On January 1, 2020, Valley Company entered into a 3-year construction contract that had an estimated gross
Question:
On January 1, 2020, Valley Company entered into a 3-year construction contract that had an estimated gross revenue of P3,000,000.
The entity used the percentage of completion in recognizing income and reported construction income as:
2020 | 600,000 |
2021 | 1,500,000 |
2022 | 900,000 |
The cost recovery method is used for income tax purposes and the entity reported construction income as:
2020 | 0 |
2021 | 0 |
2022 | 3,000,000 |
This is the only timing difference between pretax accounting income and taxable income.
The entity reported income before construction income and tax as:
2020 | 2,400,000 |
2021 | 3,600,000 |
2022 | 3,200,000 |
Income tax required | 30% |
Complete the table below.
2020 | 2021 | 2022 | |
FINANCIAL POSITION | |||
Deferred tax asset | |||
Deferred tax liability | |||
STATEMENT OF INCOME | |||
Net income before tax | |||
Taxable income | |||
Current tax expense | |||
Income tax benefit | |||
Deferred tax expense | |||
Total income tax expense | |||
Intermediate Accounting principles and analysis
ISBN: 978-0471737933
2nd Edition
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso