TEST BANK-INCOME TAXATION
CHAPTER 1-GENERAL PRINCIPLES AND CONCEPTS OF
TAXATION
A.MULTIPLE CHOICE:
1. THE PROCESS BY WHICH THE SOVEREIGN RAISES INCOME TO
DEFRAY THE EXPENSES OF THE GOVERNMENT IS CALLED- (RPCPA)
A.
B.
C.
D.
SUBSIDY
TARIFF
TAXATION
TRIBUTE
2. ONE OF THE CHARACTERISTICS OF INTERNAL REVENUE TAX IS
THAT THEY ARE-(RPCPA)
A)
B)
C)
D)
CRIMINAL IN NATURE
PENAL IN NATURE
POLITICAL IN NATURE
GENERALLY PROSPECTIVE IN APPLICATION
3. IN CASE OF CONFLICT BETWEEN THE TAX LAWS AND GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES (GAAP)-(RPCPA)
A)
B)
C)
D)
BOTH TAX LAWS AND GAAP SHALL BE ENFORCED
GAAP SHALL PREVAIL OVER TAX LAWS
TAX LAWS SHALL PREVAIL OVER GAAP
THE ISSUE SHALL BE RESOLVED BY THE COURT
4. WHICH OF THE FOLLOWING HAS NO POWER OF TAXATION?(RPCPA)
A)
B)
C)
D)
PROVINCES
CITIES
BARANGAYS
BARRIOS
5. “SCHEDULAR SYSTEM OF INCOME TAXATION” MEANS(RPCPA)
A) ALL TYPES OF INCOME ARE ADDED TOGETHER TO ARRIVE AT
GROSS INCOME
B) SEPARATE GRADUATED RATES ARE IMPOSED ON DIFFERENT
TYPES OF INCOME
C) CAPITAL GAINS ARE EXCLUDED IN DETERMINING GROSS
INCOME
D) COMPENSATION INCOME AND BUSINESS/PROFESSIONAL
INCOME ARE ADDED TOGETHER IN ARRIVING AT GROSS
INCOME
6. ONE OF THE FOLLOWING IS A PRIMARY PURPOSE OF TAXATION
A)PROTECTION
OF
LOCAL
INDUSTRIES
AGAINST
FOREIGN
COMPETITION THROUGH IMPOSITION OF HIGH CUSTOMS DUTIES ON
IMPORTED GOODS
B)REDUCTION OF INEQUALITIES IN WEALTH AND INCOME BY
IMPOSING PROGRESSIVELY HIGHER TAX RATES
C) TO SECURE REVENUE FOR THE SUPPORT OF THE GOVERNMENT
D) STRENGTHENING OF ANEMIC ENTERPRISES BY GIVING TAX
EXEMPTION
7. WHICH OF THE
TAXATION?
FOLLOWING IS NOT A SECONDARY PURPOSE OF
A) TO SERVE AS KEY INSTRUMENT OF SOCIAL CONTROL
B) TO EFFECT A MORE EQUITABLE DISTRIB UTION OF WEALTH
AMONG PEOPLE
C) TO ACHIEVE SOCIAL AND ECONOMIC STABILITY
D) TO RAISE REVENUE TO DEFRAY THE NECESSARY EXPENSE OF
THE GOVERNMENT
8. WHICH IS THE BEST ANSWER? A TAX REFORM AT ANY GIVEN TIME
UNDERSCORES THE FACT THAT-(RPCPA)
A)
B)
C)
D)
TAXATION IS AN INHERENT POWER OF THE STATE
TAXATION IS ESSENTIALLY A LEGISLATIVE POWER
TAXATION IS A POWER THAT IS VERY BROAD
THE STATE CAN AND SHOULD ADOPT PROGRESSIVE TAXATION
9.
THE LEGISLATIVE BODY CAN IMPOSE A TAX AT ANY
AMOUNT UNDERSCORES THE LEGAL DICTUM THAT TAXATION IS –
(RPCPA)
A)
B)
C)
D)
AN INHERENT POWER OF THE TAX
A VERY BROAD POWER OF THE STATE
ESSENTIALLY A LEGISLATIVE POWER
FOR PUBLIC PURPOSE
10.
ALL OF THE FOLLOWING, EXCEPT ONE, ARE BASIC
PRINCIPLES OF THE SOUND TAX SYSTEM
A) FISCAL ADEQUACY
B) THEORETICAL JUSTICE
C) ADMINISTRATIVE FEASIBILITY
D) INHERENT IN SOVEREIGNTY
11. UNDER THIS BASIC PRINCIPLE OF SOUND TAX SYSTEM, THE
GOVERNMENT SHOULD NOT INCUR A DEFICIT-(RPCPA)
A)
B)
C)
D)
THEORETICAL JUSTICE
ADMINISTRATIVE FEASIBILITY
FISCAL ADEQUACY
NONE OF THE ABOVE
12. THE FOLLOWING, EXCEPT ONE, ARE BASIC PRINCIPLES OF A SOUND
TAX SYSTEM
A) IT SHOULD BE CAPABLE OF BEING EFFECTIVELY ENFORCED
B) IT MUST BE PROGRESSIVE
C) SOURCES OF REVENUE MUST BE SUFFICIENT TO
GOVERNMENT EXPENDITURES AND OTHER PUBLIC NEEDS
D) IT SHOULD BE EXERCISED TO PROMOTE PUBLIC WELFARE
MEET
13.
WHICH OF THE FOLLOWING IS NOT ONE OF THE CANONS OF A
SOUND TAX SYSTEM?
A)
B)
C)
D)
14.
QUANTIFIABILITY
EQUALITY
CERTAINTY
CONVENIENCE
THE POWER OF TAXATION CAN ONLY BE EXERCISED BY THE
LAWMAKING BODY
A)
B)
C)
D)
SUBJECT TO CONSTITUTIONAL AND INHERENT LIMITATIONS
EQUALITY OR THEORETICAL JUSTICE
LEGISLATIVE IN CHARACTER
INHERENT IN SOVEREIGNTY
15. THE PRESIDENT OF THE PHILIPPINES AND THE PRIME MINISTER OF
JAPAN ENTERED INTO AN EXECUTIVE AGREEMENTIN RESPECT OF A
LOAN FACILITY TO THE PHILIPPINES FROM JAPAN WHEREBY IT WAS
STIPULATED THAT INTEREST ON LOANS GRANTED BY PRIVATE
JAPANESE FINANCIAL INSTITUTIONS IN THE PHILIPPINES SHALL
NOT BE SUBJECT TO PHILIPPINE INCOME TAXES. WHAT BASIC
CHARACTERISTIC OF TAXATION HAS BEEN VIOLATED BY THIS
AGREEMENT?
A)
B)
C)
D)
INHERENT LIMITATION
THEORETICAL JUSTICE
LEGISLATIVE IN CHARACTER
ADMINISTRATIVE FEASIBILITY
16. WHICH STATEMENT GIVES THE CORRECT ANSWER? THAT A
FEASIBILITY STUDY NEEDS OR NEED TO LOOK INTO THE TAXES OF
DIFFERENT POLITICAL SUBDIVISIONS OF GOVERNMENT WHICH MAY
BE ALTERNATIVE SITES OF BUSINESS BECAUSE-(RPCPA)
A) PROVINCES, CITIES AND MUNICIPALITIES MUST HAVE UNIFORM
TAXES BETWEEN AND AMONG THEMSELVES
B) THE LOCAL TAXES OF A POLITICAL SUBDIVISION NEED NOT BE
UNIFORM WITH THE LOCAL TAXES OF ANOTHER POLITICAL
SUBDIVISION
C) BUSINESSES THAT ARE SUBJECT TO NATIONAL TAXES ARE
EXEMPTED FROM LOCAL BUSINESS TAXES
D) LOCAL BUSINESS TAXES MAY BE CREDITED AGAINST NATIONAL
BUSINESS TAXES
17. STATE,MENT 1:THE POWER OF TAXATION IS INHERENT IN
SOVEREIGNTY BEING ESSENTIAL TO THE EXISTENCE OF EVERY
GOVERNMENT. HENCE, EVEN IF NOT MENTIONED IN THE
CONSTITUTION, THE STATE CAN STILL EXERCISE THE POWER.
STATEMENT 2:IT IS ESSENTIALLY A LEGISLATIVE FUNCTION. EVEN
IN THE ABSENCE OF ANY CONSTITUTIONAL PROVISION, TAXATION
POWER FALLS TO CONGRESS AS PART OF THE GENERAL POWER OF
LAWMAKING.-(RPCPA)
A)
B)
C)
D)
FALSE, FALSE
FALSE, TRUE
TRUE, TRUE
TRUE, FALSE
18. THOSE RESTRICTIONS ON THE EXERCISE OF THE POWER OF
TAXATION THAT AREW FOUND IN THE CONSTITUTION OR IMPLIED
FROM ITS PROVISIONS
A)
B)
C)
D)
THEORETICAL JUSTICE
LEGISLATIVE IN CHARACTER
INHERENT LIMITATIONS
CONSTITUTIONAL LIMITATIONS
19. WHICH OF THE FOLLOWING STATEMENTS IS NOT CORRECT?-(RPCPA)
A) TAXES MAY BE IMPOSED TO RAISE REVENUE OR TO PROVIDE
DISINCENTIVES TO CERTAIN ACTIVITIES WITHIN THE STATE
B) THE STATE CAN HAVE THE POWER OF TAXATION EVEN IF THE
CONSTITUTION DOES NOT NECESSARILY GIVE IT THE POWER TO
TAX
C) FOR THE EXERCISE OF THE POWER OF TAXATION, THE STATE CANJ
TAX ANYTHING AT ANY TIME
D) THE POWER OF TAXATION IN THE PHILIPPINE CONSTITUTION ARE
GRANTS OF POWER AND NOT LIMITATIONS ON TAXING POWERS
20. ONE OF THE FOLLOWING IS NOT AN INHERENT LIMITATION ON THE
EXERCISE OF THE POWER OF TAXATIONA)
B)
C)
D)
INTERNATIONAL COMITY
DOUBLE TAXATION
NON-DELEGATION OF THE LEGISLATIVE POWER TO TAX
TERRITORIALITY
21. THE CITY COUNCIL PASSED AN ORDINANCE IMPOSING AN
OCCUPATION TAX ON AN AIRCONDITIONING TECHNICIAN. CONDE IS
THE ONLY PERSON WITH SUCH OCCUPATION IN THE CITY. HE
CHALLENGED THE VALIDITY OF THE ORDINANCE AS BEING
DISCRIMINATORY SINCE HE IS THE ONLY ONE ADVERSELY
AFFECTED.
A) THE CONTENTION OF CONDE IS TENABLE
B) THE ORDINANCE IS UNCONSTITUTIONAL BECAUSE CONDE IS
DENIED OF HIS RIGHT TO EQUAL PROTECTION OF LAW
C) THE CONTENTION OF CONDE IS NOT JUSTIFIED BECAUSE THE
RULE ON UNIFORMITY IS NOT VIOLATED CONSIDERING THAT
THE
ORDINANCE
WOULD
ALSO
IMPOSE
ON
ALL
AIRCONDITIONING TECHNICIAN WHO MAY COME WITHIN THE
JURISDICTION OF THE CITY
D) THE ISSUE ON VALIDITY OR INVALIDITY OF THE ORDINANCE
SHOULD BE SET ASIDE
22. TREATING PERSONS WHO ARE SIMILARLY SITUATED IN THE SAME
MANNERA)
B)
C)
D)
UNIFORMITY OF TAXATION
EQUALITY OF TAXATION
DUE PROCESS OF LAW
NON-DELEGATION OF LEGISLATIVE POWER
23. WHICH OF THE FOLLOWING IS VIOLATIVE OF THE UNIFORMITY
RULE IN TAXATION?
A) DIFFERENT TAX RATES ON BOARDING STABLES FOR
RACEHORSES AND BOARDING HORSES THAT ARE NOT FOR
RACING
B) WHOLESALE DEALERS IN OIL ARE SUBJECT TO OCCUPATION
TAX WHILE WHOLESALE DEALERS IN OTHER ARTICLES SCU AS
SUGAR, BACON, COAL, IRON AND OTHER THINGS ARE NOT SO
SUBJECT
C) A ROAD USERS’ TAX IMPOSED ON ALL MOTOR VEHICLES
REGISTERED AND OPERATING IN THE CITY OF MANILA BUT
DOES NOT SUBJECT VEHICLES NOT REGISTERED THEREIN BUT
ALSO OPERATING TEMPORARILY IN SAID CITY
D) A TAX OF P2 PER SQM OR FRACTION THEREOF IS IMPSED ON
EVERY BILLBOARD OR SIGN ANYWHERE IN THE COUNTRY
24. THE LUNG CENTER OF THE PHILIPPINES, A CHARITABLE
INSTITUTION, IS ERECTED IN THE MIDDLE OF A 12-HECTARE LOT:
I.
II.
III.
IV.
A BIG SPACE AT ITS GROUND FLOOR IS BEING LEASED TO
PRIVATE PARTIES, FOR CANTEEN AND SMALL STORE SPACES,
AND TO MEDICAL OR PROFESSIONAL PRACTITIONERS WHO
USE THE SAME AS THEIR PRIVATE CLINICS FOR THEIR
PATIENTS WHOM THEY CHARGE FOR THEIR PROFESSIONAL
FEES.
THE REST OF THE PORTIONS OF THE BUILDING ARE USED FOR
ITS PATIENTS, WHETHER PAYING OR NON-PAYING
ALMOST ½ OF THE ENTIRE AREA OF THE LOT ON THE LEFT
SIDE OF THE BUILDING IS VACANT AND IDLE
A BIG PORTION ON THE RIGHT SIDE IS BEING LEASED FOR
COMMERCIAL PURPOSES TO A PRIVATE ENTERPRISE KNOWN
AS THE ELLIPTICAL ORCHIDS & GARDEN CENTER
WHICH PORTION IS SUBJECT TO REAL PROPERTY TAX?
A)
B)
C)
D)
I ONLY
I AND II
III AND IV
I, III AND IV
25. STATEMENT 1:THE CONSTITUTIONAL EXEMPTION ON INCOME
TAXES, PROPERTY TAXES AND CUSTOMS DUTIES IS ALLOWED ON
NON-STOCK, NON-PROFIT EDUCATIONAL INSTITUTIONS ONLY.
STATEMENT 2: A BUILDING BEING LEASED BY ITS OWNER TO A PRIVATE
EDUCATIONAL INSTITUTION FOR USE AS CLASSROOMS IS EXEMPT FROM
PROPERTY YAX
STATEMENT 3: INCOME OF A NON-STOCK, NON-PROFIT EDUCATIONAL
INSTITUTION RUN BY THE ARCHDIOCESE IS EXMEPT FROM TAX PROVIDED
THAT INCOMES ARE ACTUALLY, DIRECTLY AND EXCLUSIVELY USED FOR
EDUCATIONAL PURPOSES
WHICH OF THE STATEMENTS ARE CORRECT?
A)
B)
C)
D)
STATEMENT 1 ONLY
STATEMENTS 1 AND 2
STATEMENT 2 ONLY
ALL OF THEM
26. WHICH OF THE FOLLOWING STATEMENTS IS NOT CORRECT?-(RPCPA)
A) AN INHERENT LIMITATION OF TAXATION MAY BE DISREGARDED BY
THE APPLICATION OF A CONSTITUTIONAL LIMITATION
B) THE PROPERTY OF AN EDUCATIONAL INSTITUTION OPERATED BY A
RELIGIOUS ORDER IS EXEMPT FROM PROPERTY TAX, BUT ITS
INCOME IS SUBJECT TO INCOME TAX
C) THE PROHIBITION OF DELEGATION BY THE STATE OF THE POWER OF
TAXATION WILL STILL ALLOW THE BIR TO MODIFY THE RULES ON
TIME FOR FILING OF RETURNS AND PAYMENT OF TAXES
D) THE POWER OF TAXATION IS SHARED BY THE LEGISLATIVE AND
EXECUTIVE DEPARTMENTS OF GOVERNMENT
27. ST. BARNABAS COLLEGE (SBC) IS A NON-STOCK, NON-PROFIT
EDUCATIONAL INSTITUTION. IT OWNS A 5-HECTARE LOT ½ OF
WHICH IS BEING USED AS ITS SCHOOL CAMPUS WHILE THE OTHER
HALF IS VACANT. TO COPE WITH THE INCREASING OPERATING
COSTS AND TO UPGRADE ITS FACILITIES, SBC PLANS TO DO THE
FOLLOWING EFFECTIVE JANUARY 1, 2006; 1). RENT OUT TO A
MARKETING FIRM THE VACANT PORTION OF THE LAND; 2)
INJCREASE TUITION FEES BY 10% IN ACCORDANCE WITH
GOVERNMENT REGULATIONS;.3)IMPORT 20 SETS OF COMPUTERS
FOR USE IN ITS COMPUTER COURSES.
WHICH OF THE FOLLOWING QUESTIONS IS ANSWERABLE BY “YES.”?
A) IS SBC SUBJECT TO REAL ESTATE TAX ON THE ½ PORTION TO
BE RENTED OUT TO A BUSINESS ESTABLISHMENT?
B) WILL IT BE EXEMPT FROM INCOME TAX ON ITS RENTAL TO
THE MARKETING FIRM?
C) WILL THE INCREASE IN TUITION FEES BE SUBJECT TO INCOME
TAX IF IT RESULTS TO NET INCOME FROM SCHOOL
OPERATIONS?
D) WILL IT BE SUBJECT TO CUSTOMS DUTIES ON THE
IMPORTATION OF THE COMPUTERS?
28. THE QUEZON SCHOOL OF BUSINESS AND ARTS, A PROPRIETARY
EDUCATIONAL INSTITUTION WHICH IS OFFERING PRIMARY,
SECONDARY AND TERTIARY EDUCATIONB, IS REGISTERED AND
ACCREDITED BY DEPED AND CHED.
WHICH OF THE FOLLOWING IS EXEMPT FROM TAX? WHAT KIND OF
TAX?
A) THE IMPORTATION OF LABORATORY EQUIPMENTS-FROM
CUSTOMS DUTIES
B) THE SCHOOL BEING RENTED BY THE SCHOOL-FROM REAL
PROPERTY TAX
C) A PORTION OF THE SCHOOL BUILDING BEING LEASED TO A
FASTFOOD CHAIN-FROM REAL PROPERTY TAX
D) THE INCOME FROM OPERATION-FROM INCOME TAX
29. IN RELATION TO NO. 28 ABOVE, ASSUMING THAT THE
SCHOOL IS A NON-STOCK, NON-PROFIT EDUCATIONAL
INSTITUTION, WHICH OF THE FOLLOWING IS SUBJECT
TO TAX ? WHAT KIND OF TAX?
A) THE SCHOOL BUILDING OWNED BY THE SCHOOL-FROM
REAL ESTATE TAX
B) THE SCHOOL BUILDING BEING RENTED BY THE SCHOOLFROM REAL ESTATE TAX
C) A PORTION OF THE SCHOOL BUILDING BEING LEASED TO A
FASTFOOD CHAIN-FROM REAL PROPERTY TAX
D) THE INCOME FROM OPERATION-FROM INCOME TAX
30.
