Dizon, Marianne-Kae L.

BSA31KB2

Quiz-Solutions

3.) Tax depreciation 50,000,000.00

Tax rate 40%
20,000,000.00

4.) Depreciable asset 750,000.00

Tax rate 40%
Deferred tax liability 300,000.00

5.) Deferred tax asset 140,000.00 (350,000.00*40%)

Deferred tax liability 45,000.00
Deferred tax benefit 185,000.00

6-9.) Accounting income per book 3,500,000.00

Permanent differences expense 200,000.00
Permanent differences revenue (300,000.00)
Accounting income subject to tax 3,400,000.00
Deductible temporary differences:
Bad debts expense 100,000.00
Warranty expense 5,000.00
Taxable temporary differences:
Excess tax depreciation (50,000.00)
Deferred income tax on installment sales (450,000.00)
Taxable income 3,005,000.00

8.)Income tax expense 901,500.00

Income tax payable 901,500.00

Deferred tax asset 31,500.00

Income tax benefit 31,500.00

Income tax expense 150,000.00

Deferred tax liability 150,000.00

Tax benefit from inc in defrred tax asset (150,000.00)

Tax benefit from inc in defrred tax liability 31,500.00
6.) Net deferred tax benefit (118,500.00)
,000.00*40%)

Bad debts expense 100,000.00

Warranty expense 5,000.00
Total deductible temporary differences 105,000.00
Tax rate 30%
7.)Deferred tax asset 31,500.00

Excess tax depreciation 50,000.00

Deferred income tax on installment sales 450,000.00
Total taxable temporary differences 500,000.00
Tax rate 30%
9.)Deferred tax liability 150,000.00