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Income Taxation
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Multiple Choice Questions

1. On October 1, 2007, Pastrana Co. leased a new residential house for the use of its general manager. The
rent agreed upon was P136,000 per month. The amount of the fringe benefit tax monthly is:
a. P68,000 b. P100,000 c. P136,000 d. P32,000

2. Taxpayer sold capital assets as follows:

Lot 11 Lot 22
Selling Price P6,000,000 P10,000,000
Cost 2,500,000 1,000,000
Net Gain (loss) P3,500,000 P9,000,000

Terms of sale:
Down payment 1.15.2006 P500,000 P500,000
Paid on 6.15.2006 500,000 1,000,000
Paid on 9.15.2006 500,000 1,000,000
Installment due 1.15.2007 2,000,000 3,000,000
Installment due 5.15.2007 2,500,000 3,000,000
Mortgage assumed by the buyer 1,500,000

The final tax payable under the installment method for 2006 for lot 11 is:
a. P36,000 b. P90,000 c. P22,500 d. None of the above

3. In Problem No. 2, the final tax payable under the installment method for 2006 lot 22 is:
a. P135,000 b. P150,000 c. P600,000 d. None of the above

4. Jose Pidal, widower, supporting a son, 33 years old, who is invalid, has the following transactions in
2006:
Sales P1,200,000
Cost of sales 550,000
Deductions:
1. Operating expenses 367,000
2. Loss of Goods thru theft 50,000
3. Contributions:
To Quezon Province government for priority
Activity in sports development 10,000
To St. Mark Cathedral 35,000
Other income
1. Rent of Apartment 30,000
2. Capital gain from sale of family painting held for 2 years 80,000

Jose Pidal will report a net income before personal exemptions of:
a. P226,700 b. P262,700 c. P266,700 d. P302,700

5. Assuming Jose Pidal claimed the optional standard deduction, he shall report a net income before
personal exemptions of:
a. P585,000 b. P648,000 c. P760,000 d. P1,143,000

Page 1 of 25

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6. Roy, Caludio & Co. is a general professional partnership. Their income and expenses in 2006 are shown
below:
Roy, Claudio & Co.
Gross income P1,000,000
Operating expenses (deductible) 600,000
Contributions:
1. To Mandaluyong City for priority projects in education 40,000
2. To Divine Mercy Church 20,000

Note: There was no contributions of profits during the year but partner Claudio withdrew P50,000
chargeable against his share.

Partner Roy, widower with 70% interest, uses cash method
Gross income, rent P300,000
Rental expenses (deductible) 120,000
Royalty (on books) 40,000
Donation to Quiapo Church 40,000

Partner Claudio, married with 30% interest, on accrual basis
Gross income from business P420,000
Business expenses (deductible) 290,000
Dividend from domestic company 50,000

Partner Roy will report taxable net income of:
a. P232,000 b. P368,800 c. P372,000 d. P388,000

7. Partner Claudio, will report a taxable net income of:
a. P238,000 b. P206,000 c. P200,000 d. P124,000

8. Nikki Corporation has the following transactions during the year:
Gross income, Philippines business P1,600,000
Gross income, Hongkong business 400,000
Business expense, Philippines 900,000
Business expense, Hongkong 100,000
Interest connected with Philippine business 60,000
Interest connected with Hongkong business 40,000
Interest connected with business in the Phil. and Hongkong 100,000
Business expense which cannot be allocated 120,000

If taxpayer is a resident foreign corporation, its net income subject to tax in the Philippines is:
a. P464,000 b. P530,000 c. P640,000 d. P940,000

9. The books of Renato Co. show the following information for the year 2007:

Sales Cost of sales Other income Deductions
1st Qtr. P1,200,000 P680,000 P190,000, Rent Net of P320,000
5% withholding tax
2nd 1,400,000 840,000 P96,000, Royalty, Net of P360,000
Qtr. 20% withholding tax
3rd 1,500,000 900,000 P500,000, dividend from P380,000
Qtr. domestic corporation
4th 1,700,000 1,000,000 P95,000, Rent Net 5% P450,000 including fringe
Qtr. withholding tax benefit tax of P50,000
P5,800,000 P3,420,000 P1,510,000

Renato Co. is entitled to a tax credit in the amount of P20,500, representing excess quarterly income
taxes paid in 2006, which it opted to carry over to 2007.

The income tax due from Renato Co. for the 1st quarter of 2007 is:
a. P66,000 b. P109,500 c. P122,000 d. P132,000

10. The tax records of Botai Co. for 2007 show:

Page 2 of 25

000 Salary of Winnie as professor 84. 3. P147.000 Cost of investment in Z Co.000 Loss from gambling 10.000 c.P22. shall report in 20076.600 d.000 c.000 b. None of the above Page 3 of 25 .000 Investment in partnership 2005 20. P139. Gain on sale of capital asset held for 4 years 10. has the following transactions in 2007: Business gross income P200.000 2.000 b. Miriam Santiago. Bogok.000 Business expense 60. Liquidating dividend from Z Co. In 2007.000 b.000 13.000 b. P140.000 Royalty of Hubert as book author 60. have five (5) minor dependent children. None 15.000 12. P190. Jose Miguel Arroyo. Loss on sale of capital asset held for 8 months 12.000 c.000 cousin of Miriam Santiago The deductible loss of Mirriam Santiago is: a. partnership interest 100. P65. Bogok received a bonus for services rendered in 2006 in the form of 200 shares of stock of Tongek Co. Bogok shall report income from bonus in the amount of: a.Advance preweek review materials in taxation visit-http://cebu-CPAR.. spouses. after personal and additional exemptions.com Sales P2. 150. was recovered in the year 2007.000 c.000 b.000 2. of: a. Hubert and Winnie. P151.000 Allowable operating expenses of common clinic 30. after personal exemptions.000 d. income arising from the bad debt recovery. Loss on sale of office computers to Miriam Sto. Selling price.000 Hubert will report a taxable net income. P22.000 written off in 2006. They are both physicians. On January 15. 2007. Said shares have a par value of P120 per share and a fair market value of P240 per share at the time of receipt on January 15. P121. Loss on account of failure to exercise 2-month option to buy Property 2. Taxpayer’s net income before personal exemptions is: a. incurred the following losses in 2006: 1.000 Cost of sales 1.000 d. P141.000 Premium on health insurance of family 10. P42. in 2005 60.000 Prize won by Winnie 8.000 1. P111.000.000. P117.000 The bad debt of P65.000 b.000 360.000 Interest on Notes Receivable of spouses 12.000 d. P177. P124.000 Note: Miriam Santiago owns 60% of the stocks of Red Co. P48. Its fair market value in 2004 was P210 per share. Jose Miguel Arroyo had a net income of P65. 40. Domingo. Manager of Tongek Co.750 d. of: a. Botai Co. P24.100 c.300.000 Note: Wagering winnings amounted to P14. P196. 54.000 14.000 d.000. P145.000 2. P54. Loss on sale of company car to Red Co. P104. their records show the following income and expenses: Professional fees from common clinic P 140.000 Expenses which includes bad debt written off In the amount of P65. a business woman.000 Salary of Hubert as professor 120. 2007.000 and a net capital loss of P92. Wagering losses at Casino Filipino P86.000 c.000 3. single. receives a monthly salary of P120. None 11.000 Note: in 2006. in the amount of: a. Winnie will report a taxable net income.000 Other transactions: 1.

