Answered: Assuming Mr. X opted to be taxed at 8%…

Business

Accounting

Assuming Mr. X opted to be taxed at 8% tax under the train law. The income tax due is?

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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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

45.

Your client, Mr. X, showed you the following data:

Compensation Income, P900,000

Gross Sales, P2,800,000

Cost of Sales, 1,500,000

Operating Expenses, P750,000

Out of the operating expenses, there was P50,000 traced as questionable and unliquidated.

Assuming Mr. X opted to be taxed at 8% tax under the train law. The income tax due is?

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