quiz 4 it & eb
TRANSCRIPT
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ATENEO DE DAVAO UNIVERSITY
ACC 6 FINANCIAL ACCOUNTING 3
QUIZ 1 ACCOUNTING FOR INCOME TAX AND EMPLOYEE BENEFITS
NAME: _______________________________________________
General Instructions:
1. Provide what is required.
2. Write all final answers in the space provided.
3. No need to show your solutions.4. Minimize erasures.
5. Use only black or blue pen.
6. No shortcuts allowed.
7. Round off final answers to the nearest whole number. Round off PV factors to 4 decimal places.
8. NFI will automatically give you no credit.
Problem
The unadjusted financial statements of Morning Chow, Inc.'s first year of operations are as follows:
MORNING CHOW, INC.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED DECEMBER 31, 2013
Notes
Sales
Cost of Sales
Gross Profit
Add: Other Income 1
Total Profit
Less: Operating Expenses
Salaries and Wages 2
Rent Expense 3
Gas and Oil, and Other Utilities
Taxes and Licenses 4
Depreciation 5
Doubtful Accounts Expense 6Miscellaneous 7
Income before Tax
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MORNING CHOW, INC.
STATEMENT OF FINANCIAL POSITION
AS OF THE PERIOD ENDED DECEMBER 31, 2013
Notes
Cash and Cash Equivalents 8
Trade Receivables, net 9
Fair Value through Profit or Loss 10
Prepaid Assets 11
Capital Assets, net 12Total Assets
Trade Payables
Share Capital
Share Premium
Retained Earnings
Total Liabilities and Equity
NOTES TO THE FINANCIAL STATEMENTS
1 Other Income
Unrealized Gain - Fair Value through Profit or LossGain on Sale of Capital Asset
Interest Income on Cash in Bank (subject to 10% final tax)
Total
2 Salaries and Wages
Salaries and Wages to Employees
Contribution made to Retirement Benefits Plan
Total
3 Rent Expense
Monthly rent payment is subject to 12% VAT. However, rent expense shown in the financial statements is
exclusive of Output VAT. Also, 5% of rent is withheld every month subject to 1601-E remittance.
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4 Taxes and Licenses
Business Permit and other licenses
Tax penalties and surcharges
BIR registration
5 Depreciation
Capital Assets have a useful life of 10 years with nominal residual value.
6 Doubtful Accounts Expense
Doubtful Accounts Expense is 2% of credit sales which is 40% of total sales.
7 Miscellaneous
Life Insurance Premium (entity is beneficiary)
Kitchen Miscellaneous Supplies
Office Supplies
Total
8 Cash and Cash Equivalents
Cash in BankCash on Hand
Total
9 Trade and Other Receivables, net
Accounts written off in 2013 amounted to
10 Fair Value through Profit or Loss
Investments in Equity Securities classified as Fair Value through Profit or Loss. Purchased at
11 Prepaid Assets
Two months advance for the leased building
12 Capital Assets, net
The Company sold an equipment in 2013. Details of the sale are as follows:
Selling Price
Original Cost of Asset
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Additional information:
1 Note that financial statements are prepared according to the accrual basis and Income subject to Income Tax is
to be prepared according to the cash basis.
2 Income tax is yet to be computed.
3 Reflected in the Salaries and Wages is the amount contributed to the Defined Benefit Plan. However, an adjustment
is still to be made to reflect the correct retirement benefit expense.
On January 1, 2013, the memorandum records in relation to a defined benefit plan showed the following:
Fair value of plan assets
Projected benefit obligation
Prepaid/accrued benefit cost
During the current year, the following transactions are gathered:
Current service cost
Past service cost
Actual return on plan assets
Contribution to the plan
Benefits paid
Actuarial loss due to increase in PBO
Discount rate
4 Deductible depreciation expense for tax purposes is
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Required
1 Refer to the Company's Defined Benefit Plan
a.Compute for the interest cost.b.Compute for the expected return.c. Compute for the amortization of actuarial gain.d.Compute for the total benefit expense.e. What is the debit /(credit) to Employee benefit expense to reflect the adjustment.
f.Compute for the Fair value of plan assets as of December 31, 2012.g.Compute for the Projected benefit obligation as of December 31, 2012.h. Compute for the actuarial gain/(loss) during the year.i.Compute for the unamortized actuarial gain as of December 31, 2012.j.Compute for the balance of the prepaid/accrued benefit cost. State whether it is debit or credit.k.What is the debit/(credit) to Net remeasurement loss - OCI to reflect the adjustment.
l. What is the debit/(credit) to Prepaid/accrued benefit cost to reflect the adjustment.
2 Compute for the deductible salaries expense for tax purposes.
3 Compute for the deductible depreciation expense for tax purposes.
4 Compute for the deductible taxes and licenses for tax purposes.
5 Compute for the deductible rent expense for tax purposes.
6 Compute for the deductible doubtful accounts expense for tax purposes.
7 Compute for the deductible miscellaneous expense for tax purposes.
8 Compute for the accounting income subject to tax.
9 Compute for the deductible temporary differences.
10 Compute for the taxable temporary differences.11 Compute for the taxable income.
12 Compute for
a. The current tax expense
b. The deferred tax asset
c. The deferred tax liability
13 Compute for the net income after tax.
***END***
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ATENEO DE DAVAO UNIVERSITY
ACC 6 FINANCIAL ACCOUNTING 3
QUIZ 1 ACCOUNTING FOR INCOME TAX AND EMPLOYEE BENEFITS
NAME: _______________________________________________
General Instructions:
1. Provide what is required.
2. Write all final answers in the space provided.
3. No need to show your solutions.4. Minimize erasures.
5. Use only black or blue pen.
6. No shortcuts allowed.
7. Round off final answers to the nearest whole number. Round off PV factors to 4 decimal places.
8. NFI will automatically give you no credit.
Problem
The unadjusted financial statements of Morning Chow, Inc.'s first year of operations are as follows:
MORNING CHOW, INC.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED DECEMBER 31, 2013
Sales
Cost of Sales
Gross Profit
Add: Other Income
Total Profit
Less: Operating Expenses
Salaries and Wages
Rent Expense
Gas and Oil, and Other Utilities
Taxes and Licenses
Depreciation
Doubtful Accounts ExpenseMiscellaneous
Income before Tax
Notes
1
2
3
4
5
67
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MORNING CHOW, INC.
