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    Quiz Accounting For Income Tax

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    1. The document provides examples of computing deferred tax assets, total income tax expense, and current income tax expense for various companies - ABC Company, Zeus Company, Luzon Company, and Bee Company - based on differences between accounting and taxable income. 2. It also provides an example of a reconciliation between pretax financial income and taxable income for Jeff Company, and computes the related deferred tax asset, deferred tax liability, total income tax expense, and current income tax expense. 3. Finally, it shows the calculation of depreciation expense over 5 years using the SYD and straight-line methods for an equipment purchase by Bee Company, which results in a timing difference between accounting and tax de

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    Quiz Accounting For Income Tax

    Uploaded by

    Cm
    123 views5 pages
    1. The document provides examples of computing deferred tax assets, total income tax expense, and current income tax expense for various companies - ABC Company, Zeus Company, Luzon Company, and Bee Company - based on differences between accounting and taxable income. 2. It also provides an example of a reconciliation between pretax financial income and taxable income for Jeff Company, and computes the related deferred tax asset, deferred tax liability, total income tax expense, and current income tax expense. 3. Finally, it shows the calculation of depreciation expense over 5 years using the SYD and straight-line methods for an equipment purchase by Bee Company, which results in a timing difference between accounting and tax de

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    1. The document provides examples of computing deferred tax assets, total income tax expense, and current income tax expense for various companies - ABC Company, Zeus Company, Luzon Company, and Bee Company - based on differences between accounting and taxable income. 2. It also provides an example of a reconciliation between pretax financial income and taxable income for Jeff Company, and computes the related deferred tax asset, deferred tax liability, total income tax expense, and current income tax expense. 3. Finally, it shows the calculation of depreciation expense over 5 years using the SYD and straight-line methods for an equipment purchase by Bee Company, which results in a timing difference between accounting and tax de

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    123 views5 pages

    Quiz Accounting For Income Tax

    Uploaded by

    Cm
    1. The document provides examples of computing deferred tax assets, total income tax expense, and current income tax expense for various companies - ABC Company, Zeus Company, Luzon Company, and Bee Company - based on differences between accounting and taxable income. 2. It also provides an example of a reconciliation between pretax financial income and taxable income for Jeff Company, and computes the related deferred tax asset, deferred tax liability, total income tax expense, and current income tax expense. 3. Finally, it shows the calculation of depreciation expense over 5 years using the SYD and straight-line methods for an equipment purchase by Bee Company, which results in a timing difference between accounting and tax de

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 5

    Philippine Christian University - Cavite

    Intermediate Accounting 2
    Quiz - Accounting for Income Tax

    ABC Company reported pretax financial income of P5,000,000.00 for the year ended December 31, 2020.
    The taxable income was P4,500,000.00. The difference is due to accerelated depreciation for income tax purposes.
    The income tax rate is 25% and ABC company made estimated tax payment of P1,000,000.00 during the current year.

    Compute:
    a Deferred Tax Asset (Liability). Put parenthesis pag liability (125,000.00)
    b Total Income Tax Expense 1,250,000.00
    c Current Income Tax Expense 1,125,000.00

    Zeus Company reported pretax financial income of P2,000,000.00 for the year ended December 31, 2020.
    The taxable income was P5,000,000.00. The difference is due to rentral received in advance. Rental income is taxable w
    The income tax rate is 25% and ABC company made estimated tax payment of P500,000.00 during the current year.

    Compute:
    a Deferred Tax Asset (Liability). Put parenthesis pag liability 750,000.00
    b Total Income Tax Expense 500,000.00
    c Current Income Tax Expense 1,250,000.00

    In 2020 Luzon Company received an advance payment of P1,500,000.00 which was subject to tax but not reported in the
    until 2021.

    The Income statement and Tax return showed the following :

    2020
    Accounting Income 5,000,000.00
    Taxable Income 6,500,000.00
    Income Tax rate 25%

    Compute for 2020


    a Deferred Tax Asset (Liability). Put parenthesis pag liability 375,000.00
    b Total Income Tax Expense 1,250,000.00
    c Current Income Tax Expense 1,625,000.00

    Compute for 2021


    d Deferred Tax Asset (Liability). Put parenthesis pag liability 0.00
    e Total Income Tax Expense 1,750,000.00
    fOn January
    Current1,Income TaxCompany
    2020 Bee Expense purchased an equipment for P3,500,000.00. The equipment
    1,375,000.00
    has an estimated life of 5
    P500,000.00 residual value.
    4
    The entity used the SYD depreciation for accounting purposes and Straight line depreciation method for tax purposes.

    The depreciation is the only timing differences.

    Bee company generated P3,000,000 accounting income before depreciation for five years. Tax rate is 25%
    Compute for 2020
    a Deferred Tax Asset (Liability). Put parenthesis pag liability 100,000.00
    b Total Income Tax Expense 500,000.00
    c Current Income Tax Expense 600,000.00

    Compute for 2021


    d Deferred Tax Asset (Liability). Put parenthesis pag liability (50,000.00)
    e Total Income Tax Expense 550,000.00
    f Current Income Tax Expense 600,000.00

    Jeff Company prepared the following reconciliation for the first year of operations:

    Pretax financial income ₱2,000,000.00


    Nontaxable income (70,000.00)
    Nondeductible expense 50,000.00
    Long term Loss accrual in excess of deductible amount 500,000.00
    Depreciation in excess of financial depreciation (300,000.00)
    Taxable Income (25%) ₱2,180,000.00

    Compute for 2020


    a Deferred Tax Asset 75,000.00
    b Deferred (Liability). Put parenthesis pag liability (125,000.00)
    c Total Income Tax Expense 495,000.00
    d Current Income Tax Expense 545,000.00
    r 31, 2020.
    ncome tax purposes.
    during the current year.

    er 31, 2020.
    Rental income is taxable when cash received.
    uring the current year.

    tax but not reported in the accounting income

    2021
    7,000,000.00
    5,500,000.00
    25%

    t has an estimated life of 5 years with

    ethod for tax purposes.

    rate is 25%
    SYD Ratio
    2020 5 33.33%
    2021 4 26.67%
    2022 3 20.00%
    2023 2 13.33%
    2024 1 6.67%
    15

    Accounting Income 2,000,000.00 2,200,000.00


    Taxable Income 2,400,000.00 2,400,000.00

    1,500,000.00 7,000,000.00
    (100,000.00) (250,000.00)
    50,000.00 500,000.00
    500,000.00 1,500,000.00
    (300,000.00) (300,000.00)
    1,650,000.00 8,450,000.00

    (105,000.00) (105,000.00)
    175,000.00 525,000.00
    507,500.00
    577,500.00 2,957,500.00
    Depreciation Expense
    Depreciation Expense
    (SYD) (Straight Line)
    ₱1,000,000.00 ₱600,000.00
    800,000.00 600,000.00
    600,000.00 600,000.00
    400,000.00 600,000.00
    200,000.00 600,000.00
    ₱3,000,000.00 ₱3,000,000.00

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