P. 1
Chapter 7 - Business Taxes

Chapter 7 - Business Taxes

5.0

|Views: 4,522|Likes:
Published by Geraldine Gorre
answer key.5th edition
answer key.5th edition

More info:

Categories:Types, Business/Law
Published by: Geraldine Gorre on Mar 03, 2013
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as DOC, PDF, TXT or read online from Scribd
See more
See less

02/01/2015

pdf

text

original

BUSINESS AND TRANSFER TAXATION 5th Edition (BY: VALENCIA & ROXAS) 37 SUGGESTED ANSWERS

Chapter 7: BUSINESS TAXES

CHAPTER 7

BUSINESS TAXES
Problem 7-1 1. False – this is a transfer not in the conduct of business 2. False – such rule is applicable only to nonresident foreign or alien persons 3. False – Merchandising business is engaged in buying and selling of goods, not manufacturing 4. False – Only one TIN is allowed. 5. True 6. False – On or before January 31 7. False – P500 for each establishment 8. False – exempt from P500 registration fee 9. True 10. True 11. True 12. True Problem 7-2 1. False – treated as tax credit 2. True 3. False – This is a description of receipt. 4. True 5. True 6. False – Required to become VAT if total gross sales/receipts exceed P1,500,000 a year. 7. True 8. False – Commercial activity is business. 9. False – Nonresident alien/foreign person is not subject to the rule of regularity, hence, considered business. 10. False – liable to VAT without the benefit of creditable input VAT. Problem 7-3 1. False – A business could be a servicing business. 2. False – This is compensation from employment. 3. False – Both are merchandising. 4. False – This is a servicing business. 5. True 6. False – Not in the case of VAT person. VAT paid on purchases can be claimed as creditable input VAT. 7. False – employees are also required to register to BIR 8. True 9. False – only one TIN per person 10. True 11. True 12. False – should issue official receipt for the amount received Problem 7-4 1. B 2. B 3. A 4. A 5. A 6. B 7. A 8. C Problem 7-5 1. D 2. D 3. B 4. D 5. D 6. A

000 per year.3333) Net business tax payable or net VAT payable Problem 7-14 Form of business operation = Manufacturing Form of business organization = Corporation Problem 7-15 The cooperative is required to register to the BIR.000 P 75. Problem 7-9 A Gross sales or receipts not exceeding P100.000 + (P12% of P50. Annual registration fee for main store (P500) + (P500) for sales outlet 2.600.000.000 x 12%) Total VAT sales invoice amount Problem 7-13 C Output VAT (P300. D Problem 7-6 B Annual registration fee = P500 Problem 7-7 B Registration fee of: Au Chemical Supplies Gusto Eatery Total annual registration fee Problem 7-8 A Cooperatives are exempt from registration fee.000 x 12%) Input VAT (P268.12) Add: Profit margin (P75.000 x 20%) Sales price (120% of cost) Add: VAT (P90. Problem 7-10 C Total amount in the invoice [P50.000 15.000 P56.000 P 90. No registration fee or annual registration fee shall be collected from cooperatives.200 P 500 500 P1. P 1.BUSINESS AND TRANSFER TAXATION 5th Edition (BY: VALENCIA & ROXAS) 38 SUGGESTED ANSWERS Chapter 7: BUSINESS TAXES 9.000)] Problem 7-11 B Business tax (P1. No.000/1.000 28. Problem 7-16 1.800/9. because the total sales during the year do not exceed P1.000 x 12%) Problem 7-12 B Cost (P84.500.000 .000 P192.800 P 36.000 10.800 P100.800 P 7.

000 P1.000 P 48.000 x 12%) 324.000 in a year.067 7.800 12% P6.192 Note: Registration shall be made on or before the last day of January of the following year Problem 7-18 1.692 P 42.524.000 Input VAT (P2. Problem 7-21 1 Percentage tax (P1.000/1.000/9.500.344.000 Problem 7-19 Net VAT payable Add: Input VAT (P5.792.BUSINESS AND TRANSFER TAXATION 5th Edition (BY: VALENCIA & ROXAS) 39 SUGGESTED ANSWERS Chapter 7: BUSINESS TAXES Problem 7-17 Annual registration fee (1 + 50 + 10) x P500 Add: Interest (P30.540.333 Surcharge (P144.000 288.500 x 25%) Total amount to be paid to the BIR P4.700.000 P336.500.000 96.000 x 12%) Output VAT Divide by Sales (1 ) (2 ) Problem 7-20 1.000/9. Capital loss (P3.500 11. P 180.12) x 3% Add: VAT (P1.000 or (P35.000. 2. P4.000 P 36.000/1.000 P252.250. Sales invoice because official receipts are issued only when there are collections. Percentage tax (P1.000 50%) Excise tax (P2.000 x 50%) Total business tax and surcharges 2 .000 .000 x 20%) 450.344.000 Total revenue contributed to government (P 24. hence.000 216. 3.000 x 50%) Total business tax and surcharges P192. Satur Nino is not subject to VAT because the sale is a casual sale of personal property.000 72.040.792.800 P 784. Official receipts. The business should be registered as VAT because the sales exceeded P1.524.000) 30% P 0 1.500 x 20% x 8/12) Surcharge (P30.024.000 x P 750.625 P 30. Add: VAT (P1.000) Multiplied by corporate tax rate No income tax – loss Add: Other taxes paid: Custom duties (P1. the VAT of ROX Realty would be twelve percent (12%) of the FMV (higher value).000 604.000 Problem 7-22 1 As capital asset .000 P144.000. 2.000 x 12%).200.12) x 3% .000 – P3. Assuming that the FMV remains the same.333 Surcharge (P192.

200.000 P 180.000 P 750.000 x 12%) 324.000 30% P 54.000) Less: OSD (P300.500.000 .000 2 .000 P1.000 450.000 Supporting Computation: Purchase value Add: Custom duties (P1.524.000 P1.000 P2.000 Input VAT (P2.000 x 20%) Total landed cost – if ordinary asset P 750.000 – P2.000 120.000 Total revenue contributed to government P 300.250.000 x 20%) Input VAT (P2.000.000 50%) Excise tax (P2.500.000 450.000 1.250.000 1.700.500.024.000 x P 750.250.700.500.500.000 x 12%) Total landed cost – if capital asset P1.000 x 40%) Net income Multiplied by corporate tax rate Normal tax Add: Other taxes paid Custom duties (P1.700.578.000 x 50%) Excise tax (P2.524.BUSINESS AND TRANSFER TAXATION 5th Edition (BY: VALENCIA & ROXAS) 40 SUGGESTED ANSWERS Chapter 7: BUSINESS TAXES Supporting Computation: Purchase value Add: Custom duties (P1.000 1.000 x 20%) 450.000 P3. As ordinary asset Gross income (P3.700.000 324.000 x 50%) Excise tax (P2.

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->