TAX 302 – Business and Transfer Taxes

ASSIGNMENT 2

NAME: Benzon A. Ondovilla_________________ SR Code: 18-52259_______________

Answer and Solution

1.
Cash Sales ₱ 1,760,000
Sales on account ₱ 513,000
Gross Selling Price ₱ 2,273,000

Less: Sales returns and allowances ₱ 16,500

Sales discounts ₱ 16,500 ₱ 33,000
Tax Base ₱ 2,240,000
Multiply by 3/28
Output Tax ₱ 240,000
Less: Input Tax ₱ 230,000
VAT Payable ₱ 10,000
Answer:
The amount of gross selling price is ₱ 2,273,000.
The amount of VAT payable is ₱ 10,000.

2.
Cash Sales, net (594,000-13,200) ₱ 580,800
Deemed Sales:
Payment of goods to creditors ₱ 27,500
Consignment sales ₱ 34,100
Out on consignment – 75 days ₱ 68,750
Goodwill to employees ₱ 11,000 ₱ 141,350
Total ₱ 722,150
Multiply by 3/28
Output Tax ₱ 77,373
Less: Input Tax
Purchases ₱ 253,000
Multiply by 3/28
Input Tax ₱ 27,107
VAT Payable ₱ 50,266
Answer:
The amount of output tax ₱ 77,373.
The amount of VAT payable ₱ 50,266.
The amount of transaction deemed sale ₱ 141,350.
3.
Domestic sales (1,452,000 x 3/28) ₱ 155,571
Export sales (1,815,000 x 0%) ₱ -
Output tax ₱ 155,571
Less: Input tax
Purchases – domestic (618,200 x 3/28) ₱ 66,236
Purchases – export (422,000 x 3/28) ₱ 45,214
Purchases – supplies (254,100 x 3/28) ₱ 27,225 ₱ 138,675
VAT Payable ₱ 16,896
Answer:
The VAT payable of Development Company is ₱ 16,896.

4.
Sales (VAT business) ₱1,000,000
Multiply by 3/28
Output Tax ₱ 107,143
Less: Input Tax
Purchases (VAT business) (448,000*3/28) ₱ 48,000
Purchases (VAT and Non-VAT business) (110,880*3/28) ₱ 11,880
Allocation based on sales:
Sales (VAT business) ₱ 1,000,000
Sales (Non-VAT business) ₱ 500,000
Total ₱ 1,500,000
[(1,000,000/1,500,000)*11,880] ₱ 7,920 ₱ 55,920
VAT Payable ₱ 51,223
Answer:
The VAT payable of Combined Company is ₱ 51,223.

5.
2% in Inventory:
Goods for resale ₱ 1,350,000
Goods manufactured ₱ 1,562,000
Goods in process ₱ 616,000
Goods purchased for processing ₱ 429,000
Total ₱ 3,957,000
Multiply by 2% ₱ 79,140
Actual VAT Paid ₱ 365,000
Transitional Input Tax (Higher) ₱ 365,000
Answer:
The transitional input tax of Tracing Company ₱ 365,000.
 TAX 302 – Business and Transfer Taxes
ASSIGNMENT 2

NAME: Benzon A. Ondovilla_________________ SR Code: 18-52259_______________

Directions:
PROBLEM SOLVING: Provide your solutions and final answer on a separate sheet of paper.

1. (10 points) Astra Company, a VAT-registered company, is engaged in the business of selling
paper and paper products. During the quarter, its total sales as indicated in the invoice
amounted to:
Cash Sales 1,760,000
Sales on account 513,000
Sales returns and allowances 16,500
Sales discounts 16,500
Input taxes on the purchases 230,000

How much is the gross selling price? ₱ 2,273,000

How much is the VAT payable? ₱ 10,000

2. (15 points) The following data relates to the transactions of Villa Lina Company for the
month of November (amounts are gross of tax):
Sales 594,000
Sales returns and allowances 13,200
Payment of goods to creditors 27,500
Consignment sales 34,100
Goods out on consignment – 45 days 22,000
Goods out on consignment – 75 days 68,750
Distribution of goods as goodwill to employees 11,000
Purchases 253,000

How much is the output tax? ₱ 77,373

How much is the VAT payable? ₱ 50,266
How much is the transactions deemed sale? ₱ 141,350

3. (5 points) Development Company, a VAT-registered business, had the following selected

data for the month:
Export Sales (0%) 1,815,000
Domestic sales 1,452,000
Purchases of goods for export 422,000
Purchases of goods for domestic sales 618,200
Purchases of supplies 254,100
The input taxes on purchases of goods for export are claimed as tax credit.
Compute for the VAT Payable if the amounts given are inclusive of tax. ₱ 16,896

4. (5 points) Combined Company operates a VAT-business and a Non-VAT business. The total
sales and purchases during the month are as follows:
Sales (VAT business) 1,000,000
Sales (nonVAT business) 500,000
 Purchases (VAT business), VAT included 448,000
Purchases (nonVAT business) 253,000
Purchases (VAT and nonVAT business), VAT included 110,880
Compute the VAT payable of Combined Company. ₱ 51,223

5. (5 points) Tracing Company became subject to VAT effective January 1, 2019. The records
of its inventory on hand follow:
Goods purchased from VAT suppliers for resale 1,350,000
Goods purchased from nonVAT suppliers 654,320
Goods manufactured by the company 1,562,000
Goods in process 616,000
Goods purchased for processing 429,000
How much is the transitional input tax of Tracing Company? ₱ 365,000