1. An entity reported pretax financial income of P8,000,000 for the current year.

The taxable income was

P7,000,000 for the current year. The difference is due to accelerated depreciation for income tax purposes.
The income tax rate is 25% and the entity made estimated tax payment of P500,000 during the current year.
What amount should be reported as current tax expense for the current year?
a. 1,750,000
b. 2,000,000
c. 1,400,000
d. 1,500,000
2. An entity reported pretax accounting income of P5,000,000 for the current year. The taxable income was
P5,500,000. The difference is due to rental received in advance. Rental income is taxable when received. The
income tax rate is 25% and the entity made no estimated tax payment in the current year. What amount should
be reported as total income tax expense for the current year?
a. 1,375,000
b. 1,250,000
c. 1,500,000
d. 2,625,000
3. At the end of the first year of operations, an entity had taxable temporary differences totaling P3,000,000. Of
this total, P500,000 relates to current items. The entity also had deductible temporary differences totaling
P1,000,000, P250,000 of which relates to current items. Pretax financial income for the current year was
P20,000,000. The tax rate is 25%.
1. What amount should be reported as current tax expense for current year?
a. 4,000,000
b. 5,000,000
c. 5,500,000
d. 4,500,000
2. What is the net deferred tax expense or benefit for the current year?
a. 750,000 expense
b. 250,000 benefit
c. 500,000 expense
d. 500,000 benefit
4. An entity reported pretax accounting income of P6,000,000 during the first year of operations. The entity
made estimated payment of income tax of P900,000 during the current year. The current year tax rate is 30%
and the enacted tax rate for future years is 25%.
Tax return Accounting record
Uncollectible accounts expense 200,000 300,000
Depreciation expense 1,600,000 1,000,000
Tax-exempt interest revenue 500,000
1. What amount should be reported as current tax expense?
a. 1,500,000
b. 1,250,000
c. 1,800,000
d. 1,650,000
2. What amount should be reported as total tax expense?
a. 1,625,000
b. 1,375,000
c. 1,800,000
d. 1,950,000
5. An entity reported in the first year of operations pretax financial income of P5,000,000
Tax return Accounting record
Premium on officers’ life insurance 0 150,000
Payment of tax penalty 0 250,000
Uncollectible accounts expense 200,000 600,000
Depreciation expense 1,200,000 1,000,000
Warranty cost 300,000 900,000
Rent received in advance 500,000 0
1. What is the current tax expense (Tax rate 25%)?
a. 1,675,000
b. 1,575,000
c. 1,550,000
d. 1,725,000
2. What is the net deferred tax expense or benefit?
a. 325,000 benefit
b. 325,000 expense
c. 425,000 benefit
d. 425,000 expense
3. What is the total tax expense?
a. 1,350,000
b. 2,000,000
c. 1,250,000
d. 1,300,000
6. An entity reported the following information after the first year of operations:
Income before income tax 5,400,000
Income tax expense
Current 1,250,000
Deferred 100,000 1,350,000
Net income 4,050,000
The entity used the straight line method of depreciation for financial reporting purposes and accelerated
depreciation for tax purposes. The amount charged to depreciation expense per book was P1,600,000. No
other differences existed between book income and taxable income except for the depreciation. The tax rate
is 25%. What amount was deducted for depreciation in the tax return?
a. 1,700,000
b. 1,500,000
c. 1,200,000
d. 2,000,000
7. An entity reported the following assets and liabilities at year-end:
Carrying amount Tax base
Machinery 1,650,000 1,250,000
Accounts receivable 1,500,000 1,750,000
Deposits received in advance 150,000 0
Provision for warranty 500,000 0
1. What amount should be reported as deferred tax liability?
a. 300,000
b. 200,000
c. 100,000
d. 400,000
2. What amount should be reported a deferred tax asset??
a. 900,000
b. 225,000
c. 125,000
d. 500,000