Reference no: EM133051351
Question - Quantum Company reported the following pretax accounting income for several years.
2021 - P500,000
2022 - P720,000
2023 - P680,000
2024 - P650,000
2025 - P730,000
The following pieces of information are given:
There was non-taxable revenue in 2022 amounting to P100,000.
There was a non-deductible expense in 2023 amounting to P20,000.
There was a collection of P125,000 on January 1, 2021 applicable to the total rental income for a five-year operating lease. Said amount is taxable on the year of receipt.
A machinery was purchased on January 1, 2021 for P150,000. The entity depreciated the machinery using the straight-line method for five years. The sum-of-years' digits should be used for tax purposes.
Tax rate is 25%.
Tax payments applicable only to each year's current tax expense are the following:
2021 - P140,000
2022 - P160,000
2023 - P185,000
2024 - P175,000
2025 - P201,000
Required -
1. How much is the total tax-related liability as of yearend 2021?
2. How much is the total tax-related asset as of yearend 2021?
3. How much is the net deferred tax expense/benefit for 2021? [Indicate whether it is an expense of benefit]
4. How much is the total tax-related liability as of yearend 2022?
5. How much is the total tax-related asset as of yearend 2022
6. How much is the net deferred tax expense/benefit for 2022? [Indicate whether it is an expense of benefit]