Reference no: EM133149190

Question - Dunn Co.'s 2020 income statement reported P90,000 income before provision for income taxes. The compute the provision for current income tax, the following data are provided:

Rent received in advance P16,000

Income from exempt municipal bonds 20,000

Depreciation deducted for income tax purposes in excess of depreciation reported for financial statement purposes 10,000

Enacted corporate income tax rate 25%

Required -

1. On December 31, 2020, determine the amount of deferred tax asset to be recognized?

2. Determine the amount of current income tax liability to be reported in Dunn's Statement of Financial Position?

3. Determine the amount of net deferred tax expense/benefit?

4. Prepare the journal entries to record the deferred tax in 2020.