Reference no: EM132831843
Question - Psicom Company reported net income for the current year 2020 at P5,000,000 before taxes. Included in the determination of the said net income were:
Permanent Differences
Non-deductible expenses P150,000
Non-taxable income 50,000
Temporary differences at the beginning of the year:
Cumulative temporary difference creating future deductible amount P1,200,000
Cumulative temporary difference creating future taxable amount 800,000
Temporary differences at the end of the year:
Cumulative temporary difference creating future deductible amount P1,600,000
Cumulative temporary difference creating future taxable amount 500,000
The income tax rate is 40% and is not expected to change in the future.
Required -
1. How much is the current tax expense?
a. 2,320,000
b. 2,040,000
c. 2,000,000
d. 1,650,000
2. How much is the total tax expense?
a. 2,320,000
b. 2,040,000
c. 2,000,000
d. 1,650,000
3. What is the total deferred tax asset to be presented in the 2020 Statement of Financial Position?
a. 480,000
b. 320,000
c. 640,000
d. 200,000
4. What is the total deferred tax liability to be presented in the 2020 Statement of Financial Position?
a. 480,000
b. 320,000
c. 640,000
d. 200,000