Given

Pre tax income 200,000.00

Fines, surcharges & penalties 70,000.00 permanent dif
Non deductible premium 12,000.00 permanent dif
I. Income subject to final tax 10,000.00 not subject to normal tax
Excess of depreciation TI > FI 20,000.00 future taxable amount
Warranty expense accrued 30,000.00 future deductible amount
Rent received In advance 16,000.00 future deductible amount

Income tax payments 40,000.00

tax rate 30%
Beg balance taxable temp differences 24,000.00 20,000.00 44,000.00
Beg balance deductible temp differences 18,000.00 16,000.00 30,000.00 64,000.00

Pretax income (accounting income) 200,000.00

Permanent differences
Fines, surcharges & penalties 70,000.00
Non deductible premium 12,000.00
I. Income subject to final tax (10,000.00) 72,000.00
accounting income subject to tax 272,000.00
increase in FDA 46,000.00 13,800.00
increase in FTA (20,000.00) 26,000.00 (6,000.00)
Taxable income 298,000.00
tax rate 0.30
tax due 89,400.00 current tax expense
taxes paid (40,000.00)
tax still due and payable 49,400.00 current tax liability

current tax exp 89,400.00

increase in DTL 6,000.00
increase in DTA (13,800.00)
ITE 81,600.00

answers

1) Income tax expense 81,600.00 C

2) Current income tax expense 89,400.00 A

3) Current income tax payable 49,400.00 C

4) Deferred tax expense (asset) (7,800.00) D ?

5) DTA end 19,200.00 A

6) DTL end 13,200.00 B

 FTA * TR = DTL
FDA* TR = DTA

13,200.00 DTL
19,200.00 DTA

not sure if expense or asset

1/1/2015 Purchase Equipment 6,000,000.00
SL 10 years
RV -

1/1/2018 Replacement cost 8,000,000.00

SL & RV no change
Cost DRC Appreciation
Cost 6,000,000.00 8,000,000.00 2,000,000.00
A. dep (1,800,000.00) (2,400,000.00) (600,000.00)
CA/SV/RS 4,200,000.00 5,600,000.00 1,400,000.00

Pretax income 4,000,000.00

Depreciation (800,000.00)
accounting income 3,200,000.00
decrease in FTA 200,000.00 60,000.00 Decrease in DTL
Taxable income 3,400,000.00
tax rate 30%
Current income tax 1,020,000.00

Revaulation surplus 1,400,000.00 DTL, beg

tax rate 30% decrease in DTL
Deferred tax Liability 420,000.00 DTL, end

Revaulation surplus, After tax 980,000.00

current income tax
decrease in DTL
Answers Income tax expense
1) Revaulation surplus 980,000.00 B

2) DTL arising from RS 420,000.00 wala sa choices

3) Current income tax 1,020,000.00 A

4) DTL, end 360,000.00 A

5) Income tax expense 960,000.00 C

rease in DTL

420,000.00
rease in DTL (60,000.00)
360,000.00

ent income tax 1,020,000.00

rease in DTL (60,000.00)
ome tax expense 960,000.00
 FVPA
Beg 3,000,000.00 benefits paid 150,000.00
contribution 600,000.00
actual return 340,000.00
3,940,000.00 150,000.00
End 3,790,000.00

PV DBO
Benefits paid 150,000.00 Beg 2,600,000.00
interest 260,000.00
CSC 250,000.00
PSC 200,000.00
actuarial loss 80,000.00
150,000.00 3,390,000.00
End 3,240,000.00

DBC P/L
CSC 250,000.00 I. INCOME 300,000.00
I EXPENSE, DBO 260,000.00
PSC 200,000.00
I EXPENSE, AC 10,000.00
720,000.00 300,000.00
End 420,000.00

Actuarial loss 80,000.00

difference bet. i.income and actual return
i.income on FVPA 300,000.00
actual return (340,000.00) (40,000.00)
effect on changes of asset ceiling
surplus, dec 31 550,000.00
asset ceiling (350,000.00)
effect of the asset ceiling, dec 31 200,000.00
effect of the asset ceiling, jan 1 (100,000.00)
total increase on effect of asset ceiling 100,000.00
i. exp on EAC (10,000.00) 90,000.00
130,000.00

Answers
1) Fair value of plan assets, dec 31 3,790,000.00 C

2) Defined benefit obligation, dec 31 3,240,000.00 C

3) net interest expense (income) (30,000.00) B

4) Defined benefit cost P/L 420,000.00 A

5) Defined benefit cost OCI 130,000.00 C

I. exp on DBO 260,000.00
I. exp on EAC 10,000.00
I. income on FVPA (300,000.00)
Net interest expense (income) (30,000.00)