Temporary difference – Future deductible amount 5-2... Bohol Company Future deductible amount: Book depreciation in excess of tax depreciation 430,000 Nontaxable income: Proceeds from
Trang 15-1 a Nontaxable
b Nondeductible
c Nondeductible
d Temporary difference – Future taxable amount
e Temporary difference – Future taxable amount
f Temporary difference – Future deductible amount
g Temporary difference – Future deductible amount
5-2.
Add Nondeductible expenses (b + c) 600,000 + 40,000 640,000
Add Future deductible amounts (f + g) 750,000 + 400,000 1,150,000 Less Future taxable amounts (d + e) 1,500,000 + 1,000,000 (2,500,000)
30% x 7,290,000
30% x 2,500,000
30% x 1,150,000
or one compound entry may be made as follows:
5-3 (Luzon Corporation)
Income tax payable: 30% x 1,200,000 P360,000
Income Tax Expense – Deferred 540,000
30% x 1,200,000 = 360,000 30% x 1,800,000 = 540,000
Trang 25-4 (Visayas Corporation)
Income tax payable: 30% x 3,550,000 P1,065,000
Deferred Tax Asset 465,000
Income Tax Benefit-Deferred 465,000 5-5 (Mindanao Corporation)
Income Tax Expense – Current 1,560,000
Income Tax Expense – Deferred (Benefit) 415,000
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) P 600,000 Income Tax Expense – Deferred (180,000 – 159,000) (21,000)
Deferred Tax Asset: 30% x (360,000 + 240,000) P 180,000 Deferred Tax Liability: 30% x 530,000 P 159,000 5-7 (Bohol Company)
Future deductible amount:
Book depreciation in excess of tax depreciation (430,000) Nontaxable income:
Proceeds from life insurance policy upon death of officer 1,250,000
5-8 (Wall Services)
(a) Schedule of reversal of the temporary differences
Pretax financial income P2,200,000 Add nondeductible expenses 400,000
Trang 3Tax rate x 30 %
Deferred tax liability (see above) P 240,000
Income Tax Expense – Deferred 240,000
(c) Income from continuing operations before income tax P2,200,000
Income tax expense:
Deferred 240,000 768,000
5-9 (Daniel Company)
(a)
Carrying Amount Tax Base Difference
Future taxable amount 300,000 100,000
Additional taxable amount
Pretax accounting income 1,100,000 990,000 1,100,000 1,200,000 (b) Deferred Tax Liability (Asset) at the end of each year is as follows:
(c) Journal entries to record current income tax:
Income Tax Expense-Current 240,000 267,000 Income Tax Payable 240,000 267,000
(30% x 800,000) (30% x 890,000)
Income Tax Expense-Current 360,000 450,000
Income Tax Payable 360,000 450,000
(30% x 1,200,000) (30% x 1,500,000)
Trang 4Journal entries to record deferred income tax:
December 31, 2009:
December 31, 2010:
December 31, 2011:
Income Tax Expense-Deferred (Benefit) 30,000 December 31, 2012:
Deferred Tax Liability 90,000
Income Tax Expense-Deferred (Benefit) 90,000 (d)
Income tax expense:
Current P 240,000 P 267,000 P 360,000 P 450,000 Deferred (Benefit) 90,000 30,000 ( 30,000) (90,000) Total income tax
expense P 330,000 P 297,000 P 330,000 P 360,000 (e)
Income before income tax P1,100,000 P 990,000 P1,100,000 P1,200,000 Less income tax
expense (see above) 330,000 297,000 330,000 360,000 Net income P 770,000 P 693,000 P 770,000 P 840,000 5-10 (Jude Company)
(a) Future taxable amount
Carrying amount of inventories > Tax Base P 100,000 Carrying amount of building & equipment > Tax Base 1,800,000
P 1,900,000 Future Deductible Amount
Carrying amount of accounts receivable < Tax Base P200,000
Carrying amount of warranty > Tax Base 800,000 Carrying amount of unearned rent > Tax Base 500,000
P 1,500,000
Deferred Tax Assets (1,500,000 x 30%) P 450,000 Deferred Tax Liability (1,900,000 x 30%) P 570,000
Trang 5Deferred Tax Asset 75,000
450,000 – 525,000
Income Tax Benefit-Deferred 830,000
1,400,000 – 570,000 MULTIPLE CHOICE QUESTIONS
Theory
Problems
MC16 B 1,800,000 x 35% = 630,000
MC17 B Excess of Book Value > Tax Basis of Equipment
MC18 B 2,000,000 x 30% + (1,000,000 x 35%) = 950,000
MC19 D 10,000,000 x 30% = 3,000,000
MC20 C (8,000,000 – 4,000,000) x 30% = 1,200,000
MC21 B [(700,000 x 30%) + (1,400,000 x 35%)] – [(500,000 x 30%) + (1,000,000 x
35%)] = 700,000 – 500,000 = 200,000 (all non-current) MC22 C 1,200,000 – 750,000 = 450,000; 450,000 x 35% = 157,500
MC23 B 1,500,000 x 30% = 450,000
MC24 D 6,000,000 x 30% = 1,800,000
MC25 C 9,000,000 x 30% = 2,700,000
MC26 D 42,000 / 30% = 140,000; 600,000 + 140,000 = 740,000
MC27 C 150,000 x 30% = 45,000
MC28 D 5,000,000 – 900,000 + 1,200,000 + 200,000 = 5,500,000;
5,500,000 x 30% = 1,650,000 MC29 C 200,000 – 40,000 = 160,000; 160,000 x 30% = 48,000
MC30 B 150,000 x 35% = 52,500; 150,000 x 35% = 52,500; 150,000 x 30% = 45,000
52,500 + 52,500 + 45,000 = 150,000 MC31 B 95,000 x 38% = 36,100
MC32 D 6,500,000 x 30% = 1,950,000 – 900,000 = 1,050,000
MC33 C (2,600,000 – 1,400,000) x 38% = 456,000
MC34 D The deferred tax asset cannot be offset against the deferred tax liability because
they will not reverse simultaneously.
MC35 D (3,000,000 x 30%) – (5,000,000 x 30%) + (4,000,000 x 30%) = 600,000 MC36 C See computation below
MC37 C See computation below
MC38 D 172,500 / 30% = 575,000; 3,000,000 + 575,000 = 3,575,000
MC39 D 1,800,000 – 80,000 + 60,000 = 1,780,000; 1,780,000 x 30% = 534,000
MC40 B 2,000,000 – 100,000 – 120,000 + 180,000 = 1,960,000; 1,960,000 x 30% =
588,000 MC41 A 5,000,000 – 500,000 + 200,000 – 4,000,000 + 1,800,000 = 2,500,000
2,500,000 x 30% = 750,000 MC42 A (5,000,000 + 400,000 – 600,000) x 30% = 1,800,000
Trang 6(see next page for items 36 and 37).
Items 36 and 37:
Future taxable amount (accrual basis profit > cash basis profit (5,000,000) Operating loss carry-forward (for tax purposes) P 2,800,000 Income tax expense
Increase in deferred tax liability 5,000,000 x 30% P 1,500,000 Less: increase in deferred tax asset
(from accrued warranty cost) = 1,200,000 x 30% P 360,000 (from operating loss carry forward)= 2,800,000 x 30% x 40% 336,000