1. On January 1, 2007, Ola purchased a machine that had a list price of P46,320.

Ola paid cash of P18,000 and executed a one-year non-interest bearing note for the
balance. The going rate of interest was 18 percent. The machine has a 6-year life
and no residual value. Depreciation expense on the SYD basis at the end of 2007 is
a. P 8,092
b. P12,000
c. P13,234
d. P14,690

2. Bodie had a P5,400 temporary tax difference resulting using an accelerated

depreciation method for tax purposes at the end of 2007. This temporary difference
will reverse equally during 2008, 2009, 2010. The currently enacted tax rates are:
2007 25%; 2008 30%; 2009 26%; and 2010 25%. The related deferred tax
liability at the end of 2007 would be:
a. P1,350
b. P1,404
c. P1,431
d. P1,458