Tutor Financial Accounting 2

Accounting for Income Taxes

Problem 1
The following facts relate to PT Sukses:
a) Pretax financial income for 2013 is Rp1.400 million.
b) Income from rent of building is Rp100,000,000 (permanent difference)
c) Tax penalties is Rp20,000,000 (permanent difference)
d) Benefits in kind for company’s employee is Rp80 million (permanent difference)
e) Depreciation expenses reported on the income statement exceed depreciation on the
tax return by Rp20 million.
f) Interest Income from time deposit is Rp40,000,000 (permanent difference)
g) Tax Provision is Rp10,000,000 (permanent difference)
h) Amortization expense according to fiscal is Rp30 million higher than the amortization
according to commercial.
i) Prepaid tax of article 23 withheld/collected by other party is Rp80 million
j) Prepaid tax of article 25 (monthly installment) is Rp120 million
k) Tax rate is 25%

Instructions:
1) Determine the Taxable Income for PT Sukses!
2) Determine the amount of Tax Underpayment/Overpayment after considering the prepaid tax
of article 23 and 25!
3) Determine the Deferred Tax Asset and Deferred Tax Liability!
4) Prepare the necessary journal entry!
5) Present the transactions in the Income Statement of PT Sukses!
Problem 2
Hunt Co. at the end of 2012, its first year of operations, prepared a reconciliation between pretax
financial income and taxable income as follows:

Pretax financial income $ 750,000

Estimated expenses deductible for taxes when paid $1,200,000
Extra depreciation $(1,350,000)
Taxable income $ 600,000

Estimated warranty expense of $800,000 will be deductible in 2013, $300,000 in 2014, and
$100,000 in 2015. The use of the depreciable assets will result in taxable amounts of $450,000 in
each of the next three years.
Instructions
(a) Prepare a table of future taxable and deductible amounts.
(b) Prepare the journal entry to record income tax expense, deferred income taxes, and income
taxes payable for 2012, assuming an income tax rate of 40% for all years.