000 Cost of sales 430.000 net gift exempt or 30% of the net gifts whichever is higher. Page 4 of 25 . not subject to gift tax. 8. has the following records in 2007: Sales P2. c. Spouse d. which of the following statements is correct? a.com 16. b. All of the following except one are exempt from gift tax. 30 days after each donation. 6 months after each donation d. The transfer of property is onerous. c. Donation to Development Academy of the Philippines. Angelei Corporation organized in 2000. For donor’s purposes. The car was sold for P200. hence. Son-in-law 4. d. 30 days after end of the month following the donation. There is a taxable gift of P200. MCIT of P29. a.000 and has a fair value of P400. c. c. P10. d.050 Donor’s Tax 1. P150. When the donee or beneficiary is a stranger. d.000 Operating expenses 1. hence not subject to gift tax. There is a taxable gift of P300.000.000 at the time of sale. the tax payable by the donor shall be: a. d. The donor’s tax return shall be filed within: a. Personal Tax 2. d. 30% of the net gifts. Peter sold his car to James.585. Donation to Philippine Institute of Certified Public Accountants.000. The tax imposed on the transfer of property without consideration between two or more persons who are living at the time the transfer is made.100. c. b. The transfer involves a personal property. The transfer of property is gratuitous. a. b.000 cash given by a nonresident alien donor to his legitimate son who is getting married in the Philippines to a Filipina. Donation of a condominium in Japan to a Filipina by a Malaysian national not residing in the Philippines. RCIT of P27. Business Tax d.000 donation to a nonprofit school. Peter’s car cost P500. The common characteristics of transfer taxes is: a. b. The transfer is for insufficient consideration.Advance preweek review materials in taxation visit-http://cebu-CPAR. RCIT of P28. Estate tax c. a. 30% of the gross gifts. 5. Donation to Integrated Bar of the Philippines.000 For the year 2007. Angelei Corporation shall pay corporate income tax in the amount of: a. The transfer of the property takes effect upon the death of the transferor. The transfer of property takes effect during the lifetime of the transferor.000.000 net gift exempt. b. Based on the graduated rates with the first P100.400 c. one of the following is a stranger. P200. Brother or sister c. Based on the graduated rates with the first P100.200 b. Gift Tax b. Donation to International Rice Research Institute 6. Three of the following are exempt or excluded from donor’s tax.750 d. 3. MCIT of P33. 30 days after end of the year donations were made. 7. c. b.000 cash given by a resident alien o his legitimate son who is getting married in the Philippines. For donor’s tax purposes. which of the following is the exception? a. Uncle b.

political party or coalition of parties for campaign purposes shall exempt from donor’s tax. duly reported to the Commission on Elections. A gift out of conjugal property is always deemed as made by both spouses. Gift tax is considered as: a. Donation inter vivos to International Rice Research Institute. d. Donation of tangible personal (movable) property. Donation of real (immovable) property. d. c. except one: a. Donation b. c. Taxation 12. There is no optional valuation date. 17. Property tax c. b.000. whether the gift is direct or indirect. Remission of debt where the debtor did not render service in favor of the creditor. c. tangible or intangible. Capacity of the donor. the second is wrong. a. The donor’s tax for each calendar year is computed on the basis of the total net gifts made during the calendar year. b. d.com 9. Donor’s tax distinguished from estate tax: First distinction: The rates for donor’s tax are lower than those for the estate tax.000 while in estate tax it is P200. Capacity of the donee. Second statement: Any contribution in ash or in king to any candidate. One of the following donations must be in public instrument. One of the following is not exempt from donor’s tax. b. the second is correct. Gifts on property shall be valued at fair market value of te property at the date of donation. Notice is not needed. The following are requisites of a donation for purposes of the donor’s tax. 13. a. c. One of these statements is false: a. Both statements are correct.000. c. a. 14. Donation inter vivos to religious organizations. b. b. Exemption is P200. Remission d.Advance preweek review materials in taxation visit-http://cebu-CPAR. It is an act of liberality where a person disposes gratuitously of a thing or right in favor of another who accepts it. Only the first statement is correct. b. d. Page 5 of 25 . and whether the property is real or personal. 11. Gifts may or may not be covered by taxes. Delivery of the subject matter. A gift to the Development Academy of the Philippines is exempt from tax. d. a. Both statements are incorrect. Donation inter vivos. Business tax b. 15. a. Both distinctions are wrong. Succession c. Donative intent. 10. Estate tax as distinguished from donor’s tax is: a. Personal tax d. the exemption is P100. Both distinctions are correct. b. Second distinction: In donor’s tax. Payment is made as the return is filed. Only second statement is correct. First distinction is wrong. Contribution in cash or in kind for election campaign purposes. Excise tax 16. d. d. First statement: The donor’s tax shall apply whether the transfer is in trust or otherwise. c. c. First distinction is correct. Donation of intangible personal (movable property.

or directly with the Office of the Commissioner. Only second statement is correct. Only the first statement is correct. Only the first statement is correct. Only second statement is correct. a. Both statements are incorrect. Only second statement is correct. its effect is produced while the donor is still alive. Second statement: In case of gifts made by nonresidents. a. c. the difference between the fair market value at the time of transfer and consideration received is subject to donor’s tax. other than real property classified as capital assets. To subject all properties wherever situated to gift tax. First question: Is donative intent always essential to constitute a gift? No. Both statements are correct. a reasonable extension of not more than 30 days for filing the donor’s tax return. it is the donor’s death that determines the acquisition of. or the right to the property. d. and that it is revocable at the will of the donor. Second statement: In donation inter vivos. To supplement and prevent circumvention of the estate tax. 1 and 3 only c. d. 3. d. c. d. Only second statement is correct. Page 6 of 25 . c. Both statements are correct. To prevent avoidance of income taxes through the devise of splitting income amount numerous donees to escape the effect of the progressive rates of income taxation. b. neither spouse may donate any community or conjugal property without the consent of the other.com 18. c. To make the act of receiving a gift taxable. 2 and 3 only d. Both statements are correct. Only the first statement is correct. First statement: Gifts in favor of an educational and/or religious organization are exempt from donor’s tax. 2. First statement: In donation mortis causa.Advance preweek review materials in taxation visit-http://cebu-CPAR. Both statements are incorrect. Two of the following are the purpose of donor’s (gift) tax: 1. 19. a. 4. b. Both statements are incorrect. a. First statement: The commissioner shall have authority to grant in meritorious cases. 22. is transferred for less than an adequate and full consideration in money or money’s worth. Both statements are incorrect. Second statement: Transfers to educational and/or religious organization are exempt from estate tax. 20. 3 and 4 only 23. 1 and 2 only b. Where the property. b. a. Second question: How is the gift of conjugal partnership property made by the spouses treated for donor’s tax purposes? The gift is taxable to the husband being the head of the family as long as the wife gives consent to the donation. First statement: With the exception of moderate donations for charity or on occasions of family rejoicing or distress. the return may be filed with Philippine Embassy or Consulate in the country where he is domiciled at the time of the transfer. b. Only the first statement is correct. Both statements are correct. 21.

