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How much is the total income tax expense

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Reference no: EM133188878

Question - Aroyo Co. disclosed the following assets and liabilities at carrying amount at year- end:

Property 11,500,000.00

Plant and equipment 6,500,000.00

Inventory 4,000,000.00

Trade receivables 3,000,000.00

Trade payables 6,000,000.00

Cash 2,000,000.00

The value for tax purposes for property and for plant and equipment was P8,500,000 and 5,000,000 respectively.

The entity has made a provision for inventory obsolescence of P1,000,000 which is not allowed for tax purposes.

Further, an impairment charge against trade receivable of P1,000,000 has been made. This charge will not be allowed in the current for tax purposes.

Aroyo Co. reported net income of P9,000,000 for the current year.

There are no temporary differences at the beginning of the current year. The tax rate is 30%. How much is the total income tax expense?

Reference no: EM133188878

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