What amount should be reported as deferred tax liability?1,200,0001,350,0001,050,0004,000,000What amount should be reported as deferred tax asset?630,000780,000480,000450,000 An entity reported the following assets and liabilities at year-end:Carrying amountTax basePropertyPlant and equipment10,000,0007,000,0005,000,0004,000,000Inventory2,500,0004,000,000Accounts receivable2,400,0003,000,000Liabilities6,000,0005,500,000The entity had made a provision for inventory obsolescence of Pl,500,000. Further animpairment loss against accounts receivable of P600,000 has been made. The tax rate is 30%.

Solution 1: Computation of Amount of Deferred Tax liability Particulars Carrying Amount Tax…

Answered: What amount should be reported as…

What amount should be reported as deferred tax liability? 1,200,000 1,350,000 1,050,000 4,000,000 What amount should be reported as deferred tax asset? 630,000 780,000 480,000 450,000

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter9: Metric-analysis Of Financial Statements

Section: Chapter Questions

Problem 9.23E: Unusual income statement items Assume that the amount of each of the following items is material to...

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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

What amount should be reported as deferred tax liability?

1,200,000

1,350,000

1,050,000

4,000,000

What amount should be reported as deferred tax asset?

630,000

780,000

480,000

450,000

An entity reported the following assets and liabilities at year-end:
Carrying amount
Tax base
Property
Plant and equipment
10,000,000
7,000,000
5,000,000
4,000,000
Inventory
2,500,000
4,000,000
Accounts receivable
2,400,000
3,000,000
Liabilities
6,000,000
5,500,000
The entity had made a provision for inventory obsolescence of Pl,500,000. Further an
impairment loss against accounts receivable of P600,000 has been made. The tax rate is 30%.

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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