1.In 2003, the Worf Company, reported pretax financial income of P500,000. Included in that pretax financial income was P90,000 of nontaxable life insurance proceeds received as a result of the death of an officer;P120,000 of warranty expenses accrued but unpaidas of December 31, 2003;and P20,000 of life insurance premiums for a policy for an officer. Worf is the beneficiary. Worf is subject to an income tax rate of 40%.

Requirements:

a.How much is the income tax expense for 2003?

b.How much is the current tax expense for 2003?

c.How much is the deferred tax expense (benefit) for 2003?

d.Provide the year-end adjusting entry to record the income tax expense.