Xavier Company provided the following information for its first year of operations ended December 31, 2021 in connection with the preparation of its income tax return: Taxable income                                                             P 4,000,000 Non-deductible expenses                                                  200,000 Non-taxable revenue                                                           300,000 Deferred income on installment sale included in financial income but taxable in 2022                                                                                   450,000 Doubtful accounts recorded                                              100,000 Financial depreciation                                                         300,000 Tax depreciation                                                                   350,000 Estimated warranty cost accrued in 2021 but not deductible for tax purposes until paid                                                              100,000 Income tax rate                                                                         30%   a. Determine the deferred tax expense or benefit of Xavier Company. b. Determine the total income tax expense of Xavier Company

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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PROBLEM 1
Xavier Company provided the following information for its first year of operations ended December 31, 2021 in connection with the preparation of its income tax return:
Taxable income                                                             P 4,000,000
Non-deductible expenses                                                  200,000
Non-taxable revenue                                                           300,000
Deferred income on installment sale
included in financial income but taxable
in 2022                                                                                   450,000
Doubtful accounts recorded                                              100,000
Financial depreciation                                                         300,000
Tax depreciation                                                                   350,000
Estimated warranty cost accrued in
2021 but not deductible for tax
purposes until paid                                                              100,000
Income tax rate                                                                         30%
 
a. Determine the deferred tax expense or benefit of Xavier Company.
b. Determine the total income tax expense of Xavier Company.
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