P75.600 b.800 30.400 b. a. In computing the donor’s tax. 27.000 in trust for May.000 which Donee assumed. P54.000.000 c.200 c. but less than title to take effect during the lifetime of the transferor and transferee is subject to donor’s tax. Only second statement is correct. a.000 with P500. Donee is a brother of wife and gift is on account of marriage of brother held on January 10. P43. 28. Answer not given.  Dec 1 . A resident donor c. Second statement: The transfer of property by gift is perfected from the moment the donor knows of the acceptance by the donee. 2006. The transfer of the land. .000.000. In Problem No. P3. and completed by the delivery to the donee either actually or constructively of the donated property. being a gift. P990. Both statements are incorrect.Farm valued at P600.Shares of stock of F4 Corporation valued at P400. First case: Bong transfer to Kate P50. the donor’s tax due on the gifts on December 1 is a. the naked title to Ernesto and usufruct to Francisco for two year. Both statements are correct. Advance preweek review materials in taxation visit-http://cebu-CPAR. The taxable net gift assuming the donor is a resident citizen and the unpaid mortgage was assumed by the donee. 2004. The transfer is not subject to tax because the transfer is in trust. b. Second case: In consideration of his love Mary donated a parcel of land to her brother Ernesto and Francisco. Donee is first daughter and the gift is also on account of his marriage on April 10. 24. P52. The land is valued at P1. Donee is second daughter. First statement: The law in force at the time of perfection or completion of the donation shall govern the imposition of donor’s tax. Donee is the City of Makati and land will be used for a school site. is subject to donor’s tax. . Only second statement is correct. farm has an unpaid mortgage of P100. b.000 d. P76.000 b.500. P1.500. The donor’s tax due on the gift is: a. d.600 28. P31. Both statements are incorrect. Both resident donor and nonresident donor b. Both statements are correct. P27. Answer to both cases are wrong c.000. A nonresident donor d. Only answer to first case is correct d.200 d.com Second statement: Transfer of any right or interest in property. the dowry or gift on account of marriage is allowed as an exemption (deduction) to: a.Land valued at P500. A donor gave a piece of land to his legitimate daughter on account of his forthcoming marriage.000. Donee is first son and the gift is on account of marriage held on April 10.190. Only the first statement is correct. Only the first statement is correct. Only answer to second case is correct 26. none of the choices Page 7 of 25 .000 unpaid mortgage.000 d.000 c. The donor’s tax due on May 1 donations is – a. P10. a. Noli de Castro made the following gifts in 2006 –  May 1 . 25. P1.000 d. c. d. naked title to Ernesto and usufruct to Francisco.000 b. 2006 – Land valued at P180. c. Husband and wife gave the following gift of conjugal property:  January 20. a.Land in Makati valued at P1. P1. P51. Answer to both cases are correct b.000. None of the above 29.000 c.

000 Foreign shares 250. If the donor is a Japanese residing in Japan and Japan law imposes a transfer tax on the transmission of intangibles of Filipinos not residing in Japan.500. d. P1.000 Franchise used in the Philippines 500. The taxable net gift assuming the donor is a resident citizen and the piece of the land is a conjugal. A taxpayer whose annual gross receipts/sales do not exceed P1. none of the choices 34. The unpaid mortgage was assumed in full by the donee. Pay donor’s tax of P150. P1. taxable gross gift in the Philippines is – a. Transfer to religious organization b. P1. none of the choices 32. P990.000 to the Philippine National Red Cross. P490.000 c.000 Domestic shares 150.600.190. P650.000 but who is VAT- registered shall pay VAT.000 c. P990.000 b. percentage taxes are paid on a quarterly non-cumulative basis. Transfer to an educational institution c. P650.000 d. Percentage tax may be imposed together with VAT.000 c.000 of the unpaid mortgage was assumed by the donee. a.000 b. Percentage tax may be imposed together with excise tax.500.000 b. 2. P990. A taxpayer whose annual gross receipts/sales exceed P1. b. None of the above 36.000 d. The taxable net gift assuming the donor is a nonresident alien and the unpaid mortgage was not assumed by the donee. Advance preweek review materials in taxation visit-http://cebu-CPAR.000 d. P650. None d. None of the above 35. None d.com 31. If donor is an Singaporean residing in Kuala Lumpur and Singapore law exempts from transfer tax the transmission of intangibles of Filipinos not residing in Singapore.000 P1. none of the choices 33.000 c.000 d. c. None of the above 37. Not pay donor’s tax 38. the gross gift taxable in the Philippines is – a. Pay donor’s tax of P14. The taxable net gift assuming the donor is a resident alien and only P300. P500. A donor gave P500. a.000 b. the gross gift taxable in the Philippines is – a. P950.000 c.190.000 c.000 If donor is a Filipino residing in Singapore.000 d. Transfer to a trust and Philanthropic organization Other Percentage Taxes (OPT) 1. Transfer to a social institution d.500.190. a.000 c. Just like value-added tax. Which of the following transfers are exempted or deductible from both total gross estate and gross gifts? a. P500.000 b.600.000 b. Which of the following statements is incorrect? a.000 b. P1.000 shall pay VAT even if he is not VAT-registered. P1. For Philippine donor’s tax purposes. P490. Page 8 of 25 .000 each to a stranger with the specific instruction to give part of it amounting to P100. he shall: a. Donor gave the following donations to his legitimate child residing in the Philippines – Real property located in Singapore P700. Pay donor’s tax of P120.

P6. P6. Amounts received for overseas dispatch. P7. Cooperatives shall be exempt from the 3% gross receipts tax.500 8.000 Purchases of supplies.250 b. 10% overseas communications tax. air or water for transport of goods or cargoes. Disco houses c. b. True. False. Owners of bancas b. Income tax 13. Amusement tax b.500 d. Assuming the taxpayer is VAT-registered. 12. total invoice amount 11. True c. Common carriers by land for transport of passengers. P2. One of the following is not subject to the 3% percentage tax. Keepers of garage c. Tourist bus operator 6. P9. 2% of the gross receipts. c. 5% of the gross receipts. The franchise tax of grantees of radio and television broadcasting whose annual gross receipts of the preceding year do not exceed P10.000. Franchise grantees of city gas and water utilities is subject to a franchise tax of: a. 4% of the gross receipts.500 c.000 Sales during the month 100. One of the following is subject to common carrier’s tax. a. Franchise tax d. Bowling alleys Page 9 of 25 . Which of the following statements is correct? a.000 has the following data: Accounts receivable. 3% of the gross receipts. Cockpits d. 5. One of the following is not subject to amusement tax on gross receipts. d. c. Common carriers by land. Common carrier d. A tax on the right or privilege to enter places of amusement. Every person liable to the percentage tax shall always file a separate return for each branch or place of business. b. A VAT-exempt taxpayer who issues VAT invoice shall not be liable to VAT. a.200 7. Professional basketball b.500. 7 and 8 are based on the following: In the third quarter of 2007. False. b. P3. d.com Generally. Value-added tax c. a. International air carrier doing business in the Phils. A person whose business is to keep automobiles for hire or keep them stored ready for use or order. d. c. d. 4% d. P2. b. a. beginning of quarter P 50. False d. 10% value0added tax. end of monh 75. Domestic carriers and keepers of garage. 2% b. a.250 b. a. 3% c.000 c. d. or conversation originating from the Philippines are subject to: a.800 9. every person liable to pay the percentage taxes shall file a quarterly return within 25 days after the end of each taxable quarter. message. c. a taxpayer engaged in the sale of services whose annual gross receipts do not exceed P1. the VAT payable is: a. 10. True b. P7. 4.000 d. 3% Franchise tax. Owners of animal-drawn two-wheeled vehicles c. International shipping carrier doing business in the Phils. True.000 Accounts receivable.Advance preweek review materials in taxation visit-http://cebu-CPAR. Taxicab operators b. Franchise grantee of city gas and water supplies. Motorized tricycles are not subject to percentage tax. 2% franchise tax. The percentage tax due for the month is: a. False 3.000 shall be: a. 5% 11.

