Sweet and Sour Company had pretax accounting income of P2,400,000 during 2020. Sweet and Sour Company’s temporary difference for 2020 relates to a sale made in 2019 and recognized for accounting purposes at that time. However, Sweet and Sour Company uses the installment method of revenue recognition for tax purposes. During 2020, the company collected a receivable from the 2019 sale which resulted in P600,000 of income under the installment method.  What is Sweet and Sour Company’s taxable income for 2020?

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Q: pretax accounting income

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Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.