THE MUNICIPALITY OF SAN FRANCISCO HAS A 10HECTARE CEMETERY OF 4 DIFFRRENT CEMETERIES WHICH
ARE OWNED BY DIFFERENT ENTITIES. WHICH OF THE
FOLLOWING IS SUBJECT TO REAL ESTATE TAX?
A) CEMENTERIO MUNICIPAL DEL SAN FRANCISCO-A GOV’T
CEMETERY OWNED BY THE MUNICIPALITY WHICH WAS
ESTABLISHED FOR THE PURPOSE OF USING IT AS BURIAL
GROUND OF THE PAUPERS OF SAN FRANCISCO
B) SAN FRANCISCO CATHOLIC CEMETERY-OWNED BY THE
CATHOLIC CHURCH; PAYMENTS ARE REMITTED TO THE
CATHOLIC CHURCH AND FOR THE IMPROVEMENT OF THE
CEMETERY
C) LAST TRIP MEMORIAL PARK-OWNED BY A CORPOR5ATION
WHERE DIVIDENDS ARE DISTRIBUTED TO THE SHAREHOLDERS
AT THE END OF THE YEAR
D) QUITA-QUITA MEMORIAL PARK-OWNED BY AN ASSOCIATION
CONSISTING OF 100 DIFFERENT FAMILIES; EACH FAMILY OWNS
SEVERAL SQUARE METERS OF LOT; NOT A SINGLE PORTION IS
HELD FOR SALE TO EITHER MEMBER OR NON-MEMBERS OF
THE ASSOCIATION
31.ALL APPROPRIATIONS, REVENUE OR TARIFF BILLS, BILLS
AUTHORIZING INCREASE OF PUBLIC DEBT, BILLS OF LOCAL
APPLICATION, AND BILLS SHALL ORIGINATE EXCLUSIVELY IN THE(RPCPA)
A)
B)
C)
D)
OFFICE OF THE PRESIDENT
HOUSE OF REPRESENTATIVES
SENATE
SUPREME COURT
32 WHICH STATEMENT IS WRONG? TAX LAWS-(RPCPA)
A) MUST ORIGINATE FROM THE HOUSE OF REPRESENTATIVES AND ON
WHICH SAME BILL THE SENATE MAY PROPOSE AMENDMENTS
B) MAY ORIGINATE FROM THE SENATE AND ON WHICH SAME BILL THE
HOUSE OF REPRESENTATIVES MAY PROPOSE AMENDMENTS
C) MAY HAVE A HOUSE VERSION AND SENATE VERSION APPROVED
SEPARATELY
D) MAY BE RECOMMENDED BY THE PRESIDENT TO CONGFRESS
33.CONGRESSMAN ERIN TANADA OF QUEZON AND SENATOR JUAN
PONCE ENRILE SPONSORED A BILL IN THE HOUSE OF
REPRESENTATIVES AND THE SENATE, RESPECTIVELY, INCREASING THE
PERSONAL EXEMPTIONS OF INDIVIDUAL TAXPAYERS AS WELL AS
GRANTING TAX EXEMPTION TO MINIMUM WAGE EARNERS. WHICH OF
THE FOLLOWING IS CORRECT?
A) THE SENATE BILL SHOULD BE DISCUSSED AHEAD OF THE HOUSE
BILL
B) THE SENATE AND HOUSE BILLS MAY BE DISCUSSED AT THE SAME
TIME IN BOTH HOUSES
C) THE HOUSE BILL SHOULD BE DISCUSSED AHEAD NOF THE SENATE
BILL
D) NO PRIORITY; EACH BILL CAN BE DISCUSSED AHEAD OF THE OTHER
34.NO LAW GRANTING ANY TAX EXEMPTION SHALL BE PASSED WITHOUT
THE CONCURRENCE OF-(RPCPA)
A)
B)
C)
D)
MAJORITY OF ALL MEMBERS OF THE CONGRESS
2/3 VOTE OF ALL MEMBERS OF THE CONGRESS
¾ VOTE OF ALL MEMBERS OF THE CONGRESS
UNANIMOUS VOTE OF ALL MEMBERS OF THE CONGRESS
35.WHICH OF THE FOLLOWING STATEMENTS IS INCORRECT?
A) NO PERSON SHALL BE IMPRISONED FOR NON-PAYMENT OF DEBT OR
NON-PAYMENT OF TAXES
B) THE PASSAGE OF LAWS GRANTING TAX EXEMPTIONS REQUIRES THE
CONCURRENCE BY A MAJORITY OF ALL THE MEMBERS OF
CONGRESS
C) THE SUPREME COURT’S JURISDICTION OVER TAX CASES CAN NOT
BE IMPAIRED
D) THE REVENUES AND ASSETS OF NON-STOCK, NON-PROFIT
EDUCATIONAL INSTITUTIONS AND DONATIONS FFOR EDUCATIONAL
PURPOSES ARE EXEMPTED FROM TAXES AND DUTIES
36.THEY RESTRICT THE EXERCISE OF THE POWER OF TAXATION
ALTHOUGH THEY ARE NOT EMBODIED IN THE CONSTITUTION
A)
B)
C)
D)
THEORETICAL JUSTICE
LEGISLATIVE IN CHARACTER
INHERENT LIMITATIONS
CONSTUTIONAL LIMITATIONS
37. A TAX MUST BE IMPOSED FOR PUBLIC PURPOSE. WHICH OF THE
FOLLOWING IS NOT A PUBLIC PURPOSE?-(RPCPA)
A)
B)
C)
D)
NATIONAL DEFENSE
PUBLIC EDUCATION
IMPROVEMENT OF SUGAR INDUSTRY
NONE OF THE ABOVE
38. A FUNDAMENTAL RULE IN TAXATION IS THAT “THE PROPERTY OF
ONE COUNTRY MAY NOT BE TAXED BY ANOTHER COUNTRY”. THIS IS
KNOWN AS-(RPCPA)
A)
B)
C)
D)
INTERNATIONAL LAW
INTERNATIONAL COMITY
RECIPROCITY
INTERNATIONAL INHIBITION
39.QUESTION 1: CAN THE STATE TAX THE ARMED FORCES OF THE
PHILIPPINES?
QUESTION 2: ARE GOVERNMENT-OWNED
CORPORATIONS SUBJECT TO TAX?
AND
CONTROLLED
A)YES, NO
B)YES, YES
C)NO, YES
D)NO, NO
40 DIPLOMATIC OFFICIALS SUCH AS HEADS OF STATES AND
AMBASSADORS ARE EXEMPT FROM TAXES AND DUTIES BECAUSE OF
A)
B)
C)
D)
INTERNATIONAL COMITY
RECIPROCITY PROVISIONS
PRINCIPLE OF TERRITORIALITY
EXEMPTION IN THE TAX CODE
41. DEALS WITH THE PROVISION OF THE LAW WHICH DETERMINES THE
PERSON OR PROPERTY TO BE TAXED, THE SUM OR SUMS TO BE RAISED,
THE RATE THEREOF, AND THE TIME AND MANNER OF LEVYINGM
RECEIVING AND COLLECTING OF TAXES
A)
B)
C)
D)
COLLECTION
PAYMENT
ENFORCED CONTRIBUTION
LEVY
42. CONSTITUTED OF THE PROVISIONS OF LAW WHICH PRESCRIBE THE
MANNER OF ENFORCING THE OBLIGATION ON THE PART OF THOSE TAXED
TO PAY THE DEMAND THUS CREATED
A)
B)
C)
D)
COLLECTION
PROPORTIONATE IN CHARACTER
ENFORCED CONTRIBUTION
LEVY
43.THE AMOUNT REQUIRED IS DICTATED BY THE NEEDS OF THE
GOVERNMENT-(RPCPA)
A)
B)
C)
D)
LICENSE FEE
TAX
TOLL
TARIFF
44. ONE OF THE CHARACTERISTICS OF A TAX IS
A) A TAX IS A PECUNIARY BURDEN AND THE LAW MAY NOT ALLOW
PAYMENT IN KIND
B) IT IS DEPENDENT UPON THE WILL OR CONTRACTUAL ASSENT,
EXPRESS OR IMPLIED, OF THE PERSON TAXED
C) IT IS LEVIED BY THE STATE BY VIRTUE OF ITS SOVEREIGNTY
D) IT IS COLLECTED FOR PUBLIC AND PRIV ATE PURPOSE
45. ONE OF THE CHARACTERISTICS OF A TAX IS THAT-(RPCPA)
A)
B)
C)
D)
IT IS GENERALLY BASED ON CONTRACT
IT IS GENERALLY PAYABLE IN MONEY
IT IS GENERALLY ASSIGNABLE
OPTIONAL
46. WHICH IS NOT AN ESSENTIAL CHARACTERISTIC OF TAX?-(RPCPA)
A)
B)
C)
D)
UNLIMITED AS TO AMOUNT
PAYABLE IN MONEY
PROPORTIONATE IN CHARACTER
REGULAR IN PAYMENT
47. NO PERSON SHALL BE IMPRISONED FOR NON-PAYMENT OF-(RPCPA)
A)
B)
C)
D)
PROPERTY TAX
EXCISE TAX
POLL TAX
INCOME TAX
48. AN EXAMPLE OF A PROPERTY TAX IS
A) ADDITIONAL COMMUNITY TAX ON INCOME OF REAL PROPERTIES
B) REAL ESTATE TAX ON REAL PROPERTIES
C) ESTATE TAX ON INHERITED PERSONAL AS WELL AS REAL
PROPERTIES
D) DONOR’S TAX ON DONATION OF PROPERTY
49. WHICH OF THE FOLLOWING IS NOT AN EXAMPLE OF EXCISE TAX?
A)
B)
C)
D)
TRANSFER TAX
SALES TAX
REAL PROPERTY TAX
INCOME TAX
50. SHARON, A CPA HAS JUST OBTAINED HER CPA LICENSE. BEFORE SHE
CAN LAWFULLY PURSUE HER OCCUPATION, SHE SHOULD PAY(RPCPA)
A)
B)
C)
D)
PRIVILEGE TAX(PTR)
PERCENTAGE TAX
CPA’S INCOME TAX
VALUE-ADDED TAX
51. A TAX THAT IS IMPOSED UPON A PERSON WHO IS DIRECTLY BOUND
TO PAY ITA)
B)
C)
D)
DIRECT TAX
INDIRECT TAX
EXCISE TAX
POLL TAX
52. ONE IS NOT A DIRECT TAX-(RPCPA)
A)
B)
C)
D)
IMMIGRATION TAX
TRANSFER TAX
INCOME TAX
CONTRACTOR’S TAX
53.THE BASIC COMMUNITY TAX OF P5.00 OF AN INDIVIDUAL IS A(AN)\
A) PROPERTY TAX
B) DIRECT TAX
C) NATIONAL TAX
D) AD VALOREM TAX
54. STATEMENT 1: THE VALUE-ADDED TAX IS A PROPERTRY TAX
STATEMENT 2: THE ESTATE TAX IS A DIRECT TAX-(RPCPA)
A)
B)
C)
D)
THE 2 STATEMENTS ARE CORRECT
THE 2 STATEMENTS ARE WRONG
STATEMENT 1 IS CORRECT; STATEMENT 2 IS WRONG
STATEMENT 1 IS WRONG; STATEMENT 2 IS CORRECT
55.FORMS PART OF THE PURCHASE PRICE OF THE COMMODITY OR
SERVICE AND PASSED ON TO CUSTOMERS
A)
B)
C)
D)
DIRECT TAX
INDIRECT TAX
PROPERTY TAX
NONE OF THE ABOVE
56. A TAX ON BUSINESS IS-(RPCPA)
A)
B)
C)
D)
DIRECT TAX
INDIRECT TAX
PROPERTY TAX
NONE OF THE ABOVE
57. FELIX IS A MINING OPERATOR. HIS MINERAL LANDS ARE NOT COVERED
BY ANY LEASE CONTRACT. THE TAX FELIX HAS TO PAY BASED ON THE
ACTUAL VALUE OF THE GROSS OUTPUT OR MINERAL PRODUCTS
EXTRACTED IS-(RPCPA)
A)
B)
C)
D)
MINING TAX
ROYALTIES
RENTAL
AD VALOREM TAX
58.TAX THAT IS IMPOSED SOLELY TO RAISE REVENUE FOR GOV’T
EXPENDITURES
A)
B)
C)
D)
REVENUE TAX
REGULATORY TAX
SPECIFIC TAX
AD VALOREM TAX
59.TAX LEVIED FOR PARTICULAR OR SPECIFIC PURPOSE IRRESPECTIVE
OF WHETHER REVENUE IS ACTUALLY RAISED OR NOT
A)
B)
C)
D)
REVENUE TAX
REGULATORY TAX
SPECIFIC TAX
AD VALOREM TAX
60..TAX IMPOSED BY THE NATIONAL GOVERNMENT AND IS EFFECTIVE
WITHIN THE ENTIRE JURISDICTION THEREOF
A) NATIONAL TAX
B) LOCAL TAX
C) PROPORTIONAL TAX
D) GENERAL TAX
61. TAXES IMPOSED BY A POLITICAL SUBDIVISION OF THE STATE AND
IS EFFECTIVE ONLY WITHIN THE TERRITORIAL BOUNDARIES
THEREOF
A) NATIONAL TAX
B) LOCAL TAX
C) PROGRESSIVE TAX
D) REGRESSIVE TAX
62.THE FOLLOWING ARE KINDS OF TAXES AS TO GRDUATION. WHICH ONE
IS NOT?-(RPCPA)
A)
B)
C)
D)
DIGRESSIVE
UNIFORM
REGRESSIVE
PROGRESSIVE
63.THE POWER OF THE STATE OR THOSE TO WHOM THE POWER HAS BEEN
DELEGATED TO TAKE PRIVATE PROPERTY FOR PUBLIC USE UPON PAYING
TO THE OWNER A JUST COMPENSATION
A)
B)
C)
D)
POWER OF EMINENT DOMAIN
POLICE POWER
POWER OF TAXATION
PEOPLE POWER
64.THERE CAN BE CLASSIFICATION OF THE SUBJECT MATTER BEING
REQUIRED TO SHOULDER THE BURDEN. WHICH IS THE EXCEPTION?(RPCPA)
A)
B)
C)
D)
TAX
LICENSE FEE
TOLL
EMINENT DOMAIN
65.THE POWER OF THE STATE TO ENACT SUCH LAWS IN RELATION TO
PERSONS AND PROPERTY AS MAY PROMOTE PUBLIC HEALTH, PUBLIC
MORALS, PUBLIC SAFETY, AND THE GENERAL WELFARE OF THE PEOPLE\
A)
B)
C)
D)
POWER OF EMINENT DOMAIN
POLICE POWER
POWER OF TAXATION
PEOPLE POWER
66. THE FOLLOWING ARE SIMILARITIES OF THE INHERENT POWER OF
TAXATION, EMINENT DOMAIN AND POLICE POWER EXCEPT ONE-(RPCPA)
A)
B)
C)
D)
ARE NECESSARY ATTRIBUTES OF SOVEREIGNTY
INTERFERES WITH PRIVATE RIGHTS AND PROPERTY
AFFECTS ALL PERSONS OR THE PUBLIC
ARE LEGISLATIVE IN THEIR IMPLEMENTATION
67. WHICH STATEMENT REFERS TO POLICE POWER AS DISTINGUISHED
FROM TAXATION?-(RPCPA)
A) IT CAN ONLY BE IMPOSED ON SPECIFIC PROPERTY OR PROPERTIES
B) THE AMOUNT IMPOSED DEPENDS ON WHETHER THE ACTIVITY IS
USEFUL OR NOT
C) IT INVOLVES THE TAKING OF PROPERTY BY THE GOVERNMENT
D) THE AMOUNT IMPOSED HAS NO LIMIT
68.POLICE POWER AS DISTINGUISHED FROM TAXATION
A) JUST COMPENSATION IS RECEIVED BY THE OWNER OF THE
PROPERTY
B) MAYBE EXERCISED BY PRIVATE INDIVIDUALS
C) SUPERIOR TO THE NON-IMPAIRMENT CLAUSE OF THE
CONSTITUTION
D) PROPERTY IS TAKEN BY THE GOV’T FOR PUBLIC PURPOSE
69 AFTER HAVING BEEN INFORMED THAT SOME MASSAGE PARLORS ARE
BEING USED AS FRONTS FOR PROSTITUTION, THE SANGGUNIANG
PANLUNGSOD OF MANILA PASSED A TAX ORDINANCE SUBJECTING
MASSAGE PARLORS WITHIN ITS JURISDICTION TO SUCH ONEROUS TAXES
THAT LEAVE THEM NO OTHER ALTERNATIVE BUT TO STOP OPERATING.
THE PASSAGE OF THE ORDINANCE IS A VALID EXERCISE OFA)
B)
C)
D)
TAXATION
EMINENT DOMAIN
POLICE POWER
POLICE POWER AND POWER OF TAXATION
70. STATEMENT 1: THE CONGRESS CAN ENACT TAX LAWS EVEN IN THE
ABSENCE OF A CONSTITUTIONAL PROVISION GRANTING SAID BODY THE
POWER TO TAX.
STATEMENT 2: A TAX MAY BE VALIDLY IMPOSED IN THE EXERCISE OF
POLICE POWER AND NOT THE POWER TO TAX.
A)
B)
C)
D)
FALSE, FALSE
FALSE, TRUE
TRUE, TRUE
TRUE, FALSE
71. WHICH OF THE FOLLOWING MAY NOT RAISE MONEY FOR THE
GOVERNMENT-(RPCPA)
A)
B)
C)
D)
POWER OF TAXATION
POLICE POWER
POWER OF EMINENT DOMAIN
PRIVATIZATION OF GOVERNMENT’S CAPITAL ASSETS
72. IN THIS POWER OF THE STATE, THE PERSON WHO IS PARTING WITH HIS
MONEY OR PROPERTY IS PRESUMED TO RECEIVE A BENEFIT-(RPCPA)
A)
B)
C)
D)
TAXATION
POLICE POWER
EMINENT DOMAIN
FORFEITURE POWER
73. WHICH OF THE INHERENT POWERS OF THE GOVERNMENT IS INFERIOR
TO THE NON-IMPAIRMENT CLAUSE OF THE CONSTITUTION?
