10. William, Gothong & Aboitiz, Inc. (WG & A) is a domestic company engaged in the...

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10. William, Gothong & Aboitiz, Inc. (WG & A) is a domestic company engaged in the transport of cargoes. It's present treatment of the 12% output Vat in its transport of cargoes is to immediately record, recognize and pay the same at the time when the services are recognized and recorded in the book as income for income tax purposes. As of December 31, 2018, it had outstanding accounts receivable, arising from transport of cargoes in the total amount of P700,000,000, the VAT on this receivable in the amount of P84,000,000 has already been remitted to the BIR. The company would like to book the said amount as deferred output VAT and apply the same upon payment of the output VAT on services actually collected from the customers. a. Is the plan of WG & A correct? b. What other actions should be made by the company? 10. William, Gothong & Aboitiz, Inc. (WG & A) is a domestic company engaged in the transport of cargoes. It's present treatment of the 12% output Vat in its transport of cargoes is to immediately record, recognize and pay the same at the time when the services are recognized and recorded in the book as income for income tax purposes. As of December 31, 2018, it had outstanding accounts receivable, arising from transport of cargoes in the total amount of P700,000,000, the VAT on this receivable in the amount of P84,000,000 has already been remitted to the BIR. The company would like to book the said amount as deferred output VAT and apply the same upon payment of the output VAT on services actually collected from the customers. a. Is the plan of WG & A correct? b. What other actions should be made by the company?

Answer rating: 100% (QA)

a The plan of WG A to book the VAT on outstanding accounts receivable as deferred output VAT is not ... View the full answer