Professional Documents
Culture Documents
TAXATION
Second Pre-Board Examination
PROBLEMS
1. Statement 1: Congress can exercise the power of taxation even without
Constitutional delegation of the power to tax.
Statement 2: Only the legislature can exercise the power of taxation, eminent
domain and police power.
Which statement is correct?
a. Statement 1
c. Statements 1 and 2
b. Statement 2
d. Neither statement 1 nor 2
2. Which of the following normally pays real property tax?
a. Bantay Bata, a non-profit charitable institution
b. Jesus Crusade movement, a religious institution
c. University of Pangasinan, a private proprietary educational institution
d. SM Property Holdings, a registered property development company
3. An educational institution operated by a religious organization was being
required by a local government to pay real property tax. Is the assessment valid?
a. Yes, with respect to all properties held by such educational institution.
b. Yes, with respect to properties not actually devoted to educational purposes.
c. No, with respect to any properties held by such educational institution.
d. No, with respect to properties not actually devoted to educational purposes.
4. Which of the following violates Constitutional provisions?
a. Payment of salaries to priests of the Roman Catholic church employed by the
Armed Forces of the Philippines.
b. Subjecting the sale of religious literatures to income tax.
c. Imposition of license for the sale of religious literatures.
d. Authorizing the President of the Philippines to fix the rates of tariffs or
imposts.
5. Tax as to incidence is classified as
a. Fiscal or regulatory
c. National or local tax
b. Direct or indirect tax
d. Specific or ad valorem tax
6. Which of the following statement is correct?
a. In the power of taxation to destroy or not, the Marshall doctrine is
unconstitutional hence the Holmes doctrine is followed in practice.
b. An ex post facto tax law violates the constitution.
c. A tax bill personally drafted by the president shall become a law after
approval by congress.
d. It is in the public interest that errors of public officials should bind the
government.
7. Income tax may be imposed for the following purposes, except
a. To provide large amounts of revenues
b. To limit corruption
c. To offset regressive sales and consumption taxes
d. To mitigate the evils arising from the inequalities in the distribution of income
and wealth
8. Jen is engaged in business. The following pertains to her transactions during
2011:
Sold his personal car which was purchased at P200,000 to a friend who paid
only half of the cars P500,000 current fair value.
Sales of merchandise were P800,000 and the cost of goods sold were
P600,000.
1
Jen acquired several stocks from the Philippine Stock Exchange for
speculation. These stocks have aggregate purchase price of P400,000 but
with P700,000 fair value at December 31, 2011.
Jens house and lot which he acquired for P1,500,000 in 2010 now have
current fair value of P2,500,000.
40,000
1,100,000
256,000
1,920,000
P
50,000
200,000
70,000
P
400,000
200,000
50,000
Service fees
Interest income from bank
deposits
Deductible expenses
Non-deductible expenses
800,000
100,000
2011
2012
P
300,000( 360,00
0)
(
50,00
0)
P
400,000( 300,00
0)
70,000-
P
1,000,000
4
Cost of sales
Gain on sale of equipments
Interest income from bank
deposits
Deductible expenses
Non-deductible expenses
600,000
60,000
40,000
300,000
200,000
P
60,000
40,000
30,000
100,000
P
2,000,000
1,000,000
50,000
400,000
150,000
500,000
c. P195,000
d. P225,000
32. Iligan, Inc. became subject to MCIT in 2011. Assume Iligan will have the following
RCIT and MCIT data:
2011
2012
2013
2014
2015
RCIT
P
0
P 500
P 300
P 200
P 400
MCIT
400
600
200
350
350
Gross receipts
Less: Direct
expenses
Other
expenses
Net income
Inbound
flights
P9,000,0
00
4,000,00
0
Outbound
flights
P8,000,0
00
3,000,00
0
Total
P17,000,0
00
7,000,000
4,000,0
00
P
6,000,000
34. Makati Trading, Inc. reported the following on its fifth year of operation:
Sales
Cost of sales
Royalties from invention
Gain on sale of domestic stocks directly
to buyer
Rent income
Interest from customers promissory
notes
Business expenses
P
4,000,000
2,000,000
250,000
150,000
100,000
50,000
2,000,000
c. P15,000
d. P43,000