TAXATION QUIZZER 4 ANSWER KEY

1. A
Gross Sales (within and outside) P 15,000,000
Less: Sales Return 20,000
Net Sales P 14,800,000
Less: Cost of Goods Sold 5,750,000
Gross Profit P 9,050,000
Add: Other income subject to Regular Tax
Interest income from trade receivables 150,000
Interest income from BPI deposits – USA 80,000
Interest income from money market placement 100,000
Dividend income from RFC 45,000
Dividend income from NRFC 30,000
Royalty income – general (outside) 25,000
Total Gross Profit P 9,480,000
Less: Operating Expenses 3,900,000
Taxable Income P 5,580,000
Multiply by tax rate 30%
Income tax due and payable P 1,674,000

2. C
Interest income from BPI deposits – Philippines
(P 100,000 * 20%) P 20,000
Interest income – FCDU (150,000 * 15%) 22,500
Interest income from money market placement
(P 200,000 * 20%) 40,000
Royalty income (50,000 * 20%) 10,000
Total final withholding tax P 92,500

3. D
DC RFC NRFC
Gain on sale of shares of DC sold directly to buyer
 DC (150,000 * 15%) 22,500
 RFC and NRFC (150,000 – 100,000 = 50,000 * 10% = 10,000 10,000
5,000 + 5,000 = 10,000)
Sale of real property in Philippines not used in business
 DC (8,000,000 * 6%)
 RFC and NRFC (not subject to CGT but gain is included as 480,000
other income)
TOTAL CAPITAL GAINS TAX 502,500 10,000 10,000

4. B
5. B
Gross Receipts P 500,000
Less: Business Expenses with receipts 180,000
Taxable Income P 320,000

6. A
Gross Receipts P 500,000
Less: OSD (500,000 * 40%) 200,000
Taxable Income P 300,000

7. C
Gross Receipts P 500,000
Less: Exempt Income 250,000
Tax Base P 250,000
8. D
9. A
10. A
11. B
12. A
13. A (All are receivables of the decedent as of death.)
14. B
Claim against an insolvent person (fully uncollectible) P 500,000
Claim against an insolvent person (20% collectible)
(100,000 * 80%) 80,000
Deductible claim against the estate P 580,000

15. A
16. B
17. A
18. D
19. D
20. C
21. A
22. A
23. D
24. C
Beginning Inventory (net of VAT)
Packaging materials purchased from VAT suppliers P 20,000
Supplies purchased from VAT suppliers 10,000
Total VATable beginning inventory P 30,000
Multiply by transitional input VAT rate 2%
P 600

Actual VAT paid on beginning inventory

 Packaging materials (P 20,000 * 12%) P 2,400
 Supplies (10,000 * 12%) 1,200
Total VAT paid on beginning inventory P 3,600

Transitional Input VAT (whichever is higher) (item 17C) P 3,600

25. A
Purchases during the month of coconut and corn P 330,000
Multiply by rate 4%
Presumptive Input VAT (item 17D) P 13,200

26. B
Regular Input VAT from purchases during the month
(72,800 divide 1.12 times 12%) P 7,800
Transitional Input VAT 3,600
Presumptive Input VAT 13,200
Total Allowable Input VAT (item 19) P 24,600

27. C
Output VAT (700,000 * 12%) P 84,000
Less: Allowable Input VAT 24,600
VAT Payable P 59,400

28. A
Gross receipts, lease of residential units
(monthly rental is P15,000 per unit) 3,500,000
Sale of four (4) residential lots at P1,500,000 each to
four (4) individual buyers 6,000,000
 Total VAT-Exempt gross receipts P 9,500,000

29. C
Sale of three (3) parking spaces at P500,000 each P 1,500,000
Gross receipts, trucking business 3,800,000
Gross receipts, practice of accountancy 1,000,000
Total VAT-subject amount P 6,300,000

30. B
Output VAT (440,000 * 12%) P 52,800
Less: Input VAT (110,000 * 12%) 13,200
VAT Payable / Overpayment(item 26) P 39,600

31. A
Output VAT (550,000 * 12%) P 66,000
Less: Input VAT (660,000 * 12%) 79,200
VAT Payable / Overpayment (item 26) (P 13,200)

32. C
Total sales for the quarter P 1,760,000
Multiply by rate 12%
Output VAT (item 15B) P 211,200

33. B
Output VAT P 211,200
Less: Input VAT
Regular Input VAT (1,100,000 * 12%) P 132,000
VAT on importation (50,000 * 12%) 6,000 138,000
VAT Payable P 73,200
Less: VAT paid on January 39,600
VAT Payable (item 29) P 33,600

34. B
Invoice Cost, country of origin P 20,000
Freight 500
Insurance 200
Customs duty 600
Excise tax 100
Other expenses PRIOR TO REMOVAL from customs duty. 300
Tax Base P 21,700
Multiply by rate 12%
VAT on Importation (item 18H) P 2,604

35. A
Output VAT (817,600 / 1.12 * 12%) P 87,600
Less: Input VAT
Excess Input VAT from Dec 2019 P 12,000
Goods for sale from VAT registered 24,000
Services from VAT registered 2,280
Equipment 12,000
VAT on importation 2,604 52,884
VAT Payable (item 26) P 34,716