NOTRE DAME OF MIDSAYAP COLLEGE

MIDSAYAP, COLLEGE

COLLEGE OF BUSINESS AND ACCOUNTANCY

SUBJECT: BUSINESS AND TRANSFER TAXATION

TEACHER: HAMOD M. GULIDTEM, CPA

ASSIGNMENT
DO IT YOURSELF (DIY)

INSTRSUCTIONS: Write your answers on a paper. Erasures are strictly prohibited.

Early submission - Saturday (plus 10 points) / Monday (plus 3 points). Late submission –
minus 20 points. Maximum 2 pictures (scanned) only per problem. Submit your output per
problem in their respective folder.

ASSIGNMENT AND REPORTING (via zoom)

PROBLEM 1 – To be reported by Aligaen on Monday.

Ms. Aligaen, a minimum wage earner, works for ARC Corporation. She is not engaged in business
nor has any other source of income other than her employment. For 2020, Ms. Aligaen earned a
total compensation of P155,000.

a) Ms. Aligaen contributed to the SSS, Philhealth, and HDMF amounting to P10,000 and she
received 13th month pay of P15,000. How much is the income tax liability of Ms. Aligaen?

b) The following year 2021, Ms. Aligaen earned outside from her basic wage, additional pay
of P140,000 which consists of the overtime pay P85,000, night shift differential pay
P35,000, hazard pay P20,000, and holiday pay P20,000. She has the same benefits and
contributions above. Compute the income tax liability of Ms. Aligaen.

PROBLEM 2 – To be reported by Amelo on Monday.

Ms. Amelo operates a convenience store while she offers bookkeeping services to her clients. In
2020, her gross sales amounted to P850,000, in addition to her receipts from bookkeeping services
of P300,000.

a. She already signified her intention to be taxed at 8% income tax rate in her 1 st quarter
return.
Compute the income tax and business liability of Ms. Amelo for the year?

b. Ms. Amelo above, failed to signify her intention to be taxed at 8% income tax rate on gross
sales in her initial Quarterly Income Tax Return, and she incurred cost of sales and
operating expenses amounting to P600,000 and P200,000, respectively, or a total of
P800,000.
Compute the income and business tax liability of Ms. Amelo for the year?
PROBLEM 3 – To be reported by Mechael on Tuesday.

Mr. Mechael signified his intention to be taxed at 8% income tax rate on gross sales in his 1 st
quarter income tax return. He has no other source of income. His total sales in his first three
quarters amounted to P3,000,000 with 4th quarter of P3,500,000.

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

(8% rate) (8% rate) (8% rate)
Total Sales 500,000 500,000 ? ?
Less: Cost of Sales 300,000 ? 1,200,000 ?
Gross Income ? 200,000 ? ?
Less: OPEX 120,000 120,000 480,000 720,000
Taxable Income ? ? ?

a. Compute the business tax liability of Mr. Mechael.

1. 1st quarter
2. 2nd quarter
3. 3rd quarter
4. 4th quarter

b. Compute the income tax liability of Mr. Mechael.

1. 1st quarter
2. 2nd quarter
3. 3rd quarter
4. 4th quarter

PROBLEM 4 – To be reported by Ondoy on Tuesday.

Mr. Ondoy is a prominent independent contractor who offers architectural and engineering
services. Since her career flourished, her total gross receipts amounted to P4,300,000 for taxable
2020. He recorded cost of service and operating expenses were P2,200,00 and P1,000,000
respectively.

Compute the income and business tax liability of Mr. Ondoy for the year.

PROBLEM 5 – To be reported by Toylo on Tuesday.

In 2019, Mr. Toylo owns a nightclub and videoke bar, with gross sales/receipts of P2,600,000. His
cost of sales and operating expenses are P1,000,000 and P600,000, respectively, and with non-
operating income of P100,000.

Compute the income and business tax liability of Mr. Toylo for the year.
PROBLEM 6 – To be reported by Cabasag on Wednesday.

Ms. Cabasag, a comptroller of SGV Company, earned annual compensation in 2019 of P1,600,000,
inclusive of 13th month pay and other benefits in the amount of P120,000 but net of mandatory
contributions to SSS and Philhealth. Aside from employment income, she owns a convenience
store, with gross sales of P2,400,000. His cost of sales and operating expenses are P1,000,000 and
P700,000, respectively, and with non-operating income of P100,000.

a. Compute the income and business tax liability of Ms. Cabasag for 2019 if she opted to be
taxed at 8% income tax rate on her gross income for her income from business.

b. Compute her income and business tax liability for 2019 if she did not opt for the 8% income
tax based on gross sales/receipts and other non-operating income.

c. On February 2020, taxpayer tendered her resignation to concentrate on her business. Her
total compensation income amounted to P160,000, inclusive of benefits of P20,000. Her
business operations for taxable year 2020 remains the same. She opted for the 8% income
tax rate.

Compute the income and business tax liability of Ms. Cabasag for the year 2020.

PROBLEM 7 – To be reported by Omandam on Wednesday.

Ms. Omandam, an officer of BTS International Corporation, earned in 2019 an annual

compensation of P1,300,000, inclusive of 13th month and other benefits in the amount of P120,000.
Aside from employment income, he owns a farm, with gross sales of P3,600,000. Her cost of sales
and operating expenses are P1,000,000 and P600,000, respectively, and with non-operating
income of P100,000.

Compute the income and business tax liability of Ms. Omandam for the year 2019.

PROBLEM 8 – To be reported by Sabes on Thursday

Mr. Sabes, an alien employed in ABS Corporation that is a Petroleum Service Contractor, received
compensation income of P5,500,000 for 2019, inclusive of P400,000 13th month pay and other
benefits.

Compute the income tax liability of Mr. Sabes for the year 2019.

PROBLEM 9 – To be reported by Penkian on Thursday

VAL Company (a domestic employer/company) granted Ms. Penkian (a Filipino branch manager
employee), in addition to her basic salaries, P5,000 cash per quarter for her personal membership
fees at City Golf Club.

a. Compute the fringe benefit tax.

b. Same facts but the employee is a non-resident alien individual not engaged in trade or
business in the Philippines. Compute the fringe benefit tax.