Business Taxation Prelim Exam

FROM CHAPTER 2 SOLVE THE FOLLOWING:

PROBLEM 2-1 ON PAGE 2-17

Mr. A is a VAT taxpayer in merchandising business. He makes sales of his goods under
different terms of payment by the buyer. There are cash sales, installment sales, open
account sales and consignment sales. In a taxable month, he had the following data on
sales VAT not included:

Cash sales P1,000,000

Open account sales 2,000,000
Installment sales 3,000,000
Consignment sales (at suggested retail price) :
0—60 days (on which there was a remittance
from the consignee on a sale or P 500,000) 2,500,000
61—120 days old 1,800,000
Sales returns and allowances:
On cash sales 100,000
On open account sales 200,000
On installment sales 300,000
On consignment sales, 61—120 days old 200,000
Discount availed of under terms in the invoices on
open account sales, 2/10, n/30 100,000
How much was the output VAT on his sales of the month? 168,000

Solution:

Cash sales 1,000,000

Less: Sales return (100,000) 900,000

Consignment sales 500,000

Total Sales 1,400,000

Output VAT = Total sales with actual cash received x 12%

Output VAT = P 1,400,000 x 12%
Output VAT = 168,000
PROBLEM 2-6 ON PAGE 2-18

The taxpayer is real estate dealer

Consideration on the sale, per deed of sales P4,000,000
Zonal Value 4,200,000
Fair market value in the assessment rolls 3,500,000
Payments, as follows:
June 5, 2018 ( date of sale) 500,000
December 5, 2018 500,000
June 5, 2019 1,500,000
December 5, 2019 1,500,000
Value-added tax shown in the deed of sale? 504,000
Output value-added tax on June 5, 2018 collection 63,000

Solution:

Installment value added tax

June 5,2018
500,000/4,000,000 x 504,000 63,000

Dec.5 2018
500,000/4,000,000 x 504,000 63,000

June 5,2019
1,500,000/4,000,000 x 504,000 189,000

Dec.5,2019
1,500,000/4,000,000 x 504,000 189,000

Total 504,000