A)
B)
C)
D)
TAXATION
POLICE POWER
EMINENT DOMAIN
NONE
74. TAX IS DISTINGUISHED FROM LICENSE FEE-(RPCPA)
A) NON-PAYMENT DOES NOT NECESSARILY RENDER THE BUSINESS
ILLEGAL
B) A REGULATORY MEASURE
C) IMPOSED IN THE EXERCISE OF POLICE POWER
D) LIMITED TO COVER COST OF OBLIGATION
75. THE DISTINCTION OF A TAX FROM PERMIT OR LICENSE FEE IS THAT A
TAX IS-(RPCPA)
A) IMPOSED FOR REGULATION
B) ONE WHICH INVOLVES EXERCISE OF POLICE POWER
C) ONE IN WHICH THERE IS GENERALLY NO LIMIT ON THE AMOUNT
THAT MAY BE IMPOSED
D) ANSWER IS NOT GIVEN
76. WHICH OF THE FOLLOWING TERMS DESCRIBES THIS STATEMENT
“THAT THE STATE HAS COMPLETE DISCRETION ON THE AMOUNT TO BE
IMPOSED AFTER DISTINGUISHING BETWEEN A USEFUL AND NON-USEFUL
ACTIVITY?”-(RPCPA)
A)
B)
C)
D)
TAX
LICENSE FEE
TOLL
CUSTOMS DUTY
77. WHICH OF THE FOLLOWING IS NOT A DISTINCTION OR SIMILARITY OF
LICENSE FEE FROM TAX?-(RPCPA)
A)
B)
C)
D)
IMPOSED NFOR REGULATION
INVOLVES EXERCISE OF POLICE POWER
NON-PAYMENT MAKES THE BUSINESS ILLEGAL
LEGAL COMPENSATION OR REWARD OF AN OFFICER FOR SERVICES
78. ALL OF THE FOLLOWING, EXCEPT ONE, ARE CHARACTERISTICS OF A
TOLL
A)
B)
C)
D)
DEMAND OF PROPRIETORSHIP
COMPENSATION FOR THE USE OF ANOTHER’S PROPERTY
MAY BE IMPOSED BY PRIVATE INDIVIDUALS
LEVIED FOR THE SUPPORT OF THE GOVERNMENT
79. THIS IS A DEMAND OF OWNERSHIP-(RPCPA)
A)
B)
C)
D)
LICENSE FEE
TAX
TOLL
FRANCHISE
80. ONE OF THE FOLLOWING IS NOT A CHARACTERISTIC OF A SPECIAL
ASSESSMENT
A) IT HAS SPECIAL APPLICATION ONLY TO A PARTICULAR TIME AND
PLACE
B) IT IS LEVIED ONLY ON LAND
C) MAY BE LEVIED ON BUSINESS
D) BASED WHOLLY ON BENEFITS
81. WHICH STATEMENT IS WRONG?-(RPCPA)
A) A TAX IS A DEMAND OF SOVEREIGNTY
B) A TOLL IS A DEMAND OF OWNERSHIP
C) A SPECIAL ASSESSMENT IS A TAX
D) CUSTOMS DUTY IS A TAX
82.WHICH OF THE FOLLOWING IS NOT A CHARACTERISTIC OF DEBT?
A)
B)
C)
D)
GENERALLY ARISES FROM CONTRACT
PAYABLE ONLY IN MONEY
ASSIGNABLE
IMPRISONMENT IS NOT A SANCTION FOR NON-PAYMENT
83. ALL FUNDS OR INCOME DERIVED BY THE GOVERNMENT FROM ANY
OTHER SOURC E
A)
B)
C)
D)
TAX
CUSTOMS DUTY
REVENUE
ORDINARY INCOME
84. IT COMPRISES ALL KINDS OF FUNDS INCLUDING TAXES-(RPCPA)
A)
B)
C)
D)
LICENSE FEE
INCOME
CUSTOMS DUTY
REVENUE
85.WHICH OF THE FOLLOWING CONSTITUTE OBJECTIONABLE DOUBLE
TAXATION?-(RPCPA)
A) A LICENSE FEE AND A TAX IMPOSED ON THE SAME BUSINESS OR
OCCUPATION FOR SELLING THE SAME ARTICLES
B) A TAX IMPOSED BOTH ON THE OCCUPATION OF FISHING AND ON
FISHPOND OPERATION
C) PERSONS ENGAGED IN LEASING OR SELLING REAL PROPERTY ARE
SUBJECT TO REAL ESTATE DEALERS TAX AND THEIR SALES ARE
ALSO SUBJECT TO 12% VAT
D) A TAX OF 1% IS IMPOSED FOR BANK RESERVE DEFICIENCY WHILE A
PENALTY OF 1/10 OF 1% IS ALSO IMPOSED AS A CONSEQUENCE OF
SUCH RESERVE DEFICIENCY
86. WHICH OF THE FOLLOWING IS NOT AN ELEMENT OF DIRECT
DUPLICATE TAXATION WHICH IS VIOLATIVE OF THE EQUAL
PROTECTIONAND UNIFORMITY CLAUSES IN THE CONSTITUTION?
A) SAME PROPERTY IS TAXED TWICE
B) SAME TAXING AUTHORITY
C) SAME AMOUNT
D) SAME PURPOSE
87. THE FOLLOWING CONSTITUTE DOUBLE TAXATION EXCEPT ONE(RPCPA)
A)
B)
C)
D)
BOTH TAXES ARE IMPOSED IN THE SAME AMOUNT
BOTH TAXES ARE LEVIED FOR THE SAME PURPOSE
BOTH TAXES ARE IMPOSED BY THE SAME TAXING AUTHORITY
BOTH TAXES ARE IMPOSED UPON THE SAME PERSON
88. STATEMENT 1: OUR CONSTITUTION DOES NOT PROHIBIT DOUBLE
TAXATION
STATEMENT 2: IF DOUBLE TAXATION OCCURS, THE TAXPAYER MAY SEEK
RELIEF UNDER THE UNIFORMITY CLAUSE OR THE EQUAL PROTECTION
GUARANTEE-(RPCPA)
A)
B)
C)
D)
CORRECT, WRONG
WRONG, CORRECT
WRONG, WRONG
CORRECT, CORRECT
89. YOUR CLIENT OWNS A ROW OF APARTMENTS. HE COMPLAINS TO YOU
THAT HE IS BEING REQUIRED TO PAY FOUR (4) KINDS OF TAXES ON THIS
LINE OF BUSINESS ALONE. FROM THE LIST GIVEN BY YOUR CLIENT,
WHICH OF THE FOLLOWING TAXES HAS BEEN WRONGLY IMPOSED ON
HIM?
A) REAL ESTATE TAX ON THE LAND AND BUILDING
B) VALUE-ADDED TAX ON THE GROSS RECEIPTS FROM RENT
C) COMMUNITY TAX BASED ON THE ASSESSED VALUE OF THE
APARTMENT HOUSE
D) INCOME TAX ON INCOME FROM RENT
90. ONE OF THE FOLLOWING IS A FALSE STATEMENT ABOUT DOUBLE
TAXATION. WHICH IS IT?
A) THERE IS NO CONSTITUTIONAL PROHIBITION ON DOUBLE
TAXATION
B) DIRECT DUPLICATE TAXATION IS A VALID DEFENSE AGAINST A TAX
MEASURE IF IT IS VIOLATIVE OF THE EQUAL PROTECTION CLAUSE
C) ABSENCE OF ANY OF THE ELEMENTS OF DIRECT DOUBLE TAXATION
MAKES IT INDIRECT DUPLICATE TAXATION
D) A 20% FINAL WITHHOLDING TAX ON INTEREST INCOME ON BANK
DEPOSITS AND A 5% GROSS RECEIPTS TAX ON BANKS IS A DIRECT
DUPLICATE TAXATION
91. TRANSFER OF THE TAX BURDEN BY ONE ON WHOM THE TAX IS
ASSESSED TO ANOTHER
A)
B)
C)
D)
SHIFTING
CAPITALIZATION
TRANSFORMATION
TAX EXEMPTION
92. WHICH OF THE FOLLOWING IS NOT A SCHEME OF SHIFTING THE
INCIDENCE OF TAX BURDEN?-(RPCPA)
A) THE MANUFACTURER TRANSFERS THE TAX TO THE CONSUMER BY
ADDING THE TAX TO THE SELLING PRICE OF THE GOODS SOLD
B) THE PURCHASER ASKS FOR A DISCOUNT OR REFUSE TO BUY AT
REGULAR PRICE UNLESS IT IS REDUCED BY AN AMOUNT EQUAL TO
THE TAX HE WILL PAY
C) CHANGING THE TERMS OF THE SALE LIKE FOB SHIPPING POINT IN
THE PHILIPPINES TO FOB DESTINATION ABROAD, SO THAT THE
TITLE PASSES ABROAD INSTEAD OF IN THE PHILIPPINES
D) THE MANUFACTURER TRANSFERS THE SALES TAX TO THE
DISTRIBUTOR, THEN IN TURN TO THE WHOLESALER, TO THE
RETAILER AND FINALLY TO THE CONSUMER
93. THE REDUCTION IN THE SELLING PRICE OF INCOME-PRODUCING
PROPERTY BY AN AMOUNT EQUAL TO THE CAPITALIZED VALUE OF
FUTURE TAXES THAT MAY BE PAID BY THE PURCHASER
A)
B)
C)
D)
SHIFTING
CAPITALIZATION
TRANSFORMATION
TAX EXEMPTION
94. THE METHOD BY WHICH THE MANUFACTURER OR PRODUCER UPON
WHOM THE TAX IS IMPOSED PAYS THE TAX AND STRIVES TO RECOVER
SUCH EXPENSE THROUGH LOWER PRODUCTION COST WITHOUT
SACRIFICING THE QUALITY OF HIS PRODUCT
A)
B)
C)
D)
SHIFTING
CAPITALIZATION
TRANSFORMATION
TAX EXEMPTION
95. THE GRANT OF IMMUNITY TO PARTICULAR PERSONS OR CORPORATION
OR TO PERSONS OR CORPORATIONS OF A PARTICULAR CLASS FROM A TAX
WHICH PERSONS AND CORPORATIONS GENERALLY WITHIN THE SAME
TAXING DISTRICT ARE OBLIGED TO PAY
A)
B)
C)
D)
TAX EXEMPTION
TAX EVASION
TAX AVOIDANCE
TAX AMNESTY
96. STATEMENT 1: A BIR RULING ISSUED BY A COMMISSIONER OF
INTERNAL REVENUE WHICH GRANTS TAX EXEMPTION WOULD CREATEA
PERPETUAL EXEMPTION IN FAVOR OF THE TAXPAYER
STATEMENT 2: A TAX EXEMPTION MAY BE WITHDRAWN ANYTIME AT THE
PLEASURE OF THE TAXING AUTHORITY
WHICH OF THE ABOVE STATEMENTS IS TRUE?
A)
B)
C)
D)
STATEMENT 1 ONLY
STATEMENTS 1 AND 2
STATEMENT 2 ONLY
NEITHER OF THEM
97. IT IS ALSO KNOWN AS TAX DODGING
A)
B)
C)
D)
TAX EXEMPTION
TAX EVASION
TAX AVOIDANCE
TRANSFORMATION
98. IT IS ALSO KNOWN AS TAX MINIMIZATION
A)
B)
C)
D)
TAX EXEMPTION
TAX EVASION
TAX AVOIDANCE
TRANSFORMATION
99. WHICH OF
AVOIDANCE?
THE
FOLLOWING
STATEMENTS
CONSTITUTE
TAX
A) DELIBERATE FAILURE OF A TAXPAYER TO PAY THE TAXES DUE TO
THE GOVERNMENT
B) CONNOTES FRAUD THROUGH THE USE OF PRETENSES AND
FORBIDDEN DEVICES TO LESSEN OR DEFEAT TAXES
C) PUNISHABLE BY LAW
D) MAYBE CONTRARY TO THE INTENT OF THE LEGISLATURE BUT
NEVERTHELESS DO NOT VIOLATE THE LAW
100. WHICH OF THE FOLLOWING FACTS PERTAIN/S TO TAX AVOIDANCE?
I.AFTER STUDYING HIS TAX PROBLEMS, MATALINO DECIDED TO
WITHDRAW HIS BANK DEPOSITS AND TO BUY TAX-EXEMPT SECURITIES
II.TUSO WHO WISHES TO AVOID THE PAYMENT OF TAXES ASSESSABLE
ON THE TRANSACTION MADE IT APPEAR ON THE DEED OF SALE THAT
THE SELLING PRICE WAS ONLY P200,000 ALTHOUGH IT WAS ACTUALLY
P300,000
III.REFRAINING FROM ENGAGING IN ACTIVITES SUBJECT TO TAX
IV.ABUSADO INSURANCE CORPORATION SOLD ITS OFFICE BUILDING TO
ADAN FOR P100 MILLION, WHO IN TURN, SOLD THE SAME PROPERTY TO
DUGONG-BUGHAW, INC. FOR P200 MILLION. THESE 2 TRANSACTIONS
WERE EVIDENCED BTY DEEDS OF ABSOLUTE SALE NOTARIZED ON THE
SAME DAY BY THE SAME NOTARY PUBLIC.
A)
B)
C)
D)
I ONLY
I AND III ONLY
I AND IV
I, III AND IV
101. IN CASE OF AMBIGUITY, TAX LAWS SHALL BE INTERPRETED
A)
B)
C)
D)
STRICTLY AGAINST THE TAXPAYER
LIBERALLY AGAINST THE POWER
LIBERALLY IN FAVOR OF THE TAXPAYER
LIBERALLY IN FAVOR OF THE GOVERNMENT
102. IN CASES OF DEDUCTIONS AND EXEMPTIONS ON INCOME TAX
RETURNS, DOUBTS SHALL BE RESOLVED-(RPCPA)
A)
B)
C)
D)
STRICTLY AGAINST THE TAXPAYER
STRICTLY AGAINST THE GOVERNMENT
LIBERALLY IN FAVOR OF THE TAXPAYER
LIBERALLY AGAINST THE GOVERNMENT
103. THE FOLLOWING, EXCEPT ONE, ARE EXCEPTIONS TO THE RULE THAT
TAX EXEMPTIONS MUST BE STRICTLY CONSTRUED AGAINST THE
TAXPAYER
A) WHERE THE STATUTE GRANTING THE EXEMPTION PROVIDES FOR
LIBERAL INTERPRETATION THEREOF
B) IF THE TAXPAYER DOES NOT FALL WITHIN THE PURVIEW OF THE
EXCEPTION BY CLEAR LEGISLATIVE INTENT
C) IN CASE OF SPECIAL TAXES RELATING TO SPECIAL CASES AND
AFFECTING ONLY SPECIAL CLASSES OF PERSONS
D) IF EXMPTIONS REFER TO PUBLIC PROPERTY
104. A FRANCHISE CAN BE AMENDED BY-(RPCPA)
A) AN AMENDMENT OF SPECIAL LAW, WHICH GRANTED
FRANCHISE
B) AN AMENDMENT OF A LAW OF GENERAL APPLICATION
C) AN AMENDMENT OF A REVENUE REGULATION
D) AN AMENDMENT OF TAX LAWS
THE
105. SOME FRANCHISE HOLDERS WHO ARE PAYING THE FRANCHISE TAX
ARE BEING REQUIRED BY AN AMENDATORY LAW TO PAY THE VALUEADDED TAX, WHILE OTHERS REMAIN SUBJECT TO FRANCHISE TAX. WHICH
OF THE FOLLOWING CONSTITUTIONAL PROVISION MAKES THE LAW
UNCONSTITUTIONAL?-(RPCPA)
A) NO LAW SHALL BE PASSED IMPAIRING THE OBLIGATION OF
CONTRACT
B) THE RULE OF TAXATION SHALL BE UNIFORM
C) NO PERSON SHALL BE DEPRIVED OF PROPERTY WITHOUT DUE
PROCESS OF LAW
D) NONE OF THE ABOVE
106. STATEMENT 1: THE POINT ON WHICH A TAX IS ORIGINALLY IMPOSED
IS IMPACT OF TAXATION
STATEMENT 2: AS A RULE, TAXES ARE SUBJECT TO SET-OFF OR
COMPENSATION
A)
B)
C)
D)
TRUE, TRUE
FALSE, TRUE
FALSE, FALSE
TRUE, FALSE
107. WHICH OF THE FOLLOWING IS NOT CONSIDERED AS A STEP IN
MAKING A REVENUE REGULATION EFFECTIVE?
A) RECOMMENDATION BY THE COMMISSIONER OF INTERNAL
REVENUE TO THE SECRETARY OF FINANCE
B) APPROVAL BY THE SECRETARY OF FINANCE
C) LEGISLATION BY CONGRESS
D) PUBLICATION IN A NEWSPAPER OF GENERAL CIRCULATION
108. STATEMENT 1: IN CASE OF CONFLICT BETWEEN A REVENUE
REGULATION AND THE PROVISIONS OF THE NATIONAL INTERNAL
REVENUE CODE, THE LATTER SHALL PREVAIL
STATEMENT 2: THE REVOCATION OF A REVENUE REGULATION CAN NOT
BE MADE RETROACTIVE EVEN IF THE REASON FOR ITS REVOCATION IS
THAT IT IS ERRONEOUS OR CONTRARY TO LAW
A)
B)
C)
D)
CORRECT, WRONG
CORRECT, CORRECT
WRONG, CORRECT
WRONG, WRONG
109. ALL OF THE FOLLOWING, EXCEPT ONE, ARE SOURCES OF TAX LAWSA)
B)
C)
D)
LEGISLATIONS, TAX TREATIES AND TAX ORDINANCES
JUDICIAL DECISIONS
OPINIONS OF AUTHORS
ADMINISTRATIVE RULES AND REGULATIONS
110. THE LEAST SOURCE OF TAX LAW ISA)
B)
C)
D)
STATUTES
COURT DECISIONS
CONSTITUTION
BIR RULINGS
111. WHEN THE REFUND OF A TAX SUPPOSEDLY DUE TO THE TAXPAYER
HAS ALREADY BEEN BARRED BY PRESCRIPTION, AND THE SAID
TAXPAYER IS ASSESSED WITH A TAX AT PRESENT, THE TWO CASES MAY
BE SET-OFF WITH EACH OTHER. THIS DOCTRINE IS CALLED
A)
B)
C)
D)
SET-OFF DOCTRINE
DOCTRINE OF RECIPROCITY
TAX SPARING DOCTRINE
EQUITAB LE RECOUPMENT
112. STATEMENT 1: THE DOCTRINE OF EQUITABLE IS APPLICABLE IN THE
PHILIPPINES
STATEMENT 2: WHERE TAXES AND THE CLAIM OF THE TAXPAYER ARE
FULLY LIQUIDATED, DUE AND DEMANDABLE, SET-OFF OR LEGAL
COMPENSATION MAY TAKE PLACE BY OPERATION OF LAW
A)
B)
C)
D)
CORRECT, WRONG
CORRECT, CORRECT
WRONG, CORRECT
WRONG, WRONG
113. THE PLACE OR AUTHORITY THAT HAS THE RIGHT TO IMPOSE AND
COLLECT TAXESA)
B)
C)
D)
TERRITORIALITY
INTERNATIONAL COMITY
SITUS OF TAXATION
TRANSFORMATION
114. DOMICILE OR RESIDENCE OF THE OWNER IS NOT THE SITUS OF
TAXATION IN
A)
B)
C)
D)
INCOME TAX
COMMUNITY TAX
ESTATE TAX
BUSINESS TAX
115. WHICH OF THE FOLLOWING IS NOT CORRECT WITH RESPECT TO A
TAXPAYER’S SUIT?
A) IT MUST PERTAIN TO ILLEGAL DISBURSEMENT OF PUBLIC FUNDS
B) IT
PERTAINS
TO
THE
PASSAGE
OF
A
SEEMINGLY
UNCONSTITUTIONAL MEASURE
C) THE FUNDS SOUGHT TO BE DISBURSED MUSTB HAVE BEEN RAISED
THROUGH TAXATION
D) IT MUST NOT REFER TO AN ENACTMENT OF A TAX LAW
B. TRUE OR FALSE
1. NO PERSON SHALL BE IMPRISONED FOR DEBT OR NON-PAYMENT OF
POLL TAX
2. CONGRESS MAY AUTHORIZE THE PRESIDENT TO FIX WITHIN
SPECIFIED LIMITS TARIFF RATES, IMPORT AND EXPORT DUTIES,
TONNAGE AND WHARFAGE DUES, AND OTHER DUTIES OR IMPOSTS
WITHIN THE FRAMEWORK OF THE NATIONAL DEVELOPMENT
PROGRAM OF THE GOVERNMENT.
