You are on page 1of 7

EXERCISES 17-1

1. No. The discounts are not excludible from the gross selling price because they are
granted only upon the subsequent happening of an event or fulfillment of certain
conditions, such as prompt payment or attainment of sales goals by its customers
(VAT Ruling 204-90, Oct. 16, 1990).

2. I will inform Josefa Alvarado that Revenue Memorandum Circular No. 8-99, dated
January 20, 1999, requires that output tax on the sale of goods, properties and
services must not be indicated separately in the sales invoice or official receipt.
However, this memorandum circular has already been repealed by Revenue
Regulation 16-2006 which requires that all output taxes must be billed separately in
the invoice. Thus, the information gathered by her is already obsolete.

3. The taking of the goods from the grocery is a case of consumption not in the course of
business of goods originally intended for sale in the course of business which is a
deemed sale transaction. Therefore the amount corresponding to the goods taken are
subject to output tax.

4. The sale by First Unibrand Food Corporation (FUFC) is a sale not in the course of
business of all the properties which are originally intended for use in the course of
business. Therefore, it is a deemed sale transaction which is subject to VAT.
Such being the case, the sale by FUFC of all its machineries to its parent
company, NIKON, is subject to 12% VAT (BIR Ruling 057-99).

5. No, the house and lot is not held primarily to customers or held for lease in the
ordinary course of trade or business of Gabby. Moreover, the unit in the subdivision is
intended for low-cost housing under RA 7279.

7. Yes, the transaction between Isuki Company and Lyco Corporation is a case of a
foreign currency denominated sale because the sale is made to a nonresident to
which the goods are to be delivered to a resident of the Philippines and to be paid in
acceptable foreign currency in accordance with the rules and regulations of the
Bangko Sentral ng Pilipinas.

EXERCISES 17-2
1. The discount should be based on the gross selling price. The prompt payment
discount is not deductible from the selling price for purposes of computing value-
added tax because the granting of which depend upon the happening of a future
event Thus, the amount to be paid by Paloma to Papsi Cokla Company is computed
as follows:
Price per case P 100
Less: Discount (2% x P100) 2
Net amount 98
Add: VAT (100 x 12%) 12
Payable per case 110
x Number of cases purchased 10
Actual amount payable to supplier P1,100

2. Cash sales P
1,760,000

65

000 Purchase book of Bestbooks Enterprises.000 VAT payable 10.000 Total 2. The seller and the buyer are subject to VAT.240. A. Sales on account 513. Sales book of Advance Company.440 Sales 12.440 Output tax 1.440 Cash 13. a. Sales book of Advance Company. Purchase book of Bestbooks Enterprises.200 40. Buyer is VAT-registered while the seller is not.440 c.000 Purchases 500.440 Sales 12.440 Output tax (13.000 Less: Sales returns and allowances P 16. Purchases 12.440 b.200 Inventory (660.500 Sales discounts 16. Purchases 13.000 Less: Input tax 230.000 3.273.000 x 2%= 13.000 Multiply by 3/28 Output tax 240.000 Taxable base 2. 13.440 Sales 13. JANUARY Input tax P 13. Purchases 13.440 Cash 13. Cash 13.000 Input tax 1.000 Purchase book of Bestbooks Enterprises.200) vs.500 33.000 66 .440 Sales books of Advance Company.440 X 3/28) P 1.440 Cash 13. Seller is VAT-registered while buyer is not.440 4. Cash 13. Cash P 13.

000 – 2.000) 73. FEBRUARY VAT payable 70.736 67 .000 Cash 20.600 x 3/28) 9.520) 3.000 Cash 550.0 0 Cash 1. VAT Business Purchases 50.000 Output tax (1.000 Input tax (89.344.000 Cash 50.000 – 3.520 Purchase returns 21.000 Sales 300.000 Cash 560. a.000 Output tax 36.000 Output tax 3.960) 32.000.800 B.000 Sales 1.000 Sales returns 33.480 VAT payable 28.200 VAT payable 70. Input tax 60.000 Cash 336.000 Equipments 50.960 Cash 36.600 Non-VAT Business Purchases 22.600 Cash 89.000 X 3/28) 144.000 Non-VAT Business Purchases 20. VAT Business Purchases 80.000 Input tax (13.000 x 12%) 6.800 Cash 70.040 Input tax (6.000 Cash 56.960 Output tax (36.000 Output tax 144.000 b.344.200.520 Input tax 2.560 5.000 Input tax (50.000 Cash 23.800 Purchases 550.200 + 60.

