TAX 1

BIR FORM 1702 Annual Income Tax Returns of INDIVIDUALS

You are the president of FIRE IFRITS, INC. (FII). FII was incorporated on August 18, 2004. It
was registered in the Bureau of Internal Revenue RDO 081 on September 18, 2004 and
was issued with TIN 888-888-888-000. FII is located in Room 2, JPIA Bldg., Escario St.,
Brgy. Kamputhaw, Cebu City, 6000. Other information of the corporation:
Contact No. 222-2222
Email Add: fire_ifrits@yahoo.com
Line of Business: Merchandising
CTC No. 111222333444555 issued in Cebu City on January 3, 2014, P10,000

You hired the services of ITSJAYVEE and Co., CPAs with TIN 111-222-321-000, naming Mr.
Allan P. Yu, as the signing partner with TIN 444-555-222-000 and BIR Accreditation
Number 22-332122-888-1121 issued on January 1, 2014 and will expire on December 31,
2016. ITSJAYVEE and Co., CPAs issued the following financial statements of FIRE IFRIT,
INC.
FIRE IFRITS, INC.
Room 2, JPIA Bldg., Escario St., Brgy. Kamputhaw, Cebu City, 6000
STATEMENT OF FINANCIAL POSITION
December 31, 2014
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents
Accounts Receivable
Inventories
Total Current Assets
NONCURRENT ASSETS
Properties and Equipment, net
Other Non-Current Assets
Total Non Current Assets

P 5,000,000
8,500,000
5,000,000
P 18,500,000
P 8,500,000
3,000,000
P 11,500,000

TOTAL ASSETS

P 30,000,000
LIABILITIES AND OWNERS EQUITY

LIABILITIES
CURRENT LIABILITIES
Accounts Payable
Accrued Expenses
Income Tax Payable
Total Current Liabilities
NON CURRENT LIABILITIES
Long Term Loan
TOTAL LIABILITIES

P 9,000,000
7,047,000
628,625
P 16,675,625
P 5,000,000
P 21,675,625

OWNERS EQUITY
Capital Stock, 1,000 shares, P1,000 par
Share premium
Retained Earnings, beg
P 5,000,000
Add: Net Income for the year
P 1,124,375
TOTAL LIABILITIES AND OWNERS EQUITY
30,000,000

1,000,000
1,200,000
6,124,375 P 8,324,375
P

FIRE IFRITS, INC.

INCOME STATEMENT
For the year ended December 31, 2014
Gross Sales 35,000,000.00
Less: Cost of Sales
Beginning Inventory 1,200,000.00
Add: Purchases 20,000,000.00
Goods available for sale 21,200,000.00
Less: Ending Inventory 1,300,000.00 19,900,000.00
Gross Profit 15,100,000.00
Interest Income, net of 20% final tax
800,000.00
Total Gross Income15,900,000.00
Less: Operating Expenses
Bad Debts
200,000.00
Commissions
700,000.00
Fringe Benefits
800,000.00
Insurance
450,000.00
Janitorial and Messengerial 1,250,000.00
Salaries and Wages 2,000,000.00
Entertainment and Representation
900,000.00
Communication, Light and Water
800,000.00
Rental 1,000,000.00
Interest Expense on Bank Loans500,000.00
Charitable Contributions to government for general purpose
500,000.00
Repairs and Maintenance
800,000.00
Depreciation
780,000.00
Fuel and Oil 1,280,000.00
Office Supplies
500,000.00
Professional Fees 1,000,000.00
Transportation and Travel
650,000.00 14,110,000.00
Net Income 1,790,000.00
Less: Current Tax Provision665,625.00
Net Income1,124,375.00
ADDITIONAL INFORMATION:
In 2013, FIRE IFRITS, Inc. incurred a net loss of P300,000.
Only 60% of the bad debts are fully substantiated.
At the start of 2014, the unapplied excess MCIT over NCIT are as follows:
2010
15,000
2011
10,000
2012
12,000

REQUIRED: Prepare the BIR FORM 1702