KreamyKeyk Company, in its first year of operations, has the following difference between the carrying value and tax base of its assets and liabilities at the end of 2018: Carrying Value Tax Base Equipment (net) 800,000 680,000 Estimated warranty liability 400,000 0 KreamyKeyk Company estimated that the warranty liability will be settled in 2019. The difference in equipment (net) will result in taxable amounts as shown below: Year Amount 2019 40,000 2020 60,000 2021 20,000 The company has taxable income of P1,040,000 for 2018. The income tax rate is 30%. REQUIREMENTS: 1.What amount of deferred tax liability and asset should be reported in KreamyKeyk’s statement of financial position at December 31, 2018? 3. What is the amount of income tax payable (current) to be reported in KreamyKeyk’s statement of financial position at December 31, 2018? 4. What is the total income tax expense for 2018?
KreamyKeyk Company, in its first year of operations, has the following difference between the carrying value and tax base of its assets and liabilities at the end of 2018:
|
|
Carrying Value |
Tax Base |
|
Equipment (net) |
800,000 |
680,000 |
|
Estimated warranty liability |
400,000 |
0 |
KreamyKeyk Company estimated that the warranty liability will be settled in 2019.
The difference in equipment (net) will result in taxable amounts as shown below:
|
Year |
Amount |
|
2019 |
40,000 |
|
2020 |
60,000 |
|
2021 |
20,000 |
The company has taxable income of P1,040,000 for 2018. The income tax rate is 30%.
REQUIREMENTS:
1.What amount of
3. What is the amount of income tax payable (current) to be reported in KreamyKeyk’s statement of financial position at December 31, 2018?
4. What is the total income tax expense for 2018?
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