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What amount related to insurance should be reported

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On April 1,2019, ABC Company prepaid a P 38,000 premium on an annual insurance policy. The premium payment was a tax deductible expense in ABC's cash basis tax return. The accrual basis income statement will report a P 28,500 insurance expense in 2019 and 9,500 insurance expense for 2020. Income tax rate is 30% in 2019 and in subsequent years.

Problem 1: In ABC's December 31,2019 statement of financial position, what amount related to insurance should be reported as deferred tax liability?

Reference no: EM132828039

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