d. Prepare all journal entries relating to income tax. e. Compute the total income tax expense, identifying separately the current income tax expense and the deferred tax expanse
d. Prepare all journal entries relating to income tax. e. Compute the total income tax expense, identifying separately the current income tax expense and the deferred tax expanse
Chapter5: Corporations: Earnings & Profits And Dividend Distributions
Section: Chapter Questions
Problem 41P
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d. Prepare all
e. Compute the total income tax expense, identifying separately the current income tax expense and the
Transcribed Image Text:4-2 You are given the following information for Carlos Corporation
for the year ended December 31, 2020.
a.
b.
Capital gains subjected to final withholding tax,
P2,000,000.
Fines and penalties for violations of law, P400,000,
A
Transcribed Image Text:d.
f.
30
Pre-tax financial profit is P10,000,000 and income tax rate is
30% for the current and future years.
REQUIRED:
(a)
(b)
(c)
Premium payment for life insurance policy on president,
P40,000.
The president designated his family as
beneficiary.
Tax depreciation in excess
P1,500,000.
of book depreciation,
Excess of income on installment sales over income
reportable for tax purposes, P1,000,000
Rent collected in advance of period earned, P750,000.
Warranty provision accrued in advance of period paid,
P400,000.
(d)
(e)
Indicate which of the above items are permanent
differences and which are temporary differences. Classify
the permanent differences whether non-taxable revenues
or non-deductible expenses. Classify the temporary
differences whether taxable temporary differences or
deductible temporary differences.
Calculate the taxable income.
Compute income tax payable, deferred tax asset and
deferred tax liability.
Prepare all entries relating to income tax.
Compute the total income tax expense, identifying
separately the current income tax expense and the
deferred tax expense.
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