The tax return of Okinawa Company indicates taxable profit of P15,000,000 on which a tax liability of P5,250,000 has been recognized. Following is a list of items that may be required to determine accounting profit from the amount of taxable profit: Accelerated depreciation for income tax purposes was P2,000,000 and straight-line financial depreciation is P1,500,000 Insurance premium of P100,000 on the life of an officer with Okinawa as beneficiary was not included as a deduction in the tax return Interest on treasury bills was not included in the tax return. During the year, Okinawa received P2,500,000 on these investments. What was Okinawa’s accounting profit?
The tax return of Okinawa Company indicates taxable profit of P15,000,000 on which a tax liability of P5,250,000 has been recognized. Following is a list of items that may be required to determine accounting profit from the amount of taxable profit: Accelerated depreciation for income tax purposes was P2,000,000 and straight-line financial depreciation is P1,500,000 Insurance premium of P100,000 on the life of an officer with Okinawa as beneficiary was not included as a deduction in the tax return Interest on treasury bills was not included in the tax return. During the year, Okinawa received P2,500,000 on these investments. What was Okinawa’s accounting profit?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The tax return of Okinawa Company indicates taxable profit of P15,000,000 on which a tax liability of P5,250,000 has been recognized. Following is a list of items that may be required to determine accounting profit from the amount of taxable profit:
- Accelerated
depreciation for income tax purposes was P2,000,000 and straight-line financial depreciation is P1,500,000 - Insurance premium of P100,000 on the life of an officer with Okinawa as beneficiary was not included as a deduction in the tax return
- Interest on treasury bills was not included in the tax return. During the year, Okinawa received P2,500,000 on these investments.
What was Okinawa’s accounting profit?
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