000 e.00 Input tax 15.000 x 3/28) 155.642.744 Cash 34.144.000 Sales 100.43 68 .(4/5 x 3.100 Out on consignment 68. 57 Deemed sales: Payment to creditors ) 27.414.864 Cash 36.80 Input tax 1. VAT Business (exclusive of tax) Cash 448. Sales – VAT Business P 400. Domestic sales (1.571.313.521.864] 772.736 c.266.744)] 748.000 x 3/28) 27. Output tax 155. 07 7.228.000 Sales – Non-VAT Business 100.452.000 Supplies [3.000 Total 141.200 Input tax 3. Output tax 48.000.4 0 VAT payable 32.6 4 Output tax 77.944 x 3/28) 3. 14 VAT payable 50.815. Supplies 32.200 Input tax (34.864 – (4/5 x 3.944 Equipment 32.744 .000 Total sales 500.064 d. Cash 22.500 Consignment sales 34.80 Equipment [3.571.000 x 3/28) P 63.000 Sales 400.000 Output tax 48.750 Goodwill to employees 11.373.000 Non-VAT Business Cash 100.107.43 Export sales (1.2 1 Less: Input tax (253. Sales (594.6 0 6. .200 x 3/28) 1.350 Multiply by 3/28 15.000 x 0%) .686.29 62.86 Less: Sales returns (13.60 f.

9 0 9 VAT payable 16. Raw sugars are not subject to presumptive input taxes because they are exempt from value-added tax.000 x 3/28) 45.00 0 Multiply by 2 79.00 0 9.100. Actual VAT paid P 365. Output tax (P1.000 61.000 Presumptive input tax 26. 2.200 x 3/28) 66.214.562.000.857.0 138.000 Less: Input tax On purchases 35.000 x 3/28) 117.000 x 12%) 240.100 x 3/28) 27.00 0 Goods manufactured 1.225.00 0 Total 3.000.00 0 Goods in process of production 616. Bagasse is subject to presumptive input tax because it is not included in the exemption from VAT under Revenue Regulation 16-2005.4 4 8.000 Notes: 1.2 8 Purchases – domestic (618.0 bagasse 00 Rate 4 % Presumptive input tax 26.140 % Transitional input tax (higher) 365.957.896. 71 Purchases – supplies (254.00 0 Goods purchased for processing 429.235.1 4 69 .350.000 VAT payable 179.00 0 Portion produced into refined sugar: White sugar 60% Bagasse 5% ____65 % Purchases produced into refined sugar & 650.674.000 Two percent (2%) of inventory: Goods for resale P1. Total purchases of sugar cane P1.0 00 Output tax (2. Less: Input tax Purchases – export (422. 10.

Non-VAT 500.0 0 Less: Allocated Input tax Input tax on computer (44.000 (1.114.060.000.000 (4.sale of school supplies (400.714.000 55.421.714.420 Less: Input taxes On purchases 38. VAT (440.86 Purchases. VAT & Non-VAT (9. Output tax .000 14.000 Machinery (1.000 Excess tax carry over 22. 42 11.000 Sales.000 Exempt sales 600.000 VAT payable 26.14 46.000. VAT P 1.500.29 Taxable sales 400.000 x 3/28) 47.000 x12%)/60 x 2 6.000 February Output tax 65.060.000.000 x 12%) / 60 4. Output tax (700.000 106.000 Machinery (3.000) Output tax (1. Less: Input tax Purchases.000 x 3) 9.900 x 3/28) 1.500. Supplier of goods: 70 .2 8 12.000 x 12%) P48.000 Excess input tax (22.000/1.000 34.500.000 x 12%) 180.000 x 12%) 24.000.730 VAT payable 22.000 Less: Input taxes On purchases 30.000 x 12%) 60.71 Allocation based on sales: Sales.000 42.000 x 3/28) P 4.435.000 x 12%) / 60 4.000 ) 1.142. January Output tax 60.000.730 On machinery (2.000 Less: Input taxes Purchases (500.500.7 2 VAT payable 46.71) 707.885.000.29 x 400/1.000 Total 1.000 x 12%) 84.000 x 1.000 VAT payable 125.000 Less: Input taxes Purchases (200.000 Total 1.000 On machinery (2.000 Unutilized input tax 40.7 2 VAT payable 71.690 13.

060 Supplier of services: Selling price 5.000 X 1.800 1.000 71 .000 x 12%) 120 Invoice amount 1.000 x 12%) 600 Invoice amount 5.000 x 10 60 1%) Amount payable to supplier of goods 1. Actual collection (exclusive of the VAT) X Zonal value x 12 % Agreed consideration (exclusive of the VAT) 10. Selling price 1.000.500.600 Less: 5% withholding of final VAT (5.000 x 100 350 2%) Amount payable to supplier of goods 5.250 15.000 x 250 5%) 2% withholding of income tax (1.000 Less: Output tax (1.120 Less: 5% withholding of final VAT (1.000 Less: Output tax (5.000 x 50 5%) 1% withholding of income tax (1.000 x 12% = 1.