PROBLEM LL: Dowell Company reported the following carrying amount of assets and liabilities at year-end: Property 10,000,000 Plant and equipment 5,000,000 Inventory 4,000,000 Trade receivables 3,000,000 Trade payables 6,000,000 Cash 2,000,000 The value for tax purposes for property and for plant and equipment was P7,000,000 and P4,000,000, respectively. the entity has made a provision for inventory obsolescence of P2,000,000 which is not allowable for tax purposes. Further, an impairment loss against trade receivables of P1,000,000 has been made. This charge will not be allowed in the current year for tax purposes. The tax rate is 30%. 60. What amount should be reported as (1) deferred tax liability and (2) deferred tax asset at year-end? A. (1) 1,200,000; (2) 900,000 B. (1) 900,000; (2) 1,200,000 C. (1) 300,000; (2) 0 D. (1) 0; (2) 300,000 PROBLEM MM: JUICE KOHLOURD Company is in the first year of operations and reported pretax accounting income of P4,000,000. The entity provided the following information for the first year: Premium on life insurance of key officer 100.000 Depreciation on tax return in excess of book depreciation 200,000 Interest on municipal bonds 50,000 Warranty expense 40,000 Actual warranty repairs 30,000 Bad debt expense 60,000 Ending balance in allowance for bad debts 40,000 Rent received in advance that will be recognized evenly over the next three years 300,000 Income tax rate is 30%. 61. What is the current tax expense for the first year? A. 1,215,000 B. 1,260,000 C. 1,320,000 D. 1,335,000