On April 1,2019, ABC Company prepaid a P 38,000 premium on an annual insurance policy. The premium payment was a tax deductible expense in ABC's cash basis tax return. The accrual basis income statement will report a P 28,500 insurance expense in 2019 and 9,500 insurance expense for 2020. Income tax rate is 30% in 2019 and in subsequent years. In ABC's December 31,2019 statement of financial position, what amount related to insurance should be reported as deferred tax liability?
On April 1,2019, ABC Company prepaid a P 38,000 premium on an annual insurance policy. The premium payment was a tax deductible expense in ABC's cash basis tax return. The accrual basis income statement will report a P 28,500 insurance expense in 2019 and 9,500 insurance expense for 2020. Income tax rate is 30% in 2019 and in subsequent years. In ABC's December 31,2019 statement of financial position, what amount related to insurance should be reported as deferred tax liability?
Chapter18: Accounting Periods And Methods
Section: Chapter Questions
Problem 47P: How do the all events and economic performance requirements apply to the following transactions by...
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On April 1,2019, ABC Company prepaid a P 38,000 premium on an annual insurance policy. The premium payment was a tax deductible expense in ABC's cash basis tax return. The accrual basis income statement will report a P 28,500 insurance expense in 2019 and 9,500 insurance expense for 2020. Income tax rate is 30% in 2019 and in subsequent years. In ABC's December 31,2019
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