Situation 1 (TRAIN LAW) HUMILITY Corporation, is a domestic corporation engaged in the business of manufacturing...

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Situation 1 (TRAIN LAW) HUMILITY Corporation, is a domestic corporation engaged in the business of manufacturing textiles. For the fiscal year end June 30,2019, its profit and loss statement reported the following: Sales Cost of goods manufactured and sold Gross income from operations Other income Total gross income Operating expense Finance costs Net income before income tax Income tax expense Net income after income tax P 100,000,000 60,000,000 40,000,000 5,000,000 45,000,000 15,000,000 5,000,000 25,000,000 4,500,000 P 20,500,000 Additional information were made available for tax reconciliation purposes: ▸ Withholding tax credit from sales of textiles (supported by BIR Form No. 2307) - P 600,000 Other income is broken down as follows: Interest income from savings deposits (net of final withholding tax) – P200,000 Gain from sale investment property (the property was not used in the primary activity of the corporation but held for lease)- P4,000,000 (gross of withholding tax amounting to P900,000) Rental income from investment property- P800,000 (gross of withholding tax) Operating expense include allowance for bad debts expense amounting to P500,000. During the year, the Corporation has written-off bad debts which are certainly uncollectible amounting to P300,000. Finance cost is broken down as follows: Interest expense on loan from various financial institutions - P3,000,000. Interest expense on loans from a majority stockholder - P2,000,000 ➤ Income tax expense, represents quarterly income tax paid. Situation 1 (TRAIN LAW) HUMILITY Corporation, is a domestic corporation engaged in the business of manufacturing textiles. For the fiscal year end June 30,2019, its profit and loss statement reported the following: Sales Cost of goods manufactured and sold Gross income from operations Other income Total gross income Operating expense Finance costs Net income before income tax Income tax expense Net income after income tax P 100,000,000 60,000,000 40,000,000 5,000,000 45,000,000 15,000,000 5,000,000 25,000,000 4,500,000 P 20,500,000 Additional information were made available for tax reconciliation purposes: ▸ Withholding tax credit from sales of textiles (supported by BIR Form No. 2307) - P 600,000 Other income is broken down as follows: Interest income from savings deposits (net of final withholding tax) – P200,000 Gain from sale investment property (the property was not used in the primary activity of the corporation but held for lease)- P4,000,000 (gross of withholding tax amounting to P900,000) Rental income from investment property- P800,000 (gross of withholding tax) Operating expense include allowance for bad debts expense amounting to P500,000. During the year, the Corporation has written-off bad debts which are certainly uncollectible amounting to P300,000. Finance cost is broken down as follows: Interest expense on loan from various financial institutions - P3,000,000. Interest expense on loans from a majority stockholder - P2,000,000 ➤ Income tax expense, represents quarterly income tax paid.

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Answer Based on the provided financial information for HUMILITY Corporation for the fiscal year endi... View the full answer