Rent Income, net of 5% creditable withholding tax 500,000.00 Professional Fees, net of 10% creditable withholding tax 850,000.00 Royalties, net of 20% final tax Dividends from domestic corporation 150,000.00 15,000.00

Rent Income, net of 5% creditable withholding tax 500,000.00 Professional Fees, net of 10% creditable withholding tax 850,000.00 Royalties, net of 20% final tax Dividends from domestic corporation 150,000.00 15,000.00

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

Basi Inc., a domestic corporation, reported the following:

Determine the total gross income subject to regular income tax.

Rent Income, net of 5% creditable withholding tax
500,000.00
Professional Fees, net of 10% creditable withholding tax
850,000.00
Royalties, net of 20% final tax
Dividends from domestic corporation
150,000.00
15,000.00

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