okwa't Baboy Company prepared the following reconciliation of income per books with income per tax return for the year ended December 31, 2020.  Book income before taxes- P750,000 Construction contract revenue which will reverse in 2021- P100,000 Depreciation expense that will reverse in equal amounts in each of the next five years- (P400,000) Taxable income- P450,000 What amount should Tokwa't Baboy Company report in its 2020 income statement as total provision for income tax? Assume a 30% tax rate.

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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.