Chapter 7 Regular Income Tax Activity Valdez KJ PDF

KRISTINE JOYCE T.
VALDEZ BSA 2-1
1. In 2015, Ms. Maya earned P450,000 compensation income but incurred P120,000 net
loss in her business. What is her taxable income assuming she incurred personal
expenses of P100,000?
a. P 450,000
b. P 550,000
c. P 330,000
d. P 570,000
Ms. Maya’s net loss of P 120,000 cannot be deducted from taxable compensation income.
Because there is no deduction permitted against compensation income, the P 100,000
personal costs are likewise not deducted.
2. Mrs. Sipalay had a gross taxable compensation income of P400,000. She also earned
an additional P2,000 by investing her money in time deposits plus P3,000 interest
income from lending money to a friend. Compute her taxable income.
a. P303,000
b. P302,000
c. P300,000
d. P403,000
Gross Taxable Compensation Income P 400,000

Interest Income from Lending Money 3,000
Taxable Income P 403,000
3. Ms. Santander had a business net income of P300,000. She also earned P5,000
commission from selling cellular cards and P12,000 dividends from a domestic
corporation. Compute her taxable income.
a. P300,000
b. P312,000
c. P305,000
d. P317,000
Business Net Income P 300,000

Commission from Selling 5,000
4. Mr. Cabilao earned total gross receipts of P800,000 and paid P300,000 expenses in
his accounting practice. During the same year, he also earned 404 of P60,000 net gain
from the sale of domestic stocks directly to a buyer. He disposed a vacant lot at a net
gain of P140,000. What is the taxable income of Mr. Cabilao?
a. P400,000
b. P460,000
c. P 500,000
d. P 600,000
Total Gross Receipts P 800,000

Less: Expenses 300,000
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5. Mr. Jagna earned a gross compensation income of P200,000, exclusive of P20,000
non-taxable compensation income, and gross business income of P500,000 before
expenses of P200,000. He also earned book royalties of P10,000 and P8,000 interest
income from clients' promissory notes. Mr. Jagna has personal expenses of P170,000
during the year. What is Mr. Jagna's taxable compensation income?
a. P30,000
b. P180,000
c. P 200,000
d. P 220,000
Gross compensation Income exclusive of non-taxable compensation income.
6. What is Mr. Jagna's net income from business?

a. P300,000
b. P 308,000
c. P 310,000
d. P 518,000
Gross Business Income P 500,000

Business Expense (200,000)
Interest Income from Client’s Promissory Note 8,000
Net Income for Business P 308,000
7. What is Mr. Jagna's the taxable income?

a. P508,000
b. P450,000
c. P558,000
d. P468,000
Taxable Compensation Income P 200,000

Taxable Net Business Income 308,000
Total Taxable Income P 508,000
8. Mr. Bangal earned a compensation income of P120,000 and net income from business
of P300,000. He also earned P8,000 prizes from a dancing competition. and P45,000
royalties from his musical composition. Mr. Bangal has P150,000 personal expenses.
Compute the taxable income.
a. P 473,000
b. P 465,000
c. P 428,000
d. P 420,000
Compensation Income P 120,000

Net Income from Business 300,000
Prizes from Dancing Competition 8,000
9. Mr. Jordan, with a P75,000 personal exemption, had the following data in 2021:
Philippines Abroad
Gross income from sales P 4,000,000 P 6,000,000
Interest income on deposits 40,000 80,000
Less: Deductions 2,000,000 3,600,000
Compute the taxable income if Mr. Jordan is a resident citizen.

a. P4,480,000
b. P4,520,000
c. P 2,040,000
d. P 2,000,000
PHILIPPINES ABROAD TOTAL

Gross Income from Sales P 4,000,000 P 6,000,000 P 10,000,000
Interest Income on Deposits 80,000 80,000
Less: Deductions (2,000,000) (3,600,000) (5,600,000)
Total Taxable Income P 2,000,000 P 2,480,000 P 4,480,000
10. In the immediately preceding problem, compute the taxable income if Mr. Jordan is a
non-resident citizen.
a. P4,520,000
b. P 4,480,000
c. P 2,040,000
d. P 2,000,000
WITHIN
Gross Income from Sales P 4,000,000
Less: Deductions (2,000,000)
Total Taxable Income P 2,000,000
Multiple Choices - Problems 2

