Solve and explain why it is the answer. 2. Proud Co.'s records on Dec. 31, 20x1 show the followingaccount balances:Trade accounts payable (net of P10,000 debit balance in suppliersaccount and P8,000 unreleased checks drawn)Deferred tax liability (expected to reverse in 20x2)10%, 4-year note payable issued on Aug. 1, 20x1600,00010,000240,000 Bonds payable (maturing in 5 equal annual installments of P400,000) 2,000,000Reserve for contingenciesHeld for trading financial liabilitiesIncome tax payableAccrued expensesStock dividends payable50,000100,000100,00010,00024,000How much is the total current liabilities?a. 1,120,000b. 1,210,000c. 1,220,000d. 1,238,000

Current liabilities: Liabilities that have to be paid within one year or one operating cycle,…

Answered: 2. Proud Co.'s records on Dec. 31, 20x1…

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter14: Taxes On The Financial Statements

Section: Chapter Questions

Problem 27P

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Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and taxable income for 2020. The prior period adjustment was the result of an error in calculating bad debt expense for 2019. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. When the company applies intraperiod income tax allocation, the prior period adjustment will be shown on the: a. income statement at 12,000 b. income statement at 8,400 (net of 3,600 income taxes) c. retained earnings statement at 12,000 d. retained earnings statement at 8,400 (net of 3,600 income taxes)
Marmol Corporation uses the allowance method for bad debts. During 2019, Marmol charged 50,000 to bad debt expense and wrote off 45,200 of uncollectible accounts receivable. These transactions resulted in a decrease in working capital of: a. 0 b. 4,800 c. 45,200 d. 50,000
In the current year, Madison Corporation had 50,000 of taxable income at a tax rate of 25%. During the year, Madison began offering warranties on its products and has a Warranty liability for financial reporting purposes of 5,000 at the end of the year. Warranty expenses are not deductible until paid for income tax purposes. Prepare the journal entry to record Madisons income taxes at the end of the year.
JAY Co. reported net income for the current year 2021 at ₱2,395,000 before taxes. Included in the determinationof the said net income were:Non-deductible expenses ₱ 319,200Accrued warranty expenses ₱ 54,000Rental payments made in advance ₱ 210,000Advance collections from customers ₱ 171,500Non-taxable income ₱ 125,800Provision for probable losses ₱ 65,000The income tax rate is 30% and is not expected to change in the future. Required: 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 taxexpense?6. Assuming that the expected income tax rate for the following year is 32%, what is the total deferredtax liability?
JAY Co. reported net income for the current year 2021 at ₱2,395,000 before taxes. Included in the determinationof the said net income were:Non-deductible expenses ₱ 319,200Accrued warranty expenses ₱ 54,000Rental payments made in advance ₱ 210,000Advance collections from customers ₱ 171,500Non-taxable income ₱ 125,800Provision for probable losses ₱ 65,000The 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?
At the beginning of 2021, Pitman Co. had pretax financial income of $1,200,000. Additionally, there was a timing difference of $300,000 due to an accounts receivable that will not be collected until the following year. The tax rate us 30%. A. Calculate the total taxable income for 2021. B. Calculate Income tax expense, income tax payable, and the deferred amount for 2021, and create the journal entry.
Twice KPOP Company disclosed the following information on December 31, 2021: SSS payable P20,000 Notes Payable P40,000 Deferred tax liability P10,000 Notes payable due to bank, 12% interest bearing note payable yearly,issued on August 31, 2021, maturing on August 31, 2022 P1,000,000 Mortgage payable, issued on March 1, 2012, maturing after 10 years P1,500,000 Accounts receivable, after deducting credit balances of customers’accounts amounting to ₱42, 500 P150,000 Required: Compute for the Current liabilities as of December 31, 2021
4 On March 25, 2021, you were engaged by XYZ Corporation to check its tax compliance and at the same time, were tasked to file its up coming 1st quarter VAT Quarterly Return (BIR Form 2550Q) The following data were gathered from the Sales and Purchases Books of XYZ Corporation: Excerpt from company’s sales invoices Sales (VAT Inclusive for sales with 12% VAT) Amount Regular Sales 8,960,000 Sales to government 6,720,000 Zero-rated sale 4,000,000 VAT-exempt sale 2,000,000 Excerpt from supplier’s invoices Purchases (VAT Inclusive) Amount Purchase of capital goods 1,120,000 Domestic purchase of goods 3,360,000 Domestic purchase of service 2,240,000 Importation 560,000 Excerpt from vouchers with liquidation report VAT monthly payment (Jan-Feb returns) P 400,000 Required: How much Total Amount Payable/(Overpayment) will you input in line 29 of…
A company's trial balance at 31 December 2021 shows a debit balance of GHS700,000 on current tax and a credit balance of GHS8,400,000 on deferred The directors have estimated the provision for income tax for the year at GHS4.5m and the required deferred tax provision is GHS5.6m, GHS1.2m of which relates to a property revaluation. What is the profit or loss income tax charge for the year ended 31 December 2021?
JAM Company recorded in its books taxes and licenses expenses amounting to P51,055,000. The breakdown of the taxes and licenses account is as follows:Payment of deficiency FBT, P25,000,000CGT on sale of real properties, P200,000CGT on sale of shares of stock, P50,000Other percentage tax on sale of shares of stock, P5,000Payment of surcharge, P6,250,000Payment of interest on deficiency FBT, P1,250,000Payment of compromise penalties, P300,000Business taxes and licenses, P18,000,000How much of the above payments are deductible from gross income?
On August 31, Latty Co. partially refinanced $900,000 of its outstanding 10% note payable made one year ago to Dugan State Bank by paying $900,000 plus $90,000 interest, having obtained the $990,000 by using $262,000 cash and signing a new one-year $800,000 note discounted at 9% by the bank. Instructions (1) Make the entry to record the partial refunding. (2) Prepare the adjusting entry at December 31, assuming straight-line amortization of the discount
Aloha Company provided the following information on December 31, 2020: Carrying amount Tax base Accounts receivable 1,500,000 1,750,000 Motor vehicle 1,650,000 1,250,000 Provision for warranty 120,000 0 Deposits received in advance 150,000 0 The depreciation rates for accounting and taxation are 15% and 25% respectively. The deposits are taxable when received and warranty costs are deductible when paid. An allowance for doubtful accounts of P250,000 has been raised against accounts receivable for accounting purposes but such accounts are deductible only when written off as uncollectible. The entity showed accounting income before tax of P8,000,000 for 2020. The income tax rate is 30% Thre are no temporary differences at the beginning of the current year: Required:…

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