Exercise 2: Intro to Business Taxation

Instructions: Read and analyze each problem. Write your answer in a separate sheet and support it with
a solution in good form. Submit a photo of your answer via PM to your respective Class Secretary on
February 23,2021 (Tuesday) until 5:00 PM.

1. A person engaged in business sold the following properties:

Sales of goods held for sale P 250,000
Sale of personal residence 1,500,000
Sale of personal car 500,000

Compute the sales in the course of business subject to business tax ________________________

2. Mr. Cardinal, a security broker, effected the sakes of several securities of Mr. Heneral. The following
related to the sale:

Sales Commission
Sale of stocks 150,000 1,500
Sale of bonds 250,000 2,500
TOTAL 400,000 4,000

Compute the amount of receipts or sales of Mr. Cardinal subject to business tax.
_________________________

3. A non-stock charitable organization realized the following during the month:

Membership contributions P 240,000

Donation from various donors 260,000
Sale of souvenirs 150,000

Compute the amount subject to business tax ___________________

4. Roberto, a seller of goods, had the following transactions in January 2020:

Cash sales P 300,000

Credit sales (40% collected) 500,000
Sales returns and allowances 50,000
Freight charged to customers 30,000

How much is subject to business tax? ___________________

5. A service provider had the following income during the month:

Fees paid in cash and checks P 100,000

Fees paid in notes 130,000
Advances by clients for future services 30,000
Reimbursement for out-of-pocket expenses 45,000

Tax 2 – Transfer and Business Tax

Midterm
 Reimbursement for client expenses 25,000

Compute the amount subject to business tax. ________________

6. The following data pertain to a business taxpayer during a quarter:

January February March

Revenue/Sales P 200,000 P250,000 P280,000
Cash collections 150,000 180,000 200,000

a. If the taxpayer is registered as a non-VAT service provider, how much should be reported in
the BIR form to be filed on the reportorial month:
January : ________________________
February : ________________________
March : ________________________

b. If the taxpayer is registered as a non-VAT seller of goods, how much should be reported in
the BIR form to be filed on the reportorial month:
January : ________________________
February : ________________________
March : ________________________

c. If the taxpayer is registered as a VAT seller of goods, how much should be reported in the
BIR form to be filed on the reportorial month:
January : ________________________
February : ________________________
March : ________________________

d. If the taxpayer is registered as a VAT service provider, how much should be reported in the
BIR form to be filed on the reportorial month:
January : ________________________
February : ________________________
March : ________________________

7. Esmeralda Co., a non-VAT taxpayer paying 3% percentage tax exceeded the VAT threshold on
September 2020. Esmeralda generated P500,000 and P400,000 sales in October and November and
paid respectively P10,000 and P18,000 input VAT in these months. Esmeralda immediately
registered to the VATA system at the start of November 2020.

a. Compute the business tax payable in October, assuming no claim for tax credit was filed.
________________

b. Compute the business tax payable in October, assuming no Esmeralda claimed for tax credit
and was approved by the BIR. __________________

Tax 2 – Transfer and Business Tax

Midterm
 c. Compute the business tax payable in October, assuming no claim for tax refund.
_________________

d. Compute the business tax payable in November. __________________

8. A non-VAT taxpayer paying 3% percentage tax received P100,000 cash and P10,000 CWT from the
sale of service.

Computer the percentage tax. _______________________

9. A VAT taxpayer received a P60,000 on sale of goods plus P6,000 CWT certificate.

How much is the output VAT? ________________________

Tax 2 – Transfer and Business Tax

Midterm