Central Philippine University

Exercise Quiz – Tax 41

Name:___________________________ Course:_______________ Score:____________

A. A corporation engaged Auto Repair Shop for a decade presented the

following data for the year 2019:
Service Income …………………………….. 4,500,000
Interest Income on peso deposits …………… 30,000
Salaries of mechanics ……………………… 1,250,000
Auto supplies and parts used…...………….. 1,000,000
Office Salaries……………………………….. 595,000
Other administrative expenses …………… 170,000

Service Income …………………………………. 4,500,000

Less: COS
Salaries of mechanics ……… 1,250,000
Auto Supplies & parts …….. 1,000,000 2,250,000
Gross Income …………………………………. 2,250,000
Less: Operating Expenses
Office Salaries ……………. 595,000
Others ……………………… 170,000 765,000
Net Income from Operations ………………… 1,485,000
Other Income: Interest Income ……………… 30,000
Net Income Before Tax ………………………. 1,515,000

1. Gross Income is P2,250,000

2. MCIT is P45,000 (P2,250,000 X 2%)
3. Normal Income Tax using OSD is (2,250,000 x 60%) =
P1,350,000 x 30% = P 405,000
4. Normal Income Tax using itemized deduction____________
P1,485,000 x 30% = P445,500
5. Income Tax due/payable using itemized deduction is
P445,500

Income tax due/payable using OSD = P405,000

B. A corporation who started operating in January 2007, reported the

following:

2009 2010 2011 2012 2013 2014

Sales 700,000 980,000 1,000,000 1,100,000 903,500 1,250,000
COS 360,000 350,000 230,000 920,000 643,000 875,000
GI 340,000 630,000 770,000 180,000 260,500 375,000
Expenses 320,000 590,000 748,000 168,500 250,000 305,000
Net Income 20,000 40,000 22,000 11,500 10,500 70,000

MCIT ……. NA 12,600 15,400 3,600 5,210 7,500

NT ……….. 6,000 12,000 6,600 3,450 3,150 21,000
Excess MCIT 600 8,800 150 2,060

Payable …. 6,000 12,600 15,400 . 3,600 5,210 21,000

Less: Excess MCIT – (2011, 2012 & 2013) …………………………………………. 11,010
Still Payable ………………………………………………………………………….. 9,990

6. Income Tax Payable in 2009 is P6,000

7. Income Tax Payable in 2010 is P___________
8. Income Tax Payable in 2011 is P___________
 9. Income Tax Payable in 2012 is P___________
10. Income Tax Payable in 2013 is P___________
11. Income Tax still payable in 2014 is P___________

C. A corporation started operating in January 2005 presented the following:

Gross Income Net Income Excess MCIT

2010 …………………………….. 1,000,000 1,000 19,700
2011 ……………………………. 500,000 30,000 1,000
2012 ……………………………. 900,000 120,000

12. Income tax s for still payable for year 2010 is P20,000.
Entry:
Income Tax Expense ……………….. 300
Deferred Income Tax ………………19,700
Income Tax payable ……………………. P20,000

13 Income tax still payable for year 2011 is P 10,000.

14. Income tax still payable for year 2012 is P15,300.
Payable …………………………………. 36,000
Still Payable (36,000 – 20,700) ………….15,300
Less: Excess MCIT …2010 – 19,700
2011 - 1,000
Entry:
Income Tax Expense ………………… 36,000
Deferred Income Tax ………………….. 20,700
Income Tax Payable/Cash ……………. 15.300