Reference no: EM133109094

Questions -

Q1. Chicken Wings Inc. reported P950,000 net income for the quarter ended September 30, 2020 which included the following after-tax items: A P600,000 gain realized in May 2020 was allocated equally to the second, third and fourth quarters of 2020. A P160,000 write-down of inventory of June 30, 2020. In addition, the entity paid P480,000 on February 1, 2020, for 2020 calendar-year real property tax. Of this amount, P120,000 was allocated to the third quarter of 2020. What is the net income for the quarter ended September 30, 2020?

Q2. Chicken Wings Corp. is preparing the interim financial statements for the quarter ended March 31, 2020. Sales during the quarter is P5,000,000. The variable expense is 20% based on sales. The fixed expense of P3,000,000 included P1,500,000 an advertisement expense for one-year (incurred evenly in the year) and depreciation expense of P600,000 for 2020 for an equipment that was available for use on March 1, 2020. How much is the total expense reported as of March 31, 2020?

Q3. Chicken Wings Company's profit before tax for the six months to September 30, 2021, was P5,000,000. However, the business is seasonal and profit before tax for the six months to March 31, 2022, is almost certain to be P9,000,000. Profit before tax equals taxable profit for this company. Chicken Wings operates in a country where income tax on companies is at a rate of 30% if annual profits are below P11,000,000 and a rate of 35% where annual profits exceed P11,000,000. These tax rates apply to the entire profit for the year. Under IAS 34 Interim Financial Reporting, what should be the income tax expense in Chicken Wings' interim financial statements for the half year to September 30, 2021?