29. Forever Incorporated's partial income statement after its first year of operation is as follows: Income before income taxes P3,750,000 Income tax expense Current P1,035,000 Deferred 90,000 1,125,000 P2,625,000 Net Income Forever uses straight-line method of depreciation for financial reporting purposes and accelerated depreciation method for tax purposes. The amount charged to depreciation expenses on its tax return this year was P1,800,000. No other differences existed between book income and taxable income except for the amount of depreciation. Assuming a 30% tax rate, what amount was deducted for depreciation on the company's book for the current year? ANSWER:

29. Forever Incorporated's partial income statement after its first year of operation is as follows: Income before income taxes P3,750,000 Income tax expense Current P1,035,000 Deferred 90,000 1,125,000 P2,625,000 Net Income Forever uses straight-line method of depreciation for financial reporting purposes and accelerated depreciation method for tax purposes. The amount charged to depreciation expenses on its tax return this year was P1,800,000. No other differences existed between book income and taxable income except for the amount of depreciation. Assuming a 30% tax rate, what amount was deducted for depreciation on the company's book for the current year? ANSWER:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Forever Incorporated’s partial income statement after its first year of operation is as follows: Income before income taxes P3,750,000 Income tax expense Current P1,035,000 Deferred 90,000 1,125,000 Net Income P2,625,000 Forever uses straight-line method of depreciation for financial reporting purposes and accelerated depreciation method for tax purposes. The amount charged to depreciation expenses on its tax return this year was P1,800,000. No other differences existed between book income and taxable income except for the amount of depreciation. Assuming a 30% tax rate, what amount was deducted for depreciation on the company’s book for the current year?
Lin Ltd. reported the following: Earnings (loss) Depreciation (assets have a cost of $360,000) CCA Non-deductible expenses Tax rate Taxable income Accounting earnings Permanent difference Accounting income subject to tax Temporary difference 1. What is the amount of the taxable income or loss in each year? (Negative amounts and deductible amounts should be indicated by a minus sign.) Taxable income 20X7 20x7 (first year of operations) $98,000 $45,000 $60,000 $18,000 20x8 30% 2008 $(166,000) $ 45,000 $ 70,000 $18,000 30%
Zeff Company prepared the following reconciliation for the · first year of operations: 1,600,000 Pretax financial income Nontaxable interest received Long-term loss accrual in excess of deductible amount Depreciation in excess of financial depreciation ( 50,000) 100,000 ( 250,000) 1,400,000 Taxable income (Tax rate is 30%) What amount should be reported as total income tax expense? a. 495,000 b. 480,000 c. 465,000 d. 420,000 What amount should be reported as deferred tax liability a. 90,000 b. 45,000 с. 75,000 d. 30,000 What amount should be reported as deferred tax asset? a. 30,000 b. 90,000 c. 45,000 d. 75,000
A company reported in the income statement for the current year P900,000 income before provision for income tax. Please consider the following information: Rent income received in advance P150,000Interest income on time deposit 200,000Depreciation deducted for income tax purposes in excess of financial depreciation P100,000Income tax rate 30% 1. How much is the taxable income?A. 950,000B. 750,000C. 850,000D. 700,0002. How much is the accounting income subject to tax?A. 900,000B. 750,000C. 700,000D. 225,000Thank you.
1. Pine Corporation’s books showed pretax income of P600,000 for the year ended December 31, 20x1. In the computation of federal income taxes, the following data were considered: Gain on involuntary conversion (expropriation) P350,000 Depreciation deducted for tax purposes in excess of depreciation deducted for book purposes 50,000 Estimated tax payments during 20x1 70,000 Income tax rate 30% What amount should Pine report as its current income tax liability on its December 31, 20x1, balance sheet?
A company reported in the income statement for the current year 900,000 income before provision for income tax. Please consider the following information: Rent income received in advance 150,000Interest income on time deposit 200,000Depreciation deducted for income tax purposes in excess of financial depreciation 100,000Income tax rate 30% What amount should be reported as current provision for income tax or current tax expense for the current year?A. 225,000B. 270,000C. 230,000D. 220,000
Blossom Corporation's partial income statement after its first year of operations is as follows: Income before income taxes $3726000 Income tax expense Current $1015000 Deferred 88200 1103200 Net income $2622800 Blossom uses the straight-line method of depreciation for financial reporting purposes and accelerated depreciation for tax purposes. The amount charged to depreciation expense on its books this year was $2780000. No other differences existed between book income and taxable income except for the amount of depreciation. Assuming a 20% tax rate, what amount was deducted for depreciation on the corporation's tax return for the current year?
A company reported in the income statement for the current year P900,000 income before provision for income tax. Please consider the following information: Rent income received in advance 150,000Interest income on time deposit 200,000Depreciation deducted for income tax purposes in excess of financial depreciation 100,000Income tax rate 30% Required: 1. How much is the taxable income?2. How much is the accounting income subject to tax?3. How much is the permanent difference?4. How much is the net temporary differences?
A company reported in the income statement for the current year P900,000 income before provision for income tax. Please consider the following information: Rent income received in advance P150,000Interest income on time deposit 200,000Depreciation deducted for income tax purposes in excess of financial depreciation P100,000Income tax rate 30% How much is the accounting income subject to tax?A. 900,000B. 750,000C. 700,000D. 225,000
Integrity Company reported pre-tax financial income of P400,000 for 2022. In the computation of income taxes, the following data were gathered: Non-taxable gain - P175,000 Depreciation deducted for tax purposes in excess of depreciation deducted for book purposes - P25,000 Tax payment made during 2022 - P27,500 Enacted tax rate - 35% What amount shall be reported as current tax liability?
A company reported in the income statement for the current year 900,000 income before provision for income tax. Please consider the following information: Rent income received in advance 150,000Interest income on time deposit 200,000Depreciation deducted for income tax purposes in excess of financial depreciation 100,000Income tax rate 30% What amount should be reported as current provision for income tax or current tax expense for the current year?
Azure Company reported in the income statement for the current year P900,000 income before provision for income tax. Please consider the following information: Rent income received in advance P150,000 Interest income on time deposit 200,000 Depreciation deducted for income tax purposes in excess of financial depreciation P100,000 Income tax rate 30% How much is the permanent difference?A. 200,000B. 100,000C. 150,000D.350,000