The profit before tax, as reported in the income statement of Uwu Corporation for the year...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The profit before tax, as reported in the income statement of Uwu Corporation for the year ended December 31, 2020. amounted to P1.920,000, including the following revenue and expense items: Rent revenue P450.000 . Unrealized gain on financial assets at fair value through profit or loss P110,000 . Dividend income P90.000 . Provision for doubtful accounts P29,800 • Provision for inventory writedown - P39.800 • Operating expenses see items 4 and 5 below. Interest expense P100,000 The statements of financial position of Uwu al December 31, 2020 and 2019 showed the following assets and liabilitics: Assets Cash and cash equivalents Accounts receivable Allowance for doubtful accounts Financial assets at fair value through profit or loss Inventories Allowance for inventory writedown Land Building Accumulated depreciation Building Machinery and equipment Accumulated depreciation - Machinery and equipment. Deferred tax asset Liabilities Accounts payable Accrued operating expenses Unearned rent Income tax payable Loans payable Deferred tax liability 2020 800,000 1,385,000 (125,000) 800,000 (310,000) ? 750,000 (82,500) 400,000 1,450,000 1,450,000 (217,500) (145,000) 700,000 480,000 521,575 553,000 675,000 ? 1,000,000 2019 510,000 1,190,000 (95,200) 690,000 610,000 (42,700) 250,000 (192,000) Based on the information above, answer the following: 1. What is the balance of income tax payable as of December 31, 2020? 2. What is the balance of deferred tax asset as of December 31, 2020? 429,480 720,000 482,000 1,125,000 276,000 1,000,000 72,600 Additional information: 1. Uwu leased a portion of its building as an office space with Eksdi, Inc. on July 1, 2019 under an operating lease arrangement. Eksdi has already prepaid the entirel rent for three years amounting to P1,350,000, or P450,000 annually, on July 1. 2019. 2. Uwu invested in equity instruments that it classified at fair value through profit or loss. The cost of this investment on April 1, 2019 (the date of acquisition) was P500,000. The dividend received is related to this investment. 3. There were no write-offs nor reversals on the allowances for doubtful accounts and inventory writedown during the 2020. 4. 20% of the prepaid operating expenses on December 31, 2019 and 2020 results to a temporary difference, which will reverse the following year. 5.35% of the accrued operating expenses on December 31, 2019 and 2020 results to a lemporary difference, which will reverse the following year. 6. The depreciation for both building, and machinery and equipment are the same for accounting and taxation purposes. 7. The loan was drawn on January 1, 2018, with 10% interest payable every December 31. 3. What is the balance of deferred tax liability as of December 31, 2020? 4. How much is the total provision for (benent from) income tax for the year ended December 31, 2020? The profit before tax, as reported in the income statement of Uwu Corporation for the year ended December 31, 2020. amounted to P1.920,000, including the following revenue and expense items: Rent revenue P450.000 . Unrealized gain on financial assets at fair value through profit or loss P110,000 . Dividend income P90.000 . Provision for doubtful accounts P29,800 • Provision for inventory writedown - P39.800 • Operating expenses see items 4 and 5 below. Interest expense P100,000 The statements of financial position of Uwu al December 31, 2020 and 2019 showed the following assets and liabilitics: Assets Cash and cash equivalents Accounts receivable Allowance for doubtful accounts Financial assets at fair value through profit or loss Inventories Allowance for inventory writedown Land Building Accumulated depreciation Building Machinery and equipment Accumulated depreciation - Machinery and equipment. Deferred tax asset Liabilities Accounts payable Accrued operating expenses Unearned rent Income tax payable Loans payable Deferred tax liability 2020 800,000 1,385,000 (125,000) 800,000 (310,000) ? 750,000 (82,500) 400,000 1,450,000 1,450,000 (217,500) (145,000) 700,000 480,000 521,575 553,000 675,000 ? 1,000,000 2019 510,000 1,190,000 (95,200) 690,000 610,000 (42,700) 250,000 (192,000) Based on the information above, answer the following: 1. What is the balance of income tax payable as of December 31, 2020? 2. What is the balance of deferred tax asset as of December 31, 2020? 429,480 720,000 482,000 1,125,000 276,000 1,000,000 72,600 Additional information: 1. Uwu leased a portion of its building as an office space with Eksdi, Inc. on July 1, 2019 under an operating lease arrangement. Eksdi has already prepaid the entirel rent for three years amounting to P1,350,000, or P450,000 annually, on July 1. 2019. 2. Uwu invested in equity instruments that it classified at fair value through profit or loss. The cost of this investment on April 1, 2019 (the date of acquisition) was P500,000. The dividend received is related to this investment. 3. There were no write-offs nor reversals on the allowances for doubtful accounts and inventory writedown during the 2020. 4. 20% of the prepaid operating expenses on December 31, 2019 and 2020 results to a temporary difference, which will reverse the following year. 5.35% of the accrued operating expenses on December 31, 2019 and 2020 results to a lemporary difference, which will reverse the following year. 6. The depreciation for both building, and machinery and equipment are the same for accounting and taxation purposes. 7. The loan was drawn on January 1, 2018, with 10% interest payable every December 31. 3. What is the balance of deferred tax liability as of December 31, 2020? 4. How much is the total provision for (benent from) income tax for the year ended December 31, 2020?
