17. R Corp. prepared the following reconciliation of income per books with income per tax
return for the year ended December 31, 2002:
Book income before income taxes
P900,000
Add: Construction contract revenue which
will reverse in 2005
120,000
Less: Depreciation expense which will reverse
in equal amounts in each of the next 4 yrs (480.000)
P 540 000
R's effective income tax rate is 32% for 2002. What amount should R report in its 2002
income statement as a current provision for income taxes?
(a) P38,400
(b) P288,000
(c) P172,800
(d) P326,400
18. R Corp.'s income statement for the year ended December 31, 2002 shows the
following:
Income before income tax and extraordinary item P1,260,000
Gain on life insurance coverage — included
140,000
Extraordinary item — loss due to earthquake damage 420,000
R's tax rate for 2002 is 32%. How much should be reported as the provision for income tax
in R's 2002 income statement?
(a) P224,000
(b) P268,800
(c) P358,400
(d) P403,200
19. Unity Corp. prepared the following reconciliation between pretax accounting income
and taxable income for the year ended December 31, 2002:
Pretax accounting income
P1,500,000
Taxable income
(900 000)
Difference
P 600 000
Analysis of difference:
Interest on money market funds
P 150,000
Excess of tax depreciation over book
depreciation
450 000
P 600 000
Unity's effective income tax rate for 2002 is 32%. The depreciation difference will reverse in
equal amounts over the next three years at an enacted tax rate of 32%. In Unity's 2002
income statement, what amount should be reported as the current portion of its provision for
income taxes?
(a) P288,000
(b) P432,000
(c) P480,000
(d) P528,000
A