(USE THE FOLLOWING DATA TO ANSWER THE NEXT 6 REQUIREMENTS: )

The following data were provided by MS Corporation for the year 2018 and 2019:
2018 2019
Gross sales 10,000,000 12,000,000
Cost of sales 5,000,000 6,000,000
Salaries expense 800,000 800,000
Depreciation expense 300,000 400,000
Rent paid for the year, net of withholding tax 475,000 475,000
Bad debts provision 100,000 120,000
Written off bad debts 50,000 60,000
Recovery of bad debs written off - 20,000
Interest expense 150,000 200,000
Interest income from savings deposit 200,000 250,000
Royalty income 100,000 100,000
Representation expense 55,000 55,000
Capital gain on sale of a company car held for 8 months (costing P700,000) 200,000 -
Capital gain on sale of a used truck held for 2 years (costing P1, 850,000) - 150,000
Capital gain on sale of land held as capital asset for 10 mos. (costing P750,00) - 500,000
Capital loss on sale of a van, held for 18 months (costing P3,500,000) 150,000 -
Donation to government for public purpose 150,000 200,000
Donation to government for economic development activities 200,000 250,000
Gross income earned in foreign country (expressed in Phil. functional currency) 1,500,000 1,800,000
Tax paid in foreign country (expressed in Phil. functional currency) 300,000 320,000
Tax paid in the first 3 quarters on the year 200,000 250,000

Compute for the following

1. Taxable income, 2018 4,432,500 3. Tax payable, 2018 829,750.00 5. Tax due, 2019 1,682,437.50
2. Tax due, 2018 1,329,750.00 4. Taxable income, 2019 5,608,125 6. Tax payable, 2019 1,112,437.50

(USE THE FOLLOWING DATA TO ANSWER THE NEXT THREE REQUIREMENTS: )

Mr. Allen, an individual taxpayer, purchased a real property classified as capital assets for P2,000,000 five year ago. During the taxable
year, he sold the said property for P7,000,000. The prevailing fair market value on the date of sale was P6,500,000. The buyer, Mr. Maikie
will assume the mortgage of P3,000,000 and will make the following payments: down payment on January 1, P500,000; yearly installment
of P500,000 every end of the year commencing this year.

Compute the following:

7. Initial payment 2,000,000
8. Capital gains tax payment for the current year. 420,000
9. Capital gains tax payment for the year following the current year. 0

(USE THE FOLLOWING DATA TO ANSWER THE NEXT 7 REQUIREMENTS: )

Ms. Aeley sold real property appropriately classified as capital asset on July 1, of the current taxable year for P6,000,000. The zonal value
at the time of sale was P5,000,000. The property was acquired by Aeley 5 years ago at a total cost of P1,000,000.

Required: Provide what is being asked from each case below:

Case I:
Mr. A will pay a down payment of P1,200,000 on July 1, and the balance is payable in 4 annual installments beginning December 31, of
the following year.
10. The capital gains tax on the property dealing transaction is 360,000
11. Capital gains tax due for the current taxable year. 72,000

Case II:
Mr. A will make a down payment of P600,000 on July 1, and another payment of P800,000 on October 1 of the same taxable year. The
buyer will assume the mortgage of P600,000 and the balance is payable in 4 annual installments starting December 31, of the following
year.
12. Capital gains tax due for the current taxable year. 93,333
13. Capital gains tax due for the following taxable year. 66,667

Case 3:
Mr. Mr. A will make a down payment of P500,000 on July 1 and another payment of P500,000 on October 1 of the same taxable year.
The property is mortgaged for P1,200,000 which the buyer will assume, and the balance is payable in 4 annual installments beginning
December 31, of the following year.
14. Determine the contract price. 5,000,000
15. How much will be the annual installment collection after the current taxable year? 950,000
16. After the first annual collection and paying the corresponding capital gains tax due, how much is the balance of the capital gains
tax due to the government. 205,200

(USE THE FOLLOWING DATA TO ANSWER THE NEXT 2 REQUIREMENTS: )

Mr. Maikie, resident citizen and married with 3 qualified dependent children, had the following data for the 2018 taxable year:
Gross business income – Philippines P5,000,000
Cost of sales and allowable business expenses – Philippines 3,500,000
Gross business income – Singapore 2,000,000
Cost of sales and allowable business expenses – Singapore 1,400,000
Income taxes paid in Singapore 180,000
Income taxes paid in the Philippines (quarterly) 250,000

Compute the tax still due under the following options:

