Reference no: EM132740116

Milan Company reported current tax expense of P5,000,000 for 2017. The changes in assets and liabilities are as follows:

                                                 December 31, 2017                December 31, 2016

Deferred tax asset                1,000,000                              800,000

Deferred tax liability               450,000                                 600,000

Income tax payable                 500,000                              200,000

Problem 1: The deferred tax liability was caused by accelerated depreciation and the deferred tax asset is for rentals received in advance. What amount of total tax expense should be recognized in 2017?

Option 1: 4,950,000
Option 2: 4,650,000
Option 3: 5,350,000
Option 4: 5,650,000