On January 1, 2001, ABC Company acquired a building for P5,000,000. The building is depreciated using straight line method based on a useful life of 10 years with no residual value. On January 1, 2005, the building has an appraised value of P4, 800, 000. The 2005 pretax accounting income before depreciation is P9,000,000. The income tax rate is 32% and there are no other temporary differences at the beginning of 2005. 4) What is the deferred tax liability arising from the revaluation on January 1, 2005? a. P960,000 b. P384,000
On January 1, 2001, ABC Company acquired a building for P5,000,000. The building is depreciated using straight line method based on a useful life of 10 years with no residual value. On January 1, 2005, the building has an appraised value of P4, 800, 000. The 2005 pretax accounting income before depreciation is P9,000,000. The income tax rate is 32% and there are no other temporary differences at the beginning of 2005. 4) What is the deferred tax liability arising from the revaluation on January 1, 2005? a. P960,000 b. P384,000
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter18: Accounting For Income Taxes
Section: Chapter Questions
Problem 9MC: Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and...
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Transcribed Image Text:On January 1, 2001, ABC Company acquired a building for P5,000,000.
The building is depreciated using straight line method based on a useful
life of 10 years with no residual value. On January 1, 2005, the building
has an appraised value of P4, 800, 000. The 2005 pretax accounting
income before depreciation is P9,000,000. The income tax rate is 32%
and there are no other temporary differences at the beginning of 2005.
4) What is the deferred tax liability arising from the revaluation on
January 1, 2005?
a. P960,000
b. P384,000
E P576,000
Transcribed Image Text:Black Co., organized on January 2, 2004, had pretax financial statement
income of P500,000 and taxable income of P800,000 for the year ended
December 31, 2004. The only temporary differences are accrued product
warranty costs, which Black expects to pay as follows:
P 100,000
P 50,000
P 50,000
P 100,000
2005
2006
2007
2008
The enacted income tax rates are 25% for 2004, 30% for 2005 through
2007, and 35% for 2008. Black believes that future years' operations will
produce profits.
20)
In its December 31, 2004 balance sheet, what amount should Black
report as deferred tax asset?
a. P50,000
b. P75,000
C. P90,000
d. 95,000
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