Regine Company computed a pre-tax financial income of P6,000,000 for the year ended December 31, 2020. The following differences are noted between taxable and accounting income: ·         Nontaxable revenue: P600,000 ·         Nondeductible expense: P200,000 ·         Warranty provision accrued and expensed in 2020 but tax-deductible when paid: P300,000 ·         Excess tax depreciation over accounting depreciation: P250,000 ·         Excess of accounting revenue over tax revenue (timing difference): P200,000 Current tax rate for 2020 is 32% while tax rate for 2021 and forward is 30%. How much is the total tax expense?   a. 1,744,000 b. 1,699,000 c. 1,789,000 d. 1,792,000

SWFT Corp Partner Estates Trusts
42nd Edition
ISBN:9780357161548
Author:Raabe
Publisher:Raabe
Chapter14: Taxes On The Financial Statements
Section: Chapter Questions
Problem 20CE
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Regine Company computed a pre-tax financial income of P6,000,000 for the year ended December 31, 2020. The following differences are noted between taxable and accounting income:

·         Nontaxable revenue: P600,000

·         Nondeductible expense: P200,000

·         Warranty provision accrued and expensed in 2020 but tax-deductible when paid: P300,000

·         Excess tax depreciation over accounting depreciation: P250,000

·         Excess of accounting revenue over tax revenue (timing difference): P200,000

Current tax rate for 2020 is 32% while tax rate for 2021 and forward is 30%. How much is the total tax expense?
 
a. 1,744,000
b. 1,699,000
c. 1,789,000
d. 1,792,000
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