Excel Professional Services Inc.

Management Firm of Professional Review and Training Center (PRTC)

Online • Manila • Cavite • Laguna • Cebu • Cagayan De Oro • Davao
Since 1977

Taxation (TAX) GUDANI/NARANJO/SIAPIAN/WONG/CRUZ

FIRST PRE-BOARD EXAMINATION CPA Review March 2 & 3, 2024

Multiple Choice. Select the letter that corresponds to the best answer. This examination consists of 70 items and
the exam is good for three (3) hours. Good luck!

Use the tax tables if necessary:

REVISED WITHHOLDING TAX TABLE FOR COMPENSATION

DAILY 1 2 3 4 5 6
Compensation ₱685 and ₱685 - ₱1,096 - ₱2,192 - ₱5,479 - ₱21,918 and
Range below ₱1,095 ₱2,191 ₱5,478 ₱21,917 above
Prescribed 0.00 0.00 +15% ₱61.65 ₱280.85 ₱1,102.60 ₱6,034.30
Withholding Tax over ₱685 +20% over +25% over +30% over +35% over
₱1,096 ₱2,192 ₱5,479 ₱21,918
WEEKLY 1 2 3 4 5 6
Compensation ₱4,808 and ₱4,808 - ₱7,692 - ₱15,385 - ₱38,462 - ₱153,846 and
Range below ₱7,691 ₱15,384 ₱38,461 ₱153,845 above
Prescribed 0.00 0.00 +15% ₱432.60 ₱1,971.20 ₱7,740.45 ₱42,355.65
Withholding Tax over ₱4,808 +20% over +25% over +30% over +35% over
₱7,692 ₱15,385 ₱38,462 ₱153,846
SEMI- 1 2 3 4 5 6
MONTHLY
Compensation ₱10,417 and ₱10,417 - ₱16,667 - ₱33,333 - ₱83,333 - ₱333,333 and
Range below ₱16,666 ₱33,332 ₱83,332 ₱333,332 above
Prescribed 0.00 0.00 +15% ₱937.50 ₱4,270.70 ₱16,770.70 ₱91,770.70
Withholding Tax over +20% over +25% over +30% over +35% over
₱10,417 ₱16,667 ₱33,333 ₱83,333 ₱333,333
MONTHLY 1 2 3 4 5 6
Compensation ₱20,833 and ₱20,833 - ₱33,333 - ₱66,667 - ₱166,667 - ₱666,667 and
Range below ₱33,332 ₱66,666 ₱166,666 ₱666,666 above
Prescribed 0.00 0.00 +15% ₱1,875.00 ₱8,541.80 ₱33,541.80 ₱183,541.80
Withholding Tax over +20% over +25% over +30% over +35% over
₱20,833 ₱33,333 ₱66,667 ₱166,667 ₱666,667

SCHEDULE OF EXPANDED WITHHOLDING TAX (EWT)

Income Payment EWT Income Payment EWT
Professional/Management/Consultancy Gross income 3M or 1. Purchases by Top 1% - goods
fees (Individual) below - 5% Withholding Agents 2% - service
Gross income over (TWAs)
3M or VAT-reg or 2. Purchases by Large
without sworn Taxpayers
declaration – 10% 3. Purchases by
government
Purchases by Joint
ventures/consortiums
Professional/Management/Consultancy Gross income Partners in general 720,000 or
fees (Non-Individual) 720,000 or below - professional partnerships less -10%
10% (drawings, advances, Above 720,000
Gross income over sharings, allowances, etc.) – 15%
720,000 – 15%
Contractors/subcontractors (security, 2% Income distributed to 15%
janitorial, etc.) beneficiaries of estates/trusts
Director’s fees (if not employee) 10% or 15% Commission (if not employee) 10%
(720,000 threshold)
Rental 5%
Note: Above are common income payments. Complete list is in page 2 of BIR Form No. 1601-EQ.

