ABC’s pre-tax financial income is P1,800,000. Current income tax rate is 30%. In ABC Company’s books and tax returns, the following differences have been noted: ·Fines paid for late payment of taxes, P15,500 ·Premiums paid on life insurance policy on officers, P200,000. Beneficiary is ABC Company. ·Impairment of goodwill: P90,000 ·Excess of tax depreciation over book depreciation: P30,000 ·Excess of warranty expense over actual warranty expenditures: P27,000 ·Excess of estimated uncollectible accounts for financial reporting over the actual write-offs for tax reporting: P12,000 ·Rent collected in advance for period earned: P35,000 How much is the taxable income?
ABC’s pre-tax financial income is P1,800,000. Current income tax rate is 30%. In ABC Company’s books and tax returns, the following differences have been noted: ·Fines paid for late payment of taxes, P15,500 ·Premiums paid on life insurance policy on officers, P200,000. Beneficiary is ABC Company. ·Impairment of goodwill: P90,000 ·Excess of tax depreciation over book depreciation: P30,000 ·Excess of warranty expense over actual warranty expenditures: P27,000 ·Excess of estimated uncollectible accounts for financial reporting over the actual write-offs for tax reporting: P12,000 ·Rent collected in advance for period earned: P35,000 How much is the taxable income?
Chapter14: Taxes On The Financial Statements
Section: Chapter Questions
Problem 22CE
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ABC’s pre-tax financial income is P1,800,000. Current income tax rate is 30%. In ABC Company’s books and tax returns, the following differences have been noted:
·Fines paid for late payment of taxes, P15,500
·Premiums paid on life insurance policy on officers, P200,000. Beneficiary is ABC Company.
·Impairment of
·Excess of tax
·Excess of warranty expense over actual warranty expenditures: P27,000
·Excess of estimated uncollectible accounts for financial reporting over the actual write-offs for tax reporting: P12,000
·Rent collected in advance for period earned: P35,000
How much is the taxable income?
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