Problem 1 Honesty Company computed a pre-tax financial income of...

Problem 1

Honesty Company computed a pre-tax financial income of P2,200,000 for its first year of operations ended December 31, 2021. In preparing the income tax return, the accountant determined the following differences between financial and taxable income:
 

• Non-deductible expenses - P400,000
• Non-taxable revenues - P150,000
• Temporary difference (installment sales reported in financial income but not in taxable income) - P700,000

The enacted tax rates and the reversal of the temporary difference are as follows (see image below).
 

How much is the Net Income after Tax for 2021?
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Problem 2

Honesty Company reported the following results for the year ended December 31, 2021:
 

• Income (per books before income taxes) - P750,000
• Taxable income - P1,200,000

The difference between accounting income and taxable income is attributable to a temporary difference which 
will reverse in 2022. The enacted tax rates in effect are 40% in 2021 and 35% in 2022.

How much is the Deferred Tax Liability at December 31, 2022?

**** please show the computation/solution for the problem. it will be a big help if you answer this in 10-20 mins. thank you so much ****