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    Deferred Tax and Employee Benefits PDF Free

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    lana del rey
    The document contains 11 problems related to accounting for income taxes and employee benefit costs. The problems provide financial information and ask questions about calculating current and deferred tax expenses, pension expenses and obligations. Temporary differences, tax rates, pension contributions and returns are considered in the calculations.

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    Deferred Tax and Employee Benefits PDF Free

    Uploaded by

    lana del rey
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    The document contains 11 problems related to accounting for income taxes and employee benefit costs. The problems provide financial information and ask questions about calculating current and deferred tax expenses, pension expenses and obligations. Temporary differences, tax rates, pension contributions and returns are considered in the calculations.

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    The document contains 11 problems related to accounting for income taxes and employee benefit costs. The problems provide financial information and ask questions about calculating current and deferred tax expenses, pension expenses and obligations. Temporary differences, tax rates, pension contributions and returns are considered in the calculations.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    13 views3 pages

    Deferred Tax and Employee Benefits PDF Free

    Uploaded by

    lana del rey
    The document contains 11 problems related to accounting for income taxes and employee benefit costs. The problems provide financial information and ask questions about calculating current and deferred tax expenses, pension expenses and obligations. Temporary differences, tax rates, pension contributions and returns are considered in the calculations.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    UNIVERSITY OF LA SALETTE INC.

    College of Accountancy
    Santiago City, Philippines

    FINANCIAL ACCOUNTING AND REPORTING


    ACCOUNTING FOR INCOME TAX AND EMPLOYEE BENEFIT COST

    PROBLEM 1. Gali Ngan Moo Company reported pretax financial income of P8,000,000 for the current year. The
    taxable income was P7,000,000 for the current year. The difference is due to accelerated depreciation for income
    tax purposes. The income tax rate is 30% and the entity made estimated tax payment of P500,000 during the current
    year.

    What amount should be reported as current tax expense for the current year? 2,100,000

    PROBLEM 2. Pagbuti Hin Moo Company reported pretax accounting income of P5,000.000 for the current year. The
    taxable income was P5,500,000. The difference is due to rental received in advance. Rental income is taxable when
    received. The income tax rate is 30% and the entity made no estimated tax payment in the current year.

    What amount should be reported as total income tax expense for the current year? 1,500,000

    PROBLEM 3. At the end of the first year of operations, Ana Lisis Company had taxable temporary differences
    totalling P3,000,000. Of this total, P500,000 relates to current items. The entity also had deductible temporary
    diffences totalling P1,000,000, P250,000 of which relates to current items. Pretax financial income for the current
    year was P20,000,000. The tax rate is 30%

    What amount should be reported as current tax expense for the current year? 5,400,000
    What is the net deferred tax expense or benefit for the current year? 600,000 expense

    PROBLEM 4. Boo Gock Company was organized on January 1, 2017. The entity had pretax accounting income of
    P5,000,000 and taxable income of P7,000,000 for the current year. The only temporary difference is accrued
    product warranty cost that is expected to be paid in 2018. The enacted tax rates are 30% for 2017 and 25% for 2018
    and thereafter.

    What amount should be reported as total income tax expense in the income statement for 2017? 1,600,000

    PROBLEM 5. On December 31, 2017, Antook Khan Navah Company reported a deferred tax liability of P600,000 and
    a deferred tax asset of P150,000. On December 31, 2018, the deferred tax liability is P900,000 and the deferred tax
    asset is zero.

    What is the deferred tax expense for 2018? 450,000


    PROBLEM 6. Pha Nooth Company reported the following information during the first year of operations:

    Pretax financial income 9,000,000


    Nontaxable interest received 1,000,000
    Long-term loss accrual in excess of deductible amount 1,500,000
    Tax depreciation in excess of financial depreciation 2,000,000
    Income tax rate 30%

    What is the current tax expense? 2,250,000


    What is the total tax expense? 2,400,000
    What is the deferred tax liability at year-end? 600,000
    What is the deferred tax asset at year-end? 450,000

    PROBLEM 7. Taa Sha Company reported the following information for the current year:

    Pretax financial income 9,000,000


    Income from exempt municipal bonds 2,000,000
    Rent received in advance 1,500,000
    Depreciation deduction for income tax purposes in 1,000,000
    excess of depreciation reported for financial reporting
    purposes
    Estimated tax payment for current year 500,000
    Income tax rate 30%

    What amount of current tax liability should be reported at year-end? 1,750,000


    What is the total expense? 2,100,000

    PROBLEM 8. On January 1, 2016, Bah Shoo Company provided the following information in connection with a
    defined benefit plan:

    Fair value of plan assets 10,000,000


    Unamortized past service cost 1,500,000
    Projected benefit obligation (13,000,000)
    Unrecognized actuarial gain (1,000,000)
    Prepaid/Accrued benefit cost (2,500,000)

    On January 1, 2016, the entity adopted PAS 19R. The entity revealed the following transactions affecting the plan
    for the current year:

    Current service cost 2,500,000


    Past service cost-remaining vesting period of covered employees is 5 years 1,000,000
    Contribution to the plan 3,500,000
    Benefits paid to retirees 3,000,000
    Actual return on plan assets 1,500,000
    Decrease in projected benefit obligation due to change in actuarial 400,000
    assumptions
    Discount rate 10%
    Expected return on plan assets 12%

    What is the transitional balance of the accrued or prepaid benefit cost on January 1, 2016? 3,000,000 accrued
    What is the employee benefit expense for the current year? 3,800,000
    What is the net remeasurement gain for the current year? 900,000
    What is the fair value of plan assets on December 31, 2016? 12,000,000
    What is the projected benefit obligation on December 31, 2016? 14,400,000
    What is the amount should be reported as accrued or prepaid benefit cost on December 31, 2016? 2,400,000
    How much is the defined benefit cost? 2,900,000

    PROBLEM 9. Kut Shara Company provided the following pension plan information for the current year:

    January 1 Projected benefit obligation 3,500,000


    Accumulated benefit obligation 2,800,000
    During the year Pension benefits paid to retired employees 250,000
    December 31 Projected benefit obligation 4,200,000
    Accumulated benefit obligation 3,100,000
    Discount or settlement rate 10%

    What is the current service cost for the current year? 600,000

    PROBLEM 10. Plateu Company provided the following information for the current year:

    Fair value of plan assets – January 1 3,500,000


    Fair value of plan assets – December 31 5,250,000
    Employer contribution 1,100,000
    Benefits paid 850,000

    What was the actual return on plan assets for the current year? 1,500,000

    PROBLEM 11. Tiny Door Company provided the following information during the current year:

    January 1 December 31
    Fair value of plan assets 6,000,000 8,500,000
    Projected benefit obligation 5,000,000 6,500,000
    Prepaid/accrued benefit cost – surplus 1,000,000 2,000,000
    Asset ceiling 700,000 1,200,000
    Effect of asset ceiling 300,000 800,000

    During the year, the entity recognized current service cost of P1,000,000, actual return on plan assets of
    P400,000, and contribution to the plan of P2,100,000. The discount rate is 10%.
    What is the employee benefit expense for the current year? 930,000
    What is the net remeasurement loss for the current year? 670,000
    What is the defined benefit cost? 1,600,000
    What amount of prepaid benefit cost should be reported on December 31? 1,200,000

    ***END***

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