Problem 1:

The following differences between financial and taxable income were reported by Daisy
Corporation for the current year:

Excess of tax depreciation over book depreciation 60,000

Interest revenue on government bonds 9,000
Excess of estimated warranty expense over actuarial 54,000
expenditures
Unearned rent received 12,000
Fines paid 30,00
Excess of income reported under percentage of completion 45,000
accounting for financial reporting over completed-contract
accounting used for tax
Interest on indebtedness incurred to purchase tax-exempt 3,000
securities
Unrealized losses on Equity securities @ PVPL (held for trading 18,000
securities) recognized for financial reporting

Additional information:
 Daisy Corporation had pretax accounting income of P 900,000 for the current year,
before considering the items listed above.
 Daisy Corporation does not have any temporary differences at the beginning of the year.
 There were no income tax payments made during the year.
 Income tax rate is 30%.

Requirements:
a. Income Tax Expense
b. Current tax expense
c. Deferred tax expense/benefit
d. Current tax payable
e. Deferred tax liability to be presented in the statement of financial position.
f. Deferred tax asset to be presented in the statement of financial position.
g. Prepare the year end adjusting entry to record income tax expense and related
accounts.