Problem $3$

Zambia Company reported depreciation of P$2,500,000$ in the tax return for the current year. However, in the income statement, the entity reported depreciation of P$1,000,000.$ The difference is temporary that will reverse over time.

In addition, the entity leased a building and received P$4,000,000$ annual rental payment on June $15,2024.$ The beginning of the lease was July $1,2024.$ Rental income is taxable when received. The income tax rate is $30\%.$

$1.$ What amount should be reported as deferred tax asset?

A$.1,200,000$

B$.300,000$

C$.600,000$

D$.450,000$

$2.$ What amount should be reported as deferred tax liability?

A$.300,000$

B$.750,000$

C$.450,000$

D$.1,200,000$