Answered: Interest Expense 250,000.00 Interest…

Interest Expense 250,000.00 Interest Income form 5/6 30,000.00 Interest Income form Bank Deposits Dividend from a Domestic Corp 320,000.00 40,000 How much is the deductible Interest Expense?

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter10: Accounting For Sales And Cash Receipts

Section: Chapter Questions

Problem 3MC

See similar textbooks

Related questions

Q: This year, the Jackson Miller Trust earned the following: . $4,000 in ordinary dividends. • $500 in…

A: When there is no income from municipal bond then fiduciary fees are 100% deductible. When there…

Q: . Taxpayer incurred the following for the taxable period: Supplies purchased P80,000 Supplies used…

A: Under Cash basis, expenses shall be Deductible only when actually paid. Amortization and unpaid…

Q: Compute BBI’s tax expense for financial statement purposes. Compute BBI’s…

A: Tax expenses: Tax expenses can be defined as the liability owed by the corporations and the…

Q: Company Z has a deposit with ABC Bank. It obtained a loan from ASAP Financing Corp. in connection…

A: Here discuss about the details of the allowable deduction from the interest expenses which are…

Q: 7.Domex Corporation is a resident foreign corporation. It shows the following for the taxable year…

A: Royalties are charged at a separate rate and business income from abroad is also charged at…

Q: d. f. Pre-tax financial profit is P10,000,000 and income tax rate is 30% for the current and future…

A: "Since you have posted a question with multiple subparts, we will solve the first three subparts for…

Q: ABC reported a pretax financial income of P6M for the year 2021. Among the items reported in the…

A: Financial income is the net income calculated as per profit and loss account. Taxable income is the…

Q: N 12 Wren, Inc. had $490,000 in taxable revenues this year and $510,000 in deductible business…

A: The taxable income is the income used to determine the tax liability of the taxpayer. The…

Q: A company reported in the income statement for the current year P900,000 income before provision for…

A: Income as per Books 900000 Add:/less :Permanent difference- Interest income on time deposit (not…

Q: iken fro Igado Company s 20 Tinancial records! Pretax accounting income- P1,500,000 Accrued warranty…

A: tax rate 2020 - 30% 2021- 32% 2022 - 34% 2023 - 35%

Q: Green Corporation reported pretax book income of $1,016,000. During the current year, the net…

A: The percentage of the income of an individual that is subject to tax refers to the effective tax…

Q: 1. Firm B uses the calendar taxable year and the cash method of accounting. On December 31, 20x6,…

A: CASH BASED ACCOUNTING:- Cash based accounting is referred as the accounting in which the payments…

Q: Beaver Dam Inc. (BDI) listed the following items to prepare a reconciliation between book and…

A: Solution:- a) Calculation of BDI’s tax expense for financial statement purposes as follows:- Basic…

Q: Gisa cash basis consultant. His balance sheet at the end of the year shows receivables of $100 and…

A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: How much claim against the insolvent person is deductible from the gross estate?

A: The determination of claim against the insolvent person that is deductible from the gross estate is…

Q: An entity reported pretax financial income of P8.000,000 for the current year. The taxable income…

A: Income tax is paid on the taxable income. Taxable income is calculated after making the adjustments…

Q: If the beginning balance in OAA is zero and the following transactions occur, what is the ending OAA…

A: OAA- Other adjustment Account Records the Exempt income and Non deductible item which are related to…

Q: For the current year ($ in millions), Centipede Corp. had $80 In pretax accounting Income. This…

A: Correct answer is A. $70 million

Q: XYZ’s financial income is P1,800,000 before provision of income tax. The following differences have…

A: Taxable income = financial income before tax + Excess of warranty expense + Premiums paid on life…

Q: Zuma Company incurred P175,000 of interest expense during the year. In the same year, final taxes…

A: The deductible interest expense is the interest incurred by assesee. The final taxes paid is not…

Q: 7.Domex Corporation is a resident foreign corporation. It shows the following for the taxable year…

A: A foreign corporation in Philippines, whether resident or non-resident, is taxed only on income…

Q: Clal statements. Taxable income was S1,000,000 for 2022. A December 31, 2022, Miller Company had…

A: Solution: Income tax expense for the year = Current tax - Reversal of Deferred tax liability -…

Q: Sheridan Company has the following two temporary differences between its income tax expense and…

A: A deferred tax asset is an item on the balance sheet that results from an overpayment or advance…

Q: 2. Debtor Corporation shows the following data during taxable year: Sales P 500,000 Interest Income,…

A: Deductions means those items that are deducted from the gross income of the company. The deductions…

Q: . Taxpayer incurred the following for the taxable period: |Supplies purchased P80,000 Supplies used…

A: Under Cash basis expenses shall be allowed when actually paid. Amortization and other historical…

Q: Current liabilities include interest revenue received in advance, with a carrying amount if P1,000.…

A: Tax base is the value that is assessed for an item in balance sheet as per taxation of that…

Q: A Corporation is engaged in the trading business. The reported income and expenses for taxable year…

A: Solution Concept The deductible interest expense on loan payable is reduced by 33% of the interest…

Q: If the property before tax cashflow (PBTCF) in a given year is $125,000, total debt service is…

A: The Equity after tax cash flow of the investor is that income after deducting all expenses and tax.