STATEMENT OF FINANCIAL POSITION
AS OF THE PERIOD ENDED DECEMBER 31, 2013
Cash and Cash Equivalents
Trade Receivables, net
Fair Value through Profit or Loss
Prepaid Assets
Capital Assets, netTotal Assets
Trade Payables
Share Capital
Share Premium
Retained Earnings
Total Liabilities and Equity
NOTES TO THE FINANCIAL STATEMENTS
1 Other Income
Unrealized Gain - Fair Value through Profit or LossGain on Sale of Capital Asset
Interest Income on Cash in Bank (subject to 10% final tax)
Total
2 Salaries and Wages
Salaries and Wages to Employees
Contribution made to Retirement Benefits Plan
Total
3 Rent Expense
Monthly rent payment is subject to 12% VAT. However, rent expense shown in the financial statements is
exclusive of Output VAT. Also, 5% of rent is withheld every month subject to 1601-E remittance.
Notes
8
9
10
11
12
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4 Taxes and Licenses
Business Permit and other licenses
Tax penalties and surcharges
BIR registration
5 Depreciation
Capital Assets have a useful life of 10 years with nominal residual value.
6 Doubtful Accounts Expense
Doubtful Accounts Expense is 2% of credit sales which is 40% of total sales.
7 Miscellaneous
Life Insurance Premium (entity is beneficiary)
Kitchen Miscellaneous Supplies
Office Supplies
Total
8 Cash and Cash Equivalents
Cash in BankCash on Hand
Total
9 Trade and Other Receivables, net
Accounts written off in 2013 amounted to
10 Fair Value through Profit or Loss
Investments in Equity Securities classified as Fair Value through Profit or Loss. Purchased at
11 Prepaid Assets
Two months advance for the leased building
12 Capital Assets, net
The Company sold an equipment in 2013. Details of the sale are as follows:
Selling Price
Original Cost of Asset
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Additional information:
1 Note that financial statements are prepared according to the accrual basis and Income subject to Income Tax is
to be prepared according to the cash basis.
2 Income tax is yet to be computed.
3 Reflected in the Salaries and Wages is the amount contributed to the Defined Benefit Plan. However, an adjustment
is still to be made to reflect the correct retirement benefit expense.
On January 1, 2013, the memorandum records in relation to a defined benefit plan showed the following:
Fair value of plan assets
Projected benefit obligation
Prepaid/accrued benefit cost
During the current year, the following transactions are gathered:
Current service cost
Past service cost
Actual return on plan assets
Contribution to the plan
Benefits paid
Actuarial loss due to increase in PBO
Discount rate
4 Deductible depreciation expense for tax purposes is
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Required
1 Refer to the Company's Defined Benefit Plan
a.Compute for the interest cost.b.Compute for the expected return.c. Compute for the amortization of actuarial gain.d.Compute for the total benefit expense.e. What is the debit /(credit) to Employee benefit expense to reflect the adjustment.
f.Compute for the Fair value of plan assets as of December 31, 2012.g.Compute for the Projected benefit obligation as of December 31, 2012.h. Compute for the actuarial gain/(loss) during the year.i.Compute for the unamortized actuarial gain as of December 31, 2012.j.Compute for the balance of the prepaid/accrued benefit cost. State whether it is debit or credit.k.What is the debit/(credit) to Net remeasurement loss - OCI to reflect the adjustment.
l. What is the debit/(credit) to Prepaid/accrued benefit cost to reflect the adjustment.
2 Compute for the deductible salaries expense for tax purposes.
3 Compute for the deductible depreciation expense for tax purposes.
4 Compute for the deductible taxes and licenses for tax purposes.
5 Compute for the deductible rent expense for tax purposes.
6 Compute for the deductible doubtful accounts expense for tax purposes.
7 Compute for the deductible miscellaneous expense for tax purposes.
8 Compute for the accounting income subject to tax.
9 Compute for the deductible temporary differences.
10 Compute for the taxable temporary differences.11 Compute for the taxable income.
12 Compute for
a. The current tax expense
b. The deferred tax asset
c. The deferred tax liability
13 Compute for the net income after tax.
***END***
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ATENEO DE DAVAO UNIVERSITY
ACC 6 FINANCIAL ACCOUNTING 3
QUIZ 1 ACCOUNTING FOR INCOME TAX AND EMPLOYEE BENEFITS
NAME: _______________________________________________
General Instructions:
1. Provide what is required.
2. Write all final answers in the space provided.
3. No need to show your solutions.4. Minimize erasures.
5. Use only black or blue pen.
6. No shortcuts allowed.
7. Round off final answers to the nearest whole number. Round off PV factors to 4 decimal places.
8. NFI will automatically give you no credit.
Problem
The unadjusted financial statements of Morning Chow, Inc.'s first year of operations are as follows:
MORNING CHOW, INC.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED DECEMBER 31, 2013
Sales
Cost of Sales
Gross Profit
Add: Other Income
Total Profit
Less: Operating Expenses
Salaries and Wages
Rent Expense
Gas and Oil, and Other Utilities
Taxes and Licenses
Depreciation
Doubtful Accounts ExpenseMiscellaneous
Income before Tax
Notes
1
2
3
4
5
67
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MORNING CHOW, INC.
STATEMENT OF FINANCIAL POSITION
AS OF THE PERIOD ENDED DECEMBER 31, 2013
Cash and Cash Equivalents
Trade Receivables, net
Fair Value through Profit or Loss
Prepaid Assets
Capital Assets, netTotal Assets
Trade Payables
Share Capital
Share Premium
Retained Earnings
Total Liabilities and Equity
NOTES TO THE FINANCIAL STATEMENTS
1 Other Income
Unrealized Gain - Fair Value through Profit or LossGain on Sale of Capital Asset
Interest Income on Cash in Bank (subject to 10% final tax)
Total
2 Salaries and Wages
Salaries and Wages to Employees
Contribution made to Retirement Benefits Plan
Total
3 Rent Expense
Monthly rent payment is subject to 12% VAT. However, rent expense shown in the financial statements is
exclusive of Output VAT. Also, 5% of rent is withheld every month subject to 1601-E remittance.
Notes
8
9
10
11
12
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4 Taxes and Licenses
Business Permit and other licenses
Tax penalties and surcharges
BIR registration
5 Depreciation
Capital Assets have a useful life of 10 years with nominal residual value.
6 Doubtful Accounts Expense
Doubtful Accounts Expense is 2% of credit sales which is 40% of total sales.
