On December 31, 2019, an entity reported a deferred tax liability of P600,000 and a deferred tax asset of P150.000 On December 31, 2020, the deferred tax liability is P900,000 and the deferred tax asset is zero. What is the deferred tax expense for 2020?

On December 31, 2019, an entity reported a deferred tax liability of P600,000 and a deferred tax asset of P150.000 On December 31, 2020, the deferred tax liability is P900,000 and the deferred tax asset is zero. What is the deferred tax expense for 2020?

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter3: Taxes On The Financial Statements

Section: Chapter Questions

Problem 13P

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Definition Definition Estimated future tax made while preparing accounts. Deferred tax is estimated based on past and present transactions from financial statements. It is not the actual tax that needs to be paid or is refundable from the revenue authority; it is an accounting entry. It is necessary to account for deferred tax due to difference between accounting profits and taxable profits.

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