What is the adjusted balance of income tax payable to be reflected in the 2021 statement of financial position? STARS Company reported net income for the current year 2021 before taxes is #4,288,000. The following differenceswere noted between the financial reporting and tax reporting:FinancialTaxInterest on depository accountsWarranty expenseRevenue from installment sales53,000260,000584,000115,000319,000125,000PAdvance collections from customersProvision for probable losses406,000Insurance premiums on senior managers' life insurance182,000The income tax rate is 30% and is not expected to change in the future.Estimated tax payments for the last three quarters amounted to P920,000.

Tax payable: The amount of tax required to be paid by the taxpayer every year is called tax payable.…

Answered: STARS Company reported net income for…

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 12P

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What is the adjusted balance of income tax payable to be reflected in the 2021 statement of financial position?

STARS Company reported net income for the current year 2021 before taxes is #4,288,000. The following differences
were noted between the financial reporting and tax reporting:
Financial
Tax
Interest on depository accounts
Warranty expense
Revenue from installment sales
53,000
260,000
584,000
115,000
319,000
125,000
P
Advance collections from customers
Provision for probable losses
406,000
Insurance premiums on senior managers' life insurance
182,000
The income tax rate is 30% and is not expected to change in the future.
Estimated tax payments for the last three quarters amounted to P920,000.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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