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Integrity Company computed a pre-tax financial income of P2,200,000 for its first year of operations ended December 31, 2021. In preparing the income tax return, the accountant determined the following differences between financial and taxable income: Non-deductible expenses – P400,000 Non-taxable revenues – P150,000 Temporary difference (installment sales reported in financial income but not in taxable income) – P700,000 The enacted tax rates and the reversal of the temporary difference are as follows (see image below). How much is the Total Income Tax Expense in 2021? a. P749,000 b. P945,000 c. P762,600 d. P707,400

Integrity Company computed a pre-tax financial income of P2,200,000 for its first year of operations ended December 31, 2021. In preparing the income tax return, the accountant determined the following differences between financial and taxable income: Non-deductible expenses – P400,000 Non-taxable revenues – P150,000 Temporary difference (installment sales reported in financial income but not in taxable income) – P700,000 The enacted tax rates and the reversal of the temporary difference are as follows (see image below). How much is the Total Income Tax Expense in 2021? a. P749,000 b. P945,000 c. P762,600 d. P707,400

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Integrity Company computed a pre-tax financial income of P2,200,000 for its first year of operations ended December 31, 2021. In preparing the income tax return, the accountant determined the following differences between financial and taxable income:

  • Non-deductible expenses – P400,000
  • Non-taxable revenues – P150,000
  • Temporary difference (installment sales reported in financial income but not in taxable income) – P700,000

The enacted tax rates and the reversal of the temporary difference are as follows (see image below).

How much is the Total Income Tax Expense in 2021?

a. P749,000
b. P945,000
c. P762,600
d. P707,400

 

Year 2021 2022 2023 2024 Tax Rate 30% 32% 34% 35% Reversal 0 140,000 320,000 240,000
Transcribed Image Text:Year 2021 2022 2023 2024 Tax Rate 30% 32% 34% 35% Reversal 0 140,000 320,000 240,000
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