Question 1

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Mayumi, single, supporting his 58-year old mother, is a business income earner. During the
year, her income was P150,000. She also paid a total premium of P3,000 to an insurance
company for his health insurance. How much is his taxable income?

Select one:
a. P97,600
b. P97,000
c. P122,000
d. P122,600

Question 3
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During the taxable year, Mr. Juan Dela Cruz separated legally from his wife, Andrea. The
legally separated spouses have four qualified dependent children. Both spouses were
earning with the following gross taxable income: Mr. Juan Dela Cruz, P380,000; Ms. Andrea,
P250,000. For custody, the court granted Mr. Dela Cruz the two children and Ms. Andrea the
remaining two children. Meanwhile, Mr. Juan Dela Cruz is supporting his niece who is 21
years old, unmarried, and not gainfully employed. Both spouses have monthly premium
payment of P150 for health and insurance.
The additional personal exemption of Ms. Andrea is:

Select one:
a. P75,000
b. P25,000
c. Zero
d. P50,000

Question 7
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In 2016, Pedro's wife died of a car accident. His dependents are as follows:
A, child, 22 years old, employed on July 12, 2016
B, child, 21 years old on November 2, 2016
C, child, 18 years old, married on January 31, 2016
D, child, 17 years old, gainfully employed on October 1, 2016
E, child, 15 afflicted with sore eyes on May 6, 2016
F, child, 13 died together with his wife in a car accident in 2016
G, sibling, 28 paralytic
For taxable year 2016, Pedro can claim additional exemptions of

Select one:
a. P 75,000
b. P100,000
c. P125,000
d. P25,000

Question 9
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Assume that Mr. A is a widow with five qualified dependent children and had paid insurance
premium for health and hospitalization amounting to P4,000. The amount of net taxable
compensation income will be:

Select one:
a. P866,500
b. P812,500
c. P836,500
d. P691,500

Using the same data in Number 24, the net taxable compensation income is:

Select one:
a. P381,600
b. P131,600
c. P116,600
d. P321,600

Question 21
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During the taxable year, Mr.

Juan Dela Cruz
separated legally from his wife, Andrea. The
legally separated spouses have
four
qualified dependent children. Both spouses were
earning with the following
gross taxable income: Mr.
Juan Dela Cruz
, P380,000; Ms. Andrea,
P250,000. For custody, the court granted Mr.
Dela Cruz
the two children and Ms. Andrea
the remaining
two
children. Meanwhile, Mr.
Juan Dela Cruz
is supporting his niece who is
During the taxable year, Mr. Juan Dela Cruz seperated legally from his wife, Andrea. The
legally separated spouses have four qualified dependant children. Both spouses were
earning with the following gross taxable income: Mr. Juan Dela Cruz, P380,000; Ms. Andrea
P250,000. For custody, the court granted Mr. Dela Cruz the two children and Ms. Andrea the
remaining two children. Meanwhile, Mr. Juan Dela Cruz is supporting his who is 21 years old,
unmarried, and not gainfully employed. Both spouses have monthly premium payment of
P150 for health and insurance.

The additional personal exemption of Ms. Andrea is:

Select one:
a. Zero
b. P75,000
c. P25,000
d. P50,000

The grossed-up monetary value of fringe benefits shall be computed as:

Select one:
a. The monetary value shall be divided by 75% for non-resident citizens.
b. For non-resident aliens engaged in business or trade in the Philippines, the monetary
value shall be divided by 85%.
c. The monetary value of employees in special economic zone shall be divided by 68%.
d. The monetary value of the fringe benefit shall be divided by 75% for non-resident alien
not engaged in business or trade in the Philippines.

The following items are included in rent income, except:

Select one:
a. Advance rent payment with restriction
b. Income from leasehold improvement
c. Current lease payment
d. Payment of the lessee to third parties like interest in behalf of the lessor.

The amount of deduction to business income, if Mr. Delos Santos opted to used optional
standard deduction?

Select one:
a. P1,040,000
b. P468,000
c. P720,000
d. P788,000

Question 31
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The amount of deduction to business income, if Mr. Delos Santos opted to used itemized
deduction?

Select one:
a. P720,000
b. P240,000
c. P468,000
d. P320,000

ABC Corporation has the following interest income and expense for the taxable year.
Interest income, net of 20% final tax P24,000
Interest expense 60,000
How much is the deductible interest expense?

Select one:
a. P60,000
b. P50,100
c. P9,900
d. P24,000

How much is the accumulated depreciation?

Select one:
a. P15,000,000
b. P5,000,000
c. P20,000,000
d. P10,000,000

How much is the amount of accumulated depreciation at the end of the lease term?

