Details of CPA Company are as
Details of CPA Company are as follows:
Sales 5,000,000
Costof GoodsSold 2,000,000
InterestIncome reported 5,000
OperatingExpense perPFRS 1,500,000
WarrantyExpense 250,000
ActualWarrantyPaid 200,000
DepreciationExpense perPFRS 200,000
DepreciationExpense perBIR 150,000
DoubtfulAccounts 100,000
AccountingIncome 400,000
TaxRate 30%
1. How much is the Income TaxExpense of CPA Company?
2. How much is the Income TaxPayable (Current Tax Expense) of CPA Company?
3. Statement I : FutureTaxable Difference is a Permanent Difference
Statement II : Future DeductibleDifference is a Temporary Difference
- Both Statements are True
- Both Statements are False
- Only Statement 1 is True
- Only Statement 2 is True
- 4. StatementI : In a Direct Financing Leasethe Lessor earn from Financing Income Only
StatementII : In a Direct Financing Lease theLessor does not earn Dealers Income
- Both Statements are True
- Both Statements are False
- Only Statement 1 is True
- Only Statement 2 is True
Answer:
| 1 | INCOME TAX EXPENSES OF CPACOMPANY | |
| INCOME | ||
| Sales | 5000000 | |
| Interest Income reported | 5000 | |
| Accounting Income | 400000 | |
| TOTAL INCOME(A) | 5405000 | |
| EXPENSES | ||
| Cost of goods sold | 2000000 | |
| Operating Expenses | 1500000 | |
| Warranty Expenses | 250000 | |
| Depreciation expenses perPFRS | 200000 | |
| Doubtful Accounts | 100000 | |
| TOTAL EXPENSES(B) | 4050000 | |
| INCOME TAXABLE (A – B) | 1355000 | |
| Tax Rate | 30% | |
| Income tax Expenses of CPAcompany | 406500 | |
| ( 1355000 X 30%) | ||
| 2 | INCOME TAX PAYABLE | |
| INCOME TAXABLE AS PERACCOUNTING | 1455000 | |
| Add: Depreciation expenses -PFRS | 200000 | |
| Add: Warranty Expenses | 250000 | |
| TOTAL | 1905000 | |
| Less: Depreciation as perBIR | 150000 | |
| Less: Actual waranty paid | 200000 | |
| INCOME TAXABLE AS PER BIR | 1555000 | |
| Tax Rate | 30% | |
| Current tax Expenses of CPAcompany | 466500 | |
| ( 1355000 X 30%) | ||
| 3 | d. Only Statement 2 isTrue | |
| 4 | c. Only Statement 1 isTrue |
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