QUEZONIAN EDUCATIONAL COLLEGE, INC.

DR. R. SOLER ST., ZONE II POBLACION

ATIMONAN, QUEZON

BACC 3-TAXATION
BSBA-FIRST YEAR
TOPIC: MINIMUN CORPORATE TAX (MCIT) EXERCISES

1. McD company has the following information related to the business:

Gross receipts 950,000.00

Cost of services 650,000.00
Interest on bank deposits 15,000.00
Dividends from a domestic
Corporation 25,000.00
Dividends from foreign corp.(US) 50,000.00
Royalties, USA 75,000.00
General & Administrative exp. 250,000.00
Compute for the Income tax due

2. Jarex Corporation, a domestic corporation has the following data for the taxable year 2006:
Gross income 1,500.00
Taxable income 173,500.00
Compute the income tax payable

3. From the data of Zentex Corp., a domestic corporation the following information was taken for the
taxable year 2004:

Gross Income, Philippines 625,000.00

Expenses, Philippines 410,000.00
Gross income, USA 550,000.00
Expenses, USA 250,000.00
Dividends from a domestic corp. 25,000.00
Royalties, USA 120,000.00
Interest from deposit (Metrobank) 25,500.00
Compute the income tax payable
SOURCES OF INCOME >Services; Rent; Royalties; Gain on sale real property; situs of taxation is the
place where the income is derived
>Gain on sale of domestic & shares of stock
>Interest on deposits
>Dividend from a domestic and foreign corporation
>Royalties-Place of use of intangibles
DEDUCTIONS FROM GROSS Expenses:
INCOME >must be ordinary and necessary
>paid or incurred during the taxable year
>connected with trade or business and profession
>supported by sufficient evidence, and
>not against the law or public policy
>Traveling expense includes transportation, meals, lodging & laundry
expense, incurred while away from home
>Interest-it must be indebtedness
>it must be that of the taxpayer
>It must be connected with taxpayers trade or business
>Incurred or paid during the taxable year