Answered: During the current year, estimated tax…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 12P: Comprehensive Colt Company reports pretax financial income of 143,000 in 2019. In addition to pretax...

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An entity provided the following adjusted balances at year-end:

Cash	550,000	Share premium	600,000
Accounts receivable	1,650,000	Retained earnings	700,000
Prepaid taxes	300,000	Translation adjustment-debit	500,000
Accounts payable	200,000	Revenue	3,600,000
Share capital	500,000	Expenses	2,600,000

During the current year, estimated tax payments of P300,000 were charged to prepaid taxes. The entity has not yet recorded income tax expense. There were no differences between financial income and taxable tax income and tax rate is 30%. Included in accounts receivable is P500,000 due from a customer. Special terms granted to this customer require payment in equal semi-annual installments of P125,000 every April 1 and October 1.

What amount should be reported as total current assets?
1,950,000 2,200,000
2,500,000 2,250,000
What amount should be reported as total retained earnings?
1,700,000 700,000
1,400,000 900,000
What is the total shareholders’ equity?
2,500,000 1,800,000
2,000,000 1,300,000

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