3. A LAW GRANTING TAX EXEMPTION SHOULD BE CONCURRED IN BY A
MAJORITY OF ALL MEMBERS OF THE CONGRESS PRESENT.
4. THE PRESIDENT CAN VETO ANY PARTICULAR ITEM IN A REVENUE OR
TARIFF BILL, BUT THE VETO SHALL NOT AFFECT THE ITEMS OR ITEMS
TO WHICH HE DOES NOT OBJECT
5. THE POWER TO TAX CAN BE DELEGATED TO LOCAL GOVERNMENT
UNITS, SUBJECT TO LIMITATIONS THAT MAY BE SET BY LAW.
6. THE POWER OF TAXATION CAN BE DELEGATED TO THE PRESIDENT OF
THE PHILIPPINES.
7. THE PRESIDENT OF THE PHILIPPINES IS EMPOWERED TO GRANT TAX
EXEMPTION ON CERTAIN CLASS OF TAXPAYERS.
8. NON-PAYMENT OF TAX AND DEBT IS GROUND FOR IMPRISONMENT.
9. THE POWER TO TAX MAY INCLUDE THE POWER TO DESTROY.
10. PROVISIONS IN THE PHILIPPINE CONSTITUTION ARE GRANTS OF
POWER.
11. LANDS AND BUILDINGS BEING USED ACTUALLY, DIRECTLY AND
EXCLUSIVELY FOR RELIGIOUS AND CHARITABLE PURPOSES BY
CHURCHES AND CHARITABLE INSTITUTIONS ARE EXEMPT FROM
INCOME AND PROPERTY TAXES.
12. A PORTION OF A SCHOOL BUILDING WHICH IS BEING LEASED TO A
MARKETING FIRM FOR COMMERCIAL PURPOSES IS EXEMPT FROM
PROPERTY TAX.
13. A NON-STOCK, NON-PROFIT EDUCATIONAL INSTITUTION IS EXEMPT
FROM INCOME TAX ON ITS REVENUES AND FROM REAL PROPERTY
TAX ON ASSETS USED ACTUALLY, DIRECTLY AND EXCLUSIVELY FOR
EDUCATIONAL PURPOSES.
14. TAX LAWS CAN NEVER HAVE A RETROACTIVE EFFECT.
15. THE GOVERNMENT
INSTRUMENTALITIES.
CAN
NOT
TAX
ITS
AGENCIES
AND
16. A TAXPAYER’S SUIT CAN BE FILED BY ANY TAXPAYER IN ANY
INSTANCE AGAINST THE GOVERNMENT.
17. IN THE PHILIPPINES, THERE MAY BE DOUBLE TAXATION.
18. A TAX IS GENERALLY UNLIMITED BECAUSE IT IS BASED ON THE
NEEDS OF THE STATE.
19. AS A RULE, TAXES ARE SUBJECT TO SET-OFF OR COMPENSATION.
20. RECIPROCITY RULE APPLIES TO CITIZENS OF THE PHILIPPINES AND
RESIDENT ALIEN ONLY.
21. THE INHERENT POWERS ARE EXERCISED PRIMARILY BY THE
LEGISLATURE.
22. THE RULE OF TAXATION SHALL BE UNIFORM AND EQUITABLE.
23. TAXATION MAY BE USED TO IMPLEMENT THE POLICE POWER OF THE
STATE.
24. POLICE POWER IS SUPERIOR TO THE NON-IMPAIRMENT CLAUSE OF
THE CONSTITUTION.
25. THE THREE INHERENT POWERS ARE METHODS BY WHICH THE STATE
INTERFERES WITH PRIVATE RIGHT.
26. THE SALARY OF THE PRESIDENT OF THE PHILIPPINES AND OF THE
JUSTICES OF THE SUPREME COURT IS EXEMPT FROM INCOME TAX.
27. OPINIONS OF LEGAL LUMINARIES ARE SOURCES OF TAX LAWS.
28. THE CONSTITUTION GRANTS EXEMPTION FROM ALL KINDS OF TAXES
TO RELIGIOUS AND CHARITABLE ORGANIZATIONS.
29. BECAUSE THE POWER TO TAX IS UNLIMITED, COMPREHENSIVE,
PLENARY AND SUPREME, THE POWER TO TAX CAN REACH OVER INTO
ANY JURISDICTION TO SEIZE UPON PERSON OR PROPERTY.
30. A PERSON CAN OBJECT OR RESIST THE PAYMENT OF TAXES SOLELY
BECAUSE NO PERSONAL BENEFIT TO HIM CAN BE POINTED AS
ARISING FROM THE TAX.
31. THE “BENEFIT-PROTECTION THEORY” IS THE SOURCE OF THE
“DOCTRINE OF SYMBIOTIC RELATIONSHIP”.
32. A TAXPAYER COMMITS TAX AVOIDANCE WHEN HE DELIBERATELY
OMITS TO DECLARE ALL HIS TAXABLE INCOME.
33. THE THEORY OF TAXATION IS BASED ON THE LIFEBLOOD DOCTRINE.
34. A DIRECT TAX CAN BE SHIFTED DIRECTLY TO THE CONSUMERS.
35. A TAX IS A VOLUNTARY PAYMENT OR DONATION TO THE
GOVERNMENT.
36. TAXES ARE CONTRACTUAL DEBTS, HENCE A TAXPAYER CANNOT BE
IMPRISONED FOR NON-PAYMENT THEREOF.
37. AS A POWER, TAXATION REFERS TO THE INHERENT POWER OF THE
STATE TO DEMAND ENFORCED CONTRIBUTION FOR PUBLIC PURPOSE
OR PURPOSES.
38. THE GOVERNMENT CANNOT SURVIVE WITHOUT TAXATION.
39. INCOME TAX IS A PROGRESSIVE TAX.
40. TAX LAW CANNOT BE IMPOSED FOR A SPECIAL PURPOSE FOR IT
SHOULD ALWAYS BE AIMED AT REVENUE COLLECTION.
41. THE POWER OF THE STATE TO TAX EXISTS BY VIRTUE OF AN EXPRESS
PROVISION OF THE CONSTITUTION.
42. AN EXEMPTION FROM TAXATION IS TRANSFERABLE.
43. ADMINISTRATIVE FEASIBILITY MEANS ALSO THAT THE TAX MUST
NOT BE DISCOURAGING TO BUSINESS ACTIVITY.
44. FISCAL ADEQUACY MEANS THAT REVENUE SHOULD ALWAYS MEET
THE DEMANDS OF PUBLIC EXPENDITURE EVEN DURING ADVERSE
ECONOMIC CONDITION.
45. STATUTORY TAX EXEMPTIONS MAY BE REVOKED BY THE CONGRESS.
46. TAX EVASION IN ONE YEAR CAN BE OFFSET BY PAYING MORE TAXES
THE FOLLOWING YEAR.
47. NON-PAYMENT OF ADDITIONAL COMMUNITY TAX IS A GROUND FOR
IMPRISONMENT.
48. IN CASE OF CONFLICT BETWEEN A TAX LAW AND A REVENUE
REGULATION, THE LATTER SHALL PREVAIL.
49. A REVENUE REGULATION CAN EXPAND THE PROVISION OF LAW BY
IMPOSING A PENALTY EVEN IF THE LAW THAT IT IMPLEMENTS DOES
NOT IMPOSE A PENALTY.
50. REVENUE BILLS SHALL ORIGINATE EXCLUSIVELY FROM THE SENATE.
CHAPTER 11-INCOME TAX OF INDIVIDUALS
1.WHO AMONG THE FOLLOWING IS A NON-RESIDENT ALIEN?-(RPCPA)
A) AN ALIEN WHO COMES TO THE PHILIPPINES FOR A DEFINITE
PURPOSE WHICH IN ITS NATURE MAY BE PROMPTLY
ACCOMPLISHED
B) AN ALIEN WHO COMES TO THE PHILIPPINES FOR A DEFINITE
PURPOSE WHICH IN ITS NATURE WOULD REQUIRE AN EXTENDED
STAY
C) AN ALIEN WHO HAS ACQUIRED RESIDENCE IN THE PHILIPPINES
D) AN ALIEN WHO LIVES IN THE PHILIPPINES WITH NO DEFINITE
INTENTION AS TO HIS STAY
2. ARCHIE, A STAFF AUDITOR OF SGV & CO., TOOK AND PASSED THE
EXAMINATION FOR CERTIFIED INTERNAL AUDITOR (CIA). THE FOLLOWING
YEAR, HE RESIGNED FROM HIS JOB AND LEFT THE PHILIPPINES ON APRIL
10, 2006 TO WORK AS AN INTERNAL AUDITOR IN A BIG ESTABLISHMENT IN
MELBOURNE, AUSTRALIA. FOR INCOME TAX PURPOSES, WHICH OF THE
FOLLOWING STATEMENTS IS CORRECT WITH RESPECT TO ARCHIE’S
CLASSIFICATION?
A) HE SHALL BE CLASSIFIED AS NON-RESIDENT CITIZEN FOR THE
WHOLE YEAR OF 2006
B) HIS CLASSIFICATION AS A NON-RESIDENT CITIZEN WILL START IN
2007
C) HE SHALL BE CLASSIFIED AS NON-RESIDENT CITIZEN FOR THE YEAR
2006 WITH RESPECT TO HIS INCOME DERIVED FROM SOURCES
WITHOUT FROM APRIL 10, 2006
D) HE SHALL BE CLASSIFIED AS NON-RESIDENT CITIZEN FOR THE YEAR
2006 WITH RESPECT TO HIS INCOME DERIVED FROM SOURCES
WITHOUT FROM APRIL 11,2006
3. WHO AMONG THE FOLLOWING INDIVIDUAL TAXPAYERS IS TAXABLE ON
INCOME WITHIN AND WITHOUT THE PHILIPPINES?
A) ALEX, A NATIVE OF GENERAL SANTOS CITY, WORKING AS
OVERSEAS CONTRACT WORKER IN IRAQ
B) PHILANDER RODOLFO, NATURALIZED FILIPINO CITIZEN AND
MARRIED TO A FILIPINA. HE HAD BEEN LIVING IN OLONGAPO CITY
SINCE 1970
C) ALDREDO DE LA HOYA, SPANISH CITIZEN, A RESIDENT OF MADRID,
SPAIN, SPENT A ONE WEEK VACATION TRIP IN BORACAY
D) MING HONG, TAIWANESE SINGER, HELD A 3-DAY CONCERT IN
MANILA
4. WHICH OF THE FOLLOWING TAXPAYERS WHOSE PERSONAL EXEMPTION
IS SUBJECT TO THE LAW ON RECIPROCITY UNDER THE TAX CODE?-(RPCPA)
A) NON-RESIDENT CITIZEN WITH RESPECT TO HIS INCOME DERIVED
FROM OUTSIDE THE PHILIPPINES
B) NON-RESIDENT ALIEN WHO SHALL COME TO THE PHILIPPINES AND
STAY HEREIN FOR AN AGGREGATE PERIOD OF MORE THAN 180
DAYS DURING ANY CALENDAR YEAR
C) RESIDENT ALIEN DERIVING INCOME FROM A FOREIGN COUNTRY
D) NON-RESIDENT ALIEN NOT ENGAGED IN TRADE OR BUSINESS IN THE
PHILIPINES WHOSE COUNTRY ALLOWS PERSONAL EXEMPTION TO
FILIPINOS WHO ARE NOT RESIDING BUT ARE DERIVING INCOME
FROM SAID COUNTRY
5. THE PERSONAL EXEMPTION OF THE NON-RESIDENT ALIEN ENGAGED IN
TRADE OR BUSINESS IN THE PHILIPPINES IS EQUAL TO THAT ALLOWED
BY-(RPCPA)
A) THE INCOME TAX LAW OF HIS COUNTRY TO A RESIDENT CITIZEN OF
THE PHILIPPINES NOT RESIDING THERE
B) THE INCOME TAX LAW OF HIS COUNTRY TO A CITIZEN OF THE
PHILIPPINES NOT RESIDING THERE OR THE AMOUNT PROVIDED BY
THE NIRC TO A CITIZEN OR RESIDENT, WHICHEVER IS LOWER
C) THE NATIONAL INTERNAL REVENUE CODE TO A CITIZEN OR
RESIDENT
D) THE INCOME TAX LAW OF HIS COUNTRY ALLOWS TO A CITIZEN OF
THE PHILIPPINES NOT RESIDING THERE OR THE AMOUNT PROVIDED
BY THE NIRC TO A CITIZEN OR RESIDENT ALIEN, WHICHEVER IS
HIGHER
6. THE TAXPAYER IS A MARRIED NON-RESIDENT ALIEN ENGAGED IN
BUSINESS IN THE PHILIPPINES WITH TWO QUALIFIED DEPENDENT
CHILDREN. HIS COUNTRY GIVES A NON-RESIDENT FILIPINO WITH INCOME
FROM THEREFROM A BASIC PERSONAL EXEMPTION (IF MARRIED) OF
P20,000 AND ADDITIONAL EXEMPTION OF P4,000. HE IS ENTITLED TO A
PERSONAL EXEMPTION OF-(RPCPA)
A)
B)
C)
D)
P28,000
P26,000
P24,000
P20,000
7. THE FOLLOWING, EXCEPT ONE, MAY CLAIM PERSONAL EXEMPTIONS(RPCPA)
A) NONRESIDENT ALIENS NOT ENGAGED IN TRADE OR BUSINESS IN
THE PHILIPPINES
B) NONRESIDENT ALIEN ENGAGED IN TRADE OR BUSINESS IN THE
PHILIPPINES
C) RESIDENT ALIEN
D) CITIZEN
8. AN EXEMPTION PROVIDED BY LAW TO TAKE CARE OF PERSONAL,
LIVING AND FAMILY EXPENSES OF THE TAXPAYER AND THE AMOUNT OF
WHICH IS DETERMINED ACCORDING TO THE STATUS OF THE TAXPAYERS
ARE:-(RPCPA)
A)
B)
C)
D)
OPTIONAL STANDARD DEDUCTION
PERSONAL EXEMPTION
ADDITIONAL EXEMPTION
SPECIAL ADDITIONAL EXEMPTION
9. AN EXEMPTION ALLOWED TO A TAXPAYER WHO HAS QUALIFIED
LEGITIMATE, ILLEGITIMATE, OR LEGALLY ADOPTED CHILDFREN-(RPCPA)
A)
B)
C)
D)
ADDITIONAL EXEMPTION
SPECIAL ADDITIONAL PERSONAL EXEMPTION
OPTIONAL STANDARD DEDUCTION
PERSONAL EXEMPTION
10.A MAN HAS THREE WIVES UNDER HIS TRIBAL CUSTOMS AND PRACTICE.
HE IS ENTITLED TO PERSONAL EXEMPTION APPERTAINING TO-(RPCPA)
A) A SINGLE INDIVIDUAL
B) A MARRIED INDIVIDUAL
C) A MARRIED INDIVIDUAL PLUS ADDITIONAL EXEMPTION FOR
DEPENDENTS PERTAINING TO EACH OF THE 2 EXTRA WIVES
D) A HEAD OF THE FAMILY PLUS ADDITIONAL EXEMPTION FOR
DEPENDENTS PERTAINING TO EACH OF HIS THREE WIVES
11. AS A RULE, WHO OF THE SPOUSES IS THE PROPER CLAIMANT OF THE
ADDITIONAL EXEMPTION WITH RESPECT TO ANY OF THE DEPENDENT
CHILDREN?
A) THE HUSBAND IF HIS INCOME IS HIGHER THAN THE INCOME OF THE
WIFE
B) THE SPOUSE WHO HAS A HIGHER INCOME
C) THE HUSBAND
D) THE WIFE
12. THE WIFE CAN CLAIM ADDITIONAL EXEMPTION IF-(RPCPA)
A) THE HUSBAND’S INCOME IS LOWER THAN HER INCOME
B) THE HUSBAND IS A NONRESIDENT CITIZEN WITH INCOME FROM
WITHIN AND WITHOUT THE PHILIPPINES
C) THE HUSBAND IS A PURE BUSINESS INCOME EARNER
D) THE HUSBAND HAS NO INCOME OF HIS OWN
13. THE HUSBAND CAN WAIVE HIS RIGHT TO CLAIM THE ADDITIONAL
EXEMPTION IN FAVOR OF HIS WIFE IFA) HE IS A NONRESIDENT CITIZEN WHOSE INCOME IS PURELY
WITHOUT THE PHILIPPINES
B) HE HAS NO INCOME OF HIS OWN
C) HE IS A COMPENSATION INCOME EARNER IN THE PHILIPPINES
D) HIS INCOME IS PURELY SUBJECT TO FINAL WITHHOLDING TAX
14. WHO AMONG THE FOLLOWING QUALIFIES AS A DEPENDENT FOR
PURPOSES OF ADDITIONAL EXEMPTION?
A)
B)
C)
D)
SISTER-IN-LAW
STEPMOTHER
GRANDFATHER
ILLEGITIMATE DAUGHTER
15. NENA, AGED 70 YEARS OLD, WHO LIVES WITH HER UNMARRIED SON
MARIO, RECEIVED P60,000 WHICH WAS USED FOR HER SUPPORT DURING
THE YEAR. THE SOURCES OF HER SUPPORT WERE AS FOLLOWS:
SOCIAL SECURITY BENEFITS
MARIO
CAROLINE, UNRELATED FRIEND
DOUGLAS, SON OF NENA
LALAINE, NENA’S SISTER
TOTAL
P24,000
20,000
4,000
5,000
7,000
60,000
WHO CAN CLAIM HEAD OF FAMILY STATUS BASED ON NENA’S
DEPENDENCY EXEMPTION?
A)
B)
C)
D)
MARIO
DOUGLAS
LALAINE
NONE
16. WHO OF THE FOLLOWING IS NOT A QUALIFIED DEPENDENT FOR
PURPOSES OF CLAIMING ADDITIONAL EXEMPTION?
A)
B)
C)
D)
ILLEGITIMATE CHILD
LEGALLY ADOPTED CHILD
LEGITIMATE CHILD
CHILD BY NATURAL ADOPTION
17. MR. MAASIKASO, SINGLE, HAS THE FOLLOWING DEPENDENTS WHO
ARE LIVING WITH AND ENTIRELY DEPENDENT UPON HIM FOR CHIEF
SUPPORT:
ANDREA, CHILD WITH HIS EX-GIRLFRIEND
BARBARA, LEGITIMATE CHILD OF HIS SISTER, LEGALLY ADOPTED BY MR.
