Earnings from long term contracts
Cost and expenses
Income before Income Tax
Income Tax Expense (30% x 1,500,000)
Net Income
Retained earnings unappropriated
Retained earnings appropriated
Total Retained Earnings
6,680,000
(5,180,000)
1,500,000
(450,000)
1,050,000
900,000
160,000
2,110,000
Note Payable – Non Current
Total Noncurrent Liabilities
1,620,000
1,620,000
Cash
Account Receivable
Cost in excess billings on long term contract
Total Current Assets
600,000
3,500,000
1,600,000
5,700,000
The prepaid taxes of P450,000 represents the actual income tax
expense for the current year. Thus, there is no prepayment.