1. JB has has earned earned the followin following g income income in 200A: 200A: Sala Salary ry as a pr profe ofessor ssor,, net net of wit with hhold holdin ing g ta tax of of P P 0, 000 000 Professional fee as #PA, net 10$ of P0, 000 Per %iem as a &oard of director 'hirteenth month pay (irst pri)e in essay wri*ng contest Sale of ho+se and lot capital asset-
P!"0 P!"0,, 000 000 P2"0, 000 P200, 000 P!, 000 P0, 000 P00, 000
hat is the amo+nt of gross taxa&le compensa*on income s+&/ect to normal tax a. P P20, 000 c. P2, 000 &. P620, 000 d. P2, 000 2. 'he follow following ing items items of income income are are reporte reported d &y #+te, #+te, a #PA: #PA: Salary as an acco+ntant P10, 000 34er*me pay !0,000 1!th month pay and other &on+ses 1,000 A+dit retainers fee 0,000 #apital gains from sale of car 2,000 'he total compensa*on from employment is a. 150,000 c. 195, 000 &. 20 20,000 d. 2,000 !. 6orgeo+s 6orgeo+s report reported ed the the fol followin lowing g separa separa*on *on pay: pay: (irst employment for 20 years at the age of 0 7 resigned Second employment for 10 years years at the age of 0 7 8 9etrenchment 'hird employment for 10 years at the age of 0 7re*rement
P!00,000 200,000 100,000
ow m+ch is the taxa&le separa*on pay a. P 808 c. P00,000 b. P300,000 d. P00,000 . Ben) wor;s wor;s as the #<3 #<3 of B #o. is compens compensa*o a*on n income income of P0,000 P0,000 per month. month. =n Jan+ary Jan+ary !1, 200B, he &orrowed P!00,000 from B #o. As a res+lt, his monthly compensa*on income is red+ced &y P2,000 star*ng (e&r+ary, as payment to his &orrowing. =f on %ecem&er !1, 200B, a>er payment of P2,000 salary net of loan amor*)a*on. B #o. cancelled Ben)? inde&tedness, how m+ch is the la@er?s compensa*on compensa*on income in %ecem&er 200B c. P75,000 a. P2, 000 &. P0,000 d. P100,000 . A man+fact+ring man+fact+ring &+siness &+siness reported reported the following for its rst year of opera*on: P+rchases of raw materials P0,000 (reight in 20,000 9aw materials, ending in4entory 10,000 %irect la&or 00,000 (actory 34erhead 200,000 or;8in process, ending ing in4 in4ent entory 100,000 (inished goods, ending in4entory 0,000 Sales 1,2",000 (reight o+t 12,000 Sales ret+rn 2,000
=ts gross &+siness income is a. P2!5,000 b. P250,000
c. P225,000 d. P155,000
. Before star*ng to render his ser4ice, collected an ad4ance payment of P2,000 for the acceptance of the /o& contract. hen the reC+ired ser4ice from was completed, recei4ed P5,000 cash ser4ice fee a>er ded+c*ng the P2,000 ad4ance payment, pl+s an oDce machine with cash price 4al+e of P!,000 and P2,00 cost to the seller. 'he gross ser4ice income of is a. P1,000 c. P11,000 b. P1!,000 d. P10,00 ". ow m+ch of the following amo+nts recei4ed in 200B will &e incl+ded in tax ret+rn for the year 200B 9ent for year 200A P 50,000 9ent for year 200B 50,000 9ent for year 200# 0,000 9ef+nda&le deposit 120,000 a. P"20,000
c. P0,000 d. P20,000
b. P600,000
3n Earch 1, 200A, #la+de@e leases a por*on of its commercial &+ilding to Ear; with the following terms: Ad4ance deposit P0,000 Eonthly rental 20,000 Ann+al ins+rance premi+m to &e paid &y the lessee ,000 Por*on 10 mos.- of real estate tax to &e paid &y lessee !,000Fyr 'he lease contract also s*p+lates that a $ of Ear;?s net re4en+e will &e credited to #la+de@e as commission. Ear;?s net re4en+e d+ring the year is P2,000,000. 5. #la+de@e?s 200A rent income wo+ld &e c. P247,500 a. P G,000 &. P20,000 d. P!",00 G. Ass+me that the ad4anced deposit is restricted, the #la+de@e?s gross reporta&le taxa&le income wo+ld &e a. P!",00 c. P20",00 b. P307,500 d. P1G,000 10. 'he following informa*on are a4aila&le related to a 108year lease contract which commenced on J+ne !0, 200B: #ost of impro4ement p+t +p &y the lessee P150,000
P–0-
d. P150,000
P!,G"
