ABC Company (ABC), a manufacturer of hybrid engine vehicles, had pretax financial income of P30 billion for the year 20X1, its first year of operations. ABC has a current tax rate of 24% and a future enacted tax rate of 21%. The following differences between financial and taxable income were reported by ABC for the current year (all numbers in millions): 1. Excess of tax depreciation over book depreciation 11,500 II. Interest revenue on municipal bonds 1,600 II. Estimated warranty expense over actual expenditures IV. Fines paid 9,000 6,400 Unrealized gains on marketable securities recognized for V. financial reporting 3,000

ABC Company (ABC), a manufacturer of hybrid engine vehicles, had pretax financial income of P30 billion for the year 20X1, its first year of operations. ABC has a current tax rate of 24% and a future enacted tax rate of 21%. The following differences between financial and taxable income were reported by ABC for the current year (all numbers in millions): 1. Excess of tax depreciation over book depreciation 11,500 II. Interest revenue on municipal bonds 1,600 II. Estimated warranty expense over actual expenditures IV. Fines paid 9,000 6,400 Unrealized gains on marketable securities recognized for V. financial reporting 3,000

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter14: Taxes On The Financial Statements

Section: Chapter Questions

Problem 4BCRQ

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