1. Mr. Santos derived the following income in 2021:
Business Income P 200,000
Compensation income 300,000
Interest income from 5/6 lending to clients 100,000
Interest income from bank deposits 20,000
Royalty income 100,000
Capital gain on sale of personal car 20,000
Capital gain on the sale of stocks directly to a buyer 40,000
Ordinary gain on sale of old office furniture 10,000
Dividend income 50,000
Compute the total passive income subject to final tax.

a. P170,000
b. P1,370,000
c. P270,000
d. P1,470,000
Royalty Income P100,000
Interest Income from Bank Deposits 20,000
Dividend Income 50,000
Passive Income Subject to Regular Tax P 170,000
2. Compute the total income subject to regular tax

a. P1,730,000
b. P630,000
c. P1,470,000
d. P530,000
Business Income P 200,000

Compensation Income 300,000
Interest Income from 5/6 Lending to Clients 100,000
Capital Gain on sale of Personal Car 20,000
Ordinary Gain on Sale of Old Office Furniture 10,000
Toal Income Subject to Regular Tax P 630,000
3. Compute the capital gain income subject to capital gains tax

a. P70,000
b. P40,000
c. P60,000
d. P0
Capital Gain on the Sale of Stocks directly to a Buyer P 40,000.
4. Panay, Inc., a large corporation, had the following income in 2021:
Philippines Abroad
Rent income P10,000,000 P12,000,000
Dividend - domestic 50,000
Royalties 80,000 200,000
Business expenses. 8,700,000 9,800,000
Compute the taxable income if Panay, Inc. was a domestic corporation.

a. P3,500,000
b. P3,700,000
c. P1,380,000
d. P1,300,000
PHILIPPINES ABROAD TOTAL

Rent Income P 10,000,000 P 12,000,000 P 22,000,000
Royalties 200,000 200,000
Business Expense (8,700,0000) (9,800,000) (18,500,000)
Total Taxable Income P 1,300,000 P 2,400,000 P 3,700,000
5. Compute the income tax due in the immediately preceding problem
a. P1,149,000
b. P925,000
c. P1,110,000
d. P381,000
Taxable Income P 3,700,000

Multiply by: 25%
Income Tax Due P 925,000
6. Compute the taxable income assuming Panay Corporation was a resident foreign
corporation
a. P3,700,000
b. P3,500,000
c. P1,380,000
d. P1,300,000
WITHIN
Rent Income P 10,000,000
Business Expense (8,700,0000)
7. Compute the income tax due in the immediately preceding problem.

a. P325,000
b. P1,110,000
c. P1,149,000
d. P381,000

Multiply by: 25%
Income Tax Due P 325,000
8. Compute the total tax if Panay, Inc. was a non-resident foreign corporation Assume
that the tax sparing is not applicable to Cavite.
a. P 3,015,000
b. P 3,039,000
c. P 3,000,000
d. P 2,532,500
Rent Income P 10,000,000

Dividend – Domestic 50,000
Royalties 80,000

Multiply by: 25%
Total Income Tax P 2,532,500
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KRISTINE JOYCE T.

VALDEZ BSA 2-1

Gross Taxable Compensation Income P 400,000

Business Net Income P 300,000

Total Gross Receipts P 800,000

Gross compensation Income exclusive of non-taxable compensation income.

6. What is Mr. Jagna's net income from business?

Gross Business Income P 500,000

7. What is Mr. Jagna's the taxable income?

Taxable Compensation Income P 200,000

Compensation Income P 120,000

Compute the taxable income if Mr. Jordan is a resident citizen.

PHILIPPINES ABROAD TOTAL

Multiple Choices - Problems 2

Compute the total passive income subject to final tax.

2. Compute the total income subject to regular tax

Business Income P 200,000

3. Compute the capital gain income subject to capital gains tax

Capital Gain on the Sale of Stocks directly to a Buyer P 40,000.

4. Panay, Inc., a large corporation, had the following income in 2021:

Compute the taxable income if Panay, Inc. was a domestic corporation.

PHILIPPINES ABROAD TOTAL

Taxable Income P 3,700,000

7. Compute the income tax due in the immediately preceding problem.

Taxable Income P 1,300,000

Rent Income P 10,000,000

Taxable Income P 10,130,000

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