Chiko operates a cockpit.000 b.000.500. J. Corporate taxpayers. P75.000 b.com 14. P240. P78.3.000 Gross sales 450. P336 d. whether citizens or alien b. b.000 Restaurant operation Sale of food 100. 2006 P 100. P16. Individual taxpayers.000 Transport of goods 1.Advance preweek review materials in taxation visit-http://cebu-CPAR. P135. Data for the particular quarter follow: Gross receipts: Cockpit operation P500. d. its receipts consist of the following: Gross receipts: Transport of passengers P1. Nasaan Ang Kuryente Po (NAKUPO) is a holder of franchise to sell electricity. One of the following statements is incorrect. P3. P4.000 c. its gross receipts amount to P2. P351 c.000 21. whether domestic or foreign c. Using the data in no. The ½ of 1% tax on stock transaction is collected whether there is an income or a loss and is a percentage tax. Taxi No. Reyes operates Ayawmagsakay Taxi with three units in Metro Manila.000. December 31. he also operates a restaurant.000 Sale of liquor 150.000. His gross sales in any one year do not exceed P1. 2007: Merchandise inventory. P90.000 c. Grandlate is a common carrier by sea. Dealers in securities 15.000 Page 10 of 25 . The common carrier’s tax due is: a.000 d. He is not VAT-registered. P363 b.000 The amusement tax due from Chiko is: a.500 c. P200. Cruz is the owner of a small variety store.000 18. the output VAT is: a. P10. None 20.000 The common carrier’s tax payable is: a. NIL b. P30. During a particular quarter.000 Purchases from VAT-registered suppliers 350. None b. It has also receipts from the lease of its auditorium and theater amounting to P600.000 c. Mr.500.000 b. All of the following except one are liable to ½ of 1% stock transaction tax.550.200.000 d.500 d.000.000 19. The ½ of 1% tax shall be collected by the broker who made the sale and shall be remitted within 5 banking days from the date of collection.000 from sale of electricity. P120. c.000 Transport of cargoes 500.2 (net of P500 gasoline expense). P52.000 The percentage tax due is: a. Estate and trust d. P100. P13. In a particular quarter. Taxi No.000 c. P200. Inside the cockpit. The tax paid on sale of shares through local stock exchange and initial public offering (IPO) and secondary offering shall not be allowable deduction for income tax purposes.000 d. J. The following data are taken from the books of the variety store for the quarter ending March 31. P90.500 and Taxi No. 17. None 17. During the quarter. a. The ½ of 1% tax on stock transaction is a final withholding tax on income. P40. 16. The percentage tax due for the quarter is: a. 1 recorded gross receipts of P3. Which one is not? a.000 d. P360.

000 Gross receipts. P75.000 b.000 b. P40. P500. Aileen sold the shares for P350. J.000 30. Makikiraan Po Transportation Company is a holder of a franchise to operate twelve (12) units of buses in the Ilocos Region. None b.500 24. it had the following gross receipts. P2. not VAT-registered and whose annual gross sales never exceeded P550.750 d. 760 b. 28 and assuming that Aileen sold the shares to Daisy.000 29.000. P7. P7. P8.000.000 27.750 d. P7.000 d. P135. P900.000. It also owns a gas station. P2. Santos. zero 28. A horseracing oficianado has the following winnings during particular race day: Total winnings P10. 21 except that the restaurant is not owned by Chiko but is owned by another person. P225.500 d. Jean.000. None b.400 Page 11 of 25 . P500. The corporation’s shares are listed and are traded in the local stock exchange. The amusement tax due is: a.000 c. P90. P900. Using the same data in no. use of radio station’s communication facilities 500.000 How much is the common carrier’s tax payable? a.500 23.500 c.com 22. P135. P17. P300.000 Questions 31 and 32 are based on the following information: 31.000.000 and additional receipts from television coverage was P2. Gate receipts amounted to P3. P60.000 Business expenses 700. P90. From the buses P280.000 b. it has the following data: Gross receipts.000 From the garage 12. which is used exclusively to load its own buses although in very rare instances it is accepting repair jobs from outsiders.500 c.000 d.000 d.000. Aileen invested P500. a dealer in securities.000 25.000 d. sale of airtime P 2. P5. Nil b.000 Cost of winning tickets 500 The tax on winnings is: a. P 8. P2.000 c.000 through the local stock exchange. Assuming the above is not a world championship but a Philippine national boxing championship.000 c.760 d. P1.000.500. P50.000 From the gas station 300. During the first quarter of the current year. a Filipino champion. P1. The amusement tax due from Chiko is: a. its gross receipts did not exceed P10. P950 d. how much is the amusement tax? a.000 c. P50. None b.000 in the shares of stock of Manila Trading Corp. None b. promoted a world boxing championship in Manila featuring Manny Hakot. Using the data in no.000 26.400 c. Continuing no. sold P1.Advance preweek review materials in taxation visit-http://cebu-CPAR.000 and were listed and traded in the local stock exchange. The percentage tax on the sale is: a.000 worth of shares she held as investment. P300.000 d. During the month of December 2007. P400 c.000 The franchise tax due for the quarter is: a.500 c. P225. P39. P17. ABS-GMA is a radio-tv broadcasting franchise grantee.000 c. During the preceding year. the percentage tax on the sale is: a. P1. a direct buyer.000. the percentage due from Chikabebs is: a. Chikabebs.000 b. The percentage tax due on the sale is: a. The shares sold were acquired for P1. 22.

A gift out of love to a former girlfriend is an onerous transfer. P20.638 d. 2008 c.com 32. If the both statements are incorrect 1. 2008 33.700.832 Estate Tax Select the letter that correspond the BEST answer.000 Purchases. P36. F Intestate succession is a legal succession because it takes effect through the validity of the decedent’s last will and testament. VAT inclusive 209.000 P10. F 2. Advance preweek review materials in taxation visit-http://cebu-CPAR. P2. If the second statement is correct D. F In case of doubt. If the both statements are correct B. January 25. P22. Manny Pakwan owns shares of stock of domestic corporations which are actively traded in the Philippine Stock Exchange. P34. The data of which are as follows: Selling Price Cost Gain/Loss A-GAY-mat Corporation P230.400 worth of foods and drinks to Fani Lyn The amusement tax payable is – a. is a franchise to operate a private telephone company. F Onerous transfer of property is not subject to tax. Zero 34.000 (35. P19. A. F Cancellation of exiting debt as payment for services rendered by the debtor to the creditor is a gratuitous transfer. 2008 b. P5. F 6. the common carrier’s tax is payable by Makikiraan Po Transportation without any penalty on or before - a. Using data above.806 c.500 d.000 P220.000) The stock transaction tax is – a. P78. During the month.150 c.500 Local regular bills from customers 220. a non-VAT taxapayer to Fani Lyn. The estate of the decedent may include his liabilities. January 15.000 Overseas calls from the Philippines to other countries 340.005 b. P42. January 10.900 d. F Interest collected in advance before the decedent’s death. Gratuitous transfer of property may not involve financial consideration. Zero 36.000 The overseas communications tax is – a. F A sale is a form of transfer transaction that requires payment of transfer tax. P1. Malakas sold P32. The foods and drinks being served inside the nightclub are being delivered by Malakas.000 b.507 b. T 5. If the first statement is correct C. Helow Po Co. P50 d. 2008 d. The right to succession is effected at the time of transfer of the decedent’s property or rights to the heir.500 c. 2007 amounted to P126.393 c. None 35.000 395. Due to the unstable prices in the stock exchange. Her gross receipts on February. F 4. During the period. P22. Fani Lyn operates the Plastic Ma’am Nightclub in Quezon City. which occurred after the Page 12 of 25 . he decided to sell the shares. P28. The share of the surviving spouse is an exclusive property of the wife and shall be part of the decedent’s distributable estate. it had the following gross receipts: Domestic long distance calls P137. testamentary succession is preferred to legal or intestate succession. January 20. The value added tax payable by the company is – a.000 Back Lita Corporation 360. Notes or claims held by the decedent should not be included in the gross estate if cancelled by the decedent’s will.950 b. F 3.

