1.

Due to her inability to pay the debt, she was asked to clean the piggery for the latter for
three months. Thereafter,i gave her P5,000 cash and condoned the debt amounting to
P10,000. How much income should be declared by
a. P5,000
b. P10,000
c. P15,000
d. None

2. The rule on tax arbitrage, in relation to claiming interest expense as deduction from
gross income, applies to the following, except:
a. Domestic corporation subject to 25% regular income tax
b. Domestic corporation subject to 20% regular income tax
c. Resident foreign corporation
d. None of the above

3. Corporation is a resident foreign corporation. It shows the following for the taxable
year 2021:

PH Abroad
Gross income from business P10,000,000 P12,000,000
Dividend income – domestic 50,000 -
corporation
Royalty income 80,000 200,000
Business expense 8,700,000 9,800,000

Compute the taxable income of subject to the regular corporate income tax.

a. P1,300,000
b. P1,380,000
c. P3,700,000
d. P3,500,000

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Tax Review 1st Assessment – Holy Cross of Davao College