Mathis co. at the end of 2016, its first year of operations, prepared reconciliation between pretax financial income and taxable income as follows: Pretax financial income 500,000 Estimated litigation expense 1,250,000 Installment sales (1,000,000) Taxable income 750,000 The estimated litigation expense of P1,250,000 will be deductible in 2016 when it is expected to be paid. The gross profit from the installment sales will be realized in the amount of P500,000 in each of the next two years. The estimated liability for litigation is classified as non-current and the installment accounts receivable are classified as P500,000 current and P500,000 noncurrent. The income tax rate is 30% for all years. The income tax expense is?
Mathis co. at the end of 2016, its first year of operations, prepared reconciliation between pretax financial income and taxable income as follows:
Pretax financial income 500,000
Estimated litigation expense 1,250,000
Installment sales (1,000,000)
Taxable income 750,000
The estimated litigation expense of P1,250,000 will be deductible in 2016 when it is expected to be paid. The gross profit from the installment sales will be realized in the amount of P500,000 in each of the next two years. The estimated liability for litigation is classified as non-current and the installment
The income tax expense is?
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