F 8. T Exclusive property does not become community property just because it is used as family home. F Property for personal and exclusive used of either spouse including jewelry shall form part of the community property. Under the absolute community of property regime. F 11. c. Exchange of a piece of jewelry for a set of furniture. the Insurance Code assumes irrevocable designation. F 14. Which of the following is subject to transfer tax? a. Obligations contacted by a person during his lifetime terminate upon his death. In computing vanishing deduction. Donated properties subject to condition upon the wishes of the decedent donor shall not be included as part of the gross estate. the value to be taken is the lesser amount of the value of the property at the date of transfer or the value of the property at the date of death of the decedent. if such taxes paid to foreign countries pertain to properties which are included in the gross estate fir Philippine estate tax purpose. F 9. Estate tax is imposed upon the a.com decedent’s death shall be included in the gross estate. Estate tax is deductible from the gross estate. The will was subsequently rendered void by circumstances. Decedent c. The will designate a part of free portion to a stranger. T 13. The will disposed the legitime to its rightful heir. b. The will is designating the State as beneficiary of the free portion. unidentifiable deductions shall be allocated proportionately with the gross estate located within the Philippines and the gross estate located outside the Philippines. The amount of estate taxes paid to foreign country could be claimed as credit against estate tax in the Philippines. T 15. b. The property acquired through donation during marriage shall remain exclusive property of the decedent or surviving spouse. Failure of the BIR Commissioner to serve a copy of the estate tax claim to the executor or administrator is a valid ground to deny the claim. d. 17.Advance preweek review materials in taxation visit-http://cebu-CPAR. Where a decedent owns less than all of the property covered by a mortgage. F 12. Sale of personal property for a price lower than cost. F 7. T Where the decedent is nonresident alien. Privilege to receive inheritance 16. T The Register of Deeds shall not register any deed or instrument covering the decedent’s estate or any portion thereof until the taxes are shown to have been paid. only a proportionate amount is deductible. property acquired through exclusive property of the husband or wife is an exclusive property even acquired during the marriage. Which of the following is regarded as an intestate succession? a. Property or rights transferred d. There is a revocable transfer when a transferor of a corporate stock in trust for his children reserves the right to vote the shares during his lifetime to aid his children to gradually assume financial responsibilities. T 10. F When the designation of the beneficiary is not stated or is not clear. Page 13 of 25 . F There is transfer in contemplation of death when the sale involves an adequate and full consideration. Right to transfer properties b.

2: If zonal value is available at date of death. Both transfers are to be included in the gross estate b. and this is higher than the fair market value per assessor’s listings of values. Share of stock holdings of decedent in a foreign corporation whose business is 90 % done in the Philippines c. Which of the following proceeds of life insurance of the decedent is to be included in the gross estate? a. Rent income accrued before death but collected after death d. Which of the following is not to be included in the gross estate of citizen decedent? a.1 is to be included in the gross estate d. d. income payable to himself for 10 years. The estate as irrevocable beneficiary b. Only transfer No. Foreign currency deposited in bank outside the Philippines 19. Papa Tayin makes a transfer of property in trust. Transfer of real property for services rendered. The estate as the irrevocable beneficiary d. Mr. real estate shall be valued at fair market value at the date of death of the decedent. Both statements are incorrect. Page 14 of 25 . Mr. Only statement number 2 is correct. a.Advance preweek review materials in taxation visit-http://cebu-CPAR. The executor as beneficiary c. a. Transfer of personal goods for free. The parent as the irrevocable beneficiary d.1: For estate tax computation. Franchise in the name of the decedent which is exercised in the Philippines b. Papa Tayin dies after 2 years. but not yet actually received at date of death b. Which of the following is considered as transfer under general power of appointment? a.2 is to be included in the gross estate 24. c. The spouse as the irrevocable beneficiary c. Statement No. Which of the following item is considered situated outside the Philippines? a.com c. Both transfer are not to be included in the gross estate c. 18. Power designating the estate’s creditor as beneficiary 21. Only transfer No. The estate as beneficiary b. thereafter to Miss Nama Tayan or his estate. Dividend income declared. Statement No. d. Both statements are correct. None of the above 20. Bond certificate issued by a domestic corporation owned by a non-resident decedent d. b. Which of the following proceeds of life insurance of the decedent is not to be included in the gross estate? a. then the amount to be reported in the gross estate is the zonal value. Power to use property for the comport of person/s other than the decedent of his estate d. Share in partnership’s profit earned immediately after date of death c. Power to appropriate property expressly not exercisable by decedent’s creditors c. Irrevocable beneficiary other than the estate or executor 23. Only statement number 1 is correct. The spouse as the irrevocable beneficiary 22. Power to use property though a will exercisable in favor of the estate b.

000 d.000. Philippines.com 25. What would be the correct amount of the gross estate? a. with fair market value of P500. P3.000 at date of death.000 with zonal value of P3. Based on the data above. An interested buyer would like to buy his property a week before his death at P5.  Income from farm earned before the date of death.)  Commercial lot inherited by wife during marriage.000 d. P 500.000 ( net of related income tax.000. local and foreign.000.  Shares of stock of various domestic corporations. P 4. This has 20% assessment level at declared fair market value of P2.000 when inherited by wife and it has a fair market value of P10.500.800. This was valued at P6.000 b.000.000. P 5.500.  Jewelry found on the body of the decedent at the date of death.000 c. bought 10 years ago. Rent income from the commercial lot earned before the date of death. and ordered that the property be given to Nau Lila after 12 years. Page 15 of 25 .000.000.000.000 Questions 28 through 33 are based on the following information regarding the inheritance due to death of a married individual.000 ( net of related income tax).000.00 and the BIR Commissioner assessed value thereon is P4. inherited from his father 3 years ago.000.  Claimed as deductions: Funeral expenses.000 when transferred from his father to his name. the gross estate taxable in the Philippines is a.000 and an assessed value of P800.000 in 2005. P 2.000 b.000. This has realizable value of P1. The BIR zonal valuation stated a fair market value of P2. Naty Ghok died in 1993 leaving a will which directed all real estates owned by him not to be disposed or sold for a period of 12 years after his death.000. This has a zonal value of P1. P 1. P600.000.500.500. P150.000.Advance preweek review materials in taxation visit-http://cebu-CPAR. the gross taxable estate under Philippine Tax Code is a. he assumed the unpaid mortgage of P500. This asset is determined as exclusive property of the decedent. Assume that the decedent died a resident alien in the Philippines.600. In 2005 the fair market value of the said estate increased to P4. P 1. P800.000 at date of death.500.  Real property located in Ilocos. assume that the decedent was a non-resident alien at date of death.000.000 d. At that time. assessed at that time for P1. the estate left by Naty Ghok had fair market value of P500.000 Total medical expenses of P550. Philippines:  Residential house and lot in Lucena. acquired at P1. listed in the local stock exchange at date of death at aggregate of value of P400. P 800.000 b.000 at the date of death.  Real property in Mindanao.500. In 1993.000. This was taxed a P2.000 of which 80% were incurred within one year prior to death and 20% were incurred more than one year prior to death. P 1. P 1.000.000 at the date of death.000.500.000 c.000 at the date of death.000. P 4.000.800.000. Identified estate of the decedent:  Real property located in the Philippines acquired 2 years ago at cost of P1. Filipino and a resident of Lucena City.000.000 26.000.  Personal property located abroad.000 c.000 27.500. P 2.  Investment in bonds. P 2.

