On January 1, 2016, Easy Company acquired an equipment for P8,000,000 The equipment is depreciated using...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On January 1, 2016, Easy Company acquired an equipment for P8,000,000 The equipment is depreciated using straight line method based on a useful life of 8 years With no residual value. On January 1, 2019, after 3 years, the equipment was revalued at a replacement cost of P 12,000,000 with no change in the useful life. The pretax accounting income before depreciation for 2019 is P10,000,000 The income tax rate is 30% and there are no other temporary differences at the beginning ofthe year. 1. What amount should be reported as deferred tax liability on January 1, 2019 arising from the revaluation? 2. Current tax expense for the current year? 4 3. DTL on Dec. 31, 2019 arising from revaluation 4. Total tax expense? 5. Revaluation surplus Dec. 31, 2019? On January 1, 2016, Easy Company acquired an equipment for P8,000,000 The equipment is depreciated using straight line method based on a useful life of 8 years With no residual value. On January 1, 2019, after 3 years, the equipment was revalued at a replacement cost of P 12,000,000 with no change in the useful life. The pretax accounting income before depreciation for 2019 is P10,000,000 The income tax rate is 30% and there are no other temporary differences at the beginning ofthe year. 1. What amount should be reported as deferred tax liability on January 1, 2019 arising from the revaluation? 2. Current tax expense for the current year? 4 3. DTL on Dec. 31, 2019 arising from revaluation 4. Total tax expense? 5. Revaluation surplus Dec. 31, 2019?
Expert Answer:
Answer rating: 100% (QA)
Answer Solution 1 P750000 2 P2700000 3 P600000 4 P2550000 5 P1400000 Stepbystep explanation Note Deferred Tax Liability arises when the taxable income ... View the full answer
Related Book For
Financial Accounting Tools for Business Decision Making
ISBN: 978-1119368458
7th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
Posted Date:
Students also viewed these accounting questions
-
On January 1, 2010, Easy Company acquired an equipment for P8,000,000. The equipment is depreciated using straight line method based on a useful life of 8 years with no residual value. On January 1,...
-
A project that cost $80000 with a useful life of 5 years is being considered. Straight-line depreciation is being used and salvage value is $5000. The project will generate annual revenues of $21375....
-
On January 1 2016 Glass Inc (the parent) sell land costing$45,000 to its subsidiary pane co. for $80,000 (its then-current market value). if on December 31 2019 pane still owns the land, the correct...
-
On a summer day at Muscat area, the typical average outdoor temperature is 35 degrees Celsius. For the indoor temperature of a house to be kept constant a temperature of 24 degrees Celsius, the rate...
-
What are the two types of business strategy?
-
Think of a product you are familiar with-the clothes you are wearing or the beverage you just drank or the book you are reading. Identify the challenges that would be involved in distributing this...
-
You are planning to jump off a bridge with a bungee cord tied to your ankles. The bridge deck is \(150 \mathrm{~m}\) above the water, and the cord spring constant is \(40 \mathrm{~N} / \mathrm{m}\)....
-
Valenzuela Company budgeted selling expenses of $30,000 in January, $35,000 in February, and $40,000 in March. Actual selling expenses were $31,000 in January, $34,500 in February, and $47,000 in...
-
After submitting your Part A and Part B what "story" emerges about Menotomy's financial and operational strategies of the past few years?of this week's financial ratio assignments, AND looking...
-
Mike Cichanowski founded Wenonah Canoe and later purchased Current Designs, a company that designs and manufactures kayaks. The kayak-manufacturing facility is located just a few minutes from the...
-
Would you feel comfortable having your written application materials reviewed by an AI system? Why or why not
-
Judith sells a shop used in her business in July 2019 for 70,000. The shop had been bought by her mother in March 2006 for 25,000 and had been given to Judith in November 2008 when its market value...
-
Using the monthly return data given is the arithmetic mean excess return? what
-
The persons responsible for maintenance of the charge description master (CDM) at a facility should know how frequently permanent national HCPCS Level II codes are updated so that the CDM can be...
-
14) How many function calls exist in the following code? int Calel (int a, int b) ( } return a b / 2; int Calc2 (int a, } int b) ( return a b / 100; int main() { int x; int y; x Calcl (5,3); cout < <...
-
You are designing a nozzle that will form part of a large industrial system at an air treatment plant. You know the air will enter the nozzle at 5 m/s and 400 K, and that it needs to be accelerated...
-
What is the Duration and Modified duration of a 1,000 face value bond, 2 years to maturity, YTM is 9%, coupon Rate is 9%, and coupon payments are annual?
-
Complete the following acid-base reactions: (a) HCCH + NaH
-
Sparky's Mountain Bikes Ltd. markets mountain-bike tours to clients vacationing in various locations in the mountains of British Columbia. On October 1, 2017, Sparky's issued a six-month, 5% note to...
-
Explain how management communicates what it considers to be more effective measures of performance than ones that are typically measured by IFRS or ASPE.
-
The Royal Bank of Canada has a noncumulative class of preferred shares with an annual dividend rate of $1.18. David Chen owns 1,000 of these shares. If the Royal Bank declares and pays a quarterly...
-
Ibrahim bought 200 shares of a stock trading in the Abu Dhabi Securities Exchange at AED 12 (United Arab Emirates dirham) per share. Over time, the price of the stock increased to AED 18 per share....
-
Twitter is trading at \($34.50.\) Call options with a strike price of \($35\) are priced at \($2.30\) . What is the intrinsic value of the option, and what is the time value?
-
Consider a put with a strike price of \($20\) and a premium of \($4.\) If the stock price is currently \($18,\) what is the breakeven price for the buyer of the put? a. \($16\) b. $22 c. $24
Study smarter with the SolutionInn App