LAS in Acounting 2 Week 3

Republic of the Philippines
Department of Education
REGION IV-A CALABARZON
SCHOOLS DIVISION OFFICE OF BATANGAS PROVINCE
DR. JUAN A. PASTOR MEMORIAL NATIONAL HIGH SCHOOL
TALAIBON, IBAAN, BATANGAS
LEARNING ACTIVITY SHEET IN FUNDAMENTALS OF ACCOUNTANCY,

BUSINESS AND MANGEMENT 2
Quarter 2 Week 3: INCOME AND BUSINESS TAXATION
MELC: 1. Define income and business taxation and its principles and processes
2. Explain the principles and purposes of taxation
3. Explain the procedure in the computation of gross taxable income and tax due
Objective: After going through this module, you are expected to:
1. Define income and business taxation and its principles and processes
2. Explain the principles and processes of income and business taxation.
3. Distinguish individual from business taxation
4. Explain the procedure in the computation of taxable income and tax due
A tax is an imposition by the government upon person, property, or rights exercised within its
jurisdiction. In simple words, is the compulsory contribution that people pay to the government, which is used to pay
for expenses Taxation, on the other hand, refers to the power of the state by which the sovereign
raises revenue to defray the necessary expenses of the government.
The Basic Principles of a Sound Tax System are:

a. Fiscal adequacy-revenues should be adequate to sustain government spending.
b. Theoretical justice – taxes are fair and reasonable to the capabilities of the taxpayer to pay.
c. Administrative feasibility-tax legislation is enforced efficiently and effectively, preventing future
complications and uncertainty on the aspect of tax-paying citizens.
Purposes of taxation
1. Provides funds to support the government to improve people's general welfare.
2. Managing inflation (e.g., government to lessen the impact of upcoming rising prices.)
3. Helping to reduce the negative impacts (e.g., tobacco is taxed to prohibit smoking, imported goods
are taxed to secure domestic manufacturers)
4. Reasonable distribution of income (for example, higher tax payments are imposed towards those
who generate much)
General Process of Taxation

Business Individual
1. Fill up BIR Form 1903 supported by SEC 1.Fill up BIR Form 1902 supported by
and mayor’s business permit his or her birth certificate
2. Certificate of registration should be 2.The income of the taxpayer is subject to
renewed annually before January 31 withholding tax, deducted by the
employer
3. Printing of invoice and official receipt
should be authorized from BIR
4. Books of accounts of the business are
also registered with the BIR before use.
What is Income Taxation?

INCOME TAXES is the imposition of taxes on the income of individuals derived from compensation,
business trade, self-employed, or practice of a profession or from property less deductions
authorized by the law. The term "gross income" refers to the taxpayer's income for taxation purposes.
Address: Talaibon, Ibaan, Batangas

Telephone No.: (043) 311-2651
Email Ad: djapmnhs69@yahoo.com
WRITTEN TASK:
TASK 1. Solve the following:
1. Juan is a father with a 1 qualified dependent, having a monthly basic salary of P25,000. With SSS
contribution P581, PHIC P312 and Pag-ibig P100. Compute for tax due for 2017 and 2020
2. Pedro is a widow with a 2 child (ages, 17 and 21), having a monthly basic salary of P35,000. With
minimis benefits of P1,201.60 monthly. He also received a 13th month salary equivalent to one
month salary. Compute for tax due for 2017 and 2020.

Telephone No.: (043) 311-2651
3. Tiago is a single father having a annual income of P225,000. With Statutory benefits of 125,325
and bonuses and allowances of P 93,000. Compute for tax due for 2017 and 2020.
4. Pedro is single and working as a call center agent. His monthly basic salary is P30,000. Let’s say
Pedro is working graveyard and he has night allowance ,in his work. He also worked on 2 full
holidays as their team manager offered. Night differential: P4,000. Holiday pay: P3,000 Determine
the tax due for 2017 & 2020.
PERPORMANCE TASKS: Income tax:

Task 2:
1. Mrs. Jolie Sy is employed as a sales manager. Her husband is unemployed for three years now. They have
four children the eldest is 25 years old, the second is 20 years old, the third is 18 years old and the youngest
is 15 years old. Compute for the annual income tax for year 2011 given the following additional
information:Monthly salary 18,000Monthly allowance 3,000Annual Commission 120,000. Compare it with
TRAIN law.
2. Mr. Herrera is unmarried with two legal dependents. The following information is used to
determine his income tax. Compute for his annual income tax return for the year 2017 and 2018 :
Monthly salary 20,000. Monthly overtime pay 1,500. Monthly gas and food allowance 3,500
3. Mr. Dan Medina is a bank employee. He is married with four children, all in elementary and high school. His
salary isP30,000 per month and the following: Medicine allowance every 3 months 5,000.
Monthly transportation and food allowance 2,500. 13th month pay equal to his monthly salary, given once a
year. Compute for his tax due for the year end 2017 and compare it to the new TRAIN law.
4. Ms. Terry operates a convenience store while she offers bookkeeping services to her clients. In
2018, her gross sales amounted to P800,000.00, in addition to her receipts from bookkeeping
services of P300,000.00. How much is the tax due for year end 2018? If it is happen in 2017
how much will be the tax due?
5. Mr. Alvarez is a finance consultant he earned yearly as follows: Company A. P1,900,000 and
Company B.1,000,000. He also paid the following expenses during the year: Gasoline, salary,
utilities for 150,000, 120,000 and 60,000 respectively. Compute the tax due using old tax and
TRAIN law.
Task 3: Below are the taxable income and tax due of individual taxpayer using new train law.
Prepared individual tax due of the following taxpayer:
1. Allan gross compensation income of P543,425
Non-taxable compensation income P43,425
Total sales P83,333
Optional standard deduction P33,333
2. Bella gross business income is P500,000
Cost of sales P220,000
Operating expensesP120,000
3. Casey has a gross compensation income of P90,000 with same scenario of Bella’s business
4. Duncan is same as Allan gross compensation as well as his non-taxable income. With the
same business situation to Bella.

Telephone No.: (043) 311-2651

Telephone No.: (043) 311-2651

LAS in Acounting 2 Week 3

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Republic of the Philippines

LEARNING ACTIVITY SHEET IN FUNDAMENTALS OF ACCOUNTANCY,

The Basic Principles of a Sound Tax System are:

General Process of Taxation

What is Income Taxation?

Address: Talaibon, Ibaan, Batangas

Address: Talaibon, Ibaan, Batangas

PERPORMANCE TASKS: Income tax:

Address: Talaibon, Ibaan, Batangas

Address: Talaibon, Ibaan, Batangas

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