Reference no: EM132911864

Problem 1 - DL, Inc. maintains a defined contribution plan. It contributed P500,000 and P700,000 in 2019 and 2020. 20% of these amounts pertains to employee share pre-deducted from their bonuses.

Required - Compute the deductible pension expense in 2020.

Problem 2 - Mr. Paco reported the following income and expenses in 2020:

Gross compensation income P600,000

Gross professional fees 800,000

Dividend income 10,000

Interest income from deposit 15,000

Cash donation to the government for public purpose 60,000

Fair value of property donation to accredited non- profit institutions (Property book value is P80,000) 120,000

Interest on borrowings 24,000

Personal and family expenses 200,000

Entertainment and recreation expense 8,000

Other operating expenses of practice 120,000

Mandatory payroll deductions 20,000

Exempt benefits 40,000

Required - Compute the following

a. Deductible contribution expense

b. Taxable compensation income

c. Net income

d. Taxable income