Reference no: EM133106527
Question 1 - Intermediate Accounting - A reconciliation of Andolana Company's pretax accounting income with its taxable income for 2021, its first year of operations, is as follows:
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Pretax accounting income
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P3,000,000
|
|
Excess tax depreciation
|
(180,000)
|
|
Taxable income
|
P2,820,000
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The excess tax depreciation will result in equal net taxable amounts in each of the next three years. Enacted tax rates are 40% in 2021, 35% in 2022 and 2023, and 30% in 2024. What the total deferred tax liability to be reported on Andolana's balance sheet at December 31, 2021?
a. P72,000
b. P60,000
c. P63,000
d. P54,000
Question 2 - The carrying amounts and tax bases for selected assets and liabilities of Cacar Company as of December 31, 2021.
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Carrying Amount
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Tax Base
|
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Cash
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P500,000
|
P500,000
|
|
Trade and other receivables (net)
|
1,500,000
|
1,780,000
|
|
Property, plant and equipment (net)
|
4,500,000
|
2,800,000
|
|
Trade and other payables
|
2,000,000
|
2,000,000
|
|
Accrued warranty obligation
|
800,000
|
-
|
Additional Information:
DTA, Beg. is P300,000, DTL, Beg. is P240,000. Taxable income for the year 2021 is P1,800,000. During the year, Cacar Company paid income taxes of P400,000, P150,000 of which relates to the year 2020. Assume a tax rate of 30% for all years.
Required - How much is the total income tax expense recorded for the year ended December 31, 2021?
a. P246,000
b. P270,000
c. P540,000
d. P786,000