Problem $4$

An entity reported in the first year of operations pretax financial income of P$6,000,000.$ The income tax rate is $25\%.$

Tax return Accounting record

Premium on officers$$ life insurance $0265,000$

Tax exempt interest revenue $0582,600$

Uncollectible accounts expense $488,050587,250$

Depreciation expense $4,562,0003,582,000$

Warranty cost $890,0001,090,000$

Rental income $546,990746,940$

$1.$ What amount should be reported as current tax expense?

A$.1,420,600$

B$.294,987\mathrm{.}50$

C$.74,800$

D$.1,200,412\mathrm{.}50$

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

A$.1,420,600$

B$.294,987\mathrm{.}50$

C$.74,800$

D$.1,200,412\mathrm{.}50$

$3.$ What amount should be reported as deferred tax liability?

A$.1,420,600$

B$.294,987\mathrm{.}50$

C$.74,800$

D$.1,200,412\mathrm{.}50$

$4.$ What amount should be reported as total income tax expense?

A$.1,420,600$

B$.294,987\mathrm{.}50$

C$.74,800$

D$.1,200,412\mathrm{.}50$