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GRADUATED TAX TABLE UNDER TRAIN LAW (January 1, 2023 and onwards)

Over But not over The tax shall be Plus Of excess over
0 250,000 0 0 -
250,000 400,000 0 15% 250,000
400,000 800,000 22,500 20% 400,000
800,000 2,000,000 102,500 25% 800,000
2,000,000 8,000,000 402,500 30% 2,000,000
8,000,000 - 2,202,500 35% 8,000,000

1. Congress proposes that the non-resident digital S2 – Special Allowable Itemized Deduction is
service providers be taxed on their streaming service considered
income derived from Philippine subscribers. Which is a. Only S1 is true c. Both are true
FALSE? b. Only S2 is true d. Both are false
a. Congress has no power to tax the income of
taxpayers who are non-residents 8. If an individual taxpayer who opted for 8% taxation is
b. Objects or subjects of taxation are part of disqualified at the end of the year, the quarterly tax
legislative discretion payments, if any, are:
c. The bill has to originate in the House of a. Treated as a tax credit for income tax purposes
Representatives and requires the concurrence of (5%) and percentage tax (3%)
the Senate to become a law b. Treated as a tax credit for income tax purposes
d. To become a law, the bill has to go through three only
readings c. Treated as a tax credit for percentage tax
purposes only
2. Which is FALSE? Beginning July 1, 2023: d. Treated as an expense
S1 – The MCIT rate will revert from 1% to 2%
S2 – The Percentage tax rate will revert from 1% to 9. Which is not true?
3% S1- Capital gains on disposition of capital assets are
S3 – The corporate tax rate will revert from 25% to subject to capital gains tax
30% S2 – Ordinary gains on disposition of ordinary assets
a. S1 only c. S3 only are subject to regular income tax
b. S2 only d. None of the above is false a. Only S1 is true c. Both are true
b. Only S2 is true d. Both are false
3. The BIR discovered that certain taxpayers use
invoices/receipts from non-existing businesses. The 10. Monthly remittances are required in all the following
program by the BIR to recover lost revenue and the taxes, except:
criminal prosecution of erring taxpayers is known as: a. Expanded Withholding Tax
a. Oplan Baklas b. Final Withholding Tax
b. Oplan Kandado c. Fringe Benefits Tax
c. Run After Fake Transactions (RAFT) d. Withholding Tax on Compensation
d. Run After Tax Evaders (RATE) 11. Which is not absolutely true?
4. Past service costs are amortized: S1- Conversion of ordinary asset to capital asset is
a. 5 years c. 20 years allowed
b. 10 years d. Outright S2 – Conversion of capital asset to ordinary asset is
allowed
5. Which is TRUE? a. Only S1 is true c. Both are true
S1 – If a self-employed individual opted for 8%, the b. Only S2 is true d. Both are false
taxpayer is barred from amending the return
S2 – If an individual taxpayer opted OSD as his 12. In de minimis benefits, which is accurate? Maximum
method of deduction, the taxpayer is precluded from exemption in a year is:
amending the return a. Employee achievement award – Php 10,000
a. Only S1 is true c. Both are true annually
b. Only S2 is true d. Both are false b. Laundry allowance – Php 200 per month or a total
of Php 3,600
6. Which is TRUE? In applying tax arbitrage: c. Medical cash allowance to dependents – Php 1,500
S1- Interest income subject to 20% final tax is per quarter or a total of Php 6,000
considered d. Rice subsidy – Php 2,000 per month or a total of
S2 - Interest income subject to 15% final tax is Php 24,000
considered
a. Only S1 is true c. Both are true 13. Change in accounting period requires the approval of
b. Only S2 is true d. Both are false the Commissioner. In order for the application to be
approved, the change should be made:
7. Which is TRUE? In computing net operating loss (NOL) a. Not less than 60 days after the beginning of the
S1- Ordinary Allowable Itemized Deduction is proposed new accounting period
considered

