Tax 2 (Business Taxation) R.M.

Suarez, MBA
9:00 to 10:30am M/W BSBA FM3 Instructor
2:30 to 4:00pm M/W BSBA MM3
10:30 to 12:00nn T/TH BSBA HRDM3
Instruction: Answer the questions far down below. Submit your answer on or before 5:00pm of
Sunday, October 31, 2021 thru (choose only 1 among the three options):
1. email add: busneduc.scc2021@gmail.com (specify the subject & exercise # on the
title/subject head of your email)
2. GChat (specify the subject & exercise #)
3. Private message (messenger account: rene suarez) specify the subject & exercise #

Exercise #3 = Based on File 6 Module 3

VAT COMPUTATION

La Tondena Incorporated manufactures high grade alcoholic whisky. Its total

sales for the first quarter of 2019 was 6,000,000 pesos. It was reported that in the
same period, the company purchased raw materials for its whisky from a supplier
and VAT (Input) paid per receipt from the supplier was 400,000 pesos. Current VAT
rate is at 12%

Questions: (please state and/or compute your answer)

1. If the total sales is Vat exclusive, how much is the output VAT? (5 pts)
Ans: 6,000,000 mutiplied by 12% = 720,000 VAT amount
So,
6,000,000 Sales amount
6,000,000 x 12% VAT rate 720,000 VAT amount
5,280,000 Invoice amount
So,
VAT Exclusive Sales 6,000,000
Less: Sales w/o VAT 5,280,000
Output VAT amount 720,000

2. If the total sales is VAT inclusive, how much is the output VAT? (5 pts)
Ans: 6,000,000 divided by 1.12 (100%+12%) =5,357,142.86 Sales amount
5,357,142.86 multiplied by 12% = 642,857.14 VAT amount
6,000,000.00 Invoice amount
So,
VAT Inclusive Sales 6,000,000
Less: Sales w/o VAT 5,357,142.86
Output VAT amount 642,857.14
 3. Assuming that the total sales of Php 6,000,000 is vat inclusive and you
have already computed the output VAT in #2 , how much is the VAT payable
of La Tondena Inc.? (show computation in good form, taking into account
the Input and output VAT) 10 pts.
Ans: VAT is Inclusive
Total Output VAT is Php 642,857.14
Total Input VAT is 400,000.00
Output Balance for Remittance 242,857.14 VAT Payable

=====================end of exercise #3==========================