Question
The following information was taken from PURPLE Companys 2020 statement of comprehensive income: Profit before income taxes 1,500,000 Income tax expense: Current 564,000 Deferred 42,000
The following information was taken from PURPLE Companys 2020 statement of comprehensive income:
Profit before income taxes | 1,500,000 | |
Income tax expense: | ||
Current | 564,000 | |
Deferred | 42,000 | 606,000 |
Profit after income taxes | 894,000 |
2020 was PURPLEs first year of operations. The company has a 30% tax rate and the management decided to use the accelerated depreciation for tax purposes and the straight-line method for financial reporting purposes. The amount charged to depreciation expense for financial reporting purposes was P600,000. Assuming no other temporary differences existed between book income and taxable income, what amount did PURPLE deduct as depreciation on its tax return for 2020?
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