Select one:
a. P15,000,000
b. P35,000,000
c. P5,000,000
d. P25,000,000

Question 41
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How much is the book value at the end of the lease term?
Select one:
a. P15,000,000
b. P35,000,000
c. P5,000,000
d. P25,000,000

Question 42
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Should the salvage value and the amount recoverable from insurance be deducted to the
total amount of loss to be recognized?

Select one:
a. No
b. Yes

What is the amount of annual depreciation?

Select one:
a. P1,000,000
b. P4,000,000
c. P3,000,000
d. P2,000,000

Question 46
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Assume that Mr. A is single and supports the following dependents:

His parent who are both unemployed
His younger sister, 16 years old, single and unemployed, and
His elder brother, 30 years old, physically and mentally incapacitated
The net taxable compensation income is:

Select one:
a. P936,500
b. P966,500
c. P912,500
d. P791,500

Question 47
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All of the following are requisites in the carry-over of net operating loss, except:

Select one:
a. There must be no substantial change in the ownership of the business
b. Even if a corporation paid tax based on MCIT, the running of the prescriptive period is
not interrupted
c. Carry over is not allowed if the corporation is subject to MCIT during the taxable year
d. The carry-over is good for only one (1) year
Question 6
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All of the following are requisites in the carry-over of net operating loss, except:

Select one:
a. Carry over is not allowed if the corporation is subject to MCIT during the taxable year
b. The carry-over is good for only one (1) year
c. Even if a corporation paid tax based on MCIT, the running of the prescriptive period is not
interrupted
d. There must be no substantial change in the ownership of the business

The following properties were burned in a fire which broke out in the company premises:
Property I Property II
Type of loss Total loss Partial loss
Cost P800,000 P1,200,000
Accumulated Depreciation 500,000 600,000
Insurance claims 200,000 150,000
Replacement cost of damages - 500,000
The deductible loss on Property II is

Select one:
a. P350,000
b. P600,000
c. P1,200,000
d. P500,000

Question 11
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The additional personal exemption of Mr. Juan Dela Cruz is:

Select one:
a. P50,000
b. P25,000
c. P75,000
d. Zero

Question 12
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The allowable deduction for health and hospitalization insurance of Ms. Andrea is:

Select one:
a. Zero
b. P2,400
c. P1,800
d. P3,000

Question 15
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Which of the following is a deductible interest expense

Select one:
a. Interest on personal indebtedness
b. Interest on tax delinquency
c. Interest on loan between members of a family
d. Interest on loan that was used to finance construction of the taxpayer's personal family
home

Question 16
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The allowable deduction for health and hospitalization insurance of Ms. Andrea is:

Select one:
a. P1,800
b. Zero
c. P3,000
d. P2,400

Question 18
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For purposes of taxable year 2017, how much total personal exemptions would Mirabella be
entitled to?

Select one:
a. P175,000
b. P50,000
c. P150,000
d. P100,000

Question 19
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Which of the following is a deductible interest expense

Select one:
a. Interest on loan that was used to finance construction of the taxpayer's personal family
home
b. Interest on personal indebtedness
c. Interest on loan between members of a family
d. Interest on tax delinquency

Question 20
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During the taxable year, Mr. Juan Dela Cruz separated legally from his wife, Andrea. The
legally separated spouses have four qualified dependent children. Both spouses were
earning with the following gross taxable income: Mr. Juan Dela Cruz, P380,000; Ms. Andrea,
P250,000. For custody, the court granted Mr. Dela Cruz the two children and Ms. Andrea the
remaining two children. Meanwhile, Mr. Juan Dela Cruz is supporting his niece who is 21
years old, unmarried, and not gainfully employed. Both spouses have monthly premium
payment of P150 for health and insurance.
Mr. Juan Dela Cruz is classified during the taxable year as:

Select one:
a. It's complicated
b. Head of the family
c. Married
d. Single

Question 22
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A taxpayer received a basic salaray of P1,152,000 per year. At the end of taxable year, he
also received 13th month pay which is equivalent to his one month basic salary. Is the 13th
month pay of the taxpayer taxable?
Answer I No, because 13th month pay is tax exempt and does not form part of the
compensation income.
Answer II Yes, because the 13th month pay he received already esceeded the P82,000
threshold.
Select one:
a. No, because 13th month pay is tax exempt and does not form part of the compensation
income is wrong:Yes, because the 13th month pay he received already esceeded the
P82,000 threshold is correct
b. No, because 13th month pay is tax exempt and does not form part of the compensation
income is correct: Yes, because the 13th month pay he received already esceeded the
P82,000 threshold is wrong
c. Both answers are correct
d. Both answers are wrong

