Reference no: EM133903252

Problem

Diffi-Colt Corp. is a domestic corporation in manufacturing business. It owns the piece of land and buildings where it conducts manufacturing operations. However, marketing activities are in a building that it is renting in the shopping center of the metropolis. In a year, data on operations follow: Gross profit from sales P20,000,000 Net interest income from deposit in a domestic bank 40,000 Interest expense on loan 200,000 Depreciation of buildings - manufacturing (based on cost) 200,000 Amortization of patents 300,000 Contribution to a pension trust set up during the year: For past service cost 2,000,000 For current service cost 50,000 Provision for bad debts (write off during the year was P60,000) 70,000 Research and development costs, with benefits to be received from it beginning the second semester of the year (to be treated as deferred charges) 1,000,000 Expenditure for leasehold improvements on rented building (with useful life of 30 years, and remaining lease term of 20 years) 1,200,000 Contributions: To the government, for a priority activity in housing 200,000 To a local Roman Catholic parish 5,000 To NGOs organized and operated for charitable purposes 500,000 To VAWC victims 12,000 Other expenses of operations 10,000,000 Get the instant assignment help. How much would be the total allowable deductions?