7 Miscellaneous
Life Insurance Premium (entity is beneficiary)
Kitchen Miscellaneous Supplies
Office Supplies
Total
8 Cash and Cash Equivalents
Cash in BankCash on Hand
Total
9 Trade and Other Receivables, net
Accounts written off in 2013 amounted to
10 Fair Value through Profit or Loss
Investments in Equity Securities classified as Fair Value through Profit or Loss. Purchased at
11 Prepaid Assets
Two months advance for the leased building
12 Capital Assets, net
The Company sold an equipment in 2013. Details of the sale are as follows:
Selling Price
Original Cost of Asset
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Additional information:
1 Note that financial statements are prepared according to the accrual basis and Income subject to Income Tax is
to be prepared according to the cash basis.
2 Income tax is yet to be computed.
3 Reflected in the Salaries and Wages is the amount contributed to the Defined Benefit Plan. However, an adjustment
is still to be made to reflect the correct retirement benefit expense.
On January 1, 2013, the memorandum records in relation to a defined benefit plan showed the following:
Fair value of plan assets
Projected benefit obligation
Prepaid/accrued benefit cost
During the current year, the following transactions are gathered:
Current service cost
Past service cost
Actual return on plan assets
Contribution to the plan
Benefits paid
Actuarial loss due to increase in PBO
Discount rate
4 Deductible depreciation expense for tax purposes is
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Required
1 Refer to the Company's Defined Benefit Plan
a.Compute for the interest cost.b.Compute for the expected return.c. Compute for the amortization of actuarial gain.d.Compute for the total benefit expense.e. What is the debit /(credit) to Employee benefit expense to reflect the adjustment.
f.Compute for the Fair value of plan assets as of December 31, 2012.g.Compute for the Projected benefit obligation as of December 31, 2012.h. Compute for the actuarial gain/(loss) during the year.i.Compute for the unamortized actuarial gain as of December 31, 2012.j.Compute for the balance of the prepaid/accrued benefit cost. State whether it is debit or credit.k.What is the debit/(credit) to Net remeasurement loss - OCI to reflect the adjustment.
l. What is the debit/(credit) to Prepaid/accrued benefit cost to reflect the adjustment.
2 Compute for the deductible salaries expense for tax purposes.
3 Compute for the deductible depreciation expense for tax purposes.
4 Compute for the deductible taxes and licenses for tax purposes.
5 Compute for the deductible rent expense for tax purposes.
6 Compute for the deductible doubtful accounts expense for tax purposes.
7 Compute for the deductible miscellaneous expense for tax purposes.
8 Compute for the accounting income subject to tax.
9 Compute for the deductible temporary differences.
10 Compute for the taxable temporary differences.11 Compute for the taxable income.
12 Compute for
a. The current tax expense
b. The deferred tax asset
c. The deferred tax liability
13 Compute for the net income after tax.
***END***
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ATENEO DE DAVAO UNIVERSITY
ACC 6 FINANCIAL ACCOUNTING 3
QUIZ 1 ACCOUNTING FOR INCOME TAX AND EMPLOYEE BENEFITS
NAME: _______________________________________________
General Instructions:
1. Provide what is required.
2. Write all final answers in the space provided.
3. No need to show your solutions.4. Minimize erasures.
5. Use only black or blue pen.
6. No shortcuts allowed.
7. Round off final answers to the nearest whole number. Round off PV factors to 4 decimal places.
8. NFI will automatically give you no credit.
Problem
The unadjusted financial statements of Morning Chow, Inc.'s first year of operations are as follows:
MORNING CHOW, INC.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED DECEMBER 31, 2013
Sales
Cost of Sales
Gross Profit
Add: Other Income
Total Profit
Less: Operating Expenses
Salaries and Wages
Rent Expense
Gas and Oil, and Other Utilities
Taxes and Licenses
Depreciation
Doubtful Accounts ExpenseMiscellaneous
Income before Tax
Notes
1
2
3
4
5
67
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MORNING CHOW, INC.
STATEMENT OF FINANCIAL POSITION
AS OF THE PERIOD ENDED DECEMBER 31, 2013
Cash and Cash Equivalents
Trade Receivables, net
Fair Value through Profit or Loss
Prepaid Assets
Capital Assets, netTotal Assets
Trade Payables
Share Capital
Share Premium
Retained Earnings
Total Liabilities and Equity
NOTES TO THE FINANCIAL STATEMENTS
1 Other Income
Unrealized Gain - Fair Value through Profit or LossGain on Sale of Capital Asset
Interest Income on Cash in Bank (subject to 10% final tax)
Total
2 Salaries and Wages
Salaries and Wages to Employees
Contribution made to Retirement Benefits Plan
Total
3 Rent Expense
Monthly rent payment is subject to 12% VAT. However, rent expense shown in the financial statements is
exclusive of Output VAT. Also, 5% of rent is withheld every month subject to 1601-E remittance.
Notes
8
9
10
11
12
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4 Taxes and Licenses
Business Permit and other licenses
Tax penalties and surcharges
BIR registration
5 Depreciation
Capital Assets have a useful life of 10 years with nominal residual value.
6 Doubtful Accounts Expense
Doubtful Accounts Expense is 2% of credit sales which is 40% of total sales.
7 Miscellaneous
Life Insurance Premium (entity is beneficiary)
Kitchen Miscellaneous Supplies
Office Supplies
Total
8 Cash and Cash Equivalents
Cash in BankCash on Hand
Total
9 Trade and Other Receivables, net
Accounts written off in 2013 amounted to
10 Fair Value through Profit or Loss
Investments in Equity Securities classified as Fair Value through Profit or Loss. Purchased at
11 Prepaid Assets
Two months advance for the leased building
12 Capital Assets, net
The Company sold an equipment in 2013. Details of the sale are as follows:
Selling Price
Original Cost of Asset
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Additional information:
1 Note that financial statements are prepared according to the accrual basis and Income subject to Income Tax is
to be prepared according to the cash basis.
2 Income tax is yet to be computed.
3 Reflected in the Salaries and Wages is the amount contributed to the Defined Benefit Plan. However, an adjustment
is still to be made to reflect the correct retirement benefit expense.
