UNIVERSITY OF THE CORDILLERAS

TAXATION-2

NAME: _______________________________ Date: ________________

_______________________________

_______________________________

SEATWORK –General Professional Partnership

The AB & Co. is a general professional partnership, with Partners A and B, both married
each with a minor child is sharing 60%-40% respectively in the partnership net income or loss.
AB & Co. is in its fourth year of operations during taxable year 2018. The partnership withheld
an income tax of 8% on each share of the Partners when they withdrew their share. In 2018, the
partnership and the partners had the following data on income and expenses?

AB & Co:
Gross Income P900,000.00
Operating Expenses 150,000.00
Office Rental expense 120,000.00
Bad Debts 25,000.00
Depreciation Expense of Office Furniture 9,600.00

Partner A
Own Gross Income from Business P 950,000.00
Cost of Goods Sold 300,000.00
Interest Expense on Loans 26,000.00
Bad Debts Expense 17,000.00
Business Expenses 135,000.00

Partner B
Own income and Expenses none

Compute for the following:

1. Net Income of A & B Co.
2. Distributive Net Share of Partners A & B from the Net Income of A & B Co.
3. Income Tax Due of A & B Co.
4. Taxable Income of Partner A
5. Income Tax due of Partner A
6. Taxable Income of partner B
7. Income Tax Due of Partner B

ANNUAL TAXABLE (January 1, 2018 – (January 1, 2023 –

INCOME December 31, 2022) Onwards)

Not over P250,000 0% 0%

Over P250,000 but not 20% of the excess over 15% of the excess over
over P400,000 P250,000 P250%
Over P400,000 but not P30,000 + 25% of the P22,500 + 20% of the
over P800,000 excess over P400,000 excess over P400,000
Over P800,000 but not P130,000 + 30% of the P102,500 + 25% of the
over P2,000,000 excess over P800,000 excess over P800,000
Over P2,000,000 but P490,000 + 32% of the P402,500 + 30% of the
not over P8,000,000 excess over P2,000,000 excess over P2,000,000
Over P8,000,000 P2,410,000 + 35% of P2,202,500 + 35% of
the excess over the excess over
P8,000,000 P8,000,000