MAASIKASO
CARIDAD, MOTHER, 85 YEARS OLD, WIDOW, BEDRIDDEN
DONATA, GODMOTHER, 80 YEARS OLD
MR. MAASIKASO CAN CLAIM ADDITIONAL PERSONAL EXEMPTION ONA)
B)
C)
D)
ANDREA ONLY
ANDREA AND BARBARA
ANDREA, BARBARA AND CARIDAD
ANDREA, BARBARA, CARIDAD AND DONATA
18. A NATIVE OF LUCENA CITY, SUPPORTING HIS BROTHER, 18 YEARS OLD,
UNMARRIED, NOT GAINFULLY EMPLOYED, STUDYING BS ACCOUNTANCY
AT ASIA PACIFIC COLLEGE AT MAKATI CITY, IS ENTITLED TO BASIC
PERSONAL EXEMPTION OFA)
B)
C)
D)
P20,000
25,000
50,000
75,000
19. THE ADDITIONAL PERSONAL EXEMPTION ON EVERY QUALIFIED
DEPENDENT CHILD ISA)
B)
C)
D)
P8,000
32,000
25,000
50,000
20. REMY MARTIN, SINGLE, SUPPORTING THE FOLLOWING:
JOHNNY WALKER, ILLEGITIMATE SON, 16 YEARS OLD, STUDYING IN THE
UNIVERSIDAD DE JEREZ, CADIZ, SPAIN, LIVING WITH REMY MARTIN’S
DIPLOMATIC BROTHER IN ANDALUCIA, SPAIN.
TORRES, FATHER, LIVING WITH HIM. REMY MARTIN IS GIVING 60% OF THE
ENTIRE SUPPORT NEEDED, THE OTHER 40% IS BEING FURNISHED BY HIS
SISTER, CHEVAS REGAL.
REMY MARTIN CAN CLAIM A TOTAL EXEMPTION OFA)
B)
C)
D)
P20,000
75,000
33,000
41,000
21. TAXPAYERS ARE HUSBAND AND WIFE. THE GROSS COMPENSATION OF
THE WIFE IS P260,000 WHILE THE GROSS BUSINESS INCOME OF THE
HUSBAND IS P200,000. THEY HAVE SIX QUALIFIED DEPENDENT CHILDREN
BUT WITHIN THE YEAR ONE CHILD DIED. THEIR TOTAL EXEMPTIONS IS(RPCPA)
A)
B)
C)
D)
P200,000
96,000
64,000
NONE
22. LIZA’S HUSBAND DIED IN APRIL 2009 HAVING SEVEN(7) UNMARRIED
CHILDREN LIVING WITH AND WHOLLY DEPENDENT ON LIZA FOR
SUPPORT. THE AGES OF THE CHILDREN ARE AS FOLLOWS:
CHILDREN
A
B
C
D
E
F
G
AGES
24
22
19
10
8
6
3
STATUS
JOBLESS
MENTALLY RETARDED
STUDYING IN MANILA
STUDYING IN THEIR HOMETOWN
STUDYING IN THEIR HOMETOWN
STUDYING IN THEIR HOMETOWN
TAKEN BY THE GRANDPARENTS
AFTER THE DEATH OF THE FATHER
FOR PURPOSES OF TAXABLE YEAR 2009, HOW MUCH EXEMPTION WOULD
LIZA BE ENTITLED TO?-(RPCPA)
A)
B)
C)
D)
P150,000
57,000
64,000
73,000
NUMBERS 23 AND 24 ARE BASED ON THE FOLLOWING INFORMATION:
23. IN 2009, PIDOL’S WIFE DIED OF A CAR ACCIDENT. HIS DEPENDENTS ARE
AS FOLLOWS:
CHILDREN
A
B
C
D
E
F
G
STATUS
22 Y/O, EMPLOYED ON JULY 12, 2009
21 Y/O ON JANUARY 2, 2009
18 Y/O, MARRIED ON JANUARY 31, 2009
17 Y/O, GAINFULLY EMPLOYED ON OCTOBER 1, 2009
15 Y/O, AFFLICTED WITH SORE EYES ON MAY 6, 2009
13 DIED OF AN ACCIDENT IN 2009
BROTHER, 28 Y/O PARALYTIC
FOR TAXABLE YEAR 2009, PIDOL CAN CLAIM ADDITIONAL EXEMPTIONS
OFA)
B)
C)
D)
P75,000
125,000
100,000
32,000
24. FOR THE YEAR 2010, PIDOL CAN CLAIM ADDITIONAL EXEMPTIONS OFA)
B)
C)
D)
P8,000
16,000
25,000
100,000
25. ANGIE, WIDOW, EARNING AN ANNUAL GROSS COMPENSATION INCOME
OF P300,000 HAS THE FOLLOWING DEPENDENT CHILDREN IN 2009:
AUBREYBARBARACRISTETADIANAELIZA-
BABY, BORN ON JANUARY 31;
CELEBRATED HER 21ST BIRTHDAY LAST JUNE 12;
MARRIED ON JANUARY 1;
GAINFULLY EMPLOYED EFFECTIVE JULY 1;
DIED OF DENGUE FEVER ON SEPTEMBER 30;
ASSUMING ANGIE HAS TWO EMPLOYERS, HER TAXABLE INCOME IN 2009
IS-
A)
B)
C)
D)
P32,000
63,000
150,000
100,000
26. THE TAXABLE INCOME OF ANGIE IN 2010 ISA)
B)
C)
D)
P120,000
225,000
95,000
87,000
27. WHICH OF THE FOLLOWING INCOME DERIVED FROM WITHIN THE
PHILIPPINES BY A RESIDENT ALIEN IS NOT SUBJECT TO THE RATES IN
SECTION 24(A) OF THE NIRC?-(RPCPA)
A) SALARY RECEIVED BY A MANAGING PARTNER OF A GENERAL
PROFESSIONAL PARTNERSHIP
B) A PASSIVE INCOME IN THE FORM OF A PRIZE WON IN A RAFFLE
AMOUNTING TO P4,000
C) A GAIN FROM SALE OF A MOTOR VEHICLE AS ANOTHER INCOME OF
A TAXPAYER WHO IS A COMPENSATION INCOME EARNER
D) A GAIN ON SALE OF A REAL PROPERTY FOR PRIVATE USE OF THE
FAMILY OF THE TAXPAYER
28. WHICH OF THE FOLLOWING INCOME IS SUBJECT TO FINAL TAX IF
RECEIVED BY AN INDIVIDUAL TAXPAYER?
I. SHARE OF A PARTNER IN THE NET INCOME OF A BUSINESS
PARTNERSHIP
II. CASH DIVIDEND RECEIVED BY A STOCKBROKER FROM A DOMESTIC
CORPORATION
III. WINNINGS IN LOTTO
IV. RAFFLE PRIZES AMOUNTING TO P6,000
A)
B)
C)
D)
I AND II
III AND IV
I, II AND IV
I, II, III AND IV
29. WHICH OF THE FOLLOWING IS NOT A REQUISITE FOR DEDUCTIBILITY
OF HEALTH INSURANCE?
A) THE TOTAL FAMILY INCOME IS NOT MORE THAN P250,000
B) THE MAXIMUM AMOUNT OF PREMIUM DEDUCTIBLE DURING THE
YEAR IS P2,400 PER FAMILY OR P200 A MONTH
C) IN THE CASE OF MARRIED INDIVIDUAL, THE SPOUSE CLAIMING THE
ADDITIONAL EXEMPTION SHALL BE ENTITLED TO CLAIM THE
INSURANCE PREMIUMS PAID
D) THE TAXPAYER MUST BE A HEAD OF FAMILY
30.STATEMENT 1: HEALTH AND/OR HOSPITALIZATION INSURANCE
PREMIUMS PAID BY AN INDIVIDUAL IS DEDUCTIBLE ONLY IF THE
TAXPAYER IS A PURE COMPENSATION INCOME EARNER
STATEMENT 2: A TAXPAYER WHO HAS PAID A MONTHLY HEALTH
INSURANCE OF P400 FOR SIX MONTHS IN A YEAR CAN CLAIM TOTAL
DEDUCTIBLE AMOUNT OF P2,400
A)
B)
C)
D)
TRUE, FALSE
TRUE, TRUE
FALSE, TRUE
FALSE, FALSE
31. MAX, SINGLE, SUPPORTING HIS 58-YEAR OLD MOTHER, IS A
COMPENSATION INCOME EARNER. DURING THE YEAR, HIS NET
INCOME WAS P150,000. HE ALSO PAID A TOTAL PREMIUM OF P3,000
TO AN INSURANCE COMPANY FOR HIS HEALTH INSURANCE. HOW
MUCH IS HIS TAXABLE INCOME?
A)
B)
C)
D)
P97,600
97,000
122,000
122,600
32. ALL OF THE FOLLOWING, EXCEPT ONE, ARE TAXABLE ON INCOME
WITHIN ONLY:
A)
B)
C)
D)
RESIDENT ONLY
NON-RESIDENT CITIZEN
RESIDENT CITIZEN
NON-RESIDENT ALIEN
33. IN 2009, RUSTOM, FILIPINO, LEGALLY SEPARATED FROM HIS WIFE,
MINA, LEFT FOR THE UNITED STATES WITH HIS DAUGHTER,
ROBINA, TO PERMANENTLY RESIDE THEREIN. IN 2009, HE EARNED
P2 MILLION AS INCOME FROM HIS BEAUTY APRLON IN THAT
COUNTRY.
WHICH OF THE FOLLOWING STATEMENTS IS CORRECT?
A) FOR PHILIPPINE INCOME TAX PURPOSES, RUSTOM MAY
DEDUCT FROM HIS GROSS INCOME HIS PERSONAL EXEMPTION
OF P50,000 OR THE AMOUNT ALLOWED IN THAT COUNTRY,
WHICHEVER IS LOWER
B) FOR PHILIPPINE INCOME TAX PURPOSES, RUSTOM’S GROSS
INCOME IS SUBJECT TO A CREDITABLE WITHHOLDING TAX OF
10%
C) RUSTOM’S GROSS INCOME OF P2 MILLION IS NOT TAXABLE IN
THE PHILIPPINES
D) FOR PHILIPPINE INCOME TAX PURPOSES, HE IS NO LONGER
ENTITLED TO CLAIM ADDITIONAL EXEMPTION ON ROBINA
BECAUSE HE IS ALREADY CLASSIFIED AS A NON-RESIDENT
ALIEN ENGAGED IN BUSINESS IN FOREIGN COUNTRY
34. CASE 1: PEPE, A CPA, HAD SIGNED A LEGALLY ENFORCEABLE
AGREEMENT WITH HIS WIFE, PILAR, THAT THE EARNINGS FROM THE
EXERCISE OF HIS PROFESSION WOULD BE SHARED EQUALLY
BETWEEN THEM FOR PURPOSES OF COMPUTING THE INCOME TO BE
REPORTED IN THEIR RESPECTIVE INDIVIDUAL INCOME TAX
RETURN. IS THE AGREEMENT VALID?
CASE 2: LORENZO ADVISED HIS DAUGHTER, LORENA THAT THE RENT
INCOME ON THE DORMITORY OWNED BY LORENZO WILL ACCRUE TO THE
LATTER. LORENA COLLECTED THE INCOME AND REPORTED IT ON HER
OWN RETURN. WERE THE ACTIONS TAKEN BY LORENZO AND LORENA
VALID?
A)
B)
C)
D)
YES, NO
YES, YES
NO, YES
NO, NO
ITEMS 35 TO 37 ARE BASED ON THE FOLLOWING INFORMATION:
BUSINESS INCOME, PHILIPPINES
BUSINESS INCOME, UNITED STATES
EXPENSES, PHILIPPINES
EXPENSES, UNITED STATES
INTEREST ON DEPOSIT WITH METROBANK
INTEREST ON DEPOSIT IN U.S.($1=P40)
CASH PRIZE WON IN A LOCAL CONTEST
CASH PRIZE WON IN A CONTEST IN U.S.
WINNINGS IN LOTTO
P300,000
250,000
200,000
125,000
3,000
$500
P6,000
10,000
20,000
WINNINGS IN LOTTO IN U.S.
DIVIDENDS FROM SMC, A DOMESTIC COMPANY
50,000
25,000
35. THE TAXABLE INCOME IF SHARON IS A RESIDENT CITIZEN, SINGLE
ISA)
B)
C)
D)
P261,000
334,000
291,000
306,000
36.THE TAXABLE INCOME IF SHARON IS A NON-RESIDENT ALIEN ETB,
MARRIED WITH FIVE(5) DEPENDENT CHILDRENA)
B)
C)
D)
P243,000
56,000
74,000
NONE
37. THE INCOME TAX DUE ON SHARON ASSUMING SHE IS A NONRESIDENT ALIEN NETB, SINGLE, ISA)
B)
C)
D)
P83,500
63,500
18,500
334,000
NUMBERS 38 TO 40 ARE BASED ON THE FOLLOWING INFORMATION:
ELVIS AND MADONNA, HUSBAND AND WIFE, HAVE THE FOLLOWING DATA
IN 2009:
COMPENSATION INCOME
RENT INCOME(NET OF 5% WHT)
ROYALTIES ON BOOKS
DEPENDENT CHILDREN
WHT ON COMPENSATION
ELVIS
P125,000
76,000
MADONNA
P60,000
70,000
6
10,000
DURING THE YEAR, THE SPOUSES HAD AN INCOME OF P120,000 AND
EXPENSES OF P65,000, WHICH CANNOT BE IDENTIFIED AS SOLELY ESRNED
BY THE WIFE OR THE HUSBAND.
38. THE INCOME TAX PAYABLE/OVERPAYMENT OF ELVIS IS-
A)
B)
C)
D)
P3,000
10,200
(P5,500)
8,700
39. THE TAXABLE INCOME OF MADONNA ISA) P27,500
B) 37,500
C) 11,600
D) NONE
40. THE FINAL TAX ON THE PASSIVE INCOME ISA)
B)
C)
D)
P14,000
7,000
NONE
NO ANSWER
41. THE OPTIONAL STANDARD DEDUCTION ON INDIVIDUAL ISA) 40% OF TAXABLE INCOME
B) 40%
OF
BUSINESS
AND/OR
PROFESSIONAL
COMPENSATION INCOME
C) 40% OF BUSINESS AND/OR PROFESSIONAL INCOME
D) 10%
OF
BUSINESS
AND/OR
PROFESSIONAL
COMPENSATION INCOME
INCLUDING
EXCLUDING
42.OPTIONAL STANDARD DEDUCTION IS ALLOWED TO
A)
B)
C)
D)
RESIDENT ALIEN
NON-RESIDENT ALIEN ENGAGED IN TRADE OR BUSINESS
NON-RESIDENT ALIEN NOT ENGAGED IN TRADE OR BUSINESS
NON-RESIDENT FOREIGN CORPORATION
NUMBERS 43 AND 44 ARE BASED ON THE FOLLOWING INFORMATION:
ROD, MARRIED, WITH TWO DEPENDENT CHILDREN, HAD THE FOLLOWING
INCOME AND EXPENSES IN 2009:
SALARY, NET OF WHT OF P5,000
13TH MONTH PAY
GROSS RECEIPTS FROM PROFESSION, NET OF WHT OF P7,000
RENT INCOME, NET OF 5% WHT
GROSS RECEIPTS FROM BUSINESS
P55,000
5,000
83,000
57,000
125,000
PROFESSIONAL AND BUSINESS EXPENSES
PREMIUMS ON HEALTH INSURANCE
56,500
6,000
43. THE INCOME TAX PAYABLE BY ROD IF HE AVAILED OF THE ITEMIZED
DEDUCTIONSA)
B)
C)
D)
P28,125
17,125
44,500
41,360
44. THE INCOME TAX PAYABLE BY ROD IF HE AVAILED OF THE OPTIONAL
STANDARD DEDUCTIONSA)
B)
C)
D)
P4,500
50,225
51,050
51,650
NUMBERS 45 TO 46 ARE BASED ON THE FOLLOWING INFORMATION:
SPOUSES CARLOS AND IRENE, GOVERNMENT EMPLOYEES, HAD THE
FOLLOWING DATA IN 2009:
CARLOS
IRENE
13TH MONTH PAY AND OTHER BENEFITS
18,949.00
8,605.00
SSS, PHIC AND PAG-IBIG
14,549.76
4,559.75
BASIC SALARY
210,438.24
68,465.25
REPRESENTATION AND TRAVEL ALLOWANCE
96,000.00
PERSONNEL ECONOMIC RELIEF ALLOWANCE
6,000.00
OVERTIME PAY
2,450.35
4,457.04
HOLIDAY PAY
1,783.25
HAZARD PAY
6,000.00
ADDITIONAL EXEMPTIONS
50,000.00
TOTAL AMOUNT OF TAXES WITHHELD
17,046.40
45. THE INCOME TAX PAYABLE BY CARLOS ISA)
B)
C)
D)
P31.32
18,277.72
363.16
8,687.85
46. THE INCOME TAX PAYABLE ON IRENE ISA) P448.29
B) 1,431.45
C) (P983.19)
D) NONE
47. MRS. EVAN OWNS A PARCEL OF LAND WORTH P500,000 WHICH SHE
INHERITED FROM HER FATHER IN 2006 WHEN IT WAS WORTH P300,000. HER
FATHER PURCHASED IT IN 1986 FOR P100,000. IF MRS. EVAN TRANSFERS
THIS PARCEL OF LAND FOR HER WHOLLY OWNED CORPORATION IN
EXCHANGE FOR SHARES OF STOCKS OF SAID CORPORATION WORTH
P450,000. MRS. EVAN’S TAXABLE GAIN IS-(RPCPA)
A)
B)
C)
D)
ZERO
P50,000
150,000
350,000
48. MR. JOHNNY DELA CRUZ TRANSFERRED HIS COMMERCIAL LAND WITH
A COST OF P500,000 BUT WITH A FAIR MARKET VALUE OF P750,000 TO JDC
CORPORATION IN EXCHANGE OF THE STOCKS OF THE CORPORATION WITH
PAR VALUE OF P1,000,000. AS A RESULT OF THE TRANSFER, HE BECAME
THE MAJOR STOCKHOLDER OF THE CORPORATION.-(RPCPA)
AS A RESULT OF THE TRANSFER:
A) THE RECOGNIZED GAIN IS THE DIFFERENCE BETWEEN THE FAIR
MARKET VALUE OF THE SHARES OF STOCKS AND THE COST OF THE
LAND
B) THE RECOGNIZED GAIN IS THE DIFFERENCE BETWEEN THE PAR
VALUE OF THE STOCKS AND THE FAIR MARKET VALUE OF THE
LAND
C) NO RECOGNIZED GAIN BECAUSE THE LAND WAS IN EXCHANGE OF
PURELY STOCKS AND MR. JOHNNY DELA CRUZ BECAME THE
MAJORITY STOCKHOLDER
D) NO RECOGNIZED GAIN BECAUSE THE LAND WAS IN EXCHANGE OF
STOCKS OF THE CORPORATION.
