TAXATION ATTY. MACMOD, C.P.A.

Additional Quizzer
Income Taxation 2017-Edition

1. Mr. Cortez, Filipino, single, has the following Selling price 480,000
transactions for the current year:
Business gross income P200,000 Cost 500,000
Allowable deductions (including bad Taxpayer will report a taxable income of:
debts of P10k, only was written a. P305,000 c. P360,000
off) 60,000 b. P335,000 d. P318,300
Loss from gambling 10,000
Other transactions: 4. ABS Corporation, a domestic corporation now on its 5th
Selling price, partnership interest 100,000 year of operation provided the following data:
Investment in partnership in 2005 20,000
Gain on sale of capital asset held for Gross sales P1,100,000
5 years 10,000 Sales returns and allowances 200,000
Loss on sale of capital asset held for Cost of goods sold 300,000
10 months 12,000 Gain on sale of capital assets held for
Loss on account of failure to exercise 7 months 10,000
3 month option to buy property 2,000 Loss on sale of capital assets held for
Liquidating dividend from Z Co. 150,000 15 months 5,000
Cost of investment in Z Co. in 2014 60,000 Interest income (BPI) 50,000
Allowable business expenses 580,000
Note: Last year, Mr. Cortez had a net income of P65,000
and a net capital loss of P92,000. Income tax due is:
a. P8,800 c. P12,000
The taxable net income is: b. P 7,500 d. P9,625
a. P196,000 c. P106,000
b. P141,000 d. P101,000 5. On October 1 of current year, Dragon Girl Co. leased a
residential house for the use of one of its executives,
2. A Taxpayer, married with a 2 year old child, has the
Mr. Kurukuru, a special alien employee. The rent
following transactions for the current year: agreed upon was P170,000 per month. The FBT
Salaries received as employee P200,000 monthly is:
Sales 1,440,000 a. P 54,400 c. P40,000
Cost of goods sold 660,000 b. P524,000 d. P15,000
Deductions:
Operating Expenses 440,000 6. Lito an official of ABC Corporation asked for an earlier
Loss due to fire (properly reported) 60,000 retirement because he was emigrating to Canada, he
Contributions: was paid to P2M separation pay in recognition of his
To a government priority project in valuable services to the corporation plus P300,000 13 th
education 12,000 month pay, Nelson another official was separated due
To Quiapo church 42,000 to his failing eyesight. He was given P1M separation
Other income: pay. Rico was separated for violating company rules
Rent 36,000 but was given P300,000 separation pay. Ben opted to
Capital gain from sale of CAR Family retire at 55 years old after working for 10 years in the
held for 3 years 96,000 company. He received P1M. The total income subject
to withholding tax on the above payment is :
The taxpayer will report a taxable net income of: a. P 2,600,000 c. P3,300,000
a. P472,000 c. P445,400 b. P2,270,00 d. P2,518,000
b. P480,400 d. P278,400
7. On January 1, 2015, lessor leased a lot with a building
3. Taxpayer, individual, married but legally separated, thereon for a period of 10 years. It was agreed that
supporting his mother, has the following transactions the lessee will pay the following:
for the current year: a) Rent of P240,000 per year
b) Fire Insurance premium in the building of P16,000
Sales P2,000,000 per year
Cost of sales 1,150,000 c) Real property tax of P10,000 per year
Operating expenses 560,000 Lessee will also construct a warehouse on the land
Interest income from BDO 10,000 at a cost P3,600,000 with a useful life of 10 years
Interest Expense 20,000 completed on June 30, 2017, which shall belong to
Other transactions: the lessor at the end of the lease.
a. Sale of office equipment held for 5
years: The Lessor shall report for year 2017, as income from
Selling price 100,000 lease the total amount of:
Cost 120,000 a. P 336,000 c. P 326,000
Accumulated deprecation 80,000 b. P 366,000 d. P 1,296,000
b. Sale of family van held for 3 years:
Selling price 300,000 8. Based on the above problem the lessee can deduct the
Cost 210,000 total rental expenses of:
c. Sale of family car held for 18 a. P 516,000 c. P 636,000
months: b. P 506,000 d. P 756,000
 Holiday pay 10,000
9. Mr. X insured himself for P1M. After several months he Commission income as additional
died when he was able to pay a total amount of compensation income from the same 50,000
P100,000. His beneficiary, his brother received the company
P1M insurance proceeds. Mr. Y on the other hand Professional income as dentist 250,000
insured himself for P1M. After 20 years he survived the Prof. expenses 50,000
insurance policy and received return on his premiums. Tax payer is single with legally adopted child.
