question archive Tantrum Company began operations at the beginning of the current year
Tantrum Company began operations at the beginning of the current year
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Tantrum Company began operations at the beginning of the current year. At the end of the first year of operations, the entity reported P6,000,000 income before income tax in the income statement but only P5,100,000 taxable income in the tax return.
Analysis of the P900,000 difference revealed that P500,000 was a permanent difference and P400,000 was a temporary tax liability difference related to a current asset. The enacted tax rate for the current year and future years is 30%.
What is the current tax expense?
a. 1,800,000
b. 1,530,000
c. 1,380,000
d. 1,680,000
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Answer:
b .
Step-by-Step explanation
b. 1,530,000
Current tax expense = Taxable income x Tax rate
Current tax expense = P5,100,000 x 30%
Current tax expense = P1,530,000
