INCOME STATEMENT LIABILITY METHOD

An entity reported the following for the year ended December 31,2016.

Accounting Income per book 6,000,000

Payments for fines, surcharges, and penalties arising from

violation of law 500,000

Interest revenue on government bonds 150,000

Interest income on time deposits 150,000

Doubtful accounts 500,000

Estimated warranty cost that had been recognized

as expense in 2016 when the product sales were made but is deductible

for tax purposes when paid 400,000

Accounting depreciation 600,000

Tax depreciation 800,000

Unrealized losses of recognized during the year in profit or loss on

an investment in held for trading equity securities. 40,000

Gross Income on instalment sale included in accounting income

but taxable only in 2017 100,000

Income tax rate 2016 30%

2017 35%

Compute for the current tax expense, deferred tax asset, deferred tax asset, and total income tax
expense.

(Author constructed problem)