Ferrero Rocher Inc.’s only temporary difference at the beginning and end of 2020 is caused by a P3,000,000 total collectible amount for tax purposes for an installment sale of a plant asset, and the related receivable (only one-half of which is classified as a current asset) is due in equal installments in 2021 and 2022. The related deferred tax liability at the beginning of the year is P1,200,000. In the third quarter of 2020, a new tax rate of 34% is enacted into law and is scheduled to become effective for 2021. Taxable income for 2020 is P5,000,000, and taxable income is expected in all future years. How much is the deferred tax liability on December 31, 2020?
Ferrero Rocher Inc.’s only temporary difference at the beginning and end of 2020 is caused by a P3,000,000 total collectible amount for tax purposes for an installment sale of a plant asset, and the related receivable (only one-half of which is classified as a current asset) is due in equal installments in 2021 and 2022. The related deferred tax liability at the beginning of the year is P1,200,000. In the third quarter of 2020, a new tax rate of 34% is enacted into law and is scheduled to become effective for 2021. Taxable income for 2020 is P5,000,000, and taxable income is expected in all future years. How much is the deferred tax liability on December 31, 2020?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter18: Accounting For Income Taxes
Section: Chapter Questions
Problem 8E: Incomc Taxes Then Company has been in operation for several years. It has both a deductible and a...
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Ferrero Rocher Inc.’s only temporary difference at the beginning and end of 2020 is caused by a
P3,000,000 total collectible amount for tax purposes for an installment sale of a plant asset, and the related
receivable (only one-half of which is classified as a current asset) is due in equal installments in 2021 and
2022. The related
2020, a new tax rate of 34% is enacted into law and is scheduled to become effective for 2021. Taxable
income for 2020 is P5,000,000, and taxable income is expected in all future years. How much is the
deferred tax liability on December 31, 2020?
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