Question 24
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Statement I Fringe benefits received by rank and file employees are not subject to fringe
benefits tax, but included in the gross taxable income
Statement II Fringe benefits granted to managerial employees are subject to fringe benefits
tax and the employer withholds the amount of tax

Select one:
a. Neither statement is correct
b. Only Statement I is correct
c. Only Statement II is correct
d. Both statements are correct

Question 25
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The following situation may warrant that separation pay shall not be included in the gross
taxable income, except

Select one:
a. Bankruptcy of the company
b. Employment
c. Reorganization of the company
d. Disability

Question 26
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Rent income includes the following, except:

Select one:
a. Income from leasehold improvement
b. Payment of the lessee to third parties on behalf of the lessor covering insurance of the
lease
c. Advanced rent payment with restriction
d. Current lease payment

Question 27
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The amount of deductible rent expense is:

Select one:
a. P6,300,000
b. P4,200,000
c. P2,100,000
d. P0

Question 28
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How much was the deductible loss if the cost to restore was P250,000?
(Note: Disregard fair market values)

Select one:
a. P180,000
b. P250,000
c. P200,000
d. P130,000

Question 29
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The amount of deductible taxes is:

Select one:
a. P83,500
b. P383,500
c. P75,000
d. P225,000

Question 30
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The amount of deduction to business income, if Mr. Delos Santos opted to used optional
standard deduction?

Select one:
a. P788,000
b. P1,040,000
c. P468,000
d. P720,000

Question 31
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The amount of deduction to business income, if Mr. Delos Santos opted to used itemized
deduction?

Select one:
a. P468,000
b. P240,000
c. P720,000
d. P320,000

Question 32
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DEF Corporation is engaged in the sale of goods with net sales of P3,000,000. The actual
representation expense for the taxable quarter totaled P50 ,000. For income tax purposes,
how much is the deductible representation expense?

Select one:
a. P15,000
b. P5,000
c. P10,000
d. P50,000
Question 33
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ABC Corporation has the following interest income and expense for the taxable year.
Interest income, net of 20% final tax P24,000
Interest expense 60,000
How much is the deductible interest expense?

Select one:
a. P50,100
b. P9,900
c. P60,000
d. P24,000

Question 34
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XYZ Corporation has the following interest income and expense for the taxable year.
Interest income, net of 20% final tax P24,000
Interest expense 60,000
Interest on unpaid taxes 5,000
How much is the deductible interest expense?

Select one:
a. P55,100
b. P60,000
c. P50,100
d. P65,000
Question 36
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How much was the deductible loss if the automobile was totally destroyed?
(Note: Disregard fair market values)

Select one:
a. P200,000
b. P30,000
c. P100,000
d. P130,000

Question 38
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At what amount, income should be recognized?

Select one:
a. P50,000,000
b. No correct answer
c. P75,000,000
d. P25,000,000

Question 39
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How much is the accumulated depreciation?

Select one:
a. P15,000,000
b. P10,000,000
c. P5,000,000
d. P20,000,000

Question 40
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How much is the amount of accumulated depreciation at the end of the lease term?

Select one:
a. P35,000,000
b. P25,000,000
c. P5,000,000
d. P15,000,000

Question 42
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Should the salvage value and the amount recoverable from insurance be deducted to the
total amount of loss to be recognized?

Select one:
a. No
b. Yes

Question 43
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The amount of deductible loss is:

Select one:
a. P60,000,000
b. P0
c. P75,000,000
d. P15,000,000

Question 44
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The amount of total income from leasehold improvement to be recognized is:

Select one:
a. P10,000,000
b. P20,000,000
c. P5,000,000
d. P15,000,000

Question 45
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What is the amount of annual depreciation?

Select one:
a. P1,000,000
b. P3,000,000
c. P4,000,000
d. P2,000,000

Question 47
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For purposes of taxable year 2017, how much additional personal exemptions would
Mirabella be entitled to?

Select one:
a. P50,000
b. P150,000
c. P100,000
d. P175,000

Question 48
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Using the outright method, the taxable rent income for the year 2017 will be:

Select one:
a. P6,126,000
b. P126,000
c. P8,126,000
d. P94,500

Question 50
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The following properties were burned in a fire which broke out in the company premises:
Property I Property II
Type of loss Total loss Partial loss
Cost P800,000 P1,200,000
Accumulated Depreciation 500,000 600,000
Insurance claims 200,000 150,000
Replacement cost of damages - 500,000
The deductible loss on Property I is

Select one:
a. P800,000
b. P50,000
c. P250,000
d. P600,000