On January 1, 2013, the memorandum records in relation to a defined benefit plan showed the following:
Fair value of plan assets
Projected benefit obligation
Prepaid/accrued benefit cost
During the current year, the following transactions are gathered:
Current service cost
Past service cost
Actual return on plan assets
Contribution to the plan
Benefits paid
Actuarial loss due to increase in PBO
Discount rate
4 Deductible depreciation expense for tax purposes is
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Required
1 Refer to the Company's Defined Benefit Plan
a.Compute for the interest cost.b.Compute for the expected return.c. Compute for the amortization of actuarial gain.d.Compute for the total benefit expense.e. What is the debit /(credit) to Employee benefit expense to reflect the adjustment.
f.Compute for the Fair value of plan assets as of December 31, 2012.g.Compute for the Projected benefit obligation as of December 31, 2012.h. Compute for the actuarial gain/(loss) during the year.i.Compute for the unamortized actuarial gain as of December 31, 2012.j.Compute for the balance of the prepaid/accrued benefit cost. State whether it is debit or credit.k.What is the debit/(credit) to Net remeasurement loss - OCI to reflect the adjustment.
l. What is the debit/(credit) to Prepaid/accrued benefit cost to reflect the adjustment.
2 Compute for the deductible salaries expense for tax purposes.
3 Compute for the deductible depreciation expense for tax purposes.
4 Compute for the deductible taxes and licenses for tax purposes.
5 Compute for the deductible rent expense for tax purposes.
6 Compute for the deductible doubtful accounts expense for tax purposes.
7 Compute for the deductible miscellaneous expense for tax purposes.
8 Compute for the accounting income subject to tax.
9 Compute for the deductible temporary differences.
10 Compute for the taxable temporary differences.11 Compute for the taxable income.
12 Compute for
a. The current tax expense
b. The deferred tax asset
c. The deferred tax liability
13 Compute for the net income after tax.
***END***
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ATENEO DE DAVAO UNIVERSITY
ACC 6 FINANCIAL ACCOUNTING 3
QUIZ 1 ACCOUNTING FOR INCOME TAX AND EMPLOYEE BENEFITS
NAME: _______________________________________________
General Instructions:
1. Provide what is required.
2. Write all final answers in the space provided.
3. No need to show your solutions.4. Minimize erasures.
5. Use only black or blue pen.
6. No shortcuts allowed.
7. Round off final answers to the nearest whole number. Round off PV factors to 4 decimal places.
8. NFI will automatically give you no credit.
Problem
The unadjusted financial statements of Morning Chow, Inc.'s first year of operations are as follows:
MORNING CHOW, INC.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED DECEMBER 31, 2013
Notes
Sales
Cost of Sales
Gross Profit
Add: Other Income 1
Total Profit
Less: Operating Expenses
Salaries and Wages 2
Rent Expense 3
Gas and Oil, and Other Utilities
Taxes and Licenses 4
Depreciation 5
Doubtful Accounts Expense 6Miscellaneous 7
Income before Tax
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MORNING CHOW, INC.
STATEMENT OF FINANCIAL POSITION
AS OF THE PERIOD ENDED DECEMBER 31, 2013
Notes
Cash and Cash Equivalents 8
Trade Receivables, net 9
Fair Value through Profit or Loss 10
Prepaid Assets 11
Capital Assets, net 12Total Assets
Trade Payables
Share Capital
Share Premium
Retained Earnings
Total Liabilities and Equity
NOTES TO THE FINANCIAL STATEMENTS
1 Other Income
Unrealized Gain - Fair Value through Profit or LossGain on Sale of Capital Asset
Interest Income on Cash in Bank (subject to 10% final tax)
Total
2 Salaries and Wages
Salaries and Wages to Employees
Contribution made to Retirement Benefits Plan
Total
3 Rent Expense
Monthly rent payment is subject to 12% VAT. However, rent expense shown in the financial statements is
exclusive of Output VAT. Also, 5% of rent is withheld every month subject to 1601-E remittance.
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4 Taxes and Licenses
Business Permit and other licenses
Tax penalties and surcharges
BIR registration
5 Depreciation
Capital Assets have a useful life of 10 years with nominal residual value.
6 Doubtful Accounts Expense
Doubtful Accounts Expense is 2% of credit sales which is 40% of total sales.
7 Miscellaneous
Life Insurance Premium (entity is beneficiary)
Kitchen Miscellaneous Supplies
Office Supplies
Total
8 Cash and Cash Equivalents
Cash in BankCash on Hand
Total
9 Trade and Other Receivables, net
Accounts written off in 2013 amounted to
10 Fair Value through Profit or Loss
Investments in Equity Securities classified as Fair Value through Profit or Loss. Purchased at
11 Prepaid Assets
Two months advance for the leased building
12 Capital Assets, net
The Company sold an equipment in 2013. Details of the sale are as follows:
Selling Price
Original Cost of Asset
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Additional information:
1 Note that financial statements are prepared according to the accrual basis and Income subject to Income Tax is
to be prepared according to the cash basis.
2 Income tax is yet to be computed.
3 Reflected in the Salaries and Wages is the amount contributed to the Defined Benefit Plan. However, an adjustment
is still to be made to reflect the correct retirement benefit expense.
On January 1, 2013, the memorandum records in relation to a defined benefit plan showed the following:
Fair value of plan assets
Projected benefit obligation
Prepaid/accrued benefit cost
During the current year, the following transactions are gathered:
Current service cost
Past service cost
Actual return on plan assets
Contribution to the plan
Benefits paid
Actuarial loss due to increase in PBO
Discount rate
4 Deductible depreciation expense for tax purposes is
-
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Required
1 Refer to the Company's Defined Benefit Plan
a.Compute for the interest cost.b.Compute for the expected return.c. Compute for the amortization of actuarial gain.d.Compute for the total benefit expense.e. What is the debit /(credit) to Employee benefit expense to reflect the adjustment. dr
f.Compute for the Fair value of plan assets as of December 31, 2012.g.Compute for the Projected benefit obligation as of December 31, 2012.h. Compute for the actuarial gain/(loss) during the year.i.Compute for the unamortized actuarial gain as of December 31, 2012.j.Compute for the balance of the prepaid/accrued benefit cost. State whether it is debit or credit.k.What is the debit/(credit) to Net remeasurement loss - OCI to reflect the adjustment. dr
l. What is the debit/(credit) to Prepaid/accrued benefit cost to reflect the adjustment.