 17. The income tax expense paid in Singapore is allowable business deduction. 466,000 DUE; STILL DUE 216,000
18. The income tax paid in Singapore is tax credit deductible from tax due. DUE 522,000; STILL DUE 122, 857.14

(USE THE FOLLOWING DATA TO ANSWER THE NEXT 6 REQUIREMENTS: )

Mr. Mike, married with 6 qualified dependent children and a resident and self-employed citizen had the following data for the 2018 taxable
year:
Gross business income – Philippines P2,500,000
Gross business income – Australia (in peso) 4,000,000
Gross business income – China (in peso) 1,000,000
Gross business income – Indonesia (in peso) 1,600,000
Business expenses – Philippines 500,000
Business expenses – Australia (in peso) 1,000,000
Business expenses – China (in peso) 200,000
Business expenses – Indonesia (in peso) 2,900,000
Taxes paid in Philippines (quarterly) 280,000
Taxes paid in Australia (in peso) 350,000
Taxes paid in China (in peso) 150,000
Compute the following
19. Net taxable income of Mr. Mike 4.5M
20. Tax due 1.29M
21. Amount of tax credit 500,000
22. Tax payable 510,000
23. With the foregoing data, except that, the taxpayer is a corporation, compute the tax due. 1,350,000
24. With the foregoing data, except that, the taxpayer is a corporation, compute the tax payable. 570,000

(USE THE FOLLOWING DATA TO ANSWER THE NEXT 6 REQUIREMENTS: )

Mr. Del Pilar, a mixed income earner, has the following data for the current taxable year 2018:
Annual salary P1,200,000
Allowances received from the employer 250,000
Gross sales from business 5,200,000
Cost of sales 3,120,000
Itemized business allowable expenses - total 420,000
The taxpayer is married with two qualified dependent children.
Determine the tax due using the following:
25. Itemized deduction 845,200
26. Optional standard deduction 1,312,400

(USE THE FOLLOWING DATA TO ANSWER THE NEXT 4 REQUIREMENTS: )

X formed a general professional partnership with Y, participating 45:55 in the partnership’s income and expenses. The following are the data for
the partnership and the partners in 2018: XY Partnership’s Gross Income P975,550; XY Partnership’s Operating expenses (OPEX) P327,540;
X’s Gross Receipts P600,000; X’s Cost of Services P187,550; X’s OPEX P175,450; Y’s Gross Receipts P435,000; Y’s Cost of Services Ratio
35%; Y’s OPEX P122,250. Compute the tax due of each partner using an option that is tax beneficial to both partners and partnership. GPP
withheld the tax on distributive share of each partner.
27. GPP’s net taxable income. 0
28. GPP’s tax due. 0
29. X’s tax payable 63740.675
30. Y’s Tax payable 48710.825

(USE THE FOLLOWING DATA TO ANSWER THE NEXT 2 REQUIREMENTS: )

Gary, a resident citizen, had the following data on income and expenses for the calendar year 2018:
Gross sales P12,000,000 Inventory, beginning 300,000
Sales returns 1,000,000 Inventory, ending 100,000
Sales discounts 500,000 Interest income on notes 100,000
Purchases 5,000,000 Interest income on savings deposit 80,000
Freight in 150,000 Dividend from domestic corporation 100,000
Purchase returns 200,000 Entertainment and amusement exp. 20,000
Purchase discounts 100,000 Interest expense 30,000

31. Compute the tax due of Gary under itemized deduction. 1,618,448.00
32. Compute the tax due of Gary under optional standard deduction. 1885200

(USE THE FOLLOWING DATA TO ANSWER THE NEXT 2 REQUIREMENTS: )

On September 1, 2018, Ms Max borrowed P1,000,000 from smart commercial bank at 12% per annum as for additional working capital.
The loan ha a maturity period of 1 year and the bank discounted the interest. The taxpayer settled the loan on the date of maturity.
33. Under cash basis, the amount of deductible interest expense for 2019 is 120,000
34. Under accrual basis, the amount of deductible interest expense for 2019 is 80,000

35. X Corporation bought a truck for P2,500,000 on January 1, 2018 which was used for operations. On December 1, 2018, X
Corporation sold the truck for 2,800,000 under installment. The following terms were agreed:
Down payment, December 1, 2018 400,000
Amount paid December 15, 2018 400,000
Installment due in 2 equal annual installments.

Determine the amount of reportable income in 2018 and 2019, respectively. 300,000 & 0