Capital gain tax on transfers before death and paid after date of death.000 c.000  Using the above problem above.100. b. Property taxes accrued prior to decedent’s date.000b.000 Unpaid mortgage on property in Ilocos 200. P16. b. The gross exclusive estate a.300. P3. The gross exclusive estate a.600. Which of the following is deduction from the conjugal portion of the gross estate? a.Advance preweek review materials in taxation visit-http://cebu-CPAR.000 b. Which of the following is deductible from the exclusive portion of the gross estate? a. 35.500. P6.000 Medical expenses 1. Which of the following unpaid taxes is not deductible from the gross estate? a. P16. P14. d. The gross conjugal estate a. Bad debts for uncollectible claims against insolvent person. b. Vanishing deduction pertaining to property inherited by the decedent prior to marriage under conjugal property ownership.000. Transfer for public use pertaining to joint donation of husband and wife to the government. under the regime of conjugal partnership of gains.000d.600.000 34.600.000 30.000 Using the above problem above.900. P3.000c.000.000 d. P16.  Deduction claimed by the executor: Actual funeral expenses P 180.000 c. P2.000 Various claims of creditors 8. Losses incurred during administration of the estate on property included in the gross estate. 36. P10. P13.700.900.000 33. P16. The gross conjugal estate a.000 b.000 c. P13. P26. P19.000 d. Family home pertaining to house and lot acquired during marriage. P3.600.000d. P15.000 d. Claims against the exclusive portion of the estate.000.800. P16.000 Claims against insolvent person 800.000 d. The total gross estate a. c.800. Which is deductible from the gross estate of resident decedent? Page 16 of 25 .900. The total gross estate a.000 b. P26. P3.600. P4. P13. Paid mortgage pertaining to property acquired as inheritance before marriage under absolute community property ownership.000c.100. 28.700. Transfer for public use.000 29. P4. compute for the following: 31.000 32.100. d. 37. P16.800.600. under the regime of absolute community of property.900.800.000 Judicial expenses 900. P12.000 c.300. c.com  Property brought to marriage by his wife.000 b.000b. Gift taxes on life time gifts which remain unpaid at date of death. d.300. Income taxes on income earned and received after decedent’s death.100. c.100. P2.

P 450. 2 hectares with fair market value of 80. 2005 with the total amount of P200.000 Residential house.000.000 March 2005 to May 2005 450.000 c. P 100. 2005.000 c. 400 sq.000 November 2004 to December 2004 150.000.000 Real estate inherited August 9.000 Old Vehicle 800. d. This was previously Page 17 of 25 .000 d. 500 sq. P 700. The residential land and residential house are mortgaged at the Equitable PCI Bank for P300. c. meters w/ fair market value of P 400. P490. The rest of the estate is conjugal.000 Other Personal Properties 30. with fair market value of 300.000 at 18% interest per annum. P 500. PP1. arising from theft.000 d.517. The loan and accrued interest are not paid at the date of death of the decedent. P500. b. Properties: Jewelries P 1.500 Questions 40 through 41 are based on the following are the inventory of the estate of Mr.000 Farm land.000. Mr. 38.000 The commercial land is the exclusive property of the decedent and is pledge as collateral to a mortgage loan form the Metro bank obtained on April.000 Shares of stock. He is survived by his wife and three (3) children. Nakalimot Hoo Minga. An inventory of his estate as of December 31. Loss of portion of the estate incurred a month before the date of death of decedent. 2005 per certificate of the bank is P220.000 Date of Death. w/ fair market value of 160.000 b. Filipino. Loss of portion of the estate incurred during settlement. meters w/ fair market value of 250. Losses on the portion of exclusive capital of surviving spouse incurred during settlement of the estate.000 Personal Property: Appliances. The actual funeral expense is P55. 2000.000 and the judicial expenses is P15. September 30.000 39.com a. Pumayapa who died on September 11.000 b. Loss of portion of the estate incurred 200 days before the date of death of the decedent. resident of Rea Quezon died on December 2005. a. P517.600. What is the correct amount of allowable medical expenses for the following: Date Incurred Hospital Bills October 2005 to December 2005 P 100.000 Residential land. shows the following: Real Estate: Commercial land. Compute the total ordinary deductions from the entire gross estate. 2006 a. 2005. The unpaid balance of the mortgage loan on December 31. domestic corporation 250.000 Time Deposit with the Metro bank 90.Advance preweek review materials in taxation visit-http://cebu-CPAR.

The following Vanishing deduction a. of w/c P50. married and resident of Pasay City died intestate on February 24.000 Legacy to the City of Manila 100.000 Investment in bonds 100.125. He was survived by his wife. 2005.600b. Vanishing deduction c. Using the above data. Gross estate of an American residing in the Philippines at the date of death whose properties are located within and without. P1.Advance preweek review materials in taxation visit-http://cebu-CPAR.000 Collectibles.000 Medical Expenses 250.700 b. Family Home 43.700d. 300.000 40.000 41. Funeral Expenses c. P34. the total deductions from the gross estate a.000 Stolen Jewelry.000 Peso bank deposit 150.000 was paid by the present decedent before his death.124. d. Family home b. Filipino. Resident Alien. It was inherited from his uncle and the decedent assumed unpaid mortgaged of P70.000. Which of the following is a decrease in inheritance? a. P34.000 Expenses: Funeral Expenses 190. P2. His estate consist of the following: Fair Market Value Page 18 of 25 .124. Gross estate of an alien who was resident of his country at date of death. whose gross estate reported as taxable in the Philippines.600 c. Losses d.000 42.000c. Which of the following is allowed with tax credit for estate tax paid to foreign country? a.000 Judicial Expenses 120. P34. Rosa and three (3) children. P2. b. P35. Claims against insolvent person d.124. All of the Above Questions 45 through 47 are based on the following information: Mr. Judicial Expenses b. duly notarized 50.390 d.A 4917 300.000 claims against insolvent person and P100. Juan Todas.000 Loans payable.com taxed at P250. P2. included only those located in the Philippines.000. part of the gross estate 10.000 Amount received by heir under R. c.000 cancelled in a written will 350. Which of the following may reduce the taxable estate but not the inheritance? a. Standard deduction 44. excluding P50.

residential land and residential building are also mortgaged at the Metro bank.000.com January 15.240 47. she has P2.800. 10 hectares 800.000 1. Using the above problem. 2005 was P80.420 c.000 b.922.000 Estate Tax 34.422. 1. Mrs.000.750d. P3. P291. At the date of death.500 sq.000 Conjugal Real Property: Land.000 (real property) to her husband. P2. residential. Kina Pos Sahangin reveals that her shares of stock in Pure Joke Corporation shall be contributed to the local government of Tagaytay City for the maintenance of public park.172. 900. 1998 to guaranty an eighteen percent (18%) per annum mortgage loan of P100. 2000 February 24. P116.000c.000 46. a Filipino. and the unpaid balance of the loan on February 24.200. a. P2.172.420 b.Kina Pos Sahangin’s executor field and paid the follow tax returns: Donor’s tax for gift to her husband P 204. the net distributable share a.160 b. P2. She is insured for P1. mtrs.000. P160. 4 hectares 600.000c. Using the above problem.000 designating her estate as beneficiary. 2000: Land. 2005 survived by her husband. The conjugal real property. 800 sq. Page 19 of 25 .840 The transfer tax still due for the estate tax of Mrs.000 The exclusive real property. P326.meters P 500. The actual funeral expenses amounted to P320.172. The premium was paid from her exclusive property.160 d. and the balance shall be given to her husband. P3.240 d.000 Building. agricultural. P192. The last will and testament of Mrs. she made a gift of P3. 1.000.000 Land.160 ***************************************************************************************************************** Value Added Tax ***************************************************************************************************************** 1. P3. P236. m. was mortgaged at the Bank of Philippine Islands.160 c. Mrs. 800 sq.000. P356.000. fishponds.861. died November 1. At the date of death. The net taxable estate a. residential land. On January 15.000.000 cash in bank and 100. Kina Pos Sahangin.mtrs. 300 sq. the estate tax a. P2. residential. 2005 Exclusive real property inherited from his father who died on January 15.922.000 Miscellaneous 250.Advance preweek review materials in taxation visit-http://cebu-CPAR.000 shares holding of Pure Joke Corporation with a sales value of P100 per share at the date of death. P3. residential.000b.422. the loan and interest are not paid. Kina Pos Sahangin. P560.000 Conjugal Personal Property: Motor Vehicles 650.000 P 1.500 and judicial expenses were P24.000d. On February 23.000 Land.000 48. One of the following is not a major business internal revenue tax in the Tax Code.