2 Compute for the deductible salaries expense for tax purposes.
3 Compute for the deductible depreciation expense for tax purposes.
4 Compute for the deductible taxes and licenses for tax purposes.
5 Compute for the deductible rent expense for tax purposes.
6 Compute for the deductible doubtful accounts expense for tax purposes.
7 Compute for the deductible miscellaneous expense for tax purposes.
8 Compute for the accounting income subject to tax.
9 Compute for the deductible temporary differences.
10 Compute for the taxable temporary differences.11 Compute for the taxable income.
12 Compute for
a. The current tax expense
b. The deferred tax asset
c. The deferred tax liability
13 Compute for the net income after tax.
***END***
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ATENEO DE DAVAO UNIVERSITY
ACC 6 FINANCIAL ACCOUNTING 3
QUIZ 1 ACCOUNTING FOR INCOME TAX AND EMPLOYEE BENEFITS
NAME: _______________________________________________
General Instructions:
1. Provide what is required.
2. Write all final answers in the space provided.
3. No need to show your solutions.4. Minimize erasures.
5. Use only black or blue pen.
6. No shortcuts allowed.
7. Round off final answers to the nearest whole number. Round off PV factors to 4 decimal places.
8. NFI will automatically give you no credit.
Problem
The unadjusted financial statements of Morning Chow, Inc.'s first year of operations are as follows:
MORNING CHOW, INC.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED DECEMBER 31, 2013
Sales
Cost of Sales
Gross Profit
Add: Other Income
Total Profit
Less: Operating Expenses
Salaries and Wages
Rent Expense
Gas and Oil, and Other Utilities
Taxes and Licenses
Depreciation
Doubtful Accounts ExpenseMiscellaneous
Income before Tax
Notes
1
2
3
4
5
67
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MORNING CHOW, INC.
STATEMENT OF FINANCIAL POSITION
AS OF THE PERIOD ENDED DECEMBER 31, 2013
Cash and Cash Equivalents
Trade Receivables, net
Fair Value through Profit or Loss
Prepaid Assets
Capital Assets, netTotal Assets
Trade Payables
Share Capital
Share Premium
Retained Earnings
Total Liabilities and Equity
NOTES TO THE FINANCIAL STATEMENTS
1 Other Income
Unrealized Gain - Fair Value through Profit or LossGain on Sale of Capital Asset
Interest Income on Cash in Bank (subject to 10% final tax)
Total
2 Salaries and Wages
Salaries and Wages to Employees
Contribution made to Retirement Benefits Plan
Total
3 Rent Expense
Monthly rent payment is subject to 12% VAT. However, rent expense shown in the financial statements is
exclusive of Output VAT. Also, 5% of rent is withheld every month subject to 1601-E remittance.
Notes
8
9
10
11
12
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4 Taxes and Licenses
Business Permit and other licenses
Tax penalties and surcharges
BIR registration
5 Depreciation
Capital Assets have a useful life of 10 years with nominal residual value.
6 Doubtful Accounts Expense
Doubtful Accounts Expense is 2% of credit sales which is 40% of total sales.
7 Miscellaneous
Life Insurance Premium (entity is beneficiary)
Kitchen Miscellaneous Supplies
Office Supplies
Total
8 Cash and Cash Equivalents
Cash in BankCash on Hand
Total
9 Trade and Other Receivables, net
Accounts written off in 2013 amounted to
10 Fair Value through Profit or Loss
Investments in Equity Securities classified as Fair Value through Profit or Loss. Purchased at
11 Prepaid Assets
Two months advance for the leased building
12 Capital Assets, net
The Company sold an equipment in 2013. Details of the sale are as follows:
Selling Price
Original Cost of Asset
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Additional information:
1 Note that financial statements are prepared according to the accrual basis and Income subject to Income Tax is
to be prepared according to the cash basis.
2 Income tax is yet to be computed.
3 Reflected in the Salaries and Wages is the amount contributed to the Defined Benefit Plan. However, an adjustment
is still to be made to reflect the correct retirement benefit expense.
On January 1, 2013, the memorandum records in relation to a defined benefit plan showed the following:
Fair value of plan assets
Projected benefit obligation
Prepaid/accrued benefit cost
During the current year, the following transactions are gathered:
Current service cost
Past service cost
Actual return on plan assets
Contribution to the plan
Benefits paid
Actuarial loss due to increase in PBO
Discount rate
4 Deductible depreciation expense for tax purposes is
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Required
1 Refer to the Company's Defined Benefit Plan
a.Compute for the interest cost.b.Compute for the expected return.c. Compute for the amortization of actuarial gain.d.Compute for the total benefit expense.e. What is the debit /(credit) to Employee benefit expense to reflect the adjustment.
f.Compute for the Fair value of plan assets as of December 31, 2012.g.Compute for the Projected benefit obligation as of December 31, 2012.h. Compute for the actuarial gain/(loss) during the year.i.Compute for the unamortized actuarial gain as of December 31, 2012.j.Compute for the balance of the prepaid/accrued benefit cost. State whether it is debit or credit.k.What is the debit/(credit) to Net remeasurement loss - OCI to reflect the adjustment.
l. What is the debit/(credit) to Prepaid/accrued benefit cost to reflect the adjustment.
2 Compute for the deductible salaries expense for tax purposes.
3 Compute for the deductible depreciation expense for tax purposes.
4 Compute for the deductible taxes and licenses for tax purposes.
5 Compute for the deductible rent expense for tax purposes.
6 Compute for the deductible doubtful accounts expense for tax purposes.
7 Compute for the deductible miscellaneous expense for tax purposes.
8 Compute for the accounting income subject to tax.
9 Compute for the deductible temporary differences.
10 Compute for the taxable temporary differences.11 Compute for the taxable income.
12 Compute for
a. The current tax expense
b. The deferred tax asset
c. The deferred tax liability
13 Compute for the net income after tax.
***END***
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ATENEO DE DAVAO UNIVERSITY
ACC 6 FINANCIAL ACCOUNTING 3
QUIZ 1 ACCOUNTING FOR INCOME TAX AND EMPLOYEE BENEFITS
NAME: _______________________________________________
General Instructions:
1. Provide what is required.
2. Write all final answers in the space provided.
3. No need to show your solutions.4. Minimize erasures.
5. Use only black or blue pen.
6. No shortcuts allowed.
7. Round off final answers to the nearest whole number. Round off PV factors to 4 decimal places.
8. NFI will automatically give you no credit.
Problem
The unadjusted financial statements of Morning Chow, Inc.'s first year of operations are as follows:
MORNING CHOW, INC.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED DECEMBER 31, 2013
Sales
Cost of Sales
Gross Profit
Add: Other Income
Total Profit
Less: Operating Expenses
Salaries and Wages
Rent Expense
Gas and Oil, and Other Utilities
Taxes and Licenses
Depreciation
Doubtful Accounts ExpenseMiscellaneous
Income before Tax
Notes
1
2
3
4
5
67
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4 Taxes and Licenses
Business Permit and other licenses
Tax penalties and surcharges
BIR registration
5 Depreciation
Capital Assets have a useful life of 10 years with nominal residual value.