He received P1M from the insurance company although 15. His Taxable Net Income is ________________
he was only able to pay P700,000. a. P350,000 c. P340,000
The total income subject to tax is _______________? b. 320,000 d. P300,000
a. P 300,000 c. P 1,200,000
b. P 1,300,000 d. P 900,000 16. If he has no commission income, his Taxable Net
Income is ___________
10. A tax payer was a victim of a vehicular accident who a. P150,000 c. P120,000
filed a case against the offender. The court awarded b. 270,000 d. P100,000
him the following;
a. Actual damages for expenses paid in 17. If he has no commission income & professional
the hospital P 200,000 income, his Taxable Net Income is_______________
b. Attorneys fee he paid to his a. P70,000 c. P120,000
lawyer 50,000 b. 50,000 d. P 0
c. Actual damages for lost arm 250,000
d. Moral damages 100,000 18. Which is a taxable fringe benefit?
e. Exemplary damages 100,000 a. those given to rank and file employees
f. Salaries for 6 months when the tax b. contribution of employer to health and
payer was in the Hospital, absent hospitalization and vacation expenses of employee
from his job w/ a monthly salary of P 50,000 c. those exempted under special and laws.
300,000 d. De minimis benefits
The total income subject to tax is _______________?
a. P 300,000 c. P 700,000 19. Which of the following statements is incorrect?
b. P 500,000 d. P 100,000 a. To be subject to final tax passive income must be
from Philippine sources.
11. A tax payer provided the following data b. An income which is subject to final tax is excluded
Sales P 12M from the computation of income subject to Section
Sales returns & discounts P 2M 24 (A).
COGS P 4M c. Lotto winnings in foreign countries are exempt
Operating expenses P 2M from income taxation in the Philippines.
d. An income which is subject to non creditable
Using Optional Standard Deduction, the taxable net withholding tax is excluded in the computation of
income if the taxpayer is a corporation is income subject to Section 24 (A).
_______________.
a. P 3,600,000 c. P 5,900,000 20. Which of the following statements is not correct?
b. P 5,850,000 d. P 6,000,000 a. Interest income from long term deposit is exempt
from income tax.
12. Based on the same data above, using OSD, the taxable b. Winnings from Philippine Charity Sweepstakes are
net income if the taxpayer is individual, married w/5 exempt from income tax.
minor children is ____________________. c. Royalties on books, literary works and musical
a. P 5,900,000 c. P 3,600,000 composition are subject to 10% creditable
b. P 5,100,000 d. P 5,050,000 withholding tax.
d. A prize of P10,000 is subject to basic tax.
13. Mr. X provided the following data:
Salaries P450,000 21. Which of the following income of an individual taxpayer
Fringe benefits as Vice Pres. 75,000 is subject to final tax?
Rice Subsidy for 1 yr(P2k x 12 mos.) 24,000 a. P10,000 prize in Manila won by a resident citizen.
13th month pay & other bonuses 100,000 b. Dividend received by a resident citizen from a
Representation and travel allowance resident corporation.
(RATA) 20,000 c. Shares in the net income of a general professional
Int. inc. from BPI (30% longterm) 200,000 partnership received by a resident alien.
Royalty income (10% books) 100,000 d. Dividend received by a non-resident alien from a
domestic corporation.
The salaries are net of P50,000 withholding tax but gross 22. A Corp. prov. the following data:
of P10,000 SSS, union dues & Pag-ibig contributions. Mr. Sales P10,000,000
Mr. X is married with 5 minor children. COGS 4,000,000
Other income
The Taxable Net Income is _____________. Rent 1,000,000
a. P364,000 c. P664,000 Int. Income, BPI 2,000,000
b. P314,000 d. P382,000 Royalty Income 500,000
Oper. Exp. 6,900,000
14. The Final Tax (total) on Passive Income Compute:
a. P47,000 c. P50,000 a. NIT
b. P60,000 d. P48,000 b. MCIT
c. Income tax due excluding
Mr. Bayabas provided the following data. Final taxes
Salary for the year (P10,000 for 12 d. Total taxes due
months, MWE-P10,000/mo.) P120,000 Including final taxes
Overtime pay 20,000 e. Is your answer for Income Tax due (c)
Hazard pay 20,000 Same if the Corp. is a hospital? Why?