Homma Corporation had the following financial statement elements for which the December 31, 2020 carrying amount is different from the December 31, 2020 tax basis:

	Carrying amount	Tax basis
Equipment	P5,500,000	P4,000,000
Accrued liability – health care	500,000	0
Computer software	2,000,000	0

The difference between the carrying amount and tax basis of the equipment is due to accelerated depreciation for tax purposes. The accrued liability is the estimated health care cost that was recognized as expense in 2020 but deductible for tax purposes when actually paid. In January 2020, the entity incurred P3,000,000 of computer software cost. Considering the technical feasibility of the project, this cost was capitalized and amortized over 3 years for accounting purposes. However, the total amount was expensed in 2020 for tax purposes. The pretax accounting income for 2020 is P15,000,000. The income tax rate is 30% and there are no deferred taxes on January 1, 2020.

Based on the information above, answer the following:

1. What amount should be reported as current tax expense for 2020?
2. What amount should be reported as total tax expense for 2020?
3. What amount should be reported as deferred tax liability on December 31, 2020?
4. What amount should be reported as deferred tax asset on December 31, 2020?

Answer rating: 100% (QA)

1 2 3 4 Current tax expense for 2020 3600000 Total tax expense for 2020 4500000 Deferred tax liabili... View the full answer