The accounting records of M&M Inc. show the following data for 2020 (its first year of operations). 1. Life insurance expense on officers (where the company is the beneficiary) was P9,000. 2. Equipment was acquired in early January for P300,000. Straight-line depreciation over a 5- year life is used, with no salvage value. For tax purposes, M&M used a 30% rate to calculate depreciation. 3. Interest revenue on Bangko Sentral ng Pilipinas bonds totaled P4,000. 4. Product warranties were estimated to be P50,000 in 2020. Actual repair and labor costs related to the warranties in 2020 were P10,000. The remainder is estimated to be paid evenly in 2021 and 2022. 5. Gross profit on an accrual basis was P100,000. For tax purposes, P75,000 was recorded on the installment-sales method. 6. Fines incurred for pollution violations were P4,200. 7. Pretax financial income was P750,000. The tax rate is 30%. If the company pays income taxes amounting to P100,000 during the year, how much is the income tax payable at the end of 2020?

The accounting records of M&M Inc. show the following data for 2020 (its first year of operations). 1. Life insurance expense on officers (where the company is the beneficiary) was P9,000. 2. Equipment was acquired in early January for P300,000. Straight-line depreciation over a 5- year life is used, with no salvage value. For tax purposes, M&M used a 30% rate to calculate depreciation. 3. Interest revenue on Bangko Sentral ng Pilipinas bonds totaled P4,000. 4. Product warranties were estimated to be P50,000 in 2020. Actual repair and labor costs related to the warranties in 2020 were P10,000. The remainder is estimated to be paid evenly in 2021 and 2022. 5. Gross profit on an accrual basis was P100,000. For tax purposes, P75,000 was recorded on the installment-sales method. 6. Fines incurred for pollution violations were P4,200. 7. Pretax financial income was P750,000. The tax rate is 30%. If the company pays income taxes amounting to P100,000 during the year, how much is the income tax payable at the end of 2020?

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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