Professional Documents
Culture Documents
INCOME TAXES
PROBLEMS
5-1.
a.
b.
c.
d.
e.
f.
g.
Nontaxable
Nondeductible
Nondeductible
Temporary difference
Temporary difference
Temporary difference
Temporary difference
Future
Future
Future
Future
taxable amount
taxable amount
deductible amount
deductible amount
5-2.
Pretax financial income
Add Nondeductible expenses (b + c) 600,000 + 40,000
Less Nontaxable income (a)
Financial income subject to tax
Add Future deductible amounts (f + g) 750,000 + 400,000
Less Future taxable amounts (d + e) 1,500,000 + 1,000,000
Taxable income
Income tax expense Current
Income tax payable
30% x 7,290,000
P11,000,000
640,000
(3,000,000)
P 8,640,000
1,150,000
(2,500,000)
P7,290,000
2,187,000
2,187,000
750,000
345,000
750,000
345,000
(Luzon Corporation)
(a)
Pretax financial income
Future taxable amount
Taxable income
Income tax payable: 30% x 1,200,000
(b)
2,187,000
405,000
345,000
2,187,000
750,000
P3,000,000
(1,800,000)
P1,200,000
P360,000
360,000
540,000
360,000
540,000
5-4.
(Visayas Corporation)
(a)
Pre tax financial income
Future deductible amount
Taxable income
Income tax payable: 30% x 3,550,000
(b)
P2,000,000
1,550,000
P3,550,000
P1,065,000
1,065,000
465,000
1,065,000
465,000
5-5.
(Mindanao Corporation)
Income tax expense Current
1,560,000
Deferred tax asset
600,000
Deferred tax liability
185,000
Income tax expense Deferred (Benefit)
415,000
Income tax payable
1,560,000
30% x 5,200,000 = 1,560,000
30% x 2,000,000 = 600,000
(30% x 500,000) + (35% x 100,000) = 185,000
5-6.
(Samar, Inc.)
Income tax expense Current (30% x 2,000,000)
Income tax expense Deferred (180,000 159,000)
Income tax expense Total
Income tax payable (see above)
P 600,000
(21,000)
P 579,000
P 600,000
P 180,000
P 159,000
5-7.
5-8.
(Bohol Company)
Taxable income
Future deductible amount:
Book depreciation in excess of tax depreciation
Nontaxable income:
Proceeds from life insurance policy upon death of officer
Pretax financial income
(Wall Services)
(a)
Schedule of reversal of the temporary differences
2013 140,000 x 32%
2014 320,000 x 34%
2015 240,000 x 36%
Total
Pretax financial income
Add nondeductible expenses
Less nontaxable revenues
Financial income subject to tax
Future taxable amounts
Taxable income
Tax rate
Income tax payable
Deferred tax liability (see above)
61
P11,998,000
(430,000)
1,250,000
P12,818,000
P 44,800
108,800
86,400
P240,000
P2,200,000
400,000
( 140,000)
P2,460,000
( 700,000)
P1,760,000
x 30 %
P 528,000
P 240,000
(b)
(c)
5-9.
528,000
240,000
528,000
240,000
P2,200,000
768,000
P1,432,000
(Daniel Company)
(a)
2012
2013
2014
2015
Straight Line
500,000
500,000
500,000
500,000
12/31/2012
12/31/2013
12/31/2014
12/31/2015
Taxable income
Future taxable amount
Additional taxable amount
(reversal)
Pretax accounting income
SYD
800,000
600,000
400,000
200,000
Carrying Amount
1,500,000
1,000,000
500,000
0
2012
800,000
300,000
2013
890,000
100,000
1,100,000
990,000
Difference
(300,000)
(100,000)
100,000
300,000
Tax Base
1,200,000
600,000
200,000
0
Difference
300,000
400,000
300,000
0
2014
1,200,000
2015
1,500,000
( 100,000)
1,100,000
(300,000)
1,200,000
(b)
(c)
62
90,000
90,000
30,000
30,000
30,000
30,000
90,000
90,000
2014
2015
P 360,000
( 30,000)
P 450,000
(90,000)
P 330,000
P 360,000
2012
2013
P1,100,000
P 990,000
P1,100,000
P1,200,000
330,000
P 770,000
297,000
P 693,000
330,000
P 770,000
360,000
P 840,000
(c)
63
100,000
1,800,000
P 1,900,000
P200,000
800,000
500,000
P 1,500,000
P1,500,000
P 450,000
P 570,000
1,500,000
1,500,000
75,000
75,000
830,000
830,000
300,000
300,000
60,000
(Conchita Corporation)
(a)
Deferred tax liability, 12/31/2012
2M x 30%
(b)
5-13
60,000
P600,000
900,000
900,000
40,000
40,000
(Britanny Company)
(a)
Income tax expense current
3M x 30%
Previous payment in 2012
Income tax payable, 12/31/2012
(b)
(c)
P900,000
500,000
P400,000
400,000
400,000
30,000
30,000
120,000
150,000
30,000
60,000
90,000
30,000
P900,000
-0-
64
P900,000
Pretax profit
Income tax expense
Profit
P2,800,000
900,000
P1,900,000
C
C
C
D
D
MC6
MC7
MC8
MC9
MC10
C
D
D
D
C
MC11
MC12
MC13
MC14
MC15
C
C
D
B
B
Problems
MC16
MC17
MC18
MC19
MC20
MC21
B
B
B
D
C
B
MC22
MC23
MC24
MC25
MC26
MC27
MC28
C
B
D
C
D
C
D
MC29
MC30
C
B
MC31
MC32
MC33
MC34
B
D
C
D
MC35
MC36
MC37
MC38
MC39
MC40
MC41
D
C
C
D
D
B
A
MC42
65
P 1,000,000
1,200,000
(5,000,000)
P 2,800,000
66
P 1,500,000
P 360,000
336,000
P 696,000
P 804,000