Discussion Questions: Write/Type your answer on the highlighted box.

Press "ctrl + enter" if your need to use another line for y

1. What are the requisites of a deductible interest?

2. Explain the arbitrage scheme and how to determine the arbitrage limit.

3 Discuss the deductibility of discount interest and the optional capitalization treatment of interest

4. Discuss the deductibility of taxes and enumerate the non-deductible taxes.

5. Discuss the computation of foreign tax credit.

6. Enumerate the requisites of deductible losses.

7. Enumerate the requisites of deduction of bad debt expense.

8. Discuss the special considerations on depreciation of properties.

9 Discuss the rules on depletion of wasting assets for petroleum and mining companies

10. Discuss the requisites on deductibility of contributions. Enumerate those fully deductible and partially deductible contributio

11. What is the limitation on deductibility of contribution expense for corporate taxpayers and individual taxpayers?

12. Discuss the rules on pension expense.

13. Discuss the rules on research and development expenses.

Discussion Questions: Write/Type your answer on the highlighted box. Press "ctrl + enter" if your need to use another line for your a
1. What
Notare the requisites
treated as capitalofexpenditure
a deductible interest?
Interest is disallowed to be deducted from the gross income of taxpayer

2. Explain the arbitrage scheme and how to determine the arbitrage limit.

3 Discuss the deductibility of discount interest and the optional capitalization treatment of interest

4. Discuss the deductibility of taxes and enumerate the non-deductible taxes.

5. Discuss the computation of foreign tax credit.

6. Enumerate the requisites of deductible losses.

7. Enumerate the requisites of deduction of bad debt expense.

8. Discuss the special considerations on depreciation of properties.

9 Discuss the rules on depletion of wasting assets for petroleum and mining companies

10. Discuss the requisites on deductibility of contributions. Enumerate those fully deductible and partially deductible contributions.

11. What is the limitation on deductibility of contribution expense for corporate taxpayers and individual taxpayers?

12. Discuss the rules on pension expense.

13. Discuss the rules on research and development expenses.

eed more than 1 line).
Part 2
Use the = formula in answering each of the questions below. Direct answer without necessary computations (using = formula)
Write the formula (your answer) on the highlighted cells. Please do not edit the format. Checking is based on the highlighted ce

The following relates to a taxpayer:

Interest expense 400,000.00
Interest income - time deposit 100,000.00
380,000.00 1. Compute the deductible interest expense.

The following relates to a taxpayer:

Interest expense 400,000.00
Interest income - promissory notes 100,000.00
400,000.00 2. Compute the deductible interest expense

The taxpayer has the following losses:

Net Operating Loss Carry Over-last yea 200,000.00
Net capital loss-current 80,000.00
Net capital loss - last year 70,000.00
Ordinary loss 50,000.00
Taxable income before losses 400,000.00
250,000.00 3. Compute the total deductible losses in the current year.

Gawan Merchandising paid P400,000 to employees, net of P60,000 total withholding tax on compensation.
460,000.00 4. What is the deductible amount of expense by the employer?

A taxpayer under the cash basis had the following expenditures:

Acquisition of office equipment at the middle of the year (5 year useful li 200,000.00
Payment of employee salaries 40,000.00
Payment for office utilities expenses 60,000.00
300,000.00 5. How much is claimable as deductible business expense for the year?
sary computations (using = formula) is considered NOT answered.
ecking is based on the highlighted cells.

on compensation.
Part 3
Use the = formula in answering each of the questions below. Direct answer without necessary computations (using = formula)
Write the formula (your answer) on the highlighted cells. Please do not edit the format. Checking is based on the highlighted ce

Waling Waling, Inc. maintained a defined contribution pension plan. The plan is contributory where employees contribute 20%
During the year, Waling Waling contributed P1,000,000 inclusive of employee contribution which was pre-deducted through the
800,000.00 1. Compute the pension expense.

Mr. Vhinson made contributions to the following in 2021:

Street beggars 50,000.00
Barrio fiestas 60,000.00
Various cancer patients 40,000.00
Takusa, an accredited non-profit organization 100,000.00
0.00 2. Compute the deductible contribution expense.

ABC Company declared a property dividend with book value of P1,000,000, and fair value of P1,200,000. The total dividends w
0.00 3. Compute the total deductible expense.

Naga Company paid P35,000 fringe benefits tax for the purchase of merchandise used by the family of one of its company offi
109,375.00 4. How much is the deductible expense against gross income?

Makati Corporation has operations in Malaysia and Singapore with the following taxable income and taxes paid during the yea
Philippines Malaysia Singapore
Taxable income 800,000.00 900,000.00 700,000.00
Income tax paid 180,000.00 288,000.00 175,000.00
Makati Corporation wishes to claim the foreign income tax paid as tax credit.
445,000.00 5. Compute the foreign income tax credit.
ary computations (using = formula) is considered NOT answered.
ecking is based on the highlighted cells.

y where employees contribute 20% of the pension contributions.

which was pre-deducted through their salaries.

of P1,200,000. The total dividends withheld on the dividends were P60,000.

the family of one of its company officers.

come and taxes paid during the year:

Part 4
Use the = formula in answering each of the questions below. Direct answer without necessary computations (using
Write the formula (your answer) on the highlighted cells. Please do not edit the format. Checking is based on the hig

Balanga, Inc. contributed P500,000 for its pension fund inclusive of P200,000 funding of current service cost.
1. How much is the deductible pension expense?

Entertain Corporation set up a plan in 2021. The following relate to the fund:
2021 2022
Funding of current service cost 400,000 400,000
Funding of past service cost 300,000 200,000
2. Compute the deductible pension expense in 2021.

A taxpayer with net sales of P2,000,000 and cost of sales of P1,800,000 incur P15,000 entertainment, amusement
10000 3. Compute allowable deduction for EAR expenses.

A taxpayer with gross receipts of P2,000,000 and direct cost of services P1,800,000 incurred P15,000 entertainmen
10000 4. Compute the allowable deduction for EAR expense.

A taxpayer reported sales of P3,000,000 and gross receipts of P2,000,000 in 2021. It incurred entertainment, amus
5. Compute the deductible EAR expense.
cessary computations (using = formula) is considered NOT answered.
Checking is based on the highlighted cells.

of current service cost.

entertainment, amusement and recreation expenses (EAR).

curred P15,000 entertainment, amusement and recreation expenses.

ncurred entertainment, amusement, and recreation expenses of P35,000.