COMPUTATION (5 points each item)

1. Fred paid P20, 000 annual premium on a

life insurance contract which would pay
him P1, 000, 000 in case of his death.
After paying for 4 years, Fred assigned
the policy to Carlos for P120, 000.
Compute the return on capital.
COMPUTATION (5points each item)
2. Ken received the following items during the year:
P200, 000 donation from a girlfriend
P150, 000 service fee from professional services
P300, 000 inheritance from his deceased father
P100, 000 income from illegal gambling
P50, 000 gain on sale of his personal car
P250, 000 profits from his bar restaurant
Compute the total income subject to income tax.
COMPUTATION (5 points each item)
3. Gunggong had the following data in taxable year
2021

Gross income, Phils Php 500,000

Gross income, U.S. Php 300,000
Expenses, Phils Php 250,000
Expenses, U.S. Php 150,000
Question: If the taxpayer is a resident citizen of the
Philippines who is married, his taxable income is-
COMPUTATION (5 points each item)
4. Miss A, single, had the following data during the
year:
Salary (net of withholding tax of Php 25,000) Php
191,000
13th month pay Php 18,000
Other benefits Php 67,000
Question: How much is the total 13th month pay and
other benefits not taxable to Miss Ty