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b. Not less than 60 days prior to the beginning of the Higher of GSP
Unutilized portion
proposed new accounting period or Zonal
of GSP of new PR
c. Within 60 days after the use of the new accounting a. X value or X 6%
divide by GSP of
period Assessor’s
old PR
d. Within 60 days before the use of the new FMV
accounting period Higher of GSP
Utilized portion of
or Zonal
14. ABC Corp. gave Nicanor, company janitor and a GSP of new PR
b. X value or X 6%
minimum wage earner, an additional Php 50.00 divide by GSP of
Assessor’s
tricycle allowance per day due to his remote old PR
FMV
assignment. The allowance should be treated?
Higher of GSP
a. As a de minimis benefit Unutilized portion
or Zonal
b. As a fringe benefit of GSP of old PR
c. X value or X 6%
c. As a regular compensation divide by GSP of
Assessor’s
d. As a supplementary compensation new PR
FMV
15. ABC Corp. gave Nicanor, company janitor and a Utilized portion of
d. X 6%
minimum wage earner, an additional Php 50.00 GSP of new PR
tricycle allowance per day due to his remote
21. Which is FALSE?
assignment. The allowance is?
a. Domestic corporate taxpayers who are exempt
a. Exempt if all other taxable compensation does not
from tax are disqualified from using optional
exceed Php 250,000
standard deduction
b. Exempt since it is relatively of small value and is
b. Domestic corporate taxpayers who are subject to
given to promote efficiency and contentment
preferential tax is not subject to MCIT
c. Exempt since Nicanor is a minimum wage earner
c. Returns of domestic corporate taxpayers are
d. Taxable because it is an additional compensation
required to be filed on or before the 15th day of
16. Excess de minimis benefits: the fourth month following the close of the taxable
a. Are part of Other Benefits under the Php 90,000 year
threshold and therefore can be exempted from d. The rate of limitation on domestic corporate
taxation taxpayers who made a donation is 10% of taxable
b. Are subject to fringe benefits tax (FBT) if the income before donation
recipient is a person holding managerial position
22. In 2023, ABC Corp. was assessed Deficiency Income
c. Are subject to withholding tax on compensation
Tax covering BIR audit for TY 2022. The detail of the
(WTC) if the recipient is a rank-and-file employee
assessment is indicated below:
d. Are subject to either FBT or WTC depending on the
classification of the employee Deficiency Income Tax Amount
Basic Income Tax 1,000,000.00
17. Which is TRUE? The FBT is imposed:
Surcharge 250,000.00
S1 - Whether employer is individual, professional
partnership or a corporation Interest 120,000.00
S2 – Whether the employer is the government of the Compromise Penalty 25,000.00
Philippines or one of its instrumentalities Total 1,395,000.00
a. Only S1 is true c. Both are true
b. Only S2 is true d. Both are false Assuming the total deficiency tax was paid, the
deductible amount for income tax purposes in TY 2023
18. Nicanor, a government employee, yearly files his is:
Statement of Assets, Liabilities and Net Worth (SALN). a. All except surcharge
An increase in networth is presumed an income under: b. All except surcharge and compromise penalty
a. Claim of Right Doctrine c. Interest only
b. Doctrine of Proprietary Interest d. None is deductible
c. Realization Test
d. Severance Test 23. Which is FALSE in charitable non-stock, non-profit
institution?
19. Which is NOT FALSE? a. Income from profit activity and income of property
a. An investment property where depreciation is is taxable even if used actually, directly and
recognized is still a capital asset so long that its exclusively for charitable purposes
idle b. Income from profit activity is taxable if the money
b. As a rule, assets are classified capital assets is not used for the accomplishment of its purpose
c. Expropriations of real properties by the c. Income of property used in business is taxable
government are exempt from taxation regardless of the use of the proceeds
d. Real properties seized by the government are d. Property which derived income is classified as
classified either as capital or ordinary asset ordinary asset
depending on use 24. All of the following are true regarding Optional
20. In computing capital gains tax on unutilized portion Standard Deduction (OSD), except:
on proceeds on sale of principal residence, the
correct formula is:

