Xavier Company provided the following information for its first year of operations ended December 31, 2021 in connection with the preparation of its income tax return: Taxable income P 4,000,000 Non-deductible expenses 200,000 Non-taxable revenue 300,000 Deferred income on installment sale included in financial income but taxable in 2022 450,000 Doubtful accounts recorded 100,000 Financial depreciation 300,000 Tax depreciation 350,000 Estimated warranty cost accrued in 2021 but not deductible for tax purposes until paid 100,000 Income tax rate 30% a. Determine the deferred tax expense or benefit of Xavier Company. b. Determine the total income tax expense of Xavier Company
Xavier Company provided the following information for its first year of operations ended December 31, 2021 in connection with the preparation of its income tax return: Taxable income P 4,000,000 Non-deductible expenses 200,000 Non-taxable revenue 300,000 Deferred income on installment sale included in financial income but taxable in 2022 450,000 Doubtful accounts recorded 100,000 Financial depreciation 300,000 Tax depreciation 350,000 Estimated warranty cost accrued in 2021 but not deductible for tax purposes until paid 100,000 Income tax rate 30% a. Determine the deferred tax expense or benefit of Xavier Company. b. Determine the total income tax expense of Xavier Company
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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PROBLEM 1
Xavier Company provided the following information for its first year of operations ended December 31, 2021 in connection with the preparation of its income tax return:
Taxable income P 4,000,000
Non-deductible expenses 200,000
Non-taxable revenue 300,000
Deferred income on installment sale
included in financial income but taxable
in 2022 450,000
Doubtful accounts recorded 100,000
Financialdepreciation 300,000
Tax depreciation 350,000
Estimated warranty cost accrued in
2021 but not deductible for tax
purposes until paid 100,000
Income tax rate 30%
Taxable income P 4,000,000
Non-deductible expenses 200,000
Non-taxable revenue 300,000
Deferred income on installment sale
included in financial income but taxable
in 2022 450,000
Doubtful accounts recorded 100,000
Financial
Tax depreciation 350,000
Estimated warranty cost accrued in
2021 but not deductible for tax
purposes until paid 100,000
Income tax rate 30%
a. Determine the deferred tax expense or benefit of Xavier Company.
b. Determine the total income tax expense of Xavier Company.
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