Reference no: EM133104253
Question - ABC Co. reported net income for the current year 2018 at P10,000,000 before taxes. Included in the determination of the said net income were:
Fines, penalties and surcharges P20,000
Life insurance expense 30,000
Goodwill impairment 50,000
Interest income subject to final tax 100,000
Royalty income subject to final tax 150,000
Dividend income from a domestic corporation 120,000
Life insurance settlement income 130,000
Accrued warranty expense 550,000
Commission payments made in advance 400,000
Advance rent collections 500,000
Provisions for probable losses arising from lawsuits 900,000
Accrued service income 300,000
The income tax rate is 40% and is not expected to change in the future.
1. How much is the current tax expense?
a. P4,340,000
b. P4,304,000
c. P4,280,000
d. P4,300,000
2. How much is the total tax expense?
a. P3,840,000
b. P3,480,000
c. P3,500,000
d. P3,630,000
3. What is the total deferred tax asset to be presented in the 2018 Statement of Financial Position?
a. P780,000
b. P708,000
c. P700,000
d. P700,000
4. What is the total deferred tax liability to be presented in the 2018 Statement of Financial Position?
a. P280,000
b. P208,000
c. P200,000
d. P780,000
5. Assuming expected income tax rate for the following year is 35%, what is the total tax expense?
a. P3,902,500
b. P3,900,500
c. P3,900,000
d. P3,700,500
6. Assuming expected income tax rate for the ff. year is 35%, what is the total deferred tax liability?
a. P245,000
b. P254,000
c. P240,500
d. P254,500
7. Assuming expected income tax rate for the ff. year is 35%, what is the total deferred tax asset?
a. P628,500
b. P682,500
c. P682,000
d. P652,500
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