AB Company, a domestic corporation, started operations in the latter part of the first quarter of 2019. The company opted to report its financial statements for the nine months ended December 31,2019. The pretax financial income for the period was P 1,200,000. In preparing the income tax return for the period, the tax accountant determined the following differences between 2019 financial income and taxable income. a. Because of non-compliance with some local government requirements, the city treasurer assessed fines and penalties totaling P 22,500. b. The company made a donation to a foundation amounting to P 25,000. Tax laws considers a donation of this kind as non-deductible in full amount. c. Dividend revenue received from equity investments from a domestic corporation, P 5,200. d. Rent was paid in advance for one year amount to P 240,000. The financial statement of AB Company reported a prepaid rent of P 60,000. e.) The company uses straight line depreciation for all its depreciable assets and the sum of the year's digit for tax purposes, resulting to a difference in depreciation expense of P 50,000. Currently, the income tax rate is 30%. There are no changes in tax rates that have been enacted or substantially enacted for future years.
AB Company, a domestic corporation, started operations in the latter part of the first quarter of 2019. The company opted to report its financial statements for the nine months ended December 31,2019. The pretax financial income for the period was P 1,200,000. In preparing the income tax return for the period, the tax accountant determined the following differences between 2019 financial income and taxable income. a. Because of non-compliance with some local government requirements, the city treasurer assessed fines and penalties totaling P 22,500. b. The company made a donation to a foundation amounting to P 25,000. Tax laws considers a donation of this kind as non-deductible in full amount. c. Dividend revenue received from equity investments from a domestic corporation, P 5,200. d. Rent was paid in advance for one year amount to P 240,000. The financial statement of AB Company reported a prepaid rent of P 60,000. e.) The company uses straight line depreciation for all its depreciable assets and the sum of the year's digit for tax purposes, resulting to a difference in depreciation expense of P 50,000. Currently, the income tax rate is 30%. There are no changes in tax rates that have been enacted or substantially enacted for future years.
Chapter18: Accounting Periods And Methods
Section: Chapter Questions
Problem 9DQ
Related questions
Question
How much is the
A. P 33,000 and P 1,352,500
B. P 30,000 and P 372,690
C. P 30,000 and P 1,352,500
D. P 33,000 and P 372,690
Transcribed Image Text:AB Company, a domestic corporation, started operations in the latter part of the first quarter of 2019. The company opted
to report its financial statements for the nine months ended December 31,2019. The pretax financial income for the period
was P 1,200,000. In preparing the income tax return for the period, the tax accountant determined the following
differences between 2019 financial income and taxable income.
a. Because of non-compliance with some local government requirements, the city treasurer assessed fines and penalties
totaling P 22,500.
b. The company made a donation to a foundation amounting to P 25,000. Tax laws considers a donation of this kind as
non-deductible in full amount.
c. Dividend revenue received from equity investments from a domestic corporation, P 5,200.
d. Rent was paid in advance for one year amount to P 240,000. The financial statement of AB Company reported a prepaid
rent of P 60,000.
e.) The company uses straight line depreciation for all its depreciable assets and the sum of the year's digit for tax purposes,
resulting to a difference in depreciation expense of P 50,000.
Currently, the income tax rate is 30%. There are no changes in tax rates that have been enacted or substantially enacted
for future years.
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