One of the following is not an export sale. Both statements are incorrect. the VAT shall be determined by multiplying the gross selling price including the amount intended to cover the tax by the factor 12/112. of locally manufactured. c. First statement: Nonstock and nonprofit private organizations which sell exclusively to their members in the regular conduct or pursuit of commercial or economic activity are exempt from value-added tax. d. Value-added tax c. Other Percentage tax 2. Gross receipts. Sale to a non resident of goods assembled or manufactured in the Philippines for delivery to a resident in the Philippines. Both statements are correct. Only the first statement is correct.Advance preweek review materials in taxation visit-http://cebu-CPAR. Installment received plus interest and other charges. Total amount which the purchase pays to the seller. Sales tax 3. Total amount which the purchase is obligated to pay to the seller. d. c. d. Output tax d. Value-added tax. Only the second statement is correct. 5. Which one? a. Excise taxes on certain goods d. First statement: If the tax is not billed separately in the inventory. Only the second statement is correct. Second statement: Government entities engaged in commercial or economic activity are generally exempt from value-added tax. Transfer. a. Excise tax. a. Sale to foreign military bases. b. use or consumption not in the course of business of goods or properties originally intended for sale or for use in the course of business. Page 20 of 25 . The value added tax due on the sale of the taxable goods. Selling price stated in the sales document. the VAT shall be determined by multiplying the gross selling price including the tax billed separately by the factor 12/112. One of the following is not a transaction deemed sale: a. Both statements are incorrect. b. b. b. Both statements are correct. b. Excise tax b. c. b. d. Sale of gold to Bangko Sentral ng Pilipinas. 9. a. a. Only the first statement is correct. assembled or repacked products whether paid for in foreign currency or not. d. Gross selling price includes all of the following except one. c.com a. c. Sale and actual shipment of goods from the Philippines to a foreign country. b. Distribution or transfer to shareholders or investors of goods or properties as share in the profits of a VAT-registered person or creditors in payment of debt. 7. Sale of real property to a nonresident person for delivery to a resident in the Philippines. 8. c. 4. Exportations of goods on consignment. diplomatic missions or agencies and/or instrumentalities granted tax immunities. Second statement: If the tax is billed erroneously. a. Sale to bonded manufacturing warehouses of export-oriented manufacturers and to export processing zones. The following are zero-rated if paid for in acceptable foreign currency or its equivalent and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas except one. d. Income tax b. The higher between the selling price stated in the sales document or zonal value or market value. Sale of raw materials or packaging materials to a nonresident buyer for delivery to a resident local export-oriented enterprise. The tax base value added tax on the installment sale of real property is: a. Input tax c. property and services by any person whether or not he has taken the necessary steps to be registered. 6.

Page 21 of 25 . c. Only the second statement is correct. Both statements are incorrect. Local tax b. Consignment of goods if actual sale is made within 60 days following the date such goods were consigned. The actual VAT paid on the beginning inventory. 14. Monthly VAT declaration is filed on or before the: a.000 and above. Only the second statement is correct. Direct tax. The allowable transitional input tax is: a. Only the first statement is correct. a. Personal tax 18. 10. Input tax on purchase of services. c. Value added tax is a/an: a. b. b. The lower between 2% of the value of beginning inventory or actual VAT paid on such inventory. 2% of the value of beginning inventory. Both the seller and the purchaser are VAT-registered. with respect to all goods on hand as of the date of such retirement or cessation. d. b. Neither one of the seller or the purchaser is VAT-registered as long as VAT invoice is issued. 25th day from the end of each month. P8. d. 16. c. Second statement: Withholding of VAT is done when the buyer is the Government or any of its political subdivisions. 17.000. 12.com c. First statement: Unused input tax of persons whose registration had been cancelled may be converted into tax credit certificate which may be used in payment of other NIRC taxes. d. Only the first statement is correct. 75% of the sales are normally on account. Retirement from or cessation from business. The total amounts received or receivable from sales by Silvilocks in April 2007 were P224. c. d. d. The higher between 2% of the value of beginning inventory or actual VAT paid on such inventory. c. Input tax on purchase of raw materials. Which of the following input taxes can be refunded. Either one of the seller or the purchaser is VAT-registered. c. Tax credit for input taxes shall be allowed if: a. Second statement: Refund or tax credit certificate shall be granted within 25 days from the date of submission of complete documents. d. b. The hotels are allowed credit based on the track record of the hotels. Both statements are correct. Input tax on zero-rated sales of goods or services. P15.000 and above. including the value-added tax. The Silvilocks Pastry sells cakes and pastry items to well-known hotels around the Metro Manila area. Both statements are incorrect. 20th day from the end of each month. a. Withholding of VAT is not applicable when payment is: a. c. P1. P1. 13. converted into tax credit certificates or carried over to the next quarter at the option of the VAT-registered taxpayer? a. b.000 and above. b. d. First statement: VAT taxpayers except corporations use calendar quarters for VAT purposes. Indirect tax c. d. The seller is VAT-registered regardless of whether the purchaser is VAT-registered or not. Input tax on importation of supplies. Both statements are correct. d. 30th days from the end of each month. 15. b.000 and below.Advance preweek review materials in taxation visit-http://cebu-CPAR. 15th day from the end of each month. 11.

22. P7. exclusive of VAT: Cash sales P 200.800 Purchases.600 22.800 c. P34. How much is the total value-added taxes due and payable by City Appliances Marketing Co. Cruz. Creditable input taxes are: a. P11. inclusive of VAT P 246.000 20.400 How much is the VAT payable of the New City Appliances Co. His records during the month show: Value of inventory as of December 31. 2007. 15. The following are the data of City Appliances Marketing Co.000 was taken and transferred to New City Appliances Co. Continuing no. P60.200 c.000 Value of inventory as of December 31. P55. P15. 2007: Goods for sale.500 d.000 d. total invoice amount evidenced by ordinary receipt of contractor 4. J. contractor not VAT-registered. P16.000 Output tax is: a. net of VAT 70.000 VAT paid on inventory as of December 31. gross of VAT 44. P13.000 Additional information: On December 16. P24. for the last quarter of 2007: Sales up to December 15. P22. retired from its business and the inventory valued at P190.000 Office airconditioners.000 b.200 b.000 Home appliances for residence. the City Appliances Marketing Co.000 Feb. total invoice value 22.000 Sales. gross of VAT 17.700 b. 2006 Purchased from VAT-registered persons P 50. P27.280 d.000 19.400 Supplies. P8. Santos.000 Page 22 of 25 .Advance preweek review materials in taxation visit-http://cebu-CPAR.000 Open account sales 100. in its operations in the last quarter and its retirement from business? a. exclusive of VAT 20.000 b.200 Purchases up to December 15. P4. total invoice amount 56. made the following sales of goods during the month of July 2007.200 d. Sales.000 VAT payable is: a.800 b.800 c.900 c. P33.600 Repainting of store.000 Note: Receipt from installment sales is P 40. VAT-registered. J.000 Purchases. P34. P31.500. 2006 6.000 d. total invoice amount 33. P13. for the first quarter of 2008? a. P10. a trader. 2006 purchased from non-VAT persons 60.000 Sales. net of input taxes 215. P72.200 d. total invoice value P 319.200 c.000 Consignment sales Apr. 15. 2007 100.600 b.com How much is the output tax for the month of April 2007? a. A taxpayer registered under the VAT system on January 1.000 Installment sales 100. Santos intends to refund the VAT on office airconditioners. assuming that the New City Appliances Co. P35. has the following data for the first quarter of 2008. 2007. made the following purchases during the month of January. 2007 100. total invoice value P 336. There is a deferred input tax from the third quarter of P3.400 23. net of VAT 140.480 Mr. P36. P15.670 21. P28. P48.000 c.920 Repair of store.

