Juan, a farmer, uses the crop-year method in reporting his income from long-term crops. The following data are relevant to his farming operations in 2017:
- Sales of crops harvested, P800,000- Expenses on harvested crops, P300,000
- Expenses on maturing crops, P200,000
- Expenses on newly planted crops, P100,000
- Sales of tee branches for firewood, P40,000
Juan ises the crop year method in reporting crop income. Compute Juan's total income subject to tax
A. P540,000
B. P500,000
C. P340,000
D. P240.000
Answer: A. P540,000