Reference no: EM132838263

Mislane Company reported a net income for the current year 2020 at P10,000,000 before taxes. Included in the determination of the said net income were Permanent Differences Non-deductible expenses P 100,000 Non-taxable income 500,000 Temporary differences at the beginning of the year: Accrued warranty expense 250,000 Rental payments in advance 400,000 Advance collections from customers 500,000 Provision for probable losses 900,000 The income tax rate is 40% and is not expected to change in the future.

Problem 1. How much is the current tax expense?

a. 3,840,000
b. 4,340,000
c. 4,000,000
d. 3,340,000

Problem 2. How much is the total tax expense?

a. 3,840,000
b. 4,340,000
c. 4,000,000
d. 3,340,000

Problem 3. What is the total deferred tax asset to be presented in the 2020 Statement of Financial Position?

a. 660,000
b. 160,000
c. 460,000
d. 360,000

Problem 4. What is the total deferred tax liability to be presented in the 2020 Statement of Financial Position?

a. 660,000
b. 160,000
c. 460,000
d. 360,000

Problem 5. Assuming that the expected income tax rate for the following year is 35%, what is the total deferred tax liability?

a. 140,000
b. 577,500
c. 660,000
d. 160,000

Problem 6. Assuming that the expected income tax rate for the following year is 35%, what is the total deferred tax asset?

a. 140,000
b. 577,500
c. 660,000
d. 160,000