Omskirt Company reported an excess of warranty expense over warranty deductions of P720,000 for the year ended December 31, 2019. This temporary difference will reverse in equal amounts over the years 2020 through 2022. The enacted tax rates are as follows: 2019 - 30% 2020 - 32% 2021 - 34% 2022 - 36% The reporting for this temporary difference at December 31, 2019 would be: a. deferred tax liability of P216,000. b. deferred tax asset of P244,800. c. deferred tax liability of P244,800. d. deferred tax asset of P216,000.
Omskirt Company reported an excess of warranty expense over warranty deductions of P720,000 for the year ended December 31, 2019. This temporary difference will reverse in equal amounts over the years 2020 through 2022. The enacted tax rates are as follows: 2019 - 30% 2020 - 32% 2021 - 34% 2022 - 36% The reporting for this temporary difference at December 31, 2019 would be: a. deferred tax liability of P216,000. b. deferred tax asset of P244,800. c. deferred tax liability of P244,800. d. deferred tax asset of P216,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Omskirt Company reported an excess of warranty expense over warranty deductions of P720,000 for the year ended December 31, 2019. This temporary difference will reverse in equal amounts over the years 2020 through 2022. The enacted tax rates are as follows:
2019 - 30%
2020 - 32%
2021 - 34%
2022 - 36%
The reporting for this temporary difference at December 31, 2019 would be:
a. deferred tax liability of P216,000.
b. deferred tax asset of P244,800.
c. deferred tax liability of P244,800.
d. deferred tax asset of P216,000.
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