The ABC Company has determined that its taxable income for the year 2021 is P3,000,000. The following related facts were gathered (Income tax rate for current and future years is 30%): Cumulative temporary differences, 12/31/2021 Taxable temporary differences- P1,480,000 Deductible temporary differences- P750,000 Permanent differences: Non-taxable revenue- P200,000 Non-deductible expenses- P600,000 Deferred tax asset, December 31, 2020- P150,000 Deferred tax liability, December 31, 2020- P300,000 How much is the total income tax expense (current and deferred) for the year 2021? A.P969,000 B.P900,000 C.P831,000 D.P813,000

The ABC Company has determined that its taxable income for the year 2021 is P3,000,000. The following related facts were gathered (Income tax rate for current and future years is 30%): Cumulative temporary differences, 12/31/2021 Taxable temporary differences- P1,480,000 Deductible temporary differences- P750,000 Permanent differences: Non-taxable revenue- P200,000 Non-deductible expenses- P600,000 Deferred tax asset, December 31, 2020- P150,000 Deferred tax liability, December 31, 2020- P300,000 How much is the total income tax expense (current and deferred) for the year 2021? A.P969,000 B.P900,000 C.P831,000 D.P813,000

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter14: Taxes On The Financial Statements

Section: Chapter Questions

Problem 20CE

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As of December 31, 2022, its first year of operations, Batangas Company had taxable temporary differences totaling P3,000,000. Of this total, P1,000,000 relates to current items. Batangas also had deductible temporary differences totaling P1,500,000, P250,000 of which relates to current items. Pretax financial income for the year was P20,000,000. The income tax rate is 35%. How much income tax payable should Batangas Company report on December 31, 2022?
Regine Company computed a pre-tax financial income of P6,000,000 for the year ended December 31, 2020. The following differences are noted between taxable and accounting income:· Nontaxable revenue: P600,000· Nondeductible expense: P200,000· Warranty provision accrued and expensed in 2020 but tax-deductible when paid: P300,000· Excess tax depreciation over accounting depreciation: P250,000· Excess of accounting revenue over tax revenue (timing difference): P200,000Current tax rate for 2020 is 32% while tax rate for 2021 and forward is 30%. How much is the total tax expense? a. 1,744,000 b. 1,699,000 c. 1,789,000 d. 1,792,000
At the end of the year, a deductible temporary difference of $40 million has been recognised due to the difference between the carrying amount of a liability account for estimated expenses and its tax base. Taxable income is $50 million. No temporary differences existed at the beginning of the year, and the tax rate is 35%. Required: a. Prepare the journal entry(s) to record income taxes during the period. b.How much will income tax expense be shown in the income statement? c. What will be the balance sheet disclosure during the period regarding taxes?
Integrity Company computed a pre-tax financial income of P2,200,000 for its first year of operations ended December 31, 2021. In preparing the income tax return, the accountant determined the following differences between financial and taxable income: Non-deductible expenses – P400,000 Non-taxable revenues – P150,000 Temporary difference (installment sales reported in financial income but not in taxable income) – P700,000 The enacted tax rates and the reversal of the temporary difference are as follows (see image below).How much is the Total Income Tax Expense in 2021? a. P749,000 b. P945,000 c. P762,600 d. P707,400
KAY Co. reported net income for the current year 2021 at ₱4,180,000 before taxes. Included in the determinationof the said net income were:Current tax rate 30%Non-deductible expenses ₱ 84,000Non-taxable income ₱ 205,000At the beginning of the year:Cumulative temporary difference creating future deductible amount ₱ 1,110,000Cumulative temporary difference creating Future taxable amount ₱ 567,000At the end of the year:Cumulative temporary difference creating future deductible amount ₱ 720,000Cumulative temporary difference creating ₱ 632,000 Required:7. How much is the current tax expense?8. How much is the total tax expense?9. What is the total deferred tax asset to be presented in the 2021 Statement of Financial Position?10. What is the total deferred tax liability to be presented in the 2021 Statement of Financial Position?
Cris Company reported the following results for the year ended December 31, 2020, its first year of operations:· Income (per books before income taxes)- P750,000· Taxable income-P1,200,000The disparity between book income and taxable income is attributable to a temporary difference which will reverse in 2021. What should Cris record as a net deferred tax asset or liability for the year ended December 31, 2020, assuming that the enacted tax rates in effect are 40% in 2020 and 35% in 2021?
Acer, Inc. reported a taxable income of P8,000,000 in its Form 1702 for its first year of operations, calendar year 2020. Below are the differences between taxable and financial income:· Excess tax depreciation over accounting depreciation: P500,000· Revenue collected for tax in excess of accounting revenue: P2,000,000· Tax penalties expensed in the income statement: P200,000Income tax rate is 30%. What is the NET DEFERRED TAX EXPENSE for 2020? a. 450,000 benefit b. 450,000 expense c. 510,000 benefit d. 510,000 expense
Metlock Company reported the following pretax financial income (loss) for the years 2018-2022. 2018 $235,200 2019 343,000 2020 117,600 2021 (558,600) 2022 176,400 Pretax financial income (loss) and taxable income (loss) were the same for all years involved. The enacted tax rate was 34% for 2018 and 2019, and 20% for 2020-2022. Assume the carryback provision is used first for net operating losses. SUPPO
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Pretax accounting income for the year ended December 31, 2021, was $54 million for Truffles Company. Truffles' taxable income was $69 million. This was a result of differences between straight-line depreciation for financial reporting purposes and accelerated depreciation for tax purposes. The enacted tax rate is 21% for 2021 and 31% thereafter. What amount should Truffles report as the current portion of income tax expense for 2021?
IT Company reported the following results for the year ended December 31, 2020, its first year of operations: Income (per books before income taxes)- P750,000 Taxable income-P1,200,000 The disparity between book income and taxable income is attributable to a temporary difference which will reverse in 2021. What should IT record as a net deferred tax asset or liability for the year ended December 31, 2020, assuming that the enacted tax rates in effect are 40% in 2020 and 35% in 2021? A.P157,500 deferred tax liabilityB.P157,500 deferred tax assetC.P180,000 deferred tax liabilityD.P180,000 deferred tax asset
Sunland Company reports pretax financial income of $72,600 for 2025. The following items cause taxable income to be different than pretax financial income. 2. Depreciation on the tax return is greater than depreciation on the income statement by $17,200. Rent collected on the tax return is greater than rent recognized on the income-statement by $20,300. 3. Fines for pollution appear as an expense of $9,900 on the income statement. Sunland's tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2025. (a) X Your answer is incorrect. Compute taxable income and income taxes payable for 2025. Taxable income $ 92500 Income taxes payable $ 27750