6 Doubtful Accounts Expense
Doubtful Accounts Expense is 2% of credit sales which is 40% of total sales.
7 Miscellaneous
Life Insurance Premium (entity is beneficiary)
Kitchen Miscellaneous Supplies
Office Supplies
Total
8 Cash and Cash Equivalents
Cash in BankCash on Hand
Total
9 Trade and Other Receivables, net
Accounts written off in 2013 amounted to
10 Fair Value through Profit or Loss
Investments in Equity Securities classified as Fair Value through Profit or Loss. Purchased at
11 Prepaid Assets
Two months advance for the leased building
12 Capital Assets, net
The Company sold an equipment in 2013. Details of the sale are as follows:
Selling Price
Original Cost of Asset
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Additional information:
1 Note that financial statements are prepared according to the accrual basis and Income subject to Income Tax is
to be prepared according to the cash basis.
2 Income tax is yet to be computed.
3 Reflected in the Salaries and Wages is the amount contributed to the Defined Benefit Plan. However, an adjustment
is still to be made to reflect the correct retirement benefit expense.
On January 1, 2013, the memorandum records in relation to a defined benefit plan showed the following:
Fair value of plan assets
Projected benefit obligation
Prepaid/accrued benefit cost
During the current year, the following transactions are gathered:
Current service cost
Past service cost
Actual return on plan assets
Contribution to the plan
Benefits paid
Actuarial loss due to increase in PBO
Discount rate
4 Deductible depreciation expense for tax purposes is
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Required
1 Refer to the Company's Defined Benefit Plan
a.Compute for the interest cost.b.Compute for the expected return.c. Compute for the amortization of actuarial gain.d.Compute for the total benefit expense.e. What is the debit /(credit) to Employee benefit expense to reflect the adjustment.
f.Compute for the Fair value of plan assets as of December 31, 2012.g.Compute for the Projected benefit obligation as of December 31, 2012.h. Compute for the actuarial gain/(loss) during the year.i.Compute for the unamortized actuarial gain as of December 31, 2012.j.Compute for the balance of the prepaid/accrued benefit cost. State whether it is debit or credit.k.What is the debit/(credit) to Net remeasurement loss - OCI to reflect the adjustment.
l. What is the debit/(credit) to Prepaid/accrued benefit cost to reflect the adjustment.
2 Compute for the deductible salaries expense for tax purposes.
3 Compute for the deductible depreciation expense for tax purposes.
4 Compute for the deductible taxes and licenses for tax purposes.
5 Compute for the deductible rent expense for tax purposes.
6 Compute for the deductible doubtful accounts expense for tax purposes.
7 Compute for the deductible miscellaneous expense for tax purposes.
8 Compute for the accounting income subject to tax.
9 Compute for the deductible temporary differences.
10 Compute for the taxable temporary differences.11 Compute for the taxable income.
12 Compute for
a. The current tax expense
b. The deferred tax asset
c. The deferred tax liability
13 Compute for the net income after tax.
***END***
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ATENEO DE DAVAO UNIVERSITY
ACC 6 FINANCIAL ACCOUNTING 3
QUIZ 1 ACCOUNTING FOR INCOME TAX AND EMPLOYEE BENEFITS
NAME: _______________________________________________
General Instructions:
1. Provide what is required.
2. Write all final answers in the space provided.
3. No need to show your solutions.4. Minimize erasures.
5. Use only black or blue pen.
6. No shortcuts allowed.
7. Round off final answers to the nearest whole number. Round off PV factors to 4 decimal places.
8. NFI will automatically give you no credit.
Problem
The unadjusted financial statements of Morning Chow, Inc.'s first year of operations are as follows:
MORNING CHOW, INC.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED DECEMBER 31, 2013
Sales
Cost of Sales
Gross Profit
Add: Other Income
Total Profit
Less: Operating Expenses
Salaries and Wages
Rent Expense
Gas and Oil, and Other Utilities
Taxes and Licenses
Depreciation
Doubtful Accounts ExpenseMiscellaneous
Income before Tax
Notes
1
2
3
4
5
67
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MORNING CHOW, INC.
STATEMENT OF FINANCIAL POSITION
AS OF THE PERIOD ENDED DECEMBER 31, 2013
Cash and Cash Equivalents
Trade Receivables, net
Fair Value through Profit or Loss
Prepaid Assets
Capital Assets, netTotal Assets
Trade Payables
Share Capital
Share Premium
Retained Earnings
Total Liabilities and Equity
NOTES TO THE FINANCIAL STATEMENTS
1 Other Income
Unrealized Gain - Fair Value through Profit or LossGain on Sale of Capital Asset
Interest Income on Cash in Bank (subject to 10% final tax)
Total
2 Salaries and Wages
Salaries and Wages to Employees
Contribution made to Retirement Benefits Plan
Total
3 Rent Expense
Monthly rent payment is subject to 12% VAT. However, rent expense shown in the financial statements is
exclusive of Output VAT. Also, 5% of rent is withheld every month subject to 1601-E remittance.
Notes
8
9
10
11
12
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4 Taxes and Licenses
Business Permit and other licenses
Tax penalties and surcharges
BIR registration
5 Depreciation
Capital Assets have a useful life of 10 years with nominal residual value.
6 Doubtful Accounts Expense
Doubtful Accounts Expense is 2% of credit sales which is 40% of total sales.
7 Miscellaneous
Life Insurance Premium (entity is beneficiary)
Kitchen Miscellaneous Supplies
Office Supplies
Total
8 Cash and Cash Equivalents
Cash in BankCash on Hand
Total
9 Trade and Other Receivables, net
Accounts written off in 2013 amounted to
10 Fair Value through Profit or Loss
Investments in Equity Securities classified as Fair Value through Profit or Loss. Purchased at
11 Prepaid Assets
Two months advance for the leased building
12 Capital Assets, net
The Company sold an equipment in 2013. Details of the sale are as follows:
Selling Price
Original Cost of Asset
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Additional information:
1 Note that financial statements are prepared according to the accrual basis and Income subject to Income Tax is
to be prepared according to the cash basis.