11. 'he following are the income of a resident ci*)en for the period: =nterest =ncome from an in4estment in a 108year &ond 0,000 =nterest =ncome from a 8year *me deposit in Philippine &an; 0,000 =nterest =ncome from expanded foreign c+rrency &y deposit 0,000 is taxa&le interest income is a. 150,000 c. 0,000 &. 100,000 d. 8 0 8 Pacman is a resident (ilipino ci*)en, an in4estor, a song writer and an interna*onal singer. e recei4es royal*es within and o+tside the Philippines as follows: Philippines 3+tside 9oyal*es from pain relie4er in4en*on 100,000 200,000 9oyal*es from m+sical composi*ons 200,000 !00,000 9oyal*es from &oo;s 00,000 100,000 12. hat is the amo+nt nal tax on royalty income a. 50,000 c. 10,000 &. 90,000 d. 250,000 1!. hat is the amo+nt of royalty income s+&/ect to normal tax a. 8 0 8 c. 00,000 &. !00,000 d. 600,000 1. A domes*c corpora*on recei4ed 00,000 cash di4idend from a foreign corpora*on the earning of which are"0$ earned in the Philippines. 'he taxa&le di4idend income of the domes*c corpora*on is a. 500,000 c. 10,000 &. !0,000 d. 100,000 1. Eario recei4es the following pri)es and winnings d+ring the taxa&le year: (irst Pri)e in 'alentadong Pinoy 2nd place in &icycle race !rd place in chess to+rnament th place in a raHe draw hat is the total amo+nt s+&/ect to normal tax a. 10,000 c. !1,000 &. 16,000 d. !,000 1. 'he following informa*on is a4aila&le from the records of , Iear1 =ncome loss- &efore &ad de&ts wri@en o 100,000
10,000 ,000 1,000 ,000
Iear2 20,00010,000 !0,000
Iear! 0,000 ,000 5,000
(or year !, the total taxa&le income wo+ld &e a. 2,000 c. 48,000 &. ,000 d. 0,000 1". =n year 1, A company?s net opera*ng income reported was 20,000. 'he amo+nt is net of 100,000 opera*ng expenses. Part of the opera*ng expenses is 2,000 local taxes.
=n year 2, A company paid an income tax amo+n*ng to 12,000 and a KA' of 1,000. =n year !, ,000 of year 1 local tax and 2,000 income tax were ref+nded. hat amo+nt of tax ref+nd sho+ld &e reported as part of year ! taxa&le income a. 5,000 c. ,000 d. 5,000 &. ",000 15. recei4ed an ann+ity of ,550, incl+si4e of 12$ interest as part of the ins+rance plan entered into &y . hat amo+nt of this ann+ity is taxa&le against a. ,550 c. "0 d. 630 &. ,20 1G. Er. recei4ed a le@er from Er. I, his &rother, to withdraw L1,000 from the PMB. 'he teller of PMB, howe4er, iss+ed L10,000 to Er. in which the la@er too; the en*re money and spent LG,000 immediately. Ass+ming that the exchange rate is 0 per L1, how m+ch is the reporta&le income recei4ed &y error of Er. a. 0,000 c. 00,000 &. 450,000 d. 8 0 8 20. #ongress enacted a law imposing a $ tax on the gross receipts of common carriers. 'he law does not dene the term Ngross receipts.O er ded+c*ng the 20$ nal withholding tax from its *me deposits with the &an;. 'he B=9 wants to collect a $ gross receipts tax on the interest income of
d. Ies. 'he B=9 is granted wide la*t+de of discre*on to s+&/ect e4ery otem it deems proper to income taxa*on. A>er all, the amo+nt withheld is paid to the go4ernment on its &ehalf, in sa*sfac*on of its withholding taxes. 21. ao is a &ig8*me swindler. =n one year he was a&le to earn P1 Eillion from his swindling ac*4i*es. hen the #=9 disco4ered his income from swindling, the #=9 assessed him a deciency income tax for s+ch income. Ass+ming that the lawyer of ao protested the assessment on the gro+nd that the income tax applies only to legal income, not to illegal incomeQ is the conten*on correct a. *o. +ec. 32 o the */ #c%$des th# the !$r(e o gross #come a%% #come rom hate(er so$rce der(ed.
&. Mo. Rnder the M=9#, all proceeds of taxpayers are s+&/ect to income tax. c. Ies. 'he 'ax #ode recogni)es the Nprinciple of reali)a*onO &efore taxing an income. ence, since the income is not yet reali)ed, as there is s*ll o&liga*on to ret+rn the same, it sho+ld not &e s+&/ect to tax. d. Ies. 3nly income earned are s+&/ect to tax, whether legal or illegal. 22. S+ppose creditor is a corpora*on and de&tor is its stoc;holder, what is the tax implica*on in case the de&t is condoned &y the corpora*on a. #a% ta)
&. Mormal tax c. %onor?s tax d.
2!. AB# in4ested 1 million in 12$ long8term deposit BSP cer*cate with years mat+rity. hat is the applica&le income tax on its earnings a. 12$ &. 20$ c.
