Reference no: EM132809471

Gore Company, organized on January 2, 2028, had a pretax accounting income of P7,000,000 and taxable income of P10,000,000 for the year ended December 31, 2028. The 2028 tax rate was 40%. The only difference between book and taxable income is estimated warranty costs.

Expected payments and scheduled enacted tax rates are as follows:

2029        P1,000,000          35%
2030            500,000          35%
2031             500,000         35%
2032            1,000,000        30%

Problem a) How much is the net income of Gore in 2028?

Problem b) What is the balance of deferred tax asset presented in the financial statement of 2030, if there was no other related transactions?

Problem c) If in 2031, the taxable income is P 12,000,000, how much is the income tax expense in that year?