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a. An individual taxpayer who availed OSD is not S2 - He is not required to issue sales invoice if amount
required to submit audited financial statements of sale is less than Php 100
even if gross sales exceed Php 3,000,000. a. S1 only c. Both are true
b. Exempt taxpayers are qualified to use OSD. b. S2 only d. Both are false
c. In OSD, the individual taxpayer need not prove
the existence of the cost and expenses. 31. The COMELEC awarded the vote counting machines
d. Rate may be lower than 40%. contract to a South Korean company. What is the final
withholding tax rate the COMELEC needs to withhold
25. Nicanor registered with the BIR as self-employed in before rental payment to the South Korean company?
November of 2023. If he wants to avail 8% a. 4 1/2 % c. 20%
preferential tax, he must do so in his: b. 7 ½% d. 25%
a. 1st Quarterly Income Tax Return in 2023.
b. 1st Quarterly Income Tax Return in 2024. 32. Nicanor, the accountant of ABC Corp., provided
c. 4th Quarterly Income Tax Return. information and submitted indisputable proof to the
d. Annual Income Tax Return for 2023. BIR that his employer un-declared Php 100,000,000
in income and it was him who made the un-declaration
26. Which of the following is NOT an exemption
possible under the direction of the President. Under
requirement of foreign-sourced dividends?
the clothe of a valid e-Letter of Authority, the
a. Ownership of foreign corporation of at least 20%
Commissioner or his authorized representative
in value of the outstanding shares of the foreign
S1 – has the power to issue and subpoena the bank
corporation.
records of ABC Corp. and compel it to submit the bank
b. Period of uninterrupted ownership of shares is at
records.
least two years at the time of the dividends
S2 – Has the power to obtain information and can
distribution (unless the corporation is newly
inquire from banks regarding bank deposit accounts of
registered.)
ABC Corp.
c. The dividends were actually received or remitted
a. Only S1 is true c. Both are true
into the Philippines.
b. Only S2 is true d. Both are false
d. The dividends were used to reinvest in the
business operations of the foreign corporation. 33. S1 – Tax laws prevail over accounting standards.
27. Which is TRUE in excess income tax paid? S2 – Accounting standards prevail over tax laws.
S1 – ABC Corp., decided to carry-over the over- Which is FALSE?
payment, and application has been made in the a. Only S1 c. Both are true
succeeding period. Statement: The option is b. Only S2 d. Both are false
irrevocable (i.e. overpayment can no longer be 34. S1 - A person engaged in construction business can
refunded) use installment basis of accounting if the client pays
S2 – ABC Corp. decided to apply for refund or Tax on installment.
Credit Certificate (TCC) the overpayment. Statement: S2 - A person engaged in sale of real properties can
ABC can opt to revoke the initial option and carry-over use cash basis of accounting if customers pay on cash
the excess after notification to the Commissioner a. Only S1 c. Both are true
a. S1 only c. Both S1 and S2 b. Only S2 d. Both are false
b. S2 only d. Neither S1 and S2
35. Under Republic Act No. 10976 or the Ease of Paying
28. Which is TRUE in filing Individual Annual Income Tax
Taxes Act, a taxpayer shall be classified as Micro if:
Returns?
a. Gross sales exceeds Php 3,000,000
S1 – In all cases of multiple employers, an employee
b. Gross sales is at least Php 3,000,000
is required to file the corresponding income tax return.
c. Gross sales is at least Php 3,000,000 or below
S2 – Employees with multiple employers are
d. Gross sales is less than Php 3,000,000
disqualified from substituted filing even if the tax due
is equal to tax withheld after consolidation Use the following information to answer next seven (7)
a. S1 only c. Both S1 and S2 questions.
b. S2 only d. Neither S1 and S2
Nicanor is newly employed by ABC Corp. (DC), a Large
29. Which is FALSE in retirement benefits?
Taxpayer registered under the Large Taxpayer Services
S1 - All employers are required to provide retirement
(LTS). Upon assumption, he made a review of the 2023
pay to retiring employees
tax compliance of the company and found out the
S2 - Regular employee who has continuously rendered
following:
five (5) years in service may optionally retire and avail
retirement pay based on approved Retirement Plan Income Statement Amount
S3 - Part-time employees are entitled to retirement Gross Sales 25,000,000
subject to requirements Cost of Sales:
a. S1 only c. S1 and S3 only Beginning Inventory 3,000,000
b. S1 and S2 only d. None is false Purchases (Schedule 1) 15,000,000
30. Nicanor, VAT-registered online seller, earned taxable Available for Sale 18,000,000
income not exceeding Php 250,000. Which is FALSE? Ending Inventory 2,000,000 16,000,000
S1 - He is not required to file an annual income tax Gross Income 9,000,000
return (AITR) Expenses:
Salaries and wages 2,000,000

