a. Prepare a schedule showing the reversal of the temporary differences and the computation of income taxes payable and deferred tax asset or liability as of December 31, 2020.b. Prepare journal entries to record income taxes payable and deferred income taxes.c. Prepare the section of the statement of comprehensive income of Wall Services beginning with "Income from continuing operations before income taxes" for the year ended December 31, 2020. 144-8.Wall Services computed pretax financial income of P2,200,000for its first year of operations ended December 31, 2020.preparing the income tax return for the year, the tax accountantdetermined the following differences between 2020 financialincome and taxable income.(a)(b)(c)Non-deductible expensesNon taxable revenuesTemporary difference - installment salesreported in financial income but not intaxable incomeP400,000140,0002020 - 30%2021-32%700,000The temporary difference is expected to reverse in the followingpattern:2022 -34%2023 – 36%In2021 - P140,000; 2022 - P320,000; 2023 - P240,000The enacted tax rates for this year and the next three years areas follows:

Answer - Part 1 - Schedule of reversal of the temporary differences - Year Working Temp…

14-8. Wall Services computed pretax financial income of P2,200,000 for its first year of operations ended December 31, 2020. In preparing the income tax return for the year, the tax accountant determined the following differences between 2020 financial income and taxable income. (a) (b) Non-deductible expenses Non taxable revenues Temporary difference - installment sales reported in financial income but not in taxable income P400,000 140,000 The temporary difference is expected to reverse in the following pattern: 2020-30% 2021-32% 700,000 2021-P140,000; 2022-P320,000; 2023 - P240,000 The enacted tax rates for this year and the next three years are as follows: 2022-34% 2023-36%

14-8. Wall Services computed pretax financial income of P2,200,000 for its first year of operations ended December 31, 2020. In preparing the income tax return for the year, the tax accountant determined the following differences between 2020 financial income and taxable income. (a) (b) Non-deductible expenses Non taxable revenues Temporary difference - installment sales reported in financial income but not in taxable income P400,000 140,000 The temporary difference is expected to reverse in the following pattern: 2020-30% 2021-32% 700,000 2021-P140,000; 2022-P320,000; 2023 - P240,000 The enacted tax rates for this year and the next three years are as follows: 2022-34% 2023-36%

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 18E

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