49. MR. SANTOS PURCHASED A LIFE ANNUITY FOR P100,000 WHICH WILL
PAY HIM P10,000 A YEAR. THE LIFE EXPECTANCY OF MR. SANTOS IS 12
YEARS. WHICH OF THE FOLLOWING WILL MR. SANTOS BE ABLE TO
EXCLUDE FROM HIS GROSS INCOME?-(RPCPA)
A)
B)
C)
D)
P100,000
10,000
20,000
120,000
50.IF AN INDIVIDUAL PERFORMS SERVICES FOR A CREDITOR WHO IN
CONSIDERATION THEREOF CANCELS THE DEBT, THE CANCELLATION OF
INDEBTEDNESS MAY AMOUNT-(RPCPA)
A)
B)
C)
D)
TO A GIFT
TO A CAPITAL CONTRIBUTION
TO A DONATION INTER VIVOS
TO A PAYMENT OF INCOME
51. MR. AGUILA, AN EMPLOYEE OF FUERTE CORPORATION IS RECEIVING
A MONTHLY SALARY (NET OF 10% WHT) OF P18,000. DUE TO AN
OUTSTANDING ACCOMPLISHMENT IN JULY 2008, THE CORPORATION
GAVE HIM 200 SHARES OF STOCK OF THE CORPORATION WITH A PAR
VALUE OF P100 PER SHARE AND A FAIR MARKET VALUE OF P150. THE
FAIR VALUE AT THE TIME OF RECEIPT IS P152 PER SHARE.
HOW MUCH IS THE INCOME OF MR. AGUILA IN 2008?
A)
B)
C)
D)
P50,000
270,400
270,000
240,000
52. CARANCHO IS INDEBTED TO DACUYCUY. DUE TO HIS INABILITY TO
PAY THE DEBT, HE WAS ASKED TO CLEAN THE PIGGERY OF THE
LATTER FOR THREE MONTHS. THEREAFTER, DACUYCUY GAVE HIM
P5,000 AND CONDONED THE DEBT AMOUNTING TO P10,000.
HOW MUCH INCOME SHOULD BE DECLARED BY CARANCHO?
A)
B)
C)
D)
P5,000
10,000
15,000
NONE
53. REWARDS GIVEN TO PERSONS INSTRUMENTAL IN THE DISCOVERY OF
VIOLATION OF THE NATIONAL INTERNAL REVENUE CODE ARE
SUBJECT TOA) FINAL TAX OF 10% ON REWARDS COLLECTED
B) FINAL TAX OF 10% OF P1,000,000
C) FINAL TAX OF 10% OF REWARDS COLLECTED OR P1,000,000,
WHICHEVER IS HIGHER
D) FINAL TAX OF 10% OF REWARDS COLLECTED OR P1,000,000,
WHICHEVER IS LOWER
54. IN 2008, ALMONTE RECEIVED FROM HIS EMPLOYER A PROMISSORY
NOTE WITH A FACE VALUE OF P50,000 FOR SERVICES RENDERED. THE
NOTE WILL MATURE IN 2009. HOWEVER, IT CAN BE SOLD TO A BANK
AT A DISCOUNT OF 25%. THE EMPLOYER PAID THE PROMISSORY NOTE
IN 2009. HOW MUCH TAXABLE INCOME IS TO BE DECLARED BY
ALMONTE ON THE PROMISSORY NOTE IN 2008 AND 2009,
RESPECTIVELY?
A)
B)
C)
D)
P50,000, 50,000
12,500, 37,500
37,500, 12,500
NONE, 50,000
55. USING THE SAME DATA IN NUMBER 54 ABOVE, EXCEPT THAT 50% OF
THE FACE VALUE OF THE NOTE IS PAYABLE IN 2009 WHILE THE
REMAINING 50% IS PAYABLE IN 2010?
HOW MUCH INCOME IS TAXABLE TO ALMONTE IN 2008, 2009 AND IN
2010, RESPECTIVELY?
A)
B)
C)
D)
P50,000, NONE, NONE
37,500, 6,250, 6,250
12,500, 18,750, 18,750
0, 25,000, 25,000
56.
2008
NET INCOME BEFORE
WRITE-OFF OF
BAD DEBT
LESS: BAD DEBT
WRITTEN OFF
NET INCOME AFTER
BAD DEBT
2009
AMOUNT RECOVERED
CASE1
CASE2
CASE3
CASE4
70,000
70,000
70,000
70,000
40,000
80,000
55,000
85,000
40,000
(10,000)
15,000
(15,000)
40,000
30,000
40,000
85,000
THE TAXABLE AMOUNT ON THE RECOVERY OF BAD DEBT PREVIOUSLY
DEDUCTED, RESPECTIVELY, IS –
A)
B)
C)
D)
40,000, 30,000, 40,000, 85,000
40,000, 20,000, 40,000, 70,000
30,000, 30,000, 55,000, 85,000
30,000, 60,000, 25,000, 70,000
57.WHICH OF THE FOLLOWING STATEMENTS IS CORRECT WITH RESPECT
TO A LEASEHOLD CONTRACT?
STATEMENT I: SECURITY DEPOSITS ARE REPORTABLE AS INCOME OF THE
LESSOR IN THE YEAR OF RECEIPT
STATEMENT II: THE DEPRECIATION ON THE IMPROVEMENT IS TO BE
COMPUTED BY DIVIDING THE COST BY THE LIFE OF THE ASSET OR THE
REMAINING TERM OF THE LEASE, WHICHEVER IS LONGER
STATEMENT III: PREPAYMENT OF RENTALS BY THE LESSEE ARE TO BE
RECORDED BY THE LESSOR USING CASH METHOD EVEN IF IT IS
ORDINARILY USING ACCRUAL METHOD OF ACCOUNTING
A)
B)
C)
D)
I ONLY
I AND II
II AND III
III ONLY
NUMBERS 58 TO 62 ARE BASED ON THE FOLLOWING INFORMATION:
BRYAN LEASED A LAND TO JOSE FOR A PERIOD OF 11 YEARS STARTING
JANUARY 1, 2006 AT AN ANNUAL RENTAL OF P12,000. OBSERVING THE
PROVISIONS OF THE CONTRACT, JOSE CONSTRUCTED A BUILDING WHICH
SHALL BECOME THE PROPERTY OF BRYAN AT THE EXPIRATION OF THE
LEASE. THE CONSTRUCTION WAS COMPLETED ON JANUARY 1, 2009 AT A
COST OF P1,000,000 WITH AN ESTIMATED USEFUL LIFE OF 20 YEARS.
IT IS ALSO STIPULATED IN THE CONTRACT THAT THE LESSEE WILL PAY
THE P1,500 ANNUAL REAL PROPERTY TAX ON THE LAND.
58. ASSUMING THAT ON JANUARY 1, 2006, JOSE PAID P24,000 TO BRYAN
COVERING THE LEASE CONTRACT FOR 2 YEARS, HOW MUCH INCOME IS TO
BE REPORTED BY BRYAN IN 2006?
A)
B)
C)
D)
P12,000
13,500
24,000
25,500
59. HOW MUCH INCOME IS TO BE REPORTED BY BRYAN IN 2009 UNDER THE
OUTRIGHT METHOD?
A) P13,500
B) 1,500
C) 1,013,500
D) 1,000,000
60. HOW MUCH INCOME IS TO BE REPORTED BY BRYAN IN 2009 UNDER THE
SPREAD-OUT METHOD?
A)
B)
C)
D)
P13,500
1,500
1,013,500
88,500
61. HOW MUCH IS THE DEDUCTIBLE EXPENSE OF THE LESSEE IN 2009?
A)
B)
C)
D)
P138,500
63,500
125,000
13,500
62. ASSUMING THAT DUE TO THE FAULT OF THE LESSEE, THE LEASE
CONTRACT WAS TERMINATED ON JANUARY 1, 2011, HOW MUCH
INCOME IS TO BE REPORTED BY THE LESSOR IN 2011?
A)
B)
C)
D)
P763,500
750,000
88,500
1,013,500
NUMBERS 63 TO 69 ARE BASED ON THE FOLLOWING INFORMATION:
ARTURO LEASED A 216-SQUARE METER OF IDLE LAND TO LEIZZIE
COLLEGE OF BUSINESS (LCB), A PROPRIETARY EDUCATIONAL
INSTITUTION, FOR A PERIOD OF 20 YEARS EFFECTIVE JANUARY 1, 2006.
THE LEASE CONTRACT PROVIDES THAT LCB WILL ERECT A BUILDING
THEREON TO BE USED AS A CLASSROOM , WHICH IT DID ON THE LOT OF
ARTURO. THE AGREEMENT PROVIDES ALSO THAT THE BUILDING SHALL
BECOME THE PROPERTY OF THE LESSOR AT THE END OF THE LEASE. THE
BUILDING WAS COMPLETED ON JUNE 30, 2008 AT A COST OF P1,800,000.
THE ESTIMATED LIFE OF THE LEASEHOLD IMPROVEMENT IS 30 YEARS.
IT WAS FURTHER AGREED THAT LCB WILL PAY THE REAL ESTATE TAX ON
THE LAND ASSESSED AT P3,000 ANNUALLY. ON JANUARY 2, 2006, LCB PAID
ARTURO P120,000 CONSISTING OF RENTAL COVERING THE 2 YEARS
PERIOD(24 MONTHS) FROM 2006 TO 2007.
63. THE RENT INCOME TO BE REPORTED BY ARTURO IN 2006A)
B)
C)
D)
P60,000
123,000
120,000
63,000
64. THE RENT INCOME TO BE REPORTED BY ARTURO IN 2008 UNDER
OUTRIGHT METHODA) P60,000
B) 63,000
C) 1,860,000
D) 1,863,000
65. THE INCOME TO BE REPORTED BY ARTURO UNDER SPREAD-OUT
METHODA)
B)
C)
D)
P84,429
105,857
81,429
21,429
66. WHICH OF THE FOLLOWING STATEMENTS IS CORRECT?
A) EFFECTIVE JANUARY 1, 2006, THE LAND SHALL BE EXEMPT FROM
REAL ESTATE TAX
B) EFFECTIVE JUNE 30, 2008, THE LAND SHALL BE EXEMPT FROM REAL
ESTATE TAX
C) EFFECTIVE JANUARY 1, 2009, THE LAND AND THE BUILDING SHALL
BE EXEMPT FROM REAL ESTATE TAX
D) EFFECTIVE JUNE 30, 2008 THE LAND AND THE BUILDING SHALL BE
EXEMPT FROM REAL ESTATE TAX
67. THE DEDUCTIBLE EXPENSE OF LCB IN 2009A)
B)
C)
D)
P165,857
162,857
114, 429
84,429
68. THE INCOME TO BE REPORTED BY ARTURO IN 2009 UNDER SPREADOUT METHOD ISA) P105,857
B) 102,857
C) 114,429
D) 84,429
69. SUPPOSE THE LEASE CONTRACT WAS TERMINATED ON APRIL 1, 2012
DUE TO THE FAULT OF THE LESSEE, THE INCOME TO BE REPORTED
BY ARTURO UNDER SPREAD-OUT METHOD ON 2012 ISA)
B)
C)
D)
P1,443,000
1,485,857
1,440,000
1,482,857
70. ON JANUARY 1, 2006, ATO LEASED A LOT TO BENGBENG WITH A
BUILDING ERECTED THEREON FOR A PERIOD OF 10 YEARS. THE
LEASE CONTRACT PROVIDED THAT BENGBENG WILL PAY THE
FOLLOWING:
I. MONTHLY RENTAL OF P10,000
II. FIRE INSURANCE PREMIUM OF P15,000 PER YEAR
III. REAL PROPERTY TAX OF P5,000 PER YEAR
THE LESSEE WILL CONSTRUCT A CONCRETE FENCE SURROUNDING THE
LOT AT A COST OF P1,200,000 WITH A USEFUL LIFE OF 20 YEARS WHICH
SHALL BELONG TO THE LESSOR AT THE EXPIRATION OF THE LEASE. THE
FENCING WAS FINISHED ON JUNE 30, 2008.
IN 2008, ATO SHALL REPORT AS INCOME FROM LEASE (SPREAD-OUT
METHOD) AN AMOUNT OFA)
B)
C)
D)
P75,000
740,000
140,000
190,000
71. IN NUMBER 70 ABOVE, THE LESSEE CAN CLAIM A DEDUCTIBLE
EXPENSE IN 2008 OFA)
B)
C)
D)
P215,000
220,000
225,000
190,000
72. PROCEEDS OF INSURANCE TAKEN BY A CORPORATION ON THE LIFE
OF AN EXECUTIVE TO INDEMNIFY IT AGAINST LOSS IN CASE OF HIS
DEATH IS-(RPCPA)
A)
B)
C)
D)
EXEMPT FROM INCOME TAX
PART OF TAXABLE INCOME
SUBJECT TO FINAL TAX
PARTLY EXEMPT, PARTLY TAXABLE
73. CORCOR CORPORATION TOOK TWO LIFE INSURANCE POLICIES ON
THE LIFE OF ITS EVP, MRS. LOPEZ. IN ONE POLICY, THE BENEFICIARY
IS THE CORPORATION AND THE OTHER, DESIGNATES HER HUSBAND
AS THE REVOCABLE BENEFICIARY. THE INSURANCE PREMIUM PAID
BY CORCOR CORPORATION IS-(RPCPA)
A)
B)
C)
D)
TAX DEDUCTIBLE INSOFAR AS THE FIRST POLICY IS CONCERNED
TAX DEDUCTIBLE FOR BOTH POLICIES
NOT DEDUCTIBLE FOR BOTH POLICIES
FIRST POLICY IS NOT DEDUCTIBLE; SECOND POLICY IS DEDUCTIBLE
74. MRS. LUCAS WAS INSURED UNDER AN ENDOWMENT POLICY WITH A
VALUE OF P500,000. TOTAL PREMIUMS PAID BY HER DURING THE
TERM OF PREMIUM PAYMENTS ON THE POLICY WAS P490,000 FROM
THERE WAS A RETURN OF PREMIUMS OF P40,000.AT THE MATURITY
OF THE POLICY, MRS. LUCAS RECEIVED P500,000. THE INCOME OF
MRS. LUCAS UNDER THE POLICY IS-(RPCPA)
A)
B)
C)
D)
ZERO
P500,000
10,000
50,000
NUMBERS 75 AND 76 ARE BASED ON THE FOLLOWING INFORMATION:
SOFIA TOOK A LIFE INSURANCE FROM SUNSTAR INSURANCE COMPANY,
WITH HER HUSBAND NOLI AS THE BENEFICIARY. UNDER THE POLICY,
SUNSTAR WILL PAY SOFIA THE AMOUNT OF P500,000 WHEN THE POLICY
MATURES, OR TO HER BENEFICIARY HUSBAND IN CASE SHE DIES BEFORE
THE MATURITY. SOFIA WILL PAY P10,000 ANNUALLY FOR 20 YEARS.
75. ASSUMING THAT THE POLICY MATURED WHEN SOFIA REACHED 50
YEARS OLD AND SHE RECEIVED THE ENTIRE P500,000 FROM THE
INSURER, HOW MUCH INCOME SHOULD SHE REPORT?
A)
B)
C)
D)
P500,000
200,000
300,000
NONE
76. ASSUME THAT SOFIA DIED AFTER 10 YEARS OF PAYING PREMIUM.
HOW MUCH INCOME SHOULD BE REPORTED TO THE BIR?
A)
B)
C)
D)
P500,000
100,000
400,000
NONE
NUMBERS 77 TO 79 ARE BASED ON THE FOLLOWING INFORMATION:
PAUL INSURED HIS LIFE WITH AN INSURANCE COMPANY . UNDER THE
CONTRACT, HE WILL PAY A MONTHLY PREMIUM OF P2,000 FOR 10 YEARS.
IN CASE OF DEATH BEFORE THE 10TH YEAR, HIS BENEFICIARY WILL
RECEIVE AN INDEMNIFICATION IN THE AMOUNT OF P150,000. IF HE IS STILL
LIVING ON THE 10TH YEAR, HE WILL RECEIVE THE FACE VALUE OF P500,000.
77. IF PAUL DIES ON THE 5TH YEAR, HIS BENEFICIARY WILL REPORT AN
INCOME OFA)
B)
C)
D)
P500,000
150,000
260,000
EXEMPT
78. SUPPOSE PAUL DIES ON THE 5TH YEAR AND HIS BENEFICIARY WAS
OFFERED TO RECEIVE P150,000 IN LUMP SUM OR TO RECEIVE IT AT
P20,000 A MONTH FOR TEN(10) MONTHS AND THE BENEFICIARY
CHOSE THE 2ND OPTION, HE WILL REPORT AN INCOME OFA)
B)
C)
D)
P500,000
150,000
50,000
EXEMPT
79. SUPPOSE PAUL SURVIVED THE POLICY AND WAS ABLE TO RECEIVE
P500,000, HE WILL REPORT AN INCOME OFA)
B)
C)
D)
P500,000
260,000
150,000
NONE
80. ANDRES IS THE OWNER AND BENEFICIARY OF A P500,000 POLICY ON
THE LIFE OF HIS FATHER. ANDRES SELLS THE POLICY TO HIS
BROTHER ROLLY FOR P150,000. ROLLY SUBSEQUENTLY PAYS
PREMIUMS OF P50,000. UPON HIS FATHER’S DEATH, ROLLY MUST
A)
B)
C)
D)
INCLUDE P500,000 IN HIS GROSS INCOME
EXCLUDE THE ENTIRE PROCEEDS IN HIS GROSS INCOME
INCLUDE P300,000 IN HIS GROSS INCOME
INCLUDE P350,000 IN HIS GROSS INCOME
81. MR. BASIL INSURED HIS LIFE WITH HIS ESTATE AS BENEFICIARY.IN
2008, AFTER MR. BASIL HAD PAID P65,000 IN PREMIUM, HE ASSIGNED
THE POLICY TO MR. JOSE LLAMADO FOR P60,000, AND MR. LLAMADO
CONTINUED PAYING THE PREMIUMS. MR. BASIL DIED AND MR.
LLAMADO COLLECTED THE TOTAL PROCEEDS OF P200,000. MR.
LLAMADO, AFTER THE ASSIGNMENT AND BEFORE MR. BASIL’S
DEATH, PAID TOTAL PREMIUMS OF P80,000. AS A RESULT OF THE
ABOBE TRANSACTION, MR. LLAMADO-(RPCPA)
A)
B)
C)
D)
MAY CONSIDER THE PROCEEDS OF P200,000 AS EXEMPT FROM TAX
DERIVED A TAXABLE INCOME OF P55,000
DERIVED A TAXABLE INCOME OF P60,000
ANSWER NOT GIVEN
82. BINATA
REYES
WON
THE
INTERNATIONAL
BILLIARD
CHAMPIONSHIP HELD IN MADRID, SPAIN. THE TOURNAMENT WAS
SANCTIONED BY A NATIONAL SPORTS ASSOCIATION WHICH IS
RECOGNIZED BY THE PHILIPPINE OLYMPIC COMMITTEE. HE WAS
AWARDED U.S.$60,000 BY THE SPONSOR OF THE TOURNAMENT. HE
WAS ALSO GIVEN P250,000 CASH BY SAN MIGUEL CORPORATION AS
PRIZE OR AWARD.
IN THE SAME YEAR, HE ENTERED INTO A CONTRACT WITH THE SAME
COMPANY TO ADVERTISE THEIR PRODUCT FOR P1,500,000.
