Forever Incorporated’s partial income statement after its first year of operation is as follows: Income before income taxes P3,750,000 Income tax expense Current P1,035,000 Deferred 90,000 1,125,000 Net Income P2,625,000 Forever uses straight-line method of depreciation for financial reporting purposes and accelerated depreciation method for tax purposes. The amount charged to depreciation expenses on its tax return this year was P1,800,000. No other differences existed between book income and taxable income except for the amount of depreciation. Assuming a 30% tax rate, what amount was deducted for depreciation on the company’s book for the current year?
Forever Incorporated’s partial income statement after its first year of operation is as follows: Income before income taxes P3,750,000 Income tax expense Current P1,035,000 Deferred 90,000 1,125,000 Net Income P2,625,000 Forever uses straight-line method of depreciation for financial reporting purposes and accelerated depreciation method for tax purposes. The amount charged to depreciation expenses on its tax return this year was P1,800,000. No other differences existed between book income and taxable income except for the amount of depreciation. Assuming a 30% tax rate, what amount was deducted for depreciation on the company’s book for the current year?
Chapter14: Taxes On The Financial Statements
Section: Chapter Questions
Problem 4BCRQ
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Forever Incorporated’s partial income statement after its first year of operation is as follows:
|
Income before income taxes |
P3,750,000 |
|
|
Income tax expense |
||
|
Current |
P1,035,000 |
|
|
Deferred |
90,000 |
1,125,000 |
|
Net Income |
P2,625,000 |
Forever uses straight-line method of
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