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Income Statement Amount 37. How much is the expanded withholding tax (EWT) on
Professional fees 1,000,000 its professional fees?
(Schedule 2) a. 60,000 c. 90,000
Representation expense 200,000 b. 80,000 d. 100,000
Rental 1,000,000
38. How much is the expanded withholding tax (EWT) on
Contractor’s fees 1,000,000
its contractor’s fees?
(Schedule 3)
a. 4,000 c. 10,000
Losses (from spoilage) 2,000,000 b. 12,000 d. 20,000
Utilities 1,000,000
Transportation and travel 100,000 39. How much is the disallowed representation expense?
Depreciation expense 1,000,000 a. 0 c. 80,000
Miscellaneous expense 1,000,000 10,300,000 b. 40,000 d. 85,000
Net loss (1,300,000)
40. How much is the total allowable deductions? Disregard
the income payments not subjected to withholding?
Breakdowns: a. 8,300,000 c. 9,220,000
Schedule 1: b. 9,215,000 d. 10,300,000
Purchase of goods to 5,000,000
regular suppliers 41. Computed the adjusted taxable income (net loss).
Purchase of goods to 1,000,000 Disregard the income payments not subjected to
other suppliers (less than withholding
10,000 each). Note: The a. (1,220,000) c. (1,300,000)
purchases last year were b. (1,225,000) d. (3,220,000)
seven and purchases this
year are only five 42. The income tax payable by ABC if it were to file its
Annual Income Tax Return is:
Imported goods 5,000,000
a. 0 c. 160,000
Purchase of service to 3,000,000
b. 120,000 d. 225,000
regular suppliers
Purchase of service to 1,000,000 Use the following information to answer next seven (7)
other suppliers (less than questions.
10,000 each) Note: The
purchases last year were A taxpayer is engaged in trading. The taxpayer has an idle
five and purchases this land and reports it an investment property. XYC Corp.
year are only six rented the vacant lot for two years and converted it into
Schedule 2: parking lot. The details of the taxpayer’s 2023 financial
Professional fees (to VAT- 200,000 transactions are hereunder disclosed:
registered GPP)
Gross sales Php 1,500,000
Professional fees (to VAT- 400,000
Cost of sales Php 800,000
registered individual
Gross income 700,000
professionals)
Other valid expenses 200,000
Professional fees (to Non- 400,000
Net income 500,000
VAT small-time
Rent income 1,000,000
practitioners)
Total income 1,500,000
Schedule 3:
Note: Total asset is less than Php 100M.
Security services 500,000
(including 20% agency 43. Assuming the taxpayer is Nicanor, how much is the
fee) taxable income if he opted 8% preferential tax?
Janitorial services 500,000 a. 750,000 c. 2,250,000
(including 20% agency b. 1,250,000 d. 2,500,000
fee)
44. In relation to the above, how much is the income tax
Other information: savings if he opted 8% preferential tax instead of
• Losses were actual and based on police report but not graduated tax using the itemized deductions?
with the BIR a. No tax savings c. 122,500
• Sales returns, allowances and discounts were omitted b. 97, 500 d. 147,500
in the amount of Php 2,000,000. Part of the amount
is Php 1,000,000 discounts granted to Senior citizens 45. Assuming further that Nicanor opted for Optional
and PWD’s Standard Deduction instead of itemized deduction?
• Income tax paid – Php 0 Which is TRUE?
a. Overspending of P100,00
36. How much is the expanded withholding tax (EWT) on b. Savings of P100,000
its purchases? c. No impact on taxation
a. 130,000 c. 160,000 d. He will earn more money
b. 140,000 d. 190,000

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46. Assuming furthermore that the rent income is an
operating income, how much is the income tax savings 53. How much is the capital gains tax on sale or
if Nicanor opted OSD as method of deduction? disposition of shares of stocks?
a. 0 c. 277,500 a. 0 c. 450,000
b. 100,000 d. 377,500 b. 300,000 d. 600,000

