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Chapter 4 - Income Taxes Problems Luzon Corporation

This document provides examples and problems related to calculating income taxes for corporations. It includes examples of calculating current income tax expense, deferred tax assets and liabilities, and total income tax expense for various corporations based on their pretax income, taxable income, deductible amounts, and tax rates. The problems walk through calculating income tax payable and expense for both the current and future periods.

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Johanna Raissa Capada
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71 views8 pages

Chapter 4 - Income Taxes Problems Luzon Corporation

This document provides examples and problems related to calculating income taxes for corporations. It includes examples of calculating current income tax expense, deferred tax assets and liabilities, and total income tax expense for various corporations based on their pretax income, taxable income, deductible amounts, and tax rates. The problems walk through calculating income tax payable and expense for both the current and future periods.

Uploaded by

Johanna Raissa Capada
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as XLSX, PDF, TXT or read online on Scribd
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CAPADA, Johanna Raissa C.

BSMA 2-1

CHAPTER 4 - INCOME TAXES


PROBLEMS

4-3 LUZON CORPORATION


a Pretax financial income
Future taxable amount (550,000 + 600,000 + 650,000)
Taxable income

Taxable income
Multiplied by income tax rate
Income tax expense - current

Future taxable amount


Multiplied by income tax rate
Deferred tax liability

b Particulars
Income tax expense - current
Income tax expense - deferred
Income tax expense payable
Deferred tax liability

4-4 VISAYAS CORPORATION


a Pretax financial income
Future deductible amount (500,000 + 650,000 + 400,000)
Taxable income

Taxable income
Multiplied by income tax rate
Income tax expense - current

Future deductible amount


Multiplied by income tax rate
Deferred tax asset

b Particulars
Income tax expense - current
Deferred tax asset
Income tax expense payable
Income tax benefit

4-6 SAMAR CORPORATION


Future deductible amount
Multiplied by income tax rates
Deferred tax asset

Future taxable amount (360,000 +530,000)


Multiplied by income tax rates
Deferred tax liability

Income tax payable

Pretax financial income


Mulitplied by income tax rate
Income tax expense - current

Income tax expense - current


Income tax expense - deferred (267,000 - 72,000)
Total income tax expense

4-7 BOHOL COMPANY


Taxable income
Future deductible amount
Non-taxable income
Pretax financial income

4-8 WALL SERVICES


a Schedule of reversal of the temporary differences
2021 (140,000 x 32%)
2022 (320,000 x 34%)
2023 (240,000 x 36%)
Total

Pretax financial income


Add: Non-deductible expenses
Less: Non-taxable revenues
Financial income subject to tax
Future taxable amount
Taxable income
Multiplied by income tax rate
Income tax payable

Deferred tax liability

b Particulars
Income tax expense - current
Income tax payable

Income tax expense - deferred


Deferred tax liability

c Income from continuing operations before income taxes


Income tax expense:
Current
Deferred
Profit

4 - 10 JUDE COMPANY
a Inventories (950,000 - 850,000)
Building and equipment (10,000,000 - 8,200,000)
Future taxable amount

Accounts receivable (2,100,000 - 1,900,000)


Provision for warranty
Unearned rent
Future deductible amount

b Taxable income
Multiplied by income tax rates
Income tax payable

Future taxable amount


Multiplied by income tax rates
Deferred tax liability

Future deductible amount


Multiplied by income tax rates
Deferred tax asset

c Particulars
Income tax expense - current
Income tax payable
Deferred tax liability
Income tax expense - deferred
1,400,000 - 570,000 = 830,000

Income tax expense - deferred


Deferred tax asset
525,000 - 450,000 = 75,000
TAXES

3,000,000.00
- 1,800,000.00
1,200,000.00

1,200,000.00
30%
360,000.00

1,800,000.00
30%
540,000.00

Debit Credit
360,000.00
540,000.00
360,000.00
540,000.00

2,000,000.00
1,550,000.00
3,550,000.00

3,550,000.00
30%
1,065,000.00

1,550,000.00
30%
465,000.00

Debit Credit
1,065,000.00
465,000.00
1,065,000.00
465,000.00

240,000.00
30%
72,000.00

890,000.00
30%
267,000.00

600,000.00

2,000,000.00
30%
600,000.00

600,000.00
195,000.00
795,000.00

12,000,000.00
(430,000)
450,000.00
12,020,000.00

44,800.00
108,800.00
86,400.00
240,000.00

2,200,000.00
400,000.00
- 140,000.00
2,460,000.00
- 700,000.00
1,760,000.00
30%
528,000.00

240,000.00

Debit Credit
528,000.00
528,000.00

240,000.00
240,000.00

2,200,000.00

528,000.00
240,000.00 - 768,000.00
1,432,000.00

100,000.00
1,800,000.00
1,900,000.00

200,000.00
800,000.00
500,000.00
1,500,000.00

5,000,000.00
30%
1,500,000.00

1,900,000.00
30%
570,000.00

1,500,000.00
30%
450,000.00

Debit Credit
1,500,000.00
1,500,000.00
830,000.00
830,000.00

75,000.00
75,000.00

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