Solution-Compute income tax expense and provide the journal

Compute income tax expense and provide the journal entry

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Reference no: EM133060105

Question - Change in tax rate - Income tax expenseBEBE Co. has the following information for the year 20x1: Warranty obligation of P300,000 was accrued. This amount is tax deductible only when paid in 20x2.

Revenue of P1,600,000 was recognized using the percentage of completion method. Revenue is taxable only when collected. Total collections on progress billings were P1,400,000.

Pretax income for the year is P1,000,000. Income tax rate for 20x1 is 30%. However, an enacted tax law that will take effect starting January 1, 20x2 requires a tax rate of 32%.

There are no temporary differences on January 1, 20x1.

Requirement - Compute the income tax expense and provide the journal entry.

Reference no: EM133060105

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Compute income tax expense and provide the journal entry

Reference no: EM133060105

Reference no: EM133060105

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