47. Assuming the taxpayer is Nicanor and his business is 54. The total gains derived from dealings in property to be
not registered with the BIR, how much is the minimum reported as item of gross income is?
income tax exposure? a. 4,000,000 c. 8,000,000
a. 0 c. 215,500 b. 6,000,000 d. 12,000,000
b. 180,000 d. 277,500 Use the following information to answer next three (3)
48. Assuming the taxpayer is ABC Corp., a DC, how much questions.
is the income tax payable? The details of a taxpayer’s incomes are reflected
a. 25,500 c. 375,000 hereunder:
b. 300,000 d. 450,000 Particular Amount
49. In relation to the above, if ABC Corp., opted for OSD, Interest from:
Bank in the Philippines (peso) 10,000
the tax savings is:
Bank in the Philippines (dollar) 10,000
a. 96,000 c. P255,000
Bank of America in the United States 10,000
b. 204,000 d. None due to overspending
Lending transactions 10,000
Use the following information to answer next five (5) Dividends:
questions. From domestic corporation 10,000
ABC Corp., a manufacturing company, has total assets of From foreign corporation 10,000
less than P100M. The details of some of its properties are Royalties
Active royalty 10,000
shown below:
Passive royalty 10,000
Type of Property Acquisition Fair Value Selling
Prizes
Cost Price
From raffle 10,000
1. Real P5,000,000 P10,000,000* 1,000,000
From competition 10,000
property
From an award in the field of science 10,000
(idle)
2. Real P5,000,000 P7,000,000* 10,000,000 55. How much is the total final tax required to be withheld
property by withholding agents assuming the taxpayer is
(available Nicanor, a resident citizen?
for lease) a. 6,500 c. 7,500
3. Real P5,000,000 P15,000,000* 10,000,000
b. 7,000 d. 8,500
property
(leased to 56. In relation to the above, how much is the total amount
XYZ) of income Nicanor is required to report as part of his
4. Shares of P5,000,000 P8,000,000 1,000,000 gross income?
stocks a. 50,000 c. 70,000
(unlisted - b. 60,000 d. 80,000
DC)
5. Shares of P5,000,000 P4,000,000 5,000,000 57. Assuming the taxpayer is a non-resident citizen, the
stocks total income exempt from Philippine taxation is:
(traded a. 10,000 c. 30,000
every week b. 20,000 d. 40,000
days)
6. Shares of P5,000,000 P6,000,000 7,000,000 Use the following information to answer next seven (7)
stocks questions.
(foreign
corp) Nicanor, a forty-six-year-old bachelor, is the Chief
*Higher of zonal and assessor’s fair value Financial Officer of ABC Corp., a resident foreign
50. How much is the total ordinary asset? corporation. As the Country Manager, he has the power to
a. 5,000,000 c. 15,000,000 grant general and special employee benefits. The following
b. 10,000,000 d. 30,000,000 are the details of his compensation:

51. Assuming ABC Corp. disposes all the real properties, Regular and Supplementary Other benefits
how much is the total capital gains tax that is required benefits
to be paid to the BIR? Basic Salary per month - Sick leave (30 days) –
a. 0 c. 1,200,000 100,000 monetization is allowed
b. 600,000 d. 2,100,000 13th month pay and other Vacation leave (30 days) –
benefits - 200,000 monetization is allowed
52. How much is the total tax credits that may be claimed Breakdown:
by ABC Corp. when it files its Annual Income Tax 13th month pay – 100,000
Return? Loyalty award – 50,000
a. 0 c. 900,000 Christmas bonus – 30,000
b. 600,000 d. 1,500,000