Expert Answer:
Answer rating: 100% (QA)
1 The balance of income tax payable as of December 31 2020 is P276000 Calculation Profit before tax Rent revenue Unrealized gain on financial assets a... View the full answer
Related Book For
Managerial Accounting Tools for Business Decision Making
ISBN: 9781119403999
5th Canadian edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly
Posted Date:
Students also viewed these accounting questions
-
The cost of the fair value through profit or loss securities of Cepeda Company at December 31, 2011, is $62,000. AT December 31, 2011, the fair value of the securities is $59,000. Prepare the...
-
For the year ended December 31, 2013, Ebanks, Inc., earned an ROI of 12%. Sales for the year were $150 million, and average asset turnover was 2.5. Average stockholders equity was $50 million....
-
The statement of cash flows for the year ended December 31, 2013, for Bronco Metals is presented below. Required: Prepare the statement of cash flows assuming that Bronco prepares its financial...
-
A website that reviews recent movies lists 6 five-star films (the highest rating), 17 four-star films, 14 three-star films, 9 two-star films, and 4 one-star films. Make a frequency table for the data...
-
The Burj Khalifa in Dubai is 2,717 feet tall, making it the world's tallest building.
-
What is the greatest advantage of outdoor advertising? Directory advertising?
-
What is the plain-meaning rule?
-
BBB Companys balance sheet and income statement follow: Required a. Prepare a statement of cash flows for the year ended December 31, 2009. (Present the cash flows from operations using the indirect...
-
Problem 2 o is the fitted value or predicted value of the response when the predictor is xo. 1) Derive the variance of o, o2 {0}, in a Simple Linear Regression setting when there is only one...
-
BHELL has to decide whether or not to drill for oil in a new offshore site located in South China Sea, close to the Sarawak border. Previous effort made by BHELL in a nearby area shows that only 40%...
-
GEOGRAPHY Arctic Name the human activities taking place in the Arctic . 2. Any activities that may be missing? 3.Pick three marine activities in Arctic and explain how this would impact the region....
-
A stock is currently trading for $10. It will either move up or down 10% in each of the next two years. The risk-free rate is 5%. What is a call option with strike $10 worth today?
-
The start of a business requires answers to several complicated questions. One such question is the type of business structure for the new organization. This week we focus on the partnership...
-
A company just paid dividends of $2.75 per share. The company has a constant growth of 5.5%. The risk-free rate is 2.5%, beta is 0.90 and market return of 8%. The stock is selling at $75.50. a....
-
RegularAction is just a subclass of Action: true Expected: true RegularAction activities have no extra fields:true Expected: true Looking at regular actions: Wash your hands Expected: Wash your hands...
-
Provide academic research and find out what variables affect the insurance premiums and how, against 1) stock market losses (Put option value) 2) mortgage insurance, 3) car insurance, and 4) life...
-
Create a SQL stored procedure called SignUpForShift, which takes a VolunteerPersonID, Date, DepartmentID, and JobID as input and adds a new entry to the Volunteer,Schedule tables for that volunteer...
-
With your classmates, form small teams of skunkworks. Your task is to identify an innovation that you think would benefit your school, college, or university, and to outline an action plan for...
-
In May 2020, the budget committee of Big Jim Stores assembles the following data for preparing the merchandise purchases budget for the month of June: Prepare a purchases budget and budgeted income...
-
For the quarter ended March 31, 2020, Westphal Company accumulates the following sales data for its product, Garden-Tools: $350,000 budgeted; $335,000 actual. Prepare a static budget report for the...
-
For the year ending December 31, 2020, Sanjay Company accumulates the following data for the plastics division, which it operates as an investment centre: contribution margin $700,000 budgeted,...
-
The latent heat of vaporization per unit mass of a pure substance at a given temperature, \(\lambda\), is defined as the difference in enthalpy between the saturated vapor and saturated liquid at the...
-
It is desired to dehumidify \(1.2 \mathrm{~m}^{3} / \mathrm{s}\) of air, available at \(311 \mathrm{~K}\) with a wet-bulb temperature of \(303 \mathrm{~K}\), to a wet-bulb temperature of \(288...
-
Modify the Mathcad program developed in Problem 3.16 to estimate the minimum gas flow rate in strippers so that it can be used to estimate the minimum air flow required for water cooling. Test your...
Study smarter with the SolutionInn App