P30.000 d. 25. (P117.800 c. How much is Popocute’s net creditable input tax? a. in the course of the trade sells real property.000 The output VAT in April 2008 is: a.000 c. Popocute received a credit memorandum for purchases returned during the quarter covering purchases made in the previous quarter amounting to P336.000 plus P18.000 Sales return 200. During the same quarter.000 input VAT. total invoice value P 6.000 30.000 c.000 28. Jolas Realty Corp. except that the company has not filed a claim for refund during the period for input tax on previous purchases of capital goods.300 c. how much is the VAT payable or excess tax credit? a.920.Advance preweek review materials in taxation visit-http://cebu-CPAR. 1-01-08 56. None Page 23 of 25 . 4-10-07 112. P317.000 is a carry over input tax for a previous purchase of capital goods. It also hired the services of an independent contractor to repair the building used for both lines of activities for which it paid the amount of P150.000 b. P317.120.500. P81. P36. it had sold a lot under the following terms (including VAT): Total contract price P 1.000 d. sells real property in the course of its business.200 d.000 plus output tax of P24. P108. P173. P17.com 24.500 The value added tax payable for the last quarter of 2007 by Violet Corp.000 Purchases return 300.000 d. P117.000) 26.000. Its input tax carried over from the previous quarter is P215. made sales of goods amounting to P1.000. In question no.000 c.500 c. It also made sales of services amounting to P200. P100. is: a.000. P96. During the month of April 2007. P24. 27. is a VAT-registered dealer of appliances.000 (excluding VAT) and the property sold under deferred payment basis had a fair market value of P200.000. it made domestic purchases of P1.000 b. Popocute Corp.000 Deferred input taxes (carried over from the third quarter of 2007) 9. 6-30-07 112. P50. Violet Corp. Continuing no.000 b.000 Purchases. 25.000 Sale on deferred payment basis (initial payments exceed 25% of the selling price) 336000 The real property sold for cash had a zonal value of P600. P86. P107. P173.929 b. P27.000 d.000 input tax on capital goods. how much is Popocute’s net creditable input tax? a.000. P3. During a quarter. Jawo Realty Corp.000 (excluding VAT) How much is the output VAT on the sale of real property? a.000 Second installment. P1. P12. During the month of January 2007 had the following data per sales document (VAT included): Cash sales P 560.000 b.000 of which is the adjustment to input tax.170 29.000 d. P43.000. P27.000) 27.000 for goods for sale plus input tax of P120. net of input taxes 5. The following data are for the last quarter of 2007: Sales. how much is the VAT payable or excess tax credit as the case may be? a. (P83.429 25.000 First installment.000 Downpayment. P9600 b.000 plus output tax of P120.000 for a total of P1.200 b. Assuming the same facts in question no.000. It also filed a claim for refund of P200. P84000 c. for which P200. P153.000 d. P43.000 for a total of P224.120.

320 32. A VAT-registered person has the following data: Export sales. 2007 : Consigned beer to a retailer in Quezon City amounting to P200. Page 24 of 25 . d. A VAT-registered supplier sold goods amounting to P500.680 33.000 with a separate percentage tax of P6. Payment made on January 10.000 b. 2007 : Declared property dividend of one case of beer for every 10 shares.000 plus value-added tax of P6. P111. Which of the following statements is incorrect in relation to the sale of goods? a.Advance preweek review materials in taxation visit-http://cebu-CPAR.000 Domestic sales. P7.760 c. VAT exclusive 300. consuming P50.000. total invoice amount 6. 2007.000 The amount of input tax which can be refunded or converted into tax credit certificates at the option of the VAT-registered person is: a. Agua Pataranta is a manufacturer of beer. in the same business establishment.000 Purchase of labels.800 b. P36.000 d. The VAT-registered supplier may refuse the withholding of VAT as long as it is willing to pay the full 12% VAT. P112.720. February 14.000 Purchase of equipment used in the manufacture of goods for export and domestic sales.200 d. The sale is subject to creditable withholding VAT. P48. VAT-registered. sold on account goods for P112. repairs on the building amounted to P50. February 27.000 to a government-controlled corporation during a particular quarter.000 Purchase of raw materials. It had the following data during the first quarter of 2007: Sale of refined sugar. Laylu Co.500 34.000 Purchase of packaging materials. gross of VAT 784.000 d. VAT inclusive 448. On January 5.000 c. P4.000 to Vinmar Corp.000 36. During the quarter made sales of goods in the amount of P300.537 c..000. total invoice amount P 3. b. P124.000 b. n/30.760 d. P100. amounting to P150. P28.800 b.000 Purchase of sugar cane from farmers used in the manufacture of refined sugar 500. P28. The term was: 2/10.000. The creditable input tax is: a. The sales of the non-VAT business amounted to P200. P144.000 plus a value-added tax of P36.000.000 for a total of P206. P31. P144.com 31.000 d. P109. The total amount due is: a. The government-controlled corporation will withhold P15. 35.000 37.463 c.000 b. VAT inclusive 560.000 plus P1. Sweetie Pie Refining Company manufactures refined sugar.200 value-added tax.000 worth of beer to Japan. P136.000. Using the data in no.000 The VAT payable is: a. gross of VAT 112.000. used to manufacture goods for export and domestic sales. A VAT-registered person is engaged in the sale of VAT taxable goods and at the same time is also engaged in non-VAT business. P60. P4. net of VAT P 2. the VAT payable is: a. P30. During the same quarter.000 Supplies used for both export and domestic sales.000 c. The government-controlled corporation shall remit the withholding VAT to the BIR within 10 days following the end of the month the withholding was made. March 20.000. Supplies purchased for common use amounted to P10. During a particular quarter. 2007 : Exported P1.000 withholding VAT c. 2007. 2007 : President of Agua Pataranta celebrated his birthday. 31. P84. it had the following transactions (net of VAT): January 4.000 worth of beer given to him by the company as a birthday gift.000. P31.

Expenses incurred after the goods are released from Customs custody are disregarded in computing VAT on importation. Imported goods which are subject to excise tax are no longer subject to value-added tax.000 shall pay VAT even if he is not VAT-registered. the purchaser-non-exempt person shall pay the VAT on such importation. Both statements are correct.com Additional information: From January to March. P24.00. d. P120. a.Advance preweek review materials in taxation visit-http://cebu-CPAR. c.000 38. Only the second statement is correct. b. P240. VAT on importation is paid to the Bureau of Customs before the imported goods are released from its custody. domestic sales to wholesalers amounted to P600. He is entitled to input taxes. No beer was returned by the consignee until the end of the quarter. d.500. b.000 d. Only the first statement is correct. c. The output tax for the quarter is: a. Both statements are incorrect. First statement: A taxpayer whose gross sales or receipts exceeded the threshold amount of P1.000 c. a. One of the following statements is incorrect. Second statement: Importers of goods for personal use is subject to value-added tax even if he is not VAT-registered.000 b. When a person who enjoys tax-exemption on his importation subsequently sells in the Philippines such imported articles to non-exempt person. 39. P96. Page 25 of 25 .