You were asked by your audit client Panga Inc., to assist them in preparing its income tax return for the period ended December 31, 2021. You investigation revealed the following information: Pre-tax financial income P10,000,000 Estimated litigation loss recognized as a provision for the current year 600,000 Accrued rental income 1,200,000 Prepaid operating expenses 250,000 Unearned rental income 300,000 Dividend income from domestic corporation 500,000 Life insurance expense 300,000 Current income tax is 25% and is expected to remain in 2022 but will increase to 30% in 2023. Assuming all temporary differences will clear by 2022, what is the total tax expense for the year?
You were asked by your audit client Panga Inc., to assist them in preparing its income tax return for the period ended December 31, 2021. You investigation revealed the following information: Pre-tax financial income P10,000,000 Estimated litigation loss recognized as a provision for the current year 600,000 Accrued rental income 1,200,000 Prepaid operating expenses 250,000 Unearned rental income 300,000 Dividend income from domestic corporation 500,000 Life insurance expense 300,000 Current income tax is 25% and is expected to remain in 2022 but will increase to 30% in 2023. Assuming all temporary differences will clear by 2022, what is the total tax expense for the year?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
You were asked by your audit client Panga Inc., to assist them in preparing its income tax return for the period ended December 31, 2021. You investigation revealed the following information:
|
Pre-tax financial income |
P10,000,000 |
|
Estimated litigation loss recognized as a provision for the current year |
600,000 |
|
Accrued rental income |
1,200,000 |
|
Prepaid operating expenses |
250,000 |
|
Unearned rental income |
300,000 |
|
Dividend income from domestic corporation |
500,000 |
|
Life insurance expense |
300,000 |
Current income tax is 25% and is expected to remain in 2022 but will increase to 30% in 2023.
Assuming all temporary differences will clear by 2022, what is the total tax expense for the year?
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