Q: Flip's Pizzeria Inc. has the following financial items for the current year: Adjusted Taxable Income…

A: SOLUTION- INTEREST EXPENSE DEDUCTION= [(30% * ADJUSTED TAXABLE INCOME BEFORE INTEREST) + BUSINESS…

Q: Gis a cash basis consuitant His balance sheet at the end of the year shows receivables of $100 and…

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

Q: Find the possible over/understatement of taxable income given the following: Taxable income per…

A: Notes 1)Increase in mortgage payable, increase on cash in hand, decrease in bank balance, increase…

Q: 4 TarHeel Corporation reported pretax book income of $1,038,000. During the current year, the net…

A: Calculate taxable income by subtracting the sum of additional tax depreciation and deduction in the…

Q: Mega Corporation, a domestic corporation, deposited P1,000,000 in a 7- 2 point year time deposit…

A: Interest income is the income earned by lending money to someone. It is earned until the money lent…

Q: 3. ABC corp paid the following taxes which is incurred in connection with business; Community tax of…

A: Deductible tax expense refers to the allowance provided by the government on the tax levied on an…

Q: Calculate the corporate income tax for each of the following corporate taxable incomes. a. $15,000…

A: Income tax refers to the form of tax which is imposed by the governments on the income generated by…

Q: How much was the income tax payable for the first quarter? How much was the income tax payable for…

A: Minimum corporate income tax (MCIT) in total income, beginning in the fourth tax year following the…

Q: The pretax financial income of x company differs from its taxable income throughout each of 4 years…

A: Given Information: Non deductible expense = $29,100 No deferred income taxes at the beginning of…

Q: Current liabilities include interest revenue received in advance, with a carrying amount if P1,000.…

A: Under Cash basis of taxation, income and expenses are recognized in the year when they are actually…

Q: If the beginning balance in Swan, Inc.’s OAA is $6,700 and the following transactions occur, what is…

A: Ending OAA balance = Beginning balance + Tax exempt interest income + life insurance proceeds - Life…

Q: Classify the items for deduction in the following scenarios. 2. Debtor Corporation shows the…

A: Itemized deductions are those deductions which allow the person to deduct the designated expenses…

Q: X corporation, a corporation with P120,000,000 in total assets, reported the following for the year…

A: Given that, Total gross income = P500,000 Total taxable income = P300,000 Unrelated taxable income…

Q: What is Dick Tracy Corporation’s deductible expense? a. P45,000 b. P75,000 c. P95,000 d. P60,000

A: Tax refers to the amount charged by the government on individuals, partnership firms, HUF’s or any…

Q: The pretax financial income of x company differs from its taxable income throughout each of 4 years…

A: Tax liability: When a person or an entity earns an income, then that income is taxed on the basis…

Q: 10. Rom Corp. began business in 20x1 and reported taxable income of P50,000 on its 20x1 tax return,…

A: >Deferred Tax assets is the amount of tax on the future deductible amounts of 'temporary…

Q: An entity provided the following net of tax figures for the current year: Net income 7,700,000 Net…

A: Total comprehensive income consists of 2 part : 1. Net Income 2. Other Comprehensive Income (OCI)…

Q: ParentCo and SubCo report the following items of income and deduction for the current year…

A: Taxable income refers to the amount that is subject to tax charged by the government. Tax refers to…

Q: sed to amount of $491,000. Taxable income for 2021 is $845,000. The tax rate is 30% for all years.…

A: Answer: Given: Year 2021 Temporary Difference ($491,000 - $388,000) $103,000 Financial…

Q: 34. Thinker Corporation's income statement for the year ended December 31, 2022, shows pretax income…

A: Introduction: Income tax payable is the amount due on the taxable income of the business earned by…

Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

Mr. A provided you with the following information during the taxable year.