IF THE EXCHANGE RATE OF EVERY U.S. $1 IS P45, BINATA REYES SHOULD
REPORT AN INCOME OF –
A)
B)
C)
D)
P4,750,000
1,500,000
1,750,000
3,250,000
83. WHILE CROSSING ALONG THE INTERSECTION OF LEGARDA AND
RECTO AVENUE, MISS MINA MALAS WAS BUMPED BY A PASSENGER
JEEPNEY. AS A CONSEQUENCE OF THE ACCIDENT, SHE WAS
HOSPITALIZED FOR 20 DAYS. THE DRIVER AND THE OPERATOR OF
THE PASSENGER JEEPNEY PAID HER A TOTAL AMOUNT OF P135,000
FOR THE FOLLOWING EXPENSES THAT SHE INCURRED:
HOSPITAL BILLS
COST OF MEDICINES
MORAL DAMAGES FOR MENTAL
ANGUISH AND OTHERS
P60,000
15,000
60,000
SHE ALSO RECEIVED P20,000 AS SETTLEMENT OF A LIBEL CASE THAT SHE
FILED AGAINST A TV STATION WHICH ANNOUNCED THAT SHE WAS
PREGNANT AT THE TIME OF THE ACCIDENT AND THAT THE FETUS WAS
ABORTED.
THE INCOME TO BE REPORTED BY MINA ISA)
B)
C)
D)
ZERO
P20,000
60,000
155,000
84. MR. MONTES WAS INJURED IN A VEHICULAR ACCIDENT IN 2008. HE
INCURRED AND PAID MEDICAL EXPENSES OF P20,000 AND LEGAL
FEES OF P10,000 DURING THE YEAR. IN 2009, HE RECEIVED P70,000 AS
SETTLEMENT FROM THE INSURANCE COMPANY WHICH INSURED
THE CAR OWNED BY THE OTHER PARTY INVOLVED IN THE
ACCIDENT. FROM THE ABOVE PAYMENTS AND TRANSACTIONS, THE
AMOUNT OF TAXABLE INCOME OF MR. MONTES IN 2008 IS-(RPCPA)
A)
B)
C)
D)
ZERO
P40,000
70,000
50,000
85. AN ACCIDENT ATTRIBUTED TO THE NEGLIGENCE OF THE DRIVER OF
SUPERMAN LINES RESULTED IN THE DEATH OF RICHARD’S WIFE,
PHYSICAL INJURIES TO RICHARD THAT PREVENTED HIM FROM
WORKING FOR TWO(2) MONTHS AND THE TOTAL WRECK OF HIS
BRAND NEW CAR WHICH HE HAD BOUGHT FOR P450,000.
IN AN ACTION FOR DAMAGES, THE COURT AWARDED TO RICHARD THE
FOLLOWING:
P40,00040,00080,000-
INJURIES TO RICHARD CONSISTING MAINLY IN THE LOSS OF
THE LEFT LEG
TWO MONTHS SALARY OF RICHARD
FOR THE DEATH OF HIS WIFE
100,000600,000-
MORAL DAMAGES FOR THE PHYSICAL SUFFERING AND
MENTAL ANGUISH
FOR THE LOSS OF HIS CAR, THE VALUE OF WHICH HAD
INCREASED
BASED ON THE FOREGOING, RICHARD SHOULD REPORT INCOME OFA)
B)
C)
D)
P190,000
680,000
830,000
240,000
86. LYDIA WAS HIT BY A WAYWARD BUS WHILE ON HER WAY HOME.
SHE SURVIVED BUT HAD TO PAY P150,000 FOR HER
HOSPITALIZATION. SHE WAS UNABLE TO WORK FOR SIX(6) MONTHS
WHICH MEANT THAT SHE DID NOT RECEIVE HER USUAL SALARY OF
P10,000 A MONTH OR A TOTAL OF P60,000. SHE SUED THE BUS
COMPANY AND WAS ABLE TO OBTAIN A FINAL JUDGMENT
AWARDING HER P150,000 AS REIMBURSEMENT FOR HER
HOSPITALIZATION, P60,000 FOR THE SALARIES SHE FAILED TO
RECEIVE WHILE HOSPITALIZED, AND P250,000 AS MORAL DAMAGES
FOR HER PAIN AND SUFFERING. SHE WAS ABLE TO COLLECT IN
FULL FROM THE JUDGMENT.
HOW MUCH INCOME DID SHE REALIZE WHEN SHE COLLECTED FROM THE
JUDGMENT?
A)
B)
C)
D)
P460,000
250,000
60,000
400,000
87. SAMSONA WAS INJURED IN A VEHICULAR ACCIDENT IN 2007. SHE
INCURRED AND PAID HOSPITAL EXPENSES OF P30,000 AND LEGAL
FEES OF P15,000 DURING THAT YEAR. IN 2008, SHE RECEIVED P40,000
AS SETTLEMENT FROM THE INSURANCE COMPANY WHICH INSURED
THE CAR OWNED BY DIMAR, THE OTHER PARTY INVOLVED IN THE
ACCIDENT. FROM THE ABOVE PAYMENTS AND TRANSACTIONS, THE
AMOUNT OF INCOME TAXABLE TO SAMSONA ISA)
B)
C)
D)
P40,000 IN 2008
5,000 IN 2008
5,000 IN 2007
NONE
88. WHICH OF THE FOLLOWING IS A TAXABLE INCOME?-(RPCPA)
A)
B)
C)
D)
INCOME FROM QUALIFIED PENSION PLAN
COM;PENSATION FOR PERSONAL INJURIES
MORAL DAMAGES
INTEREST ON MORAL DAMAGES
89. MISS TUAZON HAD RECENTLY JOINED MMC AS SALES EXECUTIVE.
SHE WAS ADVISED TO BE RETRENCHED BECAUSE THE COMPANY
WAS LOSING HEAVILY, BUT THAT SHE WOULD BE GIVEN A
SUBSTANTIAL SEPARATION PAY. THE GENERAL MANAGER,
HOWEVER, SUGGESTED TO MISS TUAZON TO FILE A LETTER OF
RESIGNATION FROM THE COMPANY, INSTEAD OF HAVING BEEN
INVOLUNTARILY SEPARATED AS THE LATTER WOULD HAVE
IMPLICATIONS OF INEFFICIENCY ON HER PART. MISS TUAZON
CHOSE TO RESIGN FROM THE COMPANY AND RECEIVED THE SUM
OF P100,000 AS SEPARATION PAY. THE ABOVE AMOUNT IS-(RPCPA)
A)
B)
C)
D)
EXEMPT FROM INCOME TAX
TAXABLE IN FULL
NON-DEDUCTIBLE EXPENSE ON THE PART OF THE COMPANY
PARTIALLY TAXABLE
90. LETTY, AN OFFICIAL OF SAMPAGUITA CORPORATION ASKED FOR
AN EARLIER RETIREMENT BECAUSE SHE WAS EMIGRATING TO
CANADA. SHE WAS PAID P1 MILLION AS A SEPARATION PAY IN
RECOGNITION OF HER VALUABLE SERVICES TO THE CORPORATION.
SHANE, ANOTHER OFFICIAL OF THE SAME COMPANY WAS SEPARATED
FOR OCCUPYING A REDUNDANT POSITION. SHE WAS GIVEN P500,000 AS
SEPARATION PAY.
SHEILA WAS SEPARATED DUE TO HER FAILING EYESIGHT. SHE WAS GIVEN
P250,000 AS SEPARATION PAY.
ALL OF THE THREE(3) WERE NOT QUALIFIED TO RETIRE UNDER THE BIRAPPROVED PENSION PLAN OF THE CORPORATION.
Q1: IS THE SEPARATION PAY GIVEN TO LETTY SUBJECT TO INCOME TAX?
Q2: HOW ABOUT THE SEPARATION PAY RECEIVED BY SHANE?
Q3: HOW ABOUT THE SEPARATION PAY RECEIVED BY SHEILA?
A) YES TO ALL QUESTIONS
B) YES TO 2ND QUESTION
C) NO TO ALL QUESTIONS
D) NO TO 2ND AND 3RD QUESTIONS
91. DURING THE YEAR, BEN RECEIVED A COCONUT LAND FROM HIS
MOTHER BY WAY OF AN INTER-VIVOS DONATION. THE LAND HAD A
MARKET VALUE OF P700,000 AND EARNING AN AVERAGE ANNUAL
INCOME OF P50,000.
IN THE SAME YEAR, HIS MOTHER DIED. HE INHERITED A PASSENGER BUS
VALUED AT P400,000 AND A RESIDENTIAL HOUSE WORTH P2,000,000. THE
BUS EARNED A TOTAL INCOME OF P30,000 IN THE HANDS OF BEN.
AS A CONSEQUENCE OF HIS MOTHER’S DEATH, HE RECEIVED P400,000
FROM AN INSURANCE COMPANY AS PROCEEDS OF AN INSURANCE POLICY
TAKEN BY HIS MOTHER WHO APPOINTED HIM AS THE BENEFICIARY. THE
TOTAL PREMIUMS PAID WAS P150,000.
THE INCOME SUBJECT TO TAX ISA)
B)
C)
D)
P3,500,000
3,350,000
330,000
80,000
92. AFTER WORKING FOR 30 YEARS AT STO. DOMINGO CORPORATION,
MISS TAPIA RETIRED FROM EMPLOYMENT AT THE AGE OF 60. SHE
RECEIVED P600,000 AS RETIREMENT PAY FROM THE PRIVATE
RETIREMENT PLAN MAINTAINED BY THE EMPLOYER.
OTHER THAN HER RETIREMENT BENEFITS, SHE ALSO RECEIVED HER
ENDOWMENT INSURANCE POLICY IN THE AMOUNT OF P400,000 WHICH SHE
WAS PAYING FOR 20 YEARS AT AN ANNUAL PREMIUM OF P5,000.
HOW MUCH INCOME MUST BE REPORTED BY MISS TAPIA?
A)
B)
C)
D)
P300,000
400,000
600,000
NONE
93. ANTONY WAS HIRED AS STAFF AUDITOR OF RGF AND COMPANY IN
1991. IN DECEMBER 1998 HE TRANSFERRED TO BAYAN AND
ASSOCIATES. IN 2000, HE RETURNED BACK TO RGF AND COMPANY
UNTIL HIS RETIREMENT IN 2006 AT THE AGE OF 55.
QUESTION 1: ARE THE RETIREMENT BENEFITS TAXAB LE TO ANTONY?
QUESTION 2: SUPPOSE HE WAS TERMINATED FROM EMPLOYMENT DUE TO
DISHONESTY. IS THE SEPARATION PAY TAXABLE TO ANTONY?
QUESTION 3: SUPPOSE HE WAS TERMINATED FROM EMPLOYMENT DUE TO
THE MERGER OF THE TWO AUDIT FIRMS. WILL THE
SEPARATION PAY TAXABLE TO ANTONY?
A)
B)
C)
D)
NO, YES, NO
NO, YES, YES
YES, NO, NO
YES, NO, YES
94. ON OCTOBER 1, 2009, GILDA INHERITED PROPERTIES WORTH
P3,000,000 FROM HER MOTHER. THE PROPERTIES ARE EARNING
INCOME OF P90,000 A MONTH.
HOW MUCH INCOME IS TO BE REPORTED BY GILDA IN 2009?
A)
B)
C)
D)
P3,090,000
3,000,000
3,270,000
270,000
95. VILLAMOR, AN EMPLOYEE OF A COOPERATIVE WAS REGULARLY
RECEIVING A MONTHLY SALARY AND ALLOWANCE OF P3,500 AND
P1,000, RESPECTIVELY. ON JUNE 1, 2008, HE WAS RETRENCHED BY
THE COOPERATIVE PAYING HIM A SEPARATION PAY OF P125,000. HE
DECIDED TO USE THIS MONEY IN BUYING TRIMOBILE. FOR SIX(6)
MONTHS, HE EARNED A NET INCOME OF P24,000.
HOW MUCH INCOME SHOULD VILLAMOR DECLARE IN 2008 FOR INCOME
TAX PURPOSES?
A)
B)
C)
D)
P48,750
46,500
173,750
171,000
96. RAMONA MONTERO WAS RETIRED BY HER EMPLOYERCORPORATION IN 2008 AND PAID P2,000,000 AS A RETIREMENT
GRATUITY WITHOUT ANY DEDUCTION OF WITHHOLDING TAX. THE
CORPORATION BECAME BANKRUPT IN 2007. CAN THE BIR SUBJECT
THE P2,000,000 RETIREMENT GRATUITY TO INCOME TAX?-(RPCPA)
1ST ANSWER: NO, IF THE RETIREMENT GRATUITY WAS PAID BASED ON A
REASONABLE PENSION PLAN WHERE MONTERO WAS 60 YEARS OLD
AND HAS SERVED THE CORPORATION FOR 9 YEARS.
2ND ANSWER: YES, IF MONTERO WAS FORCED BY THE CORPORATION TO
RESIGN DUE TO RETRENCHMENT.
A)
B)
C)
D)
BOTH ANSWERS ARE WRONG
BOTH ANSWERS ARE CORRECT
FIRST ANSWER IS CORRECT, THE SECOND IS WRONG
FIRST ANSWER IS WRONG, THE SECOND IS CORRECT.
97. WHICH OF THE CEILINGS ON THE FOLLOWING DE MINIMIS BENEFITS
IS CORRECT?
A)
B)
C)
D)
RICE SUBSIDY
P1,000
1,000
1,500
1,500
UNIFORM ALLOWANCE
P3,000
4,000
3,500
4,000
98. 1ST STATEMENT:: LAUNDRY ALLOWANCE NOT EXCEEDING P300 PER
MONTH IS NOT EXEMPT DE MINIMIS BENEFIT IF
GIVEN TO RANK-AND-FILE EMPLOYEES
2ND STATEMENT: RICE SUBSIDY OF P1,500 PER MONTH IS AN EXEMPT DE
MINIMIS BENEFIT REGARDLESS OF WHETHER THE
RECIPIENT EMPLOYEE IS OCCUPYING A MANAGERIAL
POSITION OR NOT
A) BOTH STATEMENTS ARE WRONG
B) BOTH STATEMENTS ARE CORRECT
C) THE FIRST STATEMENT IS CORRECT; THE SECOND STATEMENT IS
WRONG
D) THE FIRST STATEMENT IS WRONG; SECOND STATEMENT IS
CORRECT
99. AFTER WORKING FOR 3O YEARS AND DUE TO OLD AGE, RAFFY
RETIRED FROM HIS EMPLOYMENT ON DECEMBER 31, 2008 AS A
RANK-AND-FILE EMPLOYEE OF TUMAGAY CORPORATION. AS A
CONSEQUENCE OF HIS RETIREMENT, HE RECEIVED THE FOLLOWING
FROM HIS EMPLOYER:
SALARY FOR 2008
CHRISTMAS GIFT
ANNIVERSARY BONUS
LOYALTY AWARD
RETIREMENT PAY
P250,000
25,000
2,500
10,000
750,000
BASED ON THE ABOVE DATA, THE AMOUNT SUBJECT TO TAX OF RAFFY ISA)
B)
C)
D)
P250,000
257,500
252,500
1,037,500
NUMBERS 100 AND 101 ARE BASED ON THE FOLLOWING INFORMATION:
RICKY HAD THE FOLLOWING DATA FROM HIS EMPLOYMENT IN 2008:
MONTHLY SALARY
TAXES WITHHELD
PAG-IBIG CONTRIBUTIONS
UNION DUES
PHILHEALTH CONTRIBUTIONS
SSS PREMIUMS
13TH MONTH PAY
MID-YEAR BONUS
;LOYALTY AWARD
P12,000
8,000
1,500
2,400
720
480
12,000
12,000
5,000
100.
THE PORTION OF COMPENSATION WHICH IS EXCLUDED FROM
THE GROSS COMPENSATION INCOME IF RICKY IS A RANK-AND-FILE
EMPLOYEE ISA)
B)
C)
D)
P5,100
34,100
29,000
NONE
101.
A)
B)
C)
D)
THE GROSS COMPENSATION INCOME OF RICKY IN 2008 IS-
P144,000
150,000
109,900
138,900
102.
WHICH OF THE FOLLOWING COMPENSATION PAYMENTS TO A
MINIMUM WAGE EARNER IS SUBJECT TO INCOME TAX?
A)
B)
C)
D)
HOLIDAY PAY
OVERTIME PAY
NIGHT SHIFT DIFFERENTIAL PAY
NONE OF THE ABOVE
103.
THREE(3) TAXPAYERS HAVE THE FOLLOWING DATA:
2009 BASIC PAY
MONTHLY BASIC PAY
HOLIDAY PAY
OVERTIME PAY
HAZARD PAY
NIGHT SHIFT DIFF PAY
TOTAL PAY
FOR THE MONTH
ALCANZO
P99,048
8,254
435
1,256
-
BARRIENTOS
P101,172
8,431
1,459
1,686
CORPORAL
P84,368
10,546
2,543
1,000
-
9,945
11,576
14,089
WHO OF THE ABOVE TAXPAYER(S) IS/ARE EXEMPT FROM INCOME TAX?
A)
B)
C)
D)
ALCANZO ONLY
ALCANZO AND BARRIENTOS
ALCANZO, BARRIENTOS AND CORPORAL
BARRIENTOS AND CORPORAL
CHAPTER 12- INCOME TAX OF CORPORATIONS
MULTIPLE CHOICE
104.
FOR PURPOSES OF INCOME TAXATION, WHICH OF THE
FOLLOWING IS NOT CONSIDERED AS A CORPORATION?
A)
B)
C)
D)
GENERAL PROFESSIONAL PARTNERSHIP
BUSINESS PARTNERSHIP
UNREGISTERED PARTNERSHIP
JOINT STOCK COMPANIES
105.
WHICH OF THE FOLOWING BUSINESSES IS NOT TAXABLE AS A
CORPORATION?
A) ANDREA, BARBIE AND CRISSY CONTRIBUTED P500,000 EACH AND
OPENED UP A DEPARTMENT STORE IN THE DOWNTOWN. THEY
AGREED THAT WHATEVER NET PROFIT IS EARNED WILL BE
DISTRIBUTED EQUALLY TO THEM. THEY DID NOT BOTHER TO
REGISTER THE BUSINESS WITH THE SECURITIES AND EXCHANGE
COMMISSION
B) GIGI AND JAYJAY, TWO SENIOR STAFF AUDITORS OF A BIG
ACCOUNTING AND AUDITING FIRM, RESIGNED FROM THEIR JOB
AND ORGANIZED A NEW FIRM WHICH THEY NAMED AS GIGI, JAYJAY
AND COMPANY, CPAs.
C) LAVINIA, DORINA, ROSA MIA AND CAPICAT FORMED A BUSINESS
ORGANIZATION WITH THE FOLLOWING AGREED FEATURES: 1) THEY
ARE DEPRIVED OF THEIR GENERAL AGENCY TO ACT ON BEHALF OF
THEIR VENTURES; 2) THE POWERS OF MANAGEMENT ARE VESTED
ON THE BOARD OF TRUESTEES; 3) THE OWNERSHIP IS REPRESENTED
IN TRANSFERABLE CERTIFICATES; 4) THE BUSINESS CONTINUES FOR
A FIXED TERM NOTWITHSTANDING THE DEATH OR DISABILITY OF
ONE OF THEM AND ; 5) THE LIABILITY OF THE PARTNERS IS NOT
LIMITED TO THEIR CONTRIBUTIONS
D) A GROUP OF FIVE(5) ENTREPRENEURS HAD ORGANIZED, FILED AND
REGISTERED THE ARTICLES OF INCORPORATION OF COJANGKUHA
CORPORATION. IT HAS AN AUTHORIZED CAPITAL STOCK OF P10
MILLION DIVIDED INTO 100,000 SHARES EACH SHARE HAVING A PAR
VALUE OF P100
106.