2 Income tax is yet to be computed.
3 Reflected in the Salaries and Wages is the amount contributed to the Defined Benefit Plan. However, an adjustment
is still to be made to reflect the correct retirement benefit expense.
On January 1, 2013, the memorandum records in relation to a defined benefit plan showed the following:
Fair value of plan assets
Projected benefit obligation
Prepaid/accrued benefit cost
During the current year, the following transactions are gathered:
Current service cost
Past service cost
Actual return on plan assets
Contribution to the plan
Benefits paid
Actuarial loss due to increase in PBO
Discount rate
4 Deductible depreciation expense for tax purposes is
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Required
1 Refer to the Company's Defined Benefit Plan
a.Compute for the interest cost.b.Compute for the expected return.c. Compute for the amortization of actuarial gain.d.Compute for the total benefit expense.e. What is the debit /(credit) to Employee benefit expense to reflect the adjustment.
f.Compute for the Fair value of plan assets as of December 31, 2012.g.Compute for the Projected benefit obligation as of December 31, 2012.h. Compute for the actuarial gain/(loss) during the year.i.Compute for the unamortized actuarial gain as of December 31, 2012.j.Compute for the balance of the prepaid/accrued benefit cost. State whether it is debit or credit.k.What is the debit/(credit) to Net remeasurement loss - OCI to reflect the adjustment.
l. What is the debit/(credit) to Prepaid/accrued benefit cost to reflect the adjustment.
2 Compute for the deductible salaries expense for tax purposes.
3 Compute for the deductible depreciation expense for tax purposes.
4 Compute for the deductible taxes and licenses for tax purposes.
5 Compute for the deductible rent expense for tax purposes.
6 Compute for the deductible doubtful accounts expense for tax purposes.
7 Compute for the deductible miscellaneous expense for tax purposes.
8 Compute for the accounting income subject to tax.
9 Compute for the deductible temporary differences.
10 Compute for the taxable temporary differences.11 Compute for the taxable income.
12 Compute for
a. The current tax expense
b. The deferred tax asset
c. The deferred tax liability
13 Compute for the net income after tax.
***END***
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Prepaid Assets 160,000 -
Deferred Tax Asset - 521,400
Capital Assets, net 2,700,000 -
Total Assets 9,459,300 521,400
Trade Payables 200,000 -
Tax Payable - 377,190
Deferred Tax Liability - 312,000
Prepaid/Accrued Benefit Cost - 4,060,000
Remeasurement gain/(loss) - (600,000)
Share Capital 5,000,000 -
Share Premium 2,259,800 (2,000,000)
Retained Earnings/(Deficit) 1,999,500 (1,627,790)
Total Liabilities and Equity 9,459,300 521,400
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160,000 Tax payable
521,400 Deferred tax liability
2,700,000
9,980,700
200,000
377,190
312,000
4,060,000
(600,000)
5,000,000
259,800
371,710
9,980,700
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539,500 161,850
(300,000) (90,000)(180,000) (54,000)
(120,000) (24,000)
84,800 25,440
495,000 148,500
519,300 167,790
(880,000) (264,000)
200,000 60,000
1,460,000 438,000
(160,000) (48,000)30,000 9,000
48,000 14,400
1,217,300 377,190
167,790
521,400
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377,190
312,000
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Set B Solutions
Employee Benefits Cost
Current Service Cost 1,200,000
Past Service Cost 300,000
Interest Cost 700,000
Expected Return (500,000)Total Expense 1,700,000
Remeasurement gain - PA 300,000
Actuarial loss - PBO (900,000)
Net Remeasurement loss (600,000)
Total Benefit Cost 2,300,000
Adjusting entry:
Salaries and Wages 1,508,000
Remeasurement loss - OCI 600,000
Share Premium 2,000,000
Prepaid/Accrued Benefit Cost 4,108,000
Working Paper Unadj. Bal. Adjustments
Sales 8,000,000 -
Cost of Sales 3,200,000 -
Gross Profit 4,800,000 -Add: Other Income 480,000 -
Total Profit 5,280,000 -
Less: Operating Expenses
Salaries and Wages 960,000 1,508,000
Rent Expense 768,000 92,160
Gas and Oil, and Other Utilities 640,000 -
Taxes and Licenses 480,500 (92,160)
Depreciation 240,000 -
Doubtful Accounts Expense 64,000 -
Miscellaneous 528,000 -Income before Tax 1,599,500 (1,508,000)
Tax expense - 32,202
Net income 1,599,500 (1,540,202)
Cash and Cash Equivalents 2,239,440 -
Trade Receivables, net 640,000 -
Fair Value through Profit or Loss 2,400,000 -
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Prepaid Assets 128,000 -
Deferred Tax Asset - 519,120
Capital Assets, net 2,160,000 -
Total Assets 7,567,440 519,120
Trade Payables 160,000 -
Tax Payable - 301,722
Deferred Tax Liability - 249,600
Prepaid/Accrued Benefit Cost - 4,108,000
Remeasurement gain/(loss) - (600,000)
Share Capital 4,000,000 -
Share Premium 1,807,940 (2,000,000)
Retained Earnings/(Deficit) 1,599,500 (1,540,202)
Total Liabilities and Equity 7,567,440 519,120
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Final Bal. Tax Basis
8,000,000 7,296,000 Accounting Income
3,200,000 3,040,000 Permanent Differences:
4,800,000 4,256,000 UG-FVTPL480,000 - Gain on Sale
5,280,000 4,256,000 Interest Income - 10%
Tax penalties
2,468,000 960,000 Life insurance
860,160 988,160 Accounting Income subject to tax
640,000 640,000 Temporary Differences:
388,340 320,500 Sales
240,000 216,000 Purchases
64,000 25,600 Employee Benefits
528,000 132,000 Rent Expense91,500 973,740 Depreciation
32,202 301,722 Doubtful Accounts Expense
59,298 672,018 Taxable Income
2,239,440 Adjusting Entry:
640,000 Tax expense
2,400,000 Deferred tax asset
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301,722
