Reference no: EM133096547

Question - JAY Co. reported net income for the current year 2021 at P2,395,000 before taxes. Included in the determination of the said net income were:

Non-deductible expenses P319,200

Accrued warranty expenses 54,000

Rental payments made in advance P210,000

Advance collections from customers P171,500

Non-taxable income P125,800

Provision for probable losses P65,000

The income tax rate is 30% and is not expected to change in the future.

Required -

1. How much is the current tax expense?

2. How much is the total tax expense?

3. What is the total deferred tax asset to be presented in the 2021 Statement of Financial Position?

4. What is the total deferred tax liability to be presented in the 2021 Statement of Financial Position?

5. Assuming that the expected income tax rate for the following year is 32%, what is the total tax expense?

6. Assuming that the expected income tax rate for the following year is 32%, what is the total deferred tax liability?