T Company reports the following revenues and expenses in its pretax financial income for the year ended December 31, 2003: Revenues P229,600 Expenses (160,100) Pretax financial income P 69,500 The revenues included in pretax financial income are the same amount as the revenues included in the company's taxable income. A reconciliation of the expenses reported for pretax financial income to the expenses reported for taxable income, however, reveals four differences: a. Depreciation deducted for financial reporting exceeded depreciation deducted for income taxes by P11,000. b. Percentage depletion deduction for income taxes exceeded depletion deducted for financial reporting by P15,600. Warranty costs deducted for income taxes exceeded warranty expenses deducted for financial reporting by P8,900. C. d. Legal expense of P9,800 was deducted for financial reporting, it will be deducted for income taxes when paid in a future year. The company expenses its percentage depletion to exceed its cost depletion in each of the next 5 years by the same amount as in 2000. At the end of 2000, the other three expenses are expected to result in total future taxable or deductible amounts as follows: Totals Future taxable amounts Depreciation expense differenceP63,000 Future deductible amounts Warranty expense difference 48,400 Legal expense difference 9,800 At the beginning of 2003, the company had a deferred tax liability of P22,200 related to the depreciation difference and a deferred tax asset of P17,190 related to the warranty difference. The income tax rate for 2003 is 35%, but in 2002 Congress enacted a 30% rate for 2004 and thereafter. 10.How much is the taxable income at December 31, 2003? (a) P65,800 (b) P69,500 (c) P73,200 (d) P74,700 A
T Company reports the following revenues and expenses in its pretax financial income for the year ended December 31, 2003: Revenues P229,600 Expenses (160,100) Pretax financial income P 69,500 The revenues included in pretax financial income are the same amount as the revenues included in the company's taxable income. A reconciliation of the expenses reported for pretax financial income to the expenses reported for taxable income, however, reveals four differences: a. Depreciation deducted for financial reporting exceeded depreciation deducted for income taxes by P11,000. b. Percentage depletion deduction for income taxes exceeded depletion deducted for financial reporting by P15,600. Warranty costs deducted for income taxes exceeded warranty expenses deducted for financial reporting by P8,900. C. d. Legal expense of P9,800 was deducted for financial reporting, it will be deducted for income taxes when paid in a future year. The company expenses its percentage depletion to exceed its cost depletion in each of the next 5 years by the same amount as in 2000. At the end of 2000, the other three expenses are expected to result in total future taxable or deductible amounts as follows: Totals Future taxable amounts Depreciation expense differenceP63,000 Future deductible amounts Warranty expense difference 48,400 Legal expense difference 9,800 At the beginning of 2003, the company had a deferred tax liability of P22,200 related to the depreciation difference and a deferred tax asset of P17,190 related to the warranty difference. The income tax rate for 2003 is 35%, but in 2002 Congress enacted a 30% rate for 2004 and thereafter. 10.How much is the taxable income at December 31, 2003? (a) P65,800 (b) P69,500 (c) P73,200 (d) P74,700 A
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 12P: Comprehensive Colt Company reports pretax financial income of 143,000 in 2019. In addition to pretax...
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Transcribed Image Text:T Company reports the following revenues and expenses in its pretax financial
income for the year ended December 31, 2003:
Revenues
P229,600
(160,100)
P 69,500
Expenses
Pretax financial income
The revenues included in pretax financial income are the same amount as the
revenues included in the company's taxable income. A reconciliation of the
expenses reported for pretax financial income to the expenses reported for
taxable income, however, reveals four differences:
Depreciation deducted for financial reporting exceeded depreciation
deducted for income taxes by P11,000.
а.
b. Percentage depletion deduction for income taxes exceeded depletion
deducted for financial reporting by P15,600.
Warranty costs deducted for income taxes exceeded warranty expenses
deducted for financial reporting by P8,900.
С.
d. Legal expense of P9,800 was deducted for financial reporting, it will be
deducted for income taxes when paid in a future year.
The company expenses its percentage depletion to exceed its cost depletion in
each of the next 5 years by the same amount as in 2000. At the end of 2000, the
other three expenses are expected to result in total future taxable or deductible
amounts as follows:
Totals
Future taxable amounts
Depreciation expense differenceP63,000
Future deductible amounts
Warranty expense difference
48,400
Legal expense difference
9,800
At the beginning of 2003, the company had a deferred tax liability of P22,200
related to the depreciation difference and a deferred tax asset of P17,190 related
to the warranty difference. The income tax rate for 2003 is 35%, but in 2002
Congress enacted a 30% rate for 2004 and thereafter.
10.How much is the taxable income at December 31, 2003?
(a) P65,800
(b) P69,500
(c) P73,200
(d) P74,700 A
11.How much is the deferred tax asset at December 31, 2003?
(a) P17,460
(b) P25,500
(c) P16,920
(d) P18,900 A
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