a. P 144,400

b. P 250,000

c. P114,000

d. P 226,900

e. Answer not given

Interest Expense
250,000.00
Interest Income form 5/6
30,000.00
Interest Income form Bank Deposits
Dividend from a Domestic Corp
320,000.00
40,000
How much is the deductible Interest Expense?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Mf3. : An entity took UAH 100,000 loan for 5 at 26% of annual interest rate. Interests are paid annually. A bank is using annuity due scheme. Interest revenue for a bank in period 1 is: An entity took UAH 100,000 loan for 5 at 26% of annual interest rate. Interests are paid annually. A bank is using annuity due scheme. Principal, paid in the fourth period, is: Outstanding loan amount is USD 17,000.00. Annuity is USD 4,315.27, interest rate is 18%. The amount of principal, paid in the given period is: Outstanding loan amount is USD 22,000.00. Annual interest rate is 11%. Interest is paid at the end of each year. In the given period bank received USD 4,300.00 of principal payment. The annuity amount is:
Vaughn Manufacturing assigns $7300000 of its accounts receivables as collateral for a $2.64 million 9% loan with a bank. Vaughn Manufacturing also pays a finance fee of 2% on the transaction upfront. What would be recorded as a gain (loss) on the transfer of receivables?
Assets- reserves: 75000 loans : 430000 liabilities : deposites : 500000 net worth : 5000 a) Suppose that a bank has the following balance sheet and you deposit $5000 in currency into your cheque account at such bank. Use a T-account to show the initial impact of this transaction on the bank’s balance sheet. What is the impact of this transaction on M1? (b) If the bank holds a reserve ratio of 0.1, what is the maximum amount the bank can loan out. Suppose that the bank intends to loan out the maximum amount it can. Show the impact of the loan on the balance sheet.
13. In 2022, Mr. Sun Ho was charged interest expense on a business related loan in the amount of PHP 60,000. His interest income on bank account with BPI is PHP 720. How much is the deductible interest expense? a. None b. PHP 59,856 c. PHP 144 d. PHP 60,000
47. On June 30, 2021, CPA Company factored P2,500,000 of accounts receivable for P2,250,000. The allowance for uncollectible accounts for these factored receivables was P50,000. On December 1, 2021, CPA Company assigned accounts receivable of P3,500,000 as collateral of a P2,000,000, 12% annual interest rate loan from a commercial bank. CPA received the P2,000,000 less 2% finance charge based on the loan. How much is the total loss/expenses related to factoring and assignment of receivables for the year 2021?
Company B uses $800,000 of its accounts receivables as collateral when the company borrowed $5,000,000 4% loan from a bank. To obtain the loan, Company B pays a finance fee of 3% on the transaction upfront. What would be recorded as a gain (loss) on the transfer of receivables? A. $0 B. Loss of $200,000 C. Loss of $150,000 D. Loss of $800,000
6 - Which of the following is the account and amount that should appear in the dotted places in the journal article above? a) 191 VAT Deductible 5.400 TL B) 391 VAT to be calculated Hs. 5.400 TL NS) 391 Calculated VAT Hs. 6.300 TL D) 360 Taxes and Funds Payable Hs. 5.400 TL TO) 191 VAT Deductible 5,000 TL
Choose the correct letter of answer: Company D's current assets and current liabilities are P200,000.00 and P140,000.00 respectively. How much additional funds can it borrow from banks for short term, without reducing the current ratio below 1.33? a. P13,800.00b. P86,200.00c. P52,612.00d. P35,870.00e. P41,818.00
The followimg assets were among those that appeared on Baird’s Co.’s books at the end of the year:Demand bank deposits P650,000Net Long-Term Receivables 400,000Patents and Trademarks 150,000 In preparing constant peso financial statements, how much should Baird classify as monetary assets?a.1,200,000b.1,050,000c.800,000d.650,000
What is the carrying value of the loans receivable as of December 31, 2022 after impairement recognition A. 8,123,0231 B. 8,000,000 C . 8,211,570 D, 9,211,570
Maria reports the following transactions Gross sales-840,000; sales discount-25,000; cost of sales-250,000; operationg expenses-190,000; interest income on bank deposit-10,000 What is the net taxable income? P565,000 P400,000 P385,000 P375,000 what is the taxable income? P565,000 P400,000 P385,000 P375,000
Assume a bank has the following balance sheet. Determine the 2-year GAP. AssetAmount LiabilityAmountCash$100 90-day CDs$1006-month Gbonds$400 360-day CDs$200 2-yearcommercialloans$400 Time Deposits 2- year $900 5-year fixedrate loans$500 Stockholder’s equity$200 Total$1,400 Total$1,400 GAP = (RSA2 yr – RSL2 yr) 0 -$100 -$200 -$300 -$800