Lobrigas, Claudine L.

BSIA-IV

Unit 6

ASSESSMENT

I. THEORY
1. C
2. B
3. A
4. B
5. B
6. A
7. B
8. A 9. D
10. B
11. A
12. C
13. D
14. A
15. B

II. PROBLEM SOLVING

Problem 1
 PretaxFinancial Income 1,600,000
Less: Nontaxable interest received (50,000)
Accounting Income subjected to final tax 1,550,000
Taxable Temporary Differences
Excess depreciation (250,000)

Deductible Temporary Differences

Long-term Accrual 100,000 Taxable Income 1,400,000

1. What amount should be reported as current tax expense?

Answer:1,400,000 x 30% = 420,000
2. What amount should be reported as total income tax expense?
Answer:1,550,000 x 30%= 465,000
3. What amount should be reported as deferred tax liability?
Answer:250,000 x 30% = 75,000

4. What amount should be reported as deferred tax asset Answer:100,000 x

30% = 30,000

Problem 2
Pretax Income 6,200,000
Permanent Differences -0-
Accounting Income subj. to tax 6,200,000
Installment accounts receivable 1,000,000
Litigation Liability (200,000)
Taxable Income 7,000,000
1. What amount should be reported as current tax expense?
Answer:7,000,000 x 30 % = 2,100,000

2. What amount should be reported as total tax expense?

Answer:6,200,000 x 30% = 1,860,000

3. What amount should be reported as deferred tax liability?

Answer:1,000,000 x 30 % = 300,000
 4. What amount should be reported as deferred tax asset Answer:200,000 x
30% = 60,000
Problem 3
Pretaxfinancial income 2,500,000

Less: interest income received

Financial income subject before tax0

Deductible temporary differences

Rent received in advance 280,000

Taxable Temporary Differences

Excess depreciation
Taxable Income

1. What amount of permanent differences between book income and taxable

income existed at year-end? Answer: 360,000

2. What amount of current tax expense should be reported?

Answer:2,260,000 x 30% = 678,000

3. What amount of income tax payable should be reported?

Answer:Current tax expense 678,000
Less: estimated tax payment 180,000
Income tax payable 498,000

4. What amount of total tax expense should be reported? Answer:2,140,000

x 30% = 642,000

Problem 4

Accounting income before tax 9,700,000

Less: Interest Income on tax-exempt municipal bonds (300,000)
Accounting income subject before tax 9,400,000
 Deductible temporary differences
Estimated Warranty Cost 150,000

Taxable Temporary Differences

Excess Depreciation (300,000)
Taxable Income 9,250,000

1. What is the current tax expense for the current year?

Answer:9,250,000 x 30% = 2,775,000

2. What is the total tax expense for the current year?

Answer:9,4000,000 x 30% = 2,820,000

3. What is the deferred tax liability at year-end? Answer:Beg.

Balance, TTD (90,000 * 30%) 27,000

Increase (300,000 * 30%) 90,000

Ending Balance 177,000

4. What is the deferred tax asset at year-end

Answer:150,000 x 30% = 45,000