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On June 30, 2005, LUNOX Company prepaid a P1,000,000 premium on an annual insurance policy. The premium payment was a tax deductible expense in the
On June 30, 2005, LUNOX Company prepaid a P1,000,000 premium on an annual insurance policy. The premium payment was a tax deductible expense in the 2005 cash basis tax return. The accrual basis income statement will report a P500,000 insurance expense in 2005 and 2006. The income tax rate is 30%. On December 31, 2005, what amount should be reported as deferred tax liability?
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