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le 501 benefit For the year ended December 31, 20x1, Mont Co.'s books showed income of P600,000 before provision for income tax ease in expense. To compute taxable income for taxation purposes, the following items should be noted: it Income from exempt municipal bonds Depreciation deducted for tax purposes in excess of depreciation recorded on the books 60,000 ease in Proceeds received from life insurance on death of officer 120,000 Estimated tax payments 100,000 Enacted corporate tax rate 30% se What amount should Mont report at December 31, 20x1, as its Income tax liability? ne lax a. 96,000 b. 114,000 IAICPA) C. 156,000 d. 162,000 J. Leer Corp.'s pretax income in 20x7 was P100,000. The temporary differences between amounts reported in the financial statements and the tax return are as follows; pense . Depreciation in the financial statements was P8,000 more than tax depreciation. . The equity method of accounting resulting in financial statement income of P35,000. A P25,000 dividend was received during the year, which is eligible for the 80% dividends received deduction. or the deral Leer's effective income tax rate was 30%% in 20x7. In its 20x7 Income statement, Leer should report a current provision for 0,000 income taxes of C. 21,900 d. 18,600 a. 26,400 b. 23,400 2.000 (AICPA) 1900 For the year ended December 31, 20x1, Tyre Co. reported Pretax financial statement income of P750,000, Its taxable income was P650,000. The difference is due to accelerated bility depreciation for income tax purposes. Tyre's effective income tax rate is 30%, and Tyre made estimated tax payments during502 20x1 of P90,000. What amount should Tyre report as current an usstalin income tax expense for 2001? b. 135,000 C. 195,000 d. 225,000 Ha. 105,000 (AICPA) 5. On January 2, 20x1, Ross Co. purchased a machine for P70,000) This machine has a 5-year useful life, a residual value of P10,000, and is depreciated using the straight-line method for financial statement purposes. For tax purposes, depreciation Income tax rat expense was P25,000 for 20x1 and P20,000 for 20x2. Ross' 20%2 income, before income taxes and depreciation expense, was are no other temp P100,000 and its tax rate was 30%. If Ross had made no adance sheet, the estimated tax payments during 20x2, what amount of current income tax liability would Ross report in its December 31, 20x2, balance sheet? a. 26,400 b. 25,800 c. 24,000 d. 22.500 hey Co. began ope (AICPA) me before inco 6. Scott Corp. received cash of P20,000 that was included in acation exceed revenues in its 20x4 financial statements, of which P12,000 will not be taxable until 20x5. Scott's enacted tax rate is 30% for in tad nondeduct 20x4, and 25% for 20x5, What amount should Scott report in retarent difference its 20x4 balance sheet for deferred income tax liability? Gerarded rate for y a. 2,000 (AICPA) b. 2,400 C. 3,000 d. 3,600 balance sheet, paty shraild Ston 7. West Corp. leased a building and received the P36,000 annual rental payment on June 15, 20x9. The beginning of the lease b was July 1, 20x9. Rental income is taxable when received West's tax rates are 30% for 20x9 and 40% thereafter. West had no other permanent or temporary differences. West determined that no valuation allowance was needed. What amount of deferred tax asset should West report in it December 31, 20x9, balance sheet? a. 5,4000 (AICPA) b. 7,200 C. 10,800 d. 14,400503 a Huff Corp. began operations on January 1, 20x8. Huff recognizes revenues from all sales under the accrual method for financial reporting purposes and appropriately uses the installment method for income tax purposes, Huff's gross margin on installment sales under each method was as follows: Year Accrual method 20x8 800,000 Installment method 20x9 1,300,000 300,000 700,000 Enacted income tax rates are 30% for 20x9 and 25% thereafter. There are no other temporary differences. In Huff's December 31, 20x9, balance sheet, the deferred income tax liability should be a. 150,000 b. 180,000 c. 275,000 d. 330,000 IAICPA) 9. Stone Co. began operations in 20x1 and reported P225,000 in income before income taxes for the year. Stone's 20x1 tax depreciation exceeded its book depreciation by P25,000. Stone also had nondeductible book expenses of P10,000 related to permanent differences. Stone's tax rate for 20x1 was 40%, and the enacted rate for years after 20x1 is 35%. In its December 31, 20x1, balance sheet, what amount of deferred income tax liability should Stone report? c. 12,250 d. 14,000 a. 8,750 b. 10,000 (AICPA)
