ACTIVITY

4/7/2022

TEAM C
Aljon Patrick A. Medina

BSBA FM2B

PROBLEM 1
Ms. D has the following details during the year:

Monthly basic salary 30,000.00

Midyear bonus 25,000.00
13th Month pay 30,000.00
Productivity Bonus received during the year 26,000.00
SSS Monthly Contribution 1,000.00
Philhealth insurance Monthly contribution 100.00
Housing Development and Mutual Fund (HDMF) Monthly Contribution 200.00
Monthly premiums paid on health and hospitalization insurance 3,000.00
Personal, family and living expenses 230,000.00

TEAM C – Compute the net taxable compensation income for the year if Ms. D’s Midyear
bonus is P28,000 and Productivity bonus received during the year is P33,000 is a
resident citizen
Prior to Train Law
Monthly Basic Salary (P30,000 x 12) P360,000.00
Midyear Bonus 28,000.00
13th Month Pay 30,000.00
Productivity Bonus received during the year 33,000.00
Total Compensation Income P451,000.00

Less: Non-Taxable Compensation

Midyear bonus 28,000.00
13th Month Pay 30,000.00
Productivity bonus 33,000.00
 Total Bonuses and Other Benefits P91,000.00
Threshold Limit P90,000.00
(P1,000.00)
Compensation income subject to tax (Taxable Compensation)
P450,000.00
Less: Mandatory Deductions (Exemptions from Tax)
SSS Monthly Contribution P1,000.00
Philhealth Insurance Monthly Contribution 100.00
HDMF Monthly Contribution 200.00
Total Mandatory Contributions P1,300.00
Multiplied: Number of Months 12
Total Annual Contributions P15,600.00
(P15,600.00)
Less: Personal Exemption. P 50,000.00. (50,000.00)
Net Taxable Compensation Income P384,400

Train Law
Monthly Basic Salary (P30,000 x 12) P360,000.00
Midyear Bonus 28,000.00
13th Month Pay 30,000.00
Productivity Bonus received during the year 33,000.00
Total Compensation Income P451,000.00
Less: Non-Taxable Compensation
Midyear bonus 28,000.00
13th Month Pay 30,000.00
Productivity bonus 33,000.00
Total Bonuses and Other Benefits P91,000.00
Threshold Limit P90,000.00
(P1,000.00)
Compensation income subject to tax (Taxable Compensation)
P450,000.00
Net Taxable Compensation Income P
450,000.00

PROBLEM 2
ENG Corp. has the following assets for the year 2021

Asset Type Cost Useful life Date of Acquisition

Cargo Truck P 5,800,000.00 10 Jan 18

Delivery Vehicle P 3,200,000.00 8 Dec 19

Laptop P 65,000.00 5 Jan 20

Baking Oven P 47,000.00 3 Jan 20
TEAM C – Compute for the total Depreciation Expense for the years 2021 and 2022 if the
entity is using Straight Line Method

Year 2021 Year 2022

Asset Type Depreciation Asset Type Depreciation

Expense Expense
Cargo Truck P 580,000.00 Cargo Truck P 580,000.00

Delivery Vehicle P 400,000.00 Delivery Vehicle P 400,000.00

Laptop P 13,000.00 Laptop P 13,000.00

Baking Oven P 15,666.67 Baking Oven P 15,666.67

Total P 1,008,666.67 Total P 1,008,666.67

* Using the straight-line method, every year of an asset's useful life, the same amount of
depreciation is taken from its value.

Formula: Depreciation Expense = cost/useful life

Solution:

2021
Cargo Truck
Depreciation Expense = cost/useful life
= 5,800,000/10
Depreciation Expense = 580,000

Delivery Vehicle
Depreciation Expense = cost/useful life
= 3,200,000/8
Depreciation Expense = 400,000
Laptop
Depreciation Expense = cost/useful life
= 65,000/5
Depreciation Expense = 13,000

Baking Oven
Depreciation Expense = cost/useful life
= 47,000/3
Depreciation Expense = 15,666.67

2022
Cargo Truck
5,800,000 – 580,000 = 5,220,000 cost of cargo truck in 2022
Depreciation Expense = cost/useful life
= 5,220,000/9
Depreciation Expense = 580,000
Delivery Vehicle
3,200,000 – 400,000 = 2,800,000 cost of delivery vehicle in 2022
Depreciation Expense = cost/useful life
= 2,800,000/7
Depreciation Expense = 400,000
Laptop
65,000 – 13,000 = 52,000 cost of laptop in 2022
Depreciation Expense = cost/useful life
= 52,000/4
Depreciation Expense = 13,000
Baking Oven
47,000 – 15,666.67 = 31,333.33 cost of delivery vehicle in 2022
Depreciation Expense = cost/useful life
 = 31,333.33/2
Depreciation Expense = 15,666.67

PROBLEM 3

PMB CORPORATION

Net Sales P5,430,000.00

Salaries and Wages 2,398,000.00
Travel Expenses made by the president of the Corp for his
birthday 150,000.00
Travel Expenses by employees in line with the business 25,000.00
Monthly Rent Expense 60,000.00
Entertainment and Amusement P179,000.00
Less: EAR deduction 27,150.00
Net Entertainment and Amusement P151,850.00
Interest on Loans by the Corp P43,000.00
Less: Deductible Interest 28,810.00
Net Interest on Loans by the Corp P14,190.00
Income tax expense paid during the year 92,000.00
P2,100,000.0
Entity’s property, plant and equipment
0
Less: Depreciation Expense 420,000.00
Net property, plant and equipment P1,680,000.00

P10,001,040.0
Taxable Income 0

ALLOWABLE EAR DEDUCTION

Sale of Goods
Net Sales = P 5,430,000.00
Actual Entertainment and Amusement = P 179,000.00

Allowable EAR Deduction = Net Sales x ½ x 1%

 = 5,430,000.00 x ½ x 0.01
= 2,715,000.00 x .01
Allowable EAR Deduction = P 27,150.00

DEDUCTIBLE INTEREST
Interest Expense (from loans) P 43,000.00
Less: (P43,000.00 x 33%) 14,190.00
Deductible interest P 28,810.00

DEPRECIATION EXPENSE
Cost = P 2,100,000.00
Useful Life = 5 years

Depreciation Expense = Cost

Useful Life
= 2,100,000.00
5
Depreciation Expense = P 420,000.00