The Chief Financial Officer of ABC Company has presented the following information in line with the 2020 audit of ABC's financial statements: Pre-tax financial income: P9,700,000 Interest income on tax-exempt municipal bonds: 300,000 Depreciation claimed on the tax return in excess of financial depreciation: 500,000 Warranty expense reported in the income statement: 200,000 Actual warranty costs paid: 50,000 Income tax rate is 30%. At the beginning of the current year, the entity reported a deferred tax asset is zero and the deferred tax liability at P90,000. How much is the total tax expense for the current year? *

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The Chief Financial Officer of ABC Company has presented the following information in line
with the 2020 audit of ABC's financial statements:
Pre-tax financial income: P9,700,000
Interest income on tax-exempt municipal bonds: 300,000
Depreciation claimed on the tax return in excess of financial depreciation: 500,000
Warranty expense reported in the income statement: 200,000
Actual warranty costs paid: 50,000
Income tax rate is 30%. At the beginning of the current year, the entity reported a deferred tax
asset is zero and the deferred tax liability at P90,000.
How much is the total tax expense for the current year? * ,
O P 2,550,000
O P 2,820,000
O P 2,730,000
O P 2,700,000
Transcribed Image Text:The Chief Financial Officer of ABC Company has presented the following information in line with the 2020 audit of ABC's financial statements: Pre-tax financial income: P9,700,000 Interest income on tax-exempt municipal bonds: 300,000 Depreciation claimed on the tax return in excess of financial depreciation: 500,000 Warranty expense reported in the income statement: 200,000 Actual warranty costs paid: 50,000 Income tax rate is 30%. At the beginning of the current year, the entity reported a deferred tax asset is zero and the deferred tax liability at P90,000. How much is the total tax expense for the current year? * , O P 2,550,000 O P 2,820,000 O P 2,730,000 O P 2,700,000
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