On January 1, 2001, ABC Company acquired a building for P5,000,000The building is depreciated using straight line method based on a usefullife of 10 years with no residual value. On January 1, 2005, the buildinghas an appraised value of P4, 800, 000. The 2005 pretax accountingincome before depreciation is P9,000,000. The income tax rate is 32%and there are no other temporary differences at the beginning of 2005.16) What is the deferred tax liability arising from the revaluation onJanuary 1, 2005?a. P960,000b. P384,000What is the 2005 current tax expense?C. P576,000d. Po 017)a. P2,720,000b. P2,624,000C. P2,880,000d. P2,784,00018)What is the deferred tax liability on December 31, 2005?a. P576,000b. P672,000C. P480,000d. P 019). What is the 2005 total income tax expense?a. P2,624,000b. P2,880,000C. P2,720,000d. P2,784,000

As per Bartleby's policy, the first 2 questions have been answered.

Answered: 16) What is the deferred tax liability…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Wildhorse Company has the following two temporary differences between its income tax expense and income taxes payable. 2025 2026 2027 Pretax financial income $820,000 $927,000 $912,000 Excess depreciation expense on tax return (28,700) (42,000) (9,700) Excess warranty expense in financial income Taxable income 20,100 10,400 7,800 $811,400 $895,400 $910,100 The income tax rate for all years is 20%. (a) Your answer is partially correct. Assuming there were no temporary differences prior to 2025, prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2025, 2026, and 2027. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)
In Step 1 the income tax expense of $8,750,000 is correct. The deferred tax liability and income tax payable are incorrect. In Step 2 the net income is correct.
P18-2 Temporary and Permanent Differences In the current year, you are calculating a diversified company’s deferred taxes. Based on an analysis of the company’s current taxable income and pretax financial income, you have iden-tified the following items that create differences between the two amounts and that may result in differences between the company’s future taxable income and its future pretax financial income: ________ 1. Percentage depletion deducted for taxes in excess of cost depletion for financial reporting _________2. Warranty costs to be deducted for taxes that were deducted as warranty expense for financial reporting _________3. Gross profit to be recognized for taxes under the completed-contract method that was recognized for financial reporting under the percentage-of-completion method _________4. Officers’ life insurance premium expense deducted for financial reporting _________5. Rent revenue to be recognized for financial reporting that was reported for taxes when…
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8
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Accounting Problem 9. A taxpayer deducted P500 interest expense in 2017 but failed to pay the same due to financial difficulty. The lender condoned the interest in 2021. Data are as follows: 2017 2018 2019 2020 2021 Income before interest P100 (P130) P80 (P160) P300 (Interest Expense)/ Condonation of interest (500) 500 Q1. What is the taxable income in 2021? Q2. What is last year to apply P160 NOLCO incurred in 2020?
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4 When should a company create a valuation allowance for a deferred tax asset? O When taxable income is greater than reported income O When there is less than a 50% probability that a company will fail to realize a portion of the asset O When there is more than a 50% probability that a company will fail to realize a portion of the asset O When reported income is greater than taxable income W
Give me correct answer with explanation.j
5

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16) What is the deferred tax liability arising from the revaluation c January 1, 2005? a. P960,000 b. P384,000 What is the 2005 current tax expense? a. P2,720,000 b. P2,624,000 C. P2,880,000 d. P2,784,000 c. P576,000 d. Po 0 17)