The difference between the book basis and tax basis of the assets and liabilities of Walang Pagod Corporation at the end of 2021 are as follows: Installment accounts receivable Litigation Liability Book Basis Tax Basis P100,000 PO 20,000 PO It is estimated that the litigation will be settled in 2022. The difference in installment accounts receivable will result in taxable amount of P60,000 in 2022 and P40,000 in 2023. Walang Pagod has taxable income of P700,000 in 2021 an is expected to have taxable income in each of the following two years. Income tax rate is 30%. This is the first year of operations of Walang Pagod.