FOLLOWING DATA IN JANUARY (ALL AMOUNTS ARE INCLUSIVE OF TAX)

MERCHANDISE INVENTORY 204,000

ACTUAL AMOUNT PAID ON THE INVTY 16,000
SALES, TOTAL INVOICE AMOUNT 469,000
PURCHASES 57,400
FIFTY PERCENT (50%) OF THE MDSE INVTY ON JANUARY 1 WERE
PURCHASED FROM NON-VAT RWGISTERED SELLERS
THE VAT PAYABLE BY ISAAC COMPANY IS
A) 30,100
B) 28,100
C) 3,960
D) 4,950
17. AN OWNER OF HEAVY EQUIPMENTS IS ENGAGED IN EQUIPMENT
RENTAL. IT USED TO BE VAT-EXEMPT BECAUSE ITS ANNUAL
RECEIPTS NEVER EXCEEDED P1,500,000. ON JANUARY 2, 2008, IT
DECIDED TO REGISTER UNDER THE VAT SYSTEM. THE FOLLOWING
DATA WERE FROM THE FIRST QUARTER ENDING MARCH 31, 2008:
RENTAL FROM HEAVY EQUIPMENTS OF 12% VAT 336,000
PURCHASES OF SUPPLIES(FEBRUARY) GROSS OF VAT 112,000
INVENTORY OF SUPPLIES:
SUBJECT TO VAT JAN. 1, 2008 50,400
NOT SUBJECT TO VAT 60,000
VAT PAID ON THE INVTY OF SUPPLIES, JAN. 1, 2008 5,400
THE VAT PAYABLE FOR THE QUARTER ENDING MARCH 2008 IS
A) 12,171
B) 33,792
C) 18,600
D) 22,992

18. STATEMENT 1: TRANSPORT OF PASSENGERS AND CARGO BY

DOMESTIC AIR OR SEA VESSELS FROM THE PHIL. TO A FOREIGN
COUNTRY IS SUBJECT TO VAT AT A RATE OF 0%
STATEMENT 2: TRANSPORT OF PASSENGERS AND CARFO BY DOMESTIC
AIR OR SEA VESSELS FROM MINDANAO TO LUZON AND VISAYAS, VICE
VERSA, IS SUBJECT TO VAT AT A RATE OF 12%
A) TRUE, FALSE
B) FALSE, TRUE
C) FALSE, FALSE
D) TRUE, TRUE
19. BETH HAD THE FOLLOWING RECEIPTS DURING THE MONTH
(EXCLUSIVE OF TAX):
PASSENGER CARGO
JEEPNEY 1 20,000
JEEPNEY 2 30,000
BUS 15,000 8,500
SEA VESSEL 1,500,000 800,000
CESSNA PLANE FOR HIRE 800,000 560,000
THE OUTPUT TAX DURING THE PERIOD IS
A) 164,220
B) 441,000
C) 283,800
D) 440,220

False
11. A business which is not registered is exempt
from business taxes.

True
12. Government agencies and instrumentalities
and non-profit organizations or associations may
be considered as businesses on their unrelated
operations; hence, these are subject to business
tax.

False
13. The absence of profit motive may preclude an
activity from being considered as business.

False
14. Government agencies and instrumentalities
and non-profit organizations or associations are
generally considered as businesses.

False
15. A company director is considered to be
engaged in business.

False
1. Marginal income earners are exempt from
both business tax and income tax.

False
2. An employed professional is engaged in
business.

True
3. Self-employed professionals rendering
services to clients are engaged in business.

False
4. Agents and brokers are considered as
employees; hence, they are not considered
engaged in business.
True
5. Consultants and movie artists are
considered engaged in business.