c 0 is Ae aR NSCOR The Professional CPA Review School ‘Main: 3F C. Villaroman Bldg. 873 P, Campa St. cor Espana, Sampatoc, Manila ® (02) 735 8901 / 735 9031 Branch: Rudel Bldg. V, Lower Mabini cor Diego Sitang. Baguio City WF (074) 4221440 email add: crc_acewyahoo.com TAXATION PRE-WEEK OCTOBER 2014 BATCH The prescriptive period for the issuance of a formal letter of demand and final assessmentnotice {FLD'FAN) may not ordinarily be stayed because of the lifeblood theory. However, there are certain instances where the running of the prescriptive period may be suspended. Which among the following. is not among the recognized exceptions which suspend the prescriptive period within which to assess? A. Where the taxpayer requests for and is granted a reinvestigation by the Commissioner. B. Ifthe taxpayer is out of the country. C. Ifthe taxpayer changes his address informing the Commissioner of such change. D. When the Commissioner of Internal Revenue is prevented from making an assessment and within 60 days thereafter. after Date assessment was received Wyo daysadouments —— March 8, 2014 Date petition for reinvestigation was filed with the BIR 67 Sube:thed March 18, 2014 Date of filing of documents to support the petition bet me ays offer _ April 8, 2014 No decision on the protest is received as of eo 99 49 AEE tober 1, 2014 The last day to appeal to the CTA is: A. October 31,2014 B, October 8, 2014 November 4,2014 —_D. March 8, 2016 . Date assessment was received March 8, 2014 Date petition for reinvestigation was filed with the BIR March 18,2014 Date of filing of documents to support the petition April 8, 2014 Date of decision of denial of the petition was received April 28, 2014 Request for reconsideration was filed with the BIR. May 7, 2014 Dute of decision of denial of request for reconsidevation was received June 2, 2014 ‘The last day to appeal to the CTA is: A. July 2, 2014 B. June 7, 2014 ©. June 23, 2014 D. June 21,2014 Date of payment of tax erroneously paid( aytr= claim for wand ) Jamuary 15, 2014 Date a claim for refund was filed February 16, 2015 Date of decision of denial by the BIR was received October 18, 2015 ‘The last day to appeal to the CTA is: A. January 15,2016 B. March 1, 2016 C. November 17,2015 D. November 17, 2017 Using No. 4, if date of decision of denial by the BIR was received on December 21, 2015, the last day to appeal to the CTA is: (hindi dapat magbeyend 56 24 .yung Y0days ) Hefer te 448 ‘A. January 20,2016 B, January 15,2016 C. April 15, 2016 D, March 17, 2016 Date of tax erroneously paid (June (0, role last S49 f eppeal hind: June 10, 2014 ; alampas sm Sune 10, Vole Date of claim for refund was filed with the BIR. # Stars) March 3, 2016 Date of BIR decision of denial was received June 2, 2016 ‘The last day to appeal to the CTA is: A. June 10, B. July 2, 2016 C. July 10, 2016 D. August 2, 2016 -The'fower to decide)isputed assessments, refunds of internal revenue taxes, fees or other charges, penalties “& relation thereof, or other matters arising under the Tex Code or other laws or ositions thereof administered by the BIR is vested in the: ‘A. Regional Trial Court - “C.Seeretary of Finance TAX = 1026 B, Court of Tax Appeals D. Commissioner of Internal Revenue Which of the following statements is true? 157. A. The final tax on compensation of special kind of non-resident aliens is 25% of the gross income, B, Informer's reward is subject to final tax of 10% based on the 10% of the value of the tax assessment or P1,000,000 whichever is higher. C. Prizes exceeding P10,000 derived by non-resident alien not engaged in trade or business here in the Philippines is subject to a final tax of 20%. s2 kA NN CRC-ACE/TAX: Preweek Quizzer (October 2014 batch) Page 2 10. u 12. 13, 14. 15. D, Interest income from a foreign currency depository unit in the Philippines of a non-resident alien is not subject to final tax. ‘The Commissioner is prohibited by law to look into the bai accounts of taxpayer, except when: . Taxpayer applies for compromise on tax obligations on account of financial incapacity. B. Taxpayer is accused of heinous crime. C. During the tax investigation, taxpayer did not invoke his right to privecy. D. The Commissioner has reason to believe that taxpayer has filed a false and fraudulent return. A domesticcorporation has the following results of operations from 2011 to 2014: 202012, 2013, a1 Gross Sales 550,000 650,000 800,000 — 1,200,000 Cost of Sales 300,000 350,000 400,000 $00,000 Allowable deductions 300,000 375,000 300,000 300,00 The corporation was incorporated on July 28, 2008. The income taxes due and payable for taxable calendar year: 2014 ae P 117,250 B. 8,000 93,500 Cc. 8,000 112,250 D. 8,000 98,500 Date the national internal revenue tax was erroneously paid - January 5, 2014; Date a claim for refund. ‘was filed with Bureau of Internal Revenue - February 6, 2015; Date of decision of denial by the Bureau of Internal Revenue was received - October 28, 2015. Last day to appeal to the Court of Tax Appeals: