Name: Gulfan, Alexa Genmary L.

Subject & Schedule: Monday ( 6:00 PM – 8:00PM) & Friday (6:00PM – 7:00PM)

Theories (3 pts each)

1. What are the elements of Gross Income?
1. It is a return on capital that increases net worth.
2. It is a realized benefit.
3. It is not exempted by law, contract, or treaty.
2. Enumerate the requisites of a realized benefit?
1. There must be an exchange transaction.
2. The transaction involves another entity.
3. It increases the net worth of the recipient.
3. What are the classifications of citizens? Kindly give a brief description each.
A. Resident Citizen – A Filipino citizen residing in the Philippines
B. Non-resident citizen -
4. What are the classifications of citizens? Kindly give a brief description each.
5. Under the constitution, enumerate the qualifications to become a citizen.
a) Those who are citizens of the Philippines at the time of adoption of the
Constitution on February 2, 1987
b) Those whose fathers or mothers are citizens of the Philippines
c) Those born before January 17, 1973 of Filipino mothers who elected Filipino
citizenship upon reaching the age of majority
d) Those who are naturalized in accordance with the law

Problems (5 pts) Show your solutions.

1. Mr. Gabucan had the following income. Kindly compute for the income derived within the
Philippines and outside the Philippines.

Interest income from deposits in a foreign bank P 350,000.00

Interest from domestic bonds 45,000.00
Royalties from books published in the Philippines 100,000.00
Rent income from properties abroad (the lease contracts
Were executed in the Philippines) 225,000.00
Professional fees for services rendered in the Philippines
To non-residents clients (paid in US Dollars) 400,000.00

Within Without World Total

Interest income from deposits in a foreign bank P - P 350,000.00 P
350,000.00
Interest from domestic bonds 45,000.00 45,000.00
Royalties from books published in the Philippines 100,000.00 100,000.00
Rent income from properties abroad 225,000.00 225,000.00
Professional Fees 400,000.00 400,000.00
Total P 545,000.00 P 575,000.00 P
1,120,000.00
2. In 2021, Zea received a 800,000 dividend income from UCJR Company. UCJR Company with
the previous gross income in 2018-2020.

2018 2019 2020 Total

Philippines 400,000 200,000 200,000 800,000
USA 200,000 400,000 600,000 1,200,000
Total 600,000 600,000 800,000 2,000,000

Compute the dividend income of Zea if UCJR is under the following scenario:
(a) Domestic Corporation – the entire 800,000.00 is earned within
(b) Non-resident foreign corporation – the entire 800,000.00 is earned abroad
(c) Resident foreign corporation – the 800,000 is earned abroad
Gross Income Ratio = P800,000/P2,000,000 = 40%
Earned within the Philippines = (40% x 800,000) = 320,000
Earned without the Philippines = (60% x 800,000) = 480,000
Total Dividends = 800,000