249,600
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Set C Solutions
Employee Benefits Cost
Current Service Cost 1,200,000
Past Service Cost 300,000
Interest Cost 700,000
Expected Return (500,000)Total Expense 1,700,000
Remeasurement gain - PA 300,000
Actuarial loss - PBO (900,000)
Net Remeasurement loss (600,000)
Total Benefit Cost 2,300,000
Adjusting entry:
Salaries and Wages 1,546,400
Remeasurement loss - OCI 600,000
Share Premium 2,000,000
Prepaid/Accrued Benefit Cost 4,146,400
Working Paper Unadj. Bal. Adjustments
Sales 6,400,000 -
Cost of Sales 2,560,000 -
Gross Profit 3,840,000 -Add: Other Income 384,000 -
Total Profit 4,224,000 -
Less: Operating Expenses
Salaries and Wages 768,000 1,546,400
Rent Expense 614,400 73,728
Gas and Oil, and Other Utilities 512,000 -
Taxes and Licenses 384,500 (73,728)
Depreciation 192,000 -
Doubtful Accounts Expense 51,200 -
Miscellaneous 422,400 -Income before Tax 1,279,500 (1,546,400)
Tax expense - (76,268)
Net income 1,279,500 (1,470,132)
Cash and Cash Equivalents 1,791,552 -
Trade Receivables, net 512,000 -
Fair Value through Profit or Loss 1,920,000 -
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Prepaid Assets 102,400 -
Deferred Tax Asset - 517,296
Capital Assets, net 1,728,000 -
Total Assets 6,053,952 517,296
Trade Payables 128,000 -
Tax Payable - 241,348
Deferred Tax Liability - 199,680
Prepaid/Accrued Benefit Cost - 4,146,400
Remeasurement gain/(loss) - (600,000)
Share Capital 3,200,000 -
Share Premium 1,446,452 (2,000,000)
Retained Earnings/(Deficit) 1,279,500 (1,470,132)
Total Liabilities and Equity 6,053,952 517,296
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Final Bal. Tax Basis
6,400,000 5,836,800 Accounting Income
2,560,000 2,432,000 Permanent Differences:
3,840,000 3,404,800 UG-FVTPL384,000 - Gain on Sale
4,224,000 3,404,800 Interest Income - 10%
Tax penalties
2,314,400 768,000 Life insurance
688,128 790,528 Accounting Income subject to tax
512,000 512,000 Temporary Differences:
310,772 256,500 Sales
192,000 172,800 Purchases
51,200 20,480 Employee Benefits
422,400 105,600 Rent Expense(266,900) 778,892 Depreciation
(76,268) 241,348 Doubtful Accounts Expense
(190,632) 537,544 Taxable Income
1,791,552 Adjusting Entry:
512,000 Deferred tax asset
1,920,000 Tax savings
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102,400 Tax payable
517,296 Deferred tax liability
1,728,000
6,571,248
128,000
241,348
199,680
4,146,400
(600,000)
3,200,000
(553,548)
(190,632)
6,571,248
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(266,900) (80,070)
(192,000) (57,600)(115,200) (34,560)
(76,800) (15,360)
54,272 16,282
316,800 95,040
(279,828) (76,268)
(563,200) (168,960)
128,000 38,400
1,546,400 463,920
(102,400) (30,720)19,200 5,760
30,720 9,216
778,892 241,348
517,296
76,268
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241,348
199,680
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Set C Solutions
Employee Benefits Cost
Current Service Cost 1,200,000
Past Service Cost 300,000
Interest Cost 700,000
Expected Return (500,000)Total Expense 1,700,000
Remeasurement gain - PA 300,000
Actuarial loss - PBO (900,000)
Net Remeasurement loss (600,000)
Total Benefit Cost 2,300,000
Adjusting entry:
Salaries and Wages 1,577,120
Remeasurement loss - OCI 600,000
Share Premium 2,000,000
Prepaid/Accrued Benefit Cost 4,177,120
Working Paper Unadj. Bal. Adjustments
Sales 5,120,000 -
Cost of Sales 2,048,000 -
Gross Profit 3,072,000 -Add: Other Income 307,200 -
Total Profit 3,379,200 -
Less: Operating Expenses
Salaries and Wages 614,400 1,577,120
Rent Expense 491,520 58,982
Gas and Oil, and Other Utilities 409,600 -
Taxes and Licenses 307,700 (58,982)
Depreciation 153,600 -
Doubtful Accounts Expense 40,960 -
Miscellaneous 337,920 -Income before Tax 1,023,500 (1,577,120)
Tax expense - (163,045)
Net income 1,023,500 (1,414,075)
Cash and Cash Equivalents 1,433,242 -
Trade Receivables, net 409,600 -
Fair Value through Profit or Loss 1,536,000 -
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Prepaid Assets 81,920 -
Deferred Tax Asset - 515,837
Capital Assets, net 1,382,400 -
Total Assets 4,843,162 515,837
Trade Payables 102,400 -
Tax Payable - 193,048
Deferred Tax Liability - 159,744
Prepaid/Accrued Benefit Cost - 4,177,120
Remeasurement gain/(loss) - (600,000)
Share Capital 2,560,000 -
Share Premium 1,157,262 (2,000,000)
Retained Earnings/(Deficit) 1,023,500 (1,414,075)
Total Liabilities and Equity 4,843,162 515,837
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Final Bal. Tax Basis
5,120,000 4,669,440 Accounting Income
2,048,000 1,945,600 Permanent Differences:
3,072,000 2,723,840 UG-FVTPL307,200 - Gain on Sale
3,379,200 2,723,840 Interest Income - 10%
Tax penalties
2,191,520 614,400 Life insurance
550,502 632,422 Accounting Income subject to tax
409,600 409,600 Temporary Differences:
248,718 205,300 Sales
153,600 138,240 Purchases
40,960 16,384 Employee Benefits
337,920 84,480 Rent Expense(553,620) 623,014 Depreciation
(163,045) 193,048 Doubtful Accounts Expense
(390,575) 429,966 Taxable Income
1,433,242 Adjusting Entry:
409,600 Deferred tax asset
1,536,000 Tax savings
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81,920 Tax payable
515,837 Deferred tax liability
1,382,400
5,358,998
102,400
193,048
159,744
4,177,120
(600,000)
2,560,000
(842,738)
(390,575)
5,358,998
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(553,620) (166,086)
(153,600) (46,080)(92,160) (27,648)
(61,440) (12,288)
43,418 13,025
253,440 76,032
(563,962) (163,045)
(450,560) (135,168)
102,400 30,720
1,577,120 473,136
(81,920) (24,576)15,360 4,608
24,576 7,373
623,014 193,048
515,837
163,045
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193,048
159,744