Problem 3:

Samar, Inc. reports taxable income of P 2,000,000 on its income tax return for the year ended
December 31, 2024.Timing difference between the financial income and taxable income for the
year are:
 Tax depreciation in excess of book depreciation- P 360,000;
 Accrual of product liability claims in excess of actual claims- P 240,000;
 Reported instalment sales income in excess of taxable instalment sales income-
P 530,000.

Required:
a. Assuming an income tax rate of 30%, compute the income tax expense –total and
current portion, deferred tax asset and liability, and income tax payable balances to be
recorded in Samar’s books.

Problem 4:

Bohol Company reported taxable income of P 12,000,000 for the year ended December 31,
2024. The controller is unfamiliar with the required treatment of temporary and permanent
difference in reconciling taxable income and pretax financial income and has contracted your
firm for advice. You are given company records that list the following differences:
Book depreciation in excess of tax depreciation P 430,000
Interest earned on government securities 450,000

Required:
Determine the pre-tax financial income.