%589,125

The deferred tax asset decreases the tax liability in future periods because it is a balance sheet…

NINE Company reported a pre-tax financial income of $8,584,950 for the year ended December 31, 2021. The following items were also noted: Insurance premium on life of an officer with NINE Company as the beneficiary Tax depreciation Financial depreciation Penalties due to late filing of income tax returns Dividend received Estimated litigation loss accrued for financial accounting purposes deductible when settled in the future Estimated doubtful accounts expense Estimated tax payments Income tax rate Cash received for rent of which #486,280 will be recognized as income by the company on the next year P 175,000 785,900 572,150 80,650 348,250 275,875 197,745 500,500 35% 589,125

NINE Company reported a pre-tax financial income of $8,584,950 for the year ended December 31, 2021. The following items were also noted: Insurance premium on life of an officer with NINE Company as the beneficiary Tax depreciation Financial depreciation Penalties due to late filing of income tax returns Dividend received Estimated litigation loss accrued for financial accounting purposes deductible when settled in the future Estimated doubtful accounts expense Estimated tax payments Income tax rate Cash received for rent of which #486,280 will be recognized as income by the company on the next year P 175,000 785,900 572,150 80,650 348,250 275,875 197,745 500,500 35% 589,125

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

Please answer in good accounting form. Thankyou

8. Compute for the deferred tax asset.

NINE Company reported a pre-tax financial income of P8,584,950 for the year ended December
31, 2021. The following items were also noted:
Insurance premium on life of an officer with NINE Company
as the beneficiary
Tax depreciation
Financial depreciation
175,000
785,900
572,150
Penalties due to late filing of income tax returns
80,650
Dividend received
348,250
Estimated litigation loss accrued for financial accounting
purposes deductible when settled in the future
Estimated doubtful accounts expense
275,875
197,745
Estimated tax payments
Income tax rate
Cash received for rent of which P486,280 will be recognized
as income by the company on the next year
500,500
35%
589,125

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.

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