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Performance bonus –
20,000 62. How much is the fringe benefit tax to be reported
Statutory benefits (SSS, Rice subsidy per month – during the 4th quarter of 2023?
Philhealth) – 20,000 5,000 a. 3,774,615.38 c. 5,928,461.54
Cost of Living Allowance – Uniform allowance – b. 4,054,615.38 d. 5,939,230.77
20,000 20,000
63. How much is the total fringe benefit tax to be reported
Monthly housing allowance Actual medical assistance –
during the 1st quarter of 2024?
– 20,000 20,000
Monthly representation Employee Achievement
a. 74,487.18 c. 116,666.67
allowance – 20,000 award – Macbook – b. 81,666.67 d. 188,461.54
100,000 64. The retirement pay is?
All awardees received the
a. Exempt because he was forced to retire
same rewards
b. Exempt because the plan is reasonable and
Overtime – 50,000 Christmas gift – 20,000
rendered service for more than 10 years
Commission – 10,000
c. Exempts as it is considered as a separation pay
Monthly gasoline allowance
d. Taxable
– 20,000
Note: Amounts are in annual unless otherwise specified Use the following information to answer next six (6)
questions.
In addition, the Company has a reasonable retirement
benefit plan and is registered with the BIR. Nicanor earned the following income in 2023:
Dividends:
On top of the above, the Company paid the following for
ABC Corp., a DC – 1,000,000
Nicanor for the 4th quarter of 2023:
DEF Corp., an RFC – 1,000,000
Condominium (registered Acquisition cost is Php 5M GHI Corp., an NRFC – 1,000,000 (rate of tax in foreign
in his name) and FMV is P3M country is 15%)
Car (registered in his Acquisition cost is Php 5M Interest from bank deposits (converted into Philippine
name) peso):
Electricity of condominium 10,000 Peso deposit at Macabeybe Bank – a rural bank in
(monthly) Pampanga – 100,000
Golf Club share 1,000,000 Dollar deposit (under expanded foreign currency
(registered in his name) depositary system) at XYZ Bank– 100,000
In February of 2024, due to his lavish lifestyle, he started Dollar deposit in Japan Bank in Tokyo, Japan – 100,000
appropriating Company funds. The Company Chairman Royalties:
based in Japan found out of the missing funds hence he For use of his intellectual property – 1,000,000
decided to send Nobita, the Chief, Fraud Auditor to For his printed books – 1,000,000
For his songs – 1,000,000
determine extent of loss and effectively make
recommendations. 65. How much cash will Nicanor receive from ABC Corp.?
a. Php 0 c. Php 900,000
The Company booked Nobita in Okaduh Manila, a posh
hotel (Php 50,000 per night). The Company also rented an b. Php 100,000 d. Php 1,000,000
expensive car for his personal use (Php 20,000 per night). 66. How much dividend income is Nicanor required to
After five days, Nobita returned to Japan. He report?
recommended for Nicanor’s termination from employment a. Php 0 c. Php 2,000,000
due to violations of the Company’s policies. Nicanor b. Php 1,000,000 d. Php 3,000,000
profusely begged the Chairman for mercy. Instead of
termination, the Chairman forced him to retire. Nicanor 67. How much of the interest income can Nicanor
received Php 2,000,000 on his last day in March 31, 2024 withdraw from Macabeybe Bank?
as his retirement pay in consideration for his more than a. Php 0 c. Php 90,000
two decades of service. b. Php 80,000 d. Php 100,000

58. How much is Nicanor’s gross compensation income? 68. How much interest income is Nicanor required to
a. 2,567,363.64 c. 2,712,727.14 report to the BIR?
b. 2,612,272.59 d. 2,812,687.48 a. Php 0 c. Php 200,000
b. Php 100,000 d. Php 300,000
59. How much is the total exempt compensation?
a. 110,000.00 c. 269,454.55 69. How much is the total final taxes paid on his
b. 210,454.55 d. 320,454.55 royalties?
a. Php 200,000 c. Php 400,000
60. How much is the exempt de minimis benefits? b. Php 300,000 d. Php 500,000
a. 45,000.00 c. 100,454.55
b. 55,000.00 d. 145,909.10 70. How much royalty income is he required to report?
a. Php 0 c. Php 2,000,000
61. How much is the excess de minimis benefits? b. Php 1,000,000 d. Php 3,000,000
a. 165,000.00 c. 437,727.18
b. 255,909.09 d. All are taxable benefits

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