Problem 16-13 (IFRS) P12,800,000 for 2020 and P18,300,000 for 2021. The tax rate is 30%. income Complex Company reported pretax accounting income of On January 1, 2020, the entity had deferred tax asset of provision of P500,000 P450,000 and no deferred tax liability. The deferred tax asset was due to a recognized on December 31, 2019 settled in 2020 at which time it was tax deductible. P1,000,000 collected in 2019 but earned only in 2020." recognized each The other reason for the deferred tax asset was rent of Life insurance premiums of P200,000 were year on key officers for 2020 and 2021. The entity paid for a two-year casualty insurance for P6,000,000 on January 1, 2020. The entire premium is tar deductible when paid. The entity collected rent from leasing some of its equipment. The rent is recognized as revenue when earned but taxable when collected. 2020 2021 3,300,000 2,500,000 3,500,000 3,300,000 Rent collected Rent earned The entity had trading investments. All gains and losses are recognized for tax purposes when the investments are sold. During 2020, the entity recognized P1,700,000 unrealized losses on trading investments which were sold in 2021. Required: 1. Compute taxable income for 2020 and 2021. 2. Compute current tax expense and total tax expensę for 2020 and 2021. 3. Compute deferred tax asset and deferred tax liability of December 31, 2020 and 2021. 4. Prépare journal entries for 2020 and 2021. 560
Problem 16-13 (IFRS) P12,800,000 for 2020 and P18,300,000 for 2021. The tax rate is 30%. income Complex Company reported pretax accounting income of On January 1, 2020, the entity had deferred tax asset of provision of P500,000 P450,000 and no deferred tax liability. The deferred tax asset was due to a recognized on December 31, 2019 settled in 2020 at which time it was tax deductible. P1,000,000 collected in 2019 but earned only in 2020." recognized each The other reason for the deferred tax asset was rent of Life insurance premiums of P200,000 were year on key officers for 2020 and 2021. The entity paid for a two-year casualty insurance for P6,000,000 on January 1, 2020. The entire premium is tar deductible when paid. The entity collected rent from leasing some of its equipment. The rent is recognized as revenue when earned but taxable when collected. 2020 2021 3,300,000 2,500,000 3,500,000 3,300,000 Rent collected Rent earned The entity had trading investments. All gains and losses are recognized for tax purposes when the investments are sold. During 2020, the entity recognized P1,700,000 unrealized losses on trading investments which were sold in 2021. Required: 1. Compute taxable income for 2020 and 2021. 2. Compute current tax expense and total tax expensę for 2020 and 2021. 3. Compute deferred tax asset and deferred tax liability of December 31, 2020 and 2021. 4. Prépare journal entries for 2020 and 2021. 560
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 9MC: Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and...
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