Boston University TAX TAX 101 **computation is based on PHILIPPINES INCOME TAX LAW1. If the taxpayer is a seller of services, which of the following shall not form part of its cost of services?a. Salaries and suppliesb. Employee benefitsc. Depreciation and rental expensesd. Interest expense2. MCIT shall applies to which of the following domestic corporations?I. Proprietary educational instit
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**computation is based on PHILIPPINES INCOME TAX LAW
1. If the taxpayer is a seller of services, which of the following shall not form part of its cost of services?
a. Salaries and supplies
b. Employee benefits
c. Depreciation and rental expenses
d. Interest expense
2. MCIT shall applies to which of the following domestic corporations?
I. Proprietary educational institutions
II. Non-profit hospitals
III. Depository banks under the expanded foreign currency deposit system (FCDS) on income from foreign currency
transactions with local commercial banks
IV. Firms that are taxed under a special income tax regime
a. I and II only c. All of the above
b. III and IV only d. None of the above
3. A PEZA registered enterprise has a registered and an unregistered activity. The MCIT shall apply to:
a. Registered activity
b. Unregistered activity
c. Both activities
d. Neither registered or unregistered activity
4. The following information were taken from the records of Tropikana Inc., a domestic corporation already in its fifth
year of operation:
Gross profit from sales P3,100,000
Capital gain on sale directly to a
buyer of shares in a domestic
corporation 100,000
Dividend from:
Domestic corporation 20,000
Resident foreign corporation 10,000
Interest on:
Bank deposit 20,000
Trade receivables 50,000
Business expenses 2,100,000
Income tax withheld 115,000
Quarterly income tax payments 160,000
Income tax payable prior year (10,000)
The income tax payable at the end of the year:
a. P318,000 c. P43,000
b. P63,200 d. P33,000
5. Short Time Services Inc., registered with BIR in 2013, has the following data for the year 2018:
Gross revenue P1,150,000
Discounts 100,000
Allowances 150,000
Salaries of personnel directly
involved in rendering service 300,000
Salaries of administrative personnel 100,000
Fees of consultants directly involved
in rendering service 50,000
Rental of equipment used in
rendering service 70,000
Rental of office space for use of
administrative personnel 50,000
Other operating expenses 420,000
How much was the income tax due and payable?
a. P27,000 c. P9,600
b. P6,600 d. Zero
6. Delta Corporation, already in its 5th year of operation as of 2019, has the following data:
2018 2019
Sales 1,700,000 2,300,000
Cost of Sales 1,050,000 1,425,000
Operating Expenses 675,000 480,000
The income tax payable in 2018 was -
a. P13,000 c. P35,000
b. P10,500 d. nil
7. The income tax payable in 2019 is -
a. P111,000 c. P98,000
b. P17,500 d. nil
Next four (4) questions are based on the following: Jolly Jeep Corporation has the following information for the taxable
year 2018:
QUARTER RCIT MCIT Creditable Withholding Tax
First 200,000 160,000 40,000
Second 240,000 500,000 60,000
Third 500,000 150,000 80,000
Fourth 300,000 200,000 70,000
Additional Information:
a) Excess MCIT for 2017, P60,000;
b) Excess tax credits from 2016 amounts to P20,000.
8. How much was the income tax payable for the first quarter?
a. P200,000 c. P120,000
b. P160,000 d. P80,000
9. How much was the income tax payable for the second quarter?
a. P660,000 c. P200,000
b. P460,00 d. P160,000
10. How much was the income tax payable for the third quarter?
a. P860,000 c. P600,000
b. P120,000 d. P140,000
11. How much was the annual income tax payable?
a. P1,260,000 c. P230,000
b. P390,000 d. P930,000
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