Professional Documents
Culture Documents
Business Taxation Problems
Business Taxation Problems
Business Taxation Problems
PART III
BUSINESS TAXATION
Reviewer in Taxation Part III Preliminaries
Tax
Coverage Basis
Rate
On sale of goods and properties gross selling price or gross value in money 12%
of the goods or properties sold, bartered or
exchanged
On sale of services and use or gross receipts derived from the sale or 12%
lease of properties exchange of services, including the use or
lease of properties
On importation of goods based on the total value used by the 12%
Bureau of Customs in determining tariff
and customs duties, plus customs duties,
excise taxes, if any, and other charges,
such as tax to be paid by the importer prior
to the release of such goods from customs
custody; provided, that where the customs
duties are determined on the basis of
quantity or volume of the goods, the VAT
shall be based on the landed cost
plus excise taxes, if any.
On export sales and other zero- 0%
rated sales
Transitional Input Tax beginning inventory of goods, materials 2%
and supplies, an input tax equivalent to 2%
of the value of such inventory or the actual
value-added tax paid on such goods,
materials and supplies, whichever is
higher, which shall be creditable against
the output tax.
Presumptive Input Tax Credit gross value in money of their purchases of 4%
primary agricultural products which are
used as inputs to his production(sardines,
mackerel, and milk, and in manufacturing
refined sugar and cooking oil and packed
noodle-based instant meals).
Number
Source Name Author Type of
Questions
Business &
Rex Banggawan Textbook 14
Transfer Taxation
Transfer & Valencia &
Textbook 8
Business Taxation Roxas
Transfer, Business
Omar Ampongan Textbook 8
& Local Taxes
CPA Reviewer in
Omar Ampongan Textbook 4
Taxation
Other Sources Various - 36
Total Number of Questions 70
Number of
Topic Type
Questions
Theories 18
Value-Added Tax
Problems 17
Theories 18
Other Percentage Tax
Problems 17
Total Number of Questions 70
VALUE-ADDED TAX
1. This refers to a stall or outlet which is not permanently fixed to
the ground and is normally set up in places like shopping malls,
hospitals, office buildings, hotels, villages or subdivisions,
churches, parks, streets and other public places, for the
purpose of selling a variety of goods/services for short durations
of time or during special events (including festivals, fiestas, etc.)
A. Businesses for mere subsistence
B. OPT subject establishments
C. Privilege stores
D. None of the above
10. One of your clients sells roasted chicken and canned fish.
During 2018, his gross sales are as follows:
A. I & II Only
B. I & IV Only
C. I, II, & IV Only
D. I, II, III & IV
A. 3
B. 2
C. 1
D. 0
A. Four of these
B. Three of these
C. Two of these
19. In 2017, Didi sold to Pac two of his adjacent lots valued at
₱1,800,000 and ₱2,050,000. The two lots are to be utilized by
Pac as one residential area. The adjacent lots are covered by
separate titles and/or separate tax declarations covered by
separate Deeds of Conveyance when sold to Pac. Determine
the VAT due on the transaction.
A. ₱ 216,000
B. ₱ 246,000
C. ₱ 462,000
D. ₱ 0
How much input tax can your client credit against its output tax
for the month?
A. ₱ 120,000
B. ₱ 36,000
C. ₱ 3,733.33
D. None of the Above
Source(s): NMBE 2016
What is the net VAT payable assuming that Sugarco was able
to sell 3,800 bags at ₱1,800/bag during the month and that
advanced VAT had been paid on the 4,000 bags produced?
(Base price of advanced VAT is ₱1,400 per 50 kg bag)
A. ₱ 716,800
B. ₱ 148,000
C. ₱ 68,000
D. ₱ 44,800
A. ₱ 100,000
B. ₱ 136,000
C. ₱ 121,000
D. ₱ 280,000
25. The following figures were taken from the Income Statement as
part of the audited financial statements (FS) as attachment to
the annual Income Tax Return (ITR) submitted to the Bureau of
Internal Revenue (BIR) by your client. (assume figures in ITR
and FS are the same)
External sales -
Valued added tax -
Sales ₱114,780,217.00
Purchases ₱111,198,133.00
Total ₱107,706,538.00
Total cost of sales 107,706,538.00
Operating expenses:
Salaries and wages 3,923,277.00
Rentals 840,000.00
Office supplies 34,766.00
Taxes, licenses and registration 596,768.00
Professional fees 35,000.00
Depreciation and amortization -
Interest income -
Listing fee -
Rebates -
Interest expense -
Other income -
Income taxes
Net income ₱1,643,868.00
Upon further examination, you found out that your client doesn’t
really have any accounting system and doesn’t maintain any
books. You also learned that it engaged another firm to
reconstruct its FS for company’s own purposes. Right after, you
decided to get a copy of the said reconstructed FS only to find
out that the operating expenses reported under that
reconstructed FS amounted to ₱21,902,224.34 (reported
depreciation is nil).