A. February 6, 2016 C. December 27, 2014 B. January 5, 2017 D. November 27, 2015 X Incorporated, engaged in healthy products, had the following investment transactions in common, stocks of SMC Corporation for the year 2014: March 10 - Purchase 200 shares P200,000 @ 1940 /sh- March 25 - Sales 50 shares 47,500 vs (59x 1900) = (2590) April 15 - Purchase 75 shares 90,000 50 = 19, April 25 - Sales 225 shares 200,000 2 XIN = [tier How much would be the cost of the April 25 sales transactions? A. P 240,000 B. P 200,000 C.P 150,000 D.P 242,500 Kapuso Company which operates a water and radio broadcasting franchise provides the following in 2014: Gross receipts: Water franchise P 2,000,000 Radio franchise 10,000,000 Operating expenses 5,000,000 Net income 7,000,000 ‘The total percentage tax on franchise is: . ‘A, P240,000 'B. P340,000 . P360,000 D. P210,000 Which of the following is subject to 10% percentage tax? ‘A. Life insurance policy premiums collected by agent of domestic insurance company. 27. B. Life insurance policy premiums collected by a resident foreign insurance company. 57. C. Life insurance policy premiums collected by agent of non-resident foreign insurance company. D. Premiums on insurance policy taken directly by the owner of the property insured with foreign insurance company. Which of the following wVATe Sale of non-food agricultural products in their original state by farmers, Services OT HOH-VAT person subject to percentage tax. aig HE 2 Sale or importation of agricultural and marine food produets in their original state None of the above. TAX - 1026 pope6. A domestic corp g selected data in the preceding year: oration had the following sel Cash sales Cou of aes a erg ioeo00 Operating expenses ¢ 3,051,000 Dividend received from a domestic corporation "225,000 Assessed value of land 2,250,000 7 219%. Assessed value of building 3130000 f a Assessed value of machinery 6,750,000) * 4340.67 How much would be the additional community tax in the current year? at A. P10,000 B. P10,500 C. PI10S2 p.puiss2 17.A closely held corporation has initially offered its shares in the Philippine Stock Exchange, The following data pertain to the initial public offering: Number of shares sold in IPO 500,000 shares Total outstanding shares, before the listing in the Philippine Stock Exchange 1,800,000 shares Gross value money of the IPO) Wht 26 10,000,000 The percentage tax due i Hap iaks fomnd centage tax du is 1) 3h over Jom x dy, » dea,000- ‘A. P50,000 B.P100,.000 . P200,000 'D. P00,000 18, Shares of Stock held as investment wher sold no? Yarough the local stock exchange shall be subjectto: A. 1/2 of 1% based on gross selling price oF gross value in money. B, 12% VAT based on gross income. C. 5% on first P100,000 capital gain; 10% on excess of P100,000, D. 4%; 2%; 1% based on gross selling price or gross value in money. 19. Shares of stock held as investment when sol (1vove) ine local stock exchange shall be subject to: A. 1/2 of 1% based on gross selling price o7 lue in money. B. 12% VAT based on gross income. C. 5% on first P100,000 capital gain; 10% on excess of P100,000. D. 4%; 2%; 1% based on gross selling price or gross value in money. 20. Which of the following is subject to the 0% gross receipts tax? A. Gross receipts on interest, commissions and discounts from lending activities and income from financial leasing B. Dividends and equity shares in net income of subsidiaries. C. Royalties, rentals of property (real or personal), profits from exchanges and all other items treated ‘as gross income in the Tax Code, D. Net trading gains within the taxable year on foreign currency, debt securities, derivatives and other similar financial instruments, 21. The lease of property, real or personal, is subject to: TAX - 1026 1, 7% gross receipts tax ifthe lessor is a bank, IL 12% VAT if the lessor is not a bank, 1 A. Yes to [and HI B, No toTand If ©. Yes to Tonly D. Yes to IT only Questions 22 and 23 are based on the following information: 8 Mighty Builders is a contractor. It entered into a contract on February 1, 2013, which was completed on February 15, 2014. If received the total value of the contract amounting to PS,500,000 on February 25, 2014, Mighty Builders spent for the materials used in the contract which it acquired from VAT-registered suppliers costing P1,500,000. During the month of February 2014, it purchased an equipment with total agreed price of P2,500,000 and paid P1,000,000. All amounts were, exclusive of value-added tax. ingut 185,00 22. The value-added tax payable for February 2014 is: Ont prt A. P180,000 B, P315,000 CC. P360,000 1 PA75,000 23, Assuming the amount collected was P2,090,900, the value-added tax for February 2014 is: ‘A, Payable of PO Ine ; C. Refimdable of P60,000 ® B. Payable of P55,000 248 D. Refundable of P240,000 24. A VAT registered public worScontractor has the following data for the second quarter of 2014 (VAT exclusive): i Contract price (private sector clients) 5,000,900 Contract price (Government) s 3,000,000