INTERMEDIATE ACCOUNTING 2 ACCOUNTING FOR INCOME TAX EXERCISES Exercises Problem 9-1 During the current year, EVERLASTING COMPANY reported accounting income of =P9,000,000 before income tax. The entity revealed the following information for the current year: Interest income on government bonds =P700,000 Depreciation claimed on tax return in excess of depreciation per book 1,300,000 Warranty expense under accrual basis 600,000 Actual warranty payment 300,000 Income from installment sale reported for tax purposes in excess of income recognized per book 200,000 Income tax rate 30% Required: 1. Compute for the current tax expense and deferred tax expense at year-end. 2. Record the necessary journal entries to record current tax and deferred tax.

INTERMEDIATE ACCOUNTING 2 ACCOUNTING FOR INCOME TAX EXERCISES Exercises Problem 9-1 During the current year, EVERLASTING COMPANY reported accounting income of =P9,000,000 before income tax. The entity revealed the following information for the current year: Interest income on government bonds =P700,000 Depreciation claimed on tax return in excess of depreciation per book 1,300,000 Warranty expense under accrual basis 600,000 Actual warranty payment 300,000 Income from installment sale reported for tax purposes in excess of income recognized per book 200,000 Income tax rate 30% Required: 1. Compute for the current tax expense and deferred tax expense at year-end. 2. Record the necessary journal entries to record current tax and deferred tax.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter21: Corporations: Taxes, Earnings, Distributions, And The Statement Of Retained Earnings

Section: Chapter Questions

Problem 1SEA: CORPORATE INCOME TAX Stanton Company estimates that its 20-1 income tax will be 80,000. Based on...

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