28. Using the same information as number 27 except that the seller
is now a non-VAT enterprise and that the ₱2,240 is the amount
due to the non-VAT enterprise before considering the discount
allowable to Lola Immaculada, how much is the discount of Lola
Immaculada?
A. ₱ 100
B. ₱ 112
C. ₱ 160
D. ₱ 180
30. Using the same information as number 29, except that the FMV
in the assessment rolls is ₱6,500,000, how much is the output
VAT to be recorded in the March 2018 collection?
A. ₱ 0
B. ₱ 292,500
C. ₱ 270,000
D. ₱ 600,000
32. Using the same information as number 31, how much is the
correct input VAT on goods to be claimed for March 2017?
A. ₱ 17,450,000
B. ₱ 17,621,428.57
C. ₱ 17,661,428.57
D. ₱ 17,661,528.57
33. Using the same information as number 31, how much is the
correct input VAT on services to be claimed for March 2017?
A. ₱ 2,860,000
B. ₱ 2,688,571.43
C. ₱ 2,480,571.43
D. ₱ 2,318,071.43
34. Using the same information as number 31, how much is the
correct input VAT on capital goods to be claimed for March
2017?
A. ₱ 0
B. ₱ 70,000
C. ₱ 35,000
D. ₱ 140,000
35. Using the same information as number 31, how much is the total
amount of input VAT that the company can claim for March
2017?
A. ₱ 20,420,000
B. ₱ 20,212,000
C. ₱ 20,212,100
D. None of the choices are correct
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C. Follow-on/Follow-through offering
D. Follow-up offering
5. Which of the following are the requisites in order for the gross
receipts from professional basketball to be exempt from
percentage tax?
A. World or Oriental Championship
B. At least two of the contenders are Filipino citizens
C. The promoter is a Filipino citizen or a corporation, more
than 50% of which is owned by Filipino citizens
D. None of the Above
Source(s): NIRC
20. Mr. Operator had the following gross receipts from operating
the following events during the month of March:
Billiards ₱ 150,000
Amateur Basketball Game 180,000
Professional Basketball Game 120,000
Concert by Jake Zyrus 320,000
24. Mang Benton is an operator of a taxi and a car for hire in Cebu
City. The taxi reported gross receipts of ₱26,000 in the month.
The car for hire was indefinitely garaged for repair when its
chauffeur bumped it to a bus. The car registered only ₱600
27. Using the same information as number 26, how much is the net
tax benefit (loss) if he chooses to sell the stocks to his friend
instead of selling the stocks through the local stock exchange?
A. ₱ 45,000
B. (₱ 45,000)
C. ₱ 38,000
D. (₱ 38,000)
28. A bank had the following income in April 2017 and May 2017,
respectively
A. ₱ 7,800
B. ₱ 8,500
C. ₱ 7,500
D. ₱ 9,800
29. Using the same information as number 28, what is the gross
receipt tax for the month of May?
A. ₱ 9,900
B. ₱ 9,200
C. ₱ 11,900
D. ₱ 11,200
Galog 500
Oyang 500
Idong 500
Kulas 500
Manay 500
Total Shares Outstanding 2,500
Manay, has likewise decided to sell her 500 shares to the public.
If the unissued shares were offered at ₱10 per share, how much
is the tax due on the primary offering?
A. ₱ 250
B. ₱ 500
C. ₱ 1,000
D. None of the choices are correct
31. Using the same information as number 30 and that that the
shares of Manay were also offered at ₱10 per share, how much
is the total tax due on the IPO?
A. ₱ 250
B. ₱ 450
C. ₱ 500
D. ₱ 1,000
33. Using the same information as number 32 except that the lease
is classified as an operating lease and ₱100,000 constitutes the
monthly operating lease payments of the lessee, what is the
gross receipt tax for the month of March?
A. ₱ 15,000
B. ₱ 5,000
C. ₱ 1,443.18
D. ₱ 1,030.84
34. Carrie Rista operates a racetrack. Other than the restaurant that
it operates, it also allows “Burger ka Dyan Burger,” a burger
stand operated by a concessionaire, to sell foods inside its
premises. The gross receipts during the month are as follows:
35. Using the same information as number 34, how much is the
amusement tax payable by “Burger ka Dyan Burger?”
A. ₱ 795,000
B. ₱ 660,000
C. ₱ 135,000
D. ₱ 0
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