A)
B)
C)
D)
WHICH OF THE FOLLOWING IS SUBJECT TO INCOME TAX?
SSS AND GSIS
PHILIPPINE HEALTH INSURANCE CORPORATION(PHIC)
PROFESSIONAL REGULATION COMMISSION(PRC)
PHILIPPINE AMUSEMENT AND GAMING CORPORATION(PAGCOR)
107.
“TAXABLE NET INCOME RECEIVED DURING EACH YEAR FROM
ALL SOURCES” IS THE TAX BASE FOR INCOME PURPOSES OF THIS
CLASS OF TAXPAYERS-(RPCPA)
A) DOMESTIC CORPORATIONS
B) RESIDENT CORPORATIONS
C) RESIDENT FOREIGN CORPORATIONS ENGAGED IN TRADE OR
BUSINESS IN THE PHILIPPINES
D) RESIDENT FOREIGN CORPORATION NOT ENGAGED IN TRADE OR
BUSINESS IN THE PHILIPPINES
108.
A)
B)
C)
D)
ONE OF THE FOLLOWING IS TAXED ON GROSS INCOME-
DOMESTIC CORPORATION
RESIDENT FOREIGN CORPORATION
NON-PROFIT CEMETERY
NON-RESIDENT FOREIGN CORPORATION
109.
RGF CORPORATION, A DOMESTIC CORPORATION HAS THE
FOLLOWING RECORDS OF INCOME AND EXPENSES IN 2009:
GROSS INCOME, NET OF 1% WHT
EXPENSES
RENT INCOME, NET OF 5% WHT
P1,435,500
756,000
136,800
EXPENSES ON RENT
DIVIDEND FROM DOMESTIC CORPORATION
ROYALTY
INTEREST FROM BANK DEPOSIT WITH PNB, GROSS OF TAX
34,600
25,000
80,000
15,000
THE INCOME TAX PAYABLE BY RGF CORPORATION ISA)
B)
C)
D)
P241,020
219,320
803,400
259,490
110.
BASED ON THE DATA IN NUMBER 109 ABOVE, THE TOTAL
FINAL TAXES PAYABLE ON RGF CORPORATION ISA)
B)
C)
D)
P19,000
21,500
33,250
3,000
111.
LCY CORPORATION, A CORPORATION ENGAGED IN BUSINESS
IN THE PHILIPPINES AND ABROAD, HAS THE FOLLOWING DATA IN
2009:
GROSS INCOME, PHILIPPINES
EXPENSES, PHILIPPINES
GROSS INCOME, USA
EXPENSES, USA
INTEREST ON BANK DEPOSIT
P975,000
750,000
770,000
630,000
25,000
THE INCOME TAX DUE IF THE CORPORATION IS-
A)
B)
C)
D)
DOMESTIC
RESIDENT
FOREIGN
NON-RESIDENT
FOREIGN
P116,800
127,750
312,000
109.500
P72,000
78,750
515,850
67,500
P320,000
350,000
116,800
300,000
112.
FLT CORPORATION, A DOMESTIC CORPORATION HAS THE
FOLLOWING RECORD OF INCOME AND EXPENSES DURING THE
YEAR:
GROSS INCOME
EXPENSES
DIVIDEND FROM A RESIDENT FOREIGN CORPORATION
ROYALTIES, PHILIPPINES
ROYALTIES, USA
INTEREST ON TIME DEPOSIT WITH METROBANK
INTEREST ON MONEY MARKET PLACEMENT
P1,540,000
654,000
95,000
230,000
175,000
18,000
25,000
THE TAXABLE INCOME ON FLT CORPORATION ISA)
B)
C)
D)
P886,000
1,156,000
641,000
616,000
113.
ISA)
B)
C)
D)
THE TOTAL FINAL WITHHOLDING TAX ON FLT CORPORATION
P51,475
72,600
103,120
148,100
NUMBERS 114 TO 117 ARE BASED ON THE FOLLOWING INFORMATION:
GCF CORPORATION WHICH STARTED WITH ITS OPERATIONS IN 1990 HAS
THE FOLLOWING RECORDS IN 2009:
IST QTR
P500,000
400,000
GROSS PROFIT
EXPENSES
DIVIDENDDOMESTIC COMPANY
15,000
INCOME TAX WITHHELD 5,000
RENT INCOME, GROSS
OF 5% WHT
36,000
2ND QTR
P850,000
770,000
3RD QTR
P800,000
640,000
4TH QTR
P770,000
575,000
15,000
7,000
20,000
8,000
20,000
6,750
36,000
48,000
48,000
THE COMPANY HAD AN EXCESS PAYMENT OF P12,500 IN 2008 FROM WHICH
IT HAD DECIDED TO CLAIM TAX CREDIT
114.
THE INCOME TAX PAYABLE AT THE END OF THE FIRST
QUARTER ISA) P40,800
B) 36,720
C) 28,300
D) 21,500
115.
THE INCOME TAX PAYABLE AT THE END OF THE SECOND
QUARTER ISA)
B)
C)
D)
P19,200
28,320
31,800
26,000
116.
THE INCOME TAX PAYABLE AT THE END OF THE THIRD
QUARTER ISA)
B)
C)
D)
P52,000
62,400
12,640
NONE
117.
THE INCOME TAX PAYABLE/REFUND AT THE END OF THE
YEAR ISA)
B)
C)
D)
P25,090
63,750
75,900
68,610
118.
ABC COMPANY, A DOMESTIC CORPORATION HAS THE
FOLLOWING DATA-(RPCPA)
INCOME TAX FOR 2008
LESS: TAX CREDITS
EXCESS TAX CREDITS
P110,000
125,000
15,000
2009
INCOME NET OF 1% WHT
DEDUCTIONS
1ST QTR
P495,000
460,000
FOR THE 1ST QUARTER OF 2009, THE CORPORATION WILL REPORT:
A)
B)
C)
D)
EXCESS TAX CREDIT OF P6,000
TAX PAYABLE OF P7,000
EXCESS TAX CREDIT OF P8,000
TAX PAYABLE OF P2,000
119.
A DOMESTIC CORPORATION HAS THE FOLLOWING DATA:
EXCESS TAX CREDITS FROM 2008
P15,000
FOR THE YEAR 2009:
INCOME, NET OF 1% WHT
DEDUCTIONS
1ST QTR
P495,000
460,000
2ND QTR
P792,000
700,000
HOW MUCH IS THE INCOME TAX STILL DUE AND PAYABLE IN THE SECOND
QUARTER?-(RPCPA)
A)
B)
C)
D)
P21,000
14,000
10,400
29,440
120.
IF THE GROSS INCOME FROM UNRELATED ACTIVITY EXCEEDS
50% OF THE TOTAL GROSS INCOME DERIVED BY ANY PRIVATE
EDUCATIONAL INSTITUTION, THE RATE SHALL BE 30% BASED ON
THE ENTIRE TAXABLE INCOME. THIS PRINCIPLE IS KNOWN AS
A)
B)
C)
D)
CONSTRUCTIVE RECEIPT
TAX BENEFIT RULE
END RESULT DOCTRINE
PREDOMINANCE TEST
121.
IN 2009, RGF UNIVERSITY, A PROPRIETARY EDUCATIONAL
INSTITUTION REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION
(SEC)
AND
COMMISSION
ON
HIGHER
EDUCATION(CHED), SPENT P15,000,000 FOR THE CONSTRUCTION OF A
NEW BUILDING. FOR INCOME TAX PURPOSES, THE AMOUNT MAYBE:
A) CLAIMED ENTIRELY AS DEDUCTION FROM ITS 2007 GROSS INCOME
B) CLASSIFIED AS AN ASSET OR EXPENSED OUTRIGHT, AT THE OPTION
OF THE GOVERNMENT
C) CLASSIFIED AS AN ASSET OR EXPENSED OUTRIGHT, AT THE OPTION
OF THE TAXPAYER
D) CLASSIFIED AS AN ASSET AND CLAIM AN ANNUAL DEPRECIATION
OVER THE LIFE OF THE BUILDING
NUMBERS 122 AND 123 ARE BASED ON THE FOLLOWING INFORMATION:
THE QUEZON SCHOOL OF BUSINESS AND ARTS (QSBA) IS A PRIVATE
EDUCATIONAL INSTITUTION RECOGNIZED BY THE GOVERNMENT. THE
FOLLOWING ARE THE FINANCIAL DATA FOR THE ITS FISCAL YEAR ENDING
JUNE 30, 2009:
TUITION FEES
MISCELLANEOUS FEES
INTEREST ON BANK DEPOSITS
RENT INCOME OF SCHOOL FACILITIES TO OUTSIDERS
SALARY AND BONUSES, ALL PERSONNEL
OTHER OPERATING EXPENSES
REPAYMENT OF LOAN
QUARTERLY (THREE QUARTERS) INCOME TAX PAID
P12,800,000
1,800,000
12,300
350,000
7,500,000
3,500,000
400,000
48,000
A BUILDING WAS CONSTRUCTED ON APRIL 2, 2009 AT A COST OF P2,000,000
WITH A DEPRECIABLE LIFE OF 50 YEARS.
122.
ASSUMING THE COST OF CONSTRUCTION IS TREATED AS AN
EXPENSE, THE INCOME TAX PAYABLE BY THE SCHOOL FOR THE
YEAR ENDED JUNE 30, 2009 ISA)
B)
C)
D)
P343,000
147,000
576,000
160,000
123.
THE INCOME TAX PAYABLE IF THE COST OF BUILDING
CONSTRUCTION IS CAPITALIZED:
A)
B)
C)
D)
P346,000
147,000
1,203,200
345,667
124.
IN 2009, PROSPEROUS CORPORATION, A DOMESTIC
CORPORATION, HAD A NET INCOME OF P2,000,000. IT PAID A
CORPORATE TAX OF 30% LEAVING A DISTRIBUTABLE INCOME OF
P1,400,000. IF A DIVIDEND IS DECLARED BY THE CORPORATION AND
RECEIVED BY THE FOLLOWING STOCKHOLDERS, WHICH OF THE
FOLLOWING STATEMENTS IS FALSE?
A) NON-RESIDENT ALIENS ENGAGED IN TRADE OR BUSINESS ARE
LIABLE TO PAY 30% DIVIDEND TAX
B) NON-RESIDENT ALIENS NOT ENGAGED IN TRADE OR BUSINESS ARE
LIABLE TO PAY 25% DIVIDEND TAX
C) RESIDENT CITIZENS ARE LIABLE TO PAY 10% DIVIDEND TAX
D) RESIDENT FOREIGN CORPORATIONS ARE EXEMPT FROM THE
PAYMENT OF DIVIDEND TAX
125.
DIVIDENDS FROM A DOMESTIC CORPORATION AND/OR SHARE
IN THE NET INCOME OF A TAXABLE PARTNERSHIP RECEIVED BY A
CITIZEN DURING THE YEAR 2009 IS SUBJECT TO A FINAL TAX OF(RPCPA)
A)
B)
C)
D)
ZERO
30%
20%
10%
126.
THE TY CORPORATION IS AN INTERNATIONAL CARRIER
DOING BUSINESS IN THE PHILIPPINES. ITS TAXABLE BASE FOR
INCOME TAX PURPOSES IS-(RPCPA)
A)
B)
C)
D)
GROSS PHILIPPINE BILLINGS
GROSS PHILIPPINE BILLINGS MINUS DEDUCTIBLE EXPENSES
REGULAR RATES OF 32% OF ITS NET TAXABLE INCOME
ALLOCATION OF INCOME FROM SOURCES WITHIN AND WITHOUT
THE PHILIPPINES, AS WELL AS EXPENSES
127.
A RESIDENT INTERNATIONAL CARRIER HAS THE FOLLOWING
DATA FOR THE CURRENT YEAR: GROSS INCOME OF P700,000 AND
EXPENSES OF P200,000 FROM THE PHILIPPINES; GROSS INCOME OF
P500,000 AND EXPENSES OF P100,000 FROM HONGKONG. HOW MUCH
IS THE TAX PAYABLE OF THE CORPORATION?-(RPCPA)
A)
B)
C)
D)
P288,000
17,500
160,000
30,000
128.
A)
B)
C)
D)
ONE OF THE FOLLOWING IS EXEMPT FROM INCOME TAX
PROPRIETARY EDUCATIONAL INSTITUTION
PRIVATE CEMETERIES
GOVERNMENT EDUCATIONAL INSTITUTIONS
MUTUAL SAVINGS BANK
129.
ON FEBRUARY 5, 2009, ZORRO CORPORATION DECLARES 20%
STOCK DIVIDEND AND ISSUED SHARES OF STOCKS AMOUNTING TO
P100,000. ON MARCH 20, 2009, THE CORPORATION REDEEMED THE
STOCK DIVIDEND BY VIRTUE OF WHICH THE STOCKHOLDERS
SURRENDERED THEIR STOCK CERTIFICATES IN RETURN FOR THE
CASH PAID TO THEM BY ZORRO CORPORATION IN THE AMOUNT OF
P100,000.
A) THE STOCK DIVIDENDS DECLARED ARE TAXABLE BECAUSE
GENERALLY, STOCK DIVIDENDS ARE SUBJECT TO INCOME TAX
B) THE DIVIDENDS ARE TAXABLE TO THE STOCKHOLDERS BECAUSE
THEY ARE ACTUALLY PROPERTY DIVIDENDS.
C) THE REDEMPTION OF THE STOCK DIVIDEND IS ESSENTIALLY
EQUIVALENT TO THE DISTRIBUTION OF A TAXABLE DIVIDEND.
HENCE, THE AMOUNT SO DISTRIBUTED IN REDEMPTION SHALL BE
CONSIDERED AS TAXABLE INCOME
D) THE DISTRIBUTION AND THE REDEMPTION OF THE STOCKS ARE NOT
TAXABLE BECAUSE STOCK DIVIDENDS ARE EXEMPT FROM INCOME
TAX
130.
IF A CORPORATION DISTRIBUTES ITS ASSETS TO ITS
STOCKHOLDERS UPON DISSOLUTION, THIS KIND OF CORPORATE
DISTRIBUTION WILL RESULT IN-(RPCPA)
A)
B)
C)
D)
STOCK DIVIDENDS
PROPERTY DIVIDENDS
CASH DIVIDENDS
LIQUIDATING DIVIDENDS
131.
IF A CORPORATION TO WHICH THE STOCKHOLDER IS
INDEBTED FORGIVES THE DEBT, THE TRANSACTION HAS THE
EFFECT OF A PAYMENT OF WHAT KIND OF DIVIDEND?-(RPCPA)
A)
B)
C)
D)
STOCK DIVIDEND
CASH DIVIDEND
LIQUIDATING DIVIDEND
INDIRECT DIVIDEND
SPECIAL TOPIC-MINIMUM CORPORATE INCOME TAX
132.
ON-
THE MINIMUM CORPORATE INCOME TAX (MCIT) IS IMPOSED
A) 2% OF GROSS INCOME
B) 10% OF GROSS INCOME
C) 5% OF GROSS INCOME
D) 15% OF GROSS INCOME
133.
ON-
THE MINIMUM CORPORATE INCOME TAX (MCIT) IS IMPOSED
A) PROPRIETARY EDUCATIONAL CORPORATIONS TAXABLE AT 10% OF
GROSS INCOME
B) DEPOSITARY BANKS UNDER THE EXPANDED FOREIGN CURRENCY
DEPOSIT SYSTEM
C) BUSINESS PARTNERSHIPS
D) OFFSHORE BANKING UNITS SUBJECT TO FINAL TAX OF 10%
134.
THE IMPOSITION OF MINIMUM CORPORATE INCOME TAX
SHALL NOT BE SUSPENDED WHENEVER THE CORPORATION SUFFERS
LOSSES DUE TO
A)
B)
C)
D)
PROLONGED LABOR DISPUTE
FORCE MAJEURE
LEGITIMATE BUSINESS REVERSES
MISMANAGEMENT
135.
A CORPORATION WHICH WAS REGISTERED WITH THE BUREAU
OF INTERNAL REVENUE IN MAY, 2002 SHALL BE COVERED BY MCIT
IN
A)
B)
C)
D)
2005
2006
2008
2009
136.
WATCHOUT CORPORATION WHICH COMMENCED BUSINESS
OPERATIONS IN 2000 HAS A GROSS INCOME OF P632,000 AND
ALLOWABLE DEDUCTIONS OF P610,000 IN 2009. ITS INCOME TAX
PAYABLE DURING THE YEAR ISA)
B)
C)
D)
P7,700
7,040
6,660
12,640
137.
MAEKIS CORPORATION HAS THE FOLLOWING DATA:
SALES
COST OF SALES
OPERATING EXPENSES
2009
1,700,000
1,050,000
615,000
2010
2,300,000
1,425,000
480,000
THE INCOME TAX PAYAB LE IN 2009 ISA)
B)
C)
D)
P13,000
12, 250
35,000
10,500
138.
IN NUMBER 137, THE INCOME TAX PAYABLE BY MAEKIS
CORPORATION IN 2010 ISA)
B)
C)
D)
P117,750
17,500
116,000
137,500
139.
IN NUMBER 137 ABOVE, THE JOURNAL ENTRY IN 2009 TO
RECORD EXCESS MCIT ISA) DEFERRED CHARGES-MCIT-(13,000-10,500)
INCOME TAX PAYABLE
B) DEFERRED CHARGES-MCIT
INCOME TAX PAYABLE
C) PROVISION FOR INCOME TAX
INCOME TAX
D) INCOME TAX PAYABLE
CASH
2,500
2,500
13,000
13,000
11,200
11,200
13,000
13,000
140.
IN NUMBER 137 ABOVE, THE ACCOUNTING ENTRY IN 2010 TO
RECORD THE CARRY FORWARD OF EXCESS MCIT AGAINST NORMAL
INCOME TAX LIABILITY IN 2009 ISA) DEFERRED CHARGES-MCIT
INCOME TAX PAYABLE
B) PROVISION FOR INCOME TAX
INCOME TAX PAYABLE
C) INCOME TAX PAYABLE
DEFERRED CHARGES-MCIT
D) RETAINED EARNINGS
DEFERRED CHARGES-MCIT
1,800
1,800
124,500
124,500
2,500
2,500
1,800
1,800
141.
STATEMENT 1:IF THE QUARTERLY INCOME TAX IS BASED ON
MCIT, THE EXCESS MCIT FROM THE PREVIOUS TAXABLE YEAR/S
SHALL NOT BE ALLOWED TO BE CREDITED
STATEMENT 2: EXPANDED WITHHOLDING TAX, QUARTERLY CORPORATE
INCOME TAX PAYMENTS UNDER THE NORMAL INCOME TAX, AND THE
MCIT PAID IN THE PREVIOUS TAXABLE QUARTERS ARE ALLOWED TO BE
APPLIED AGAINST THE QUARTERLY MCIT DUE.
A)
B)
C)
D)
FALSE, FALSE
FALSE, TRUE
TRUE, FALSE
TRUE, TRUE
142.
ADY CORPORATION HAS THE FOLLOWING
YEAR:
1ST QTR
NORMAL INCOME TAX
P10,000
MCIT
8,000
TAXES WITHHELD DURING THE QTR 2,000
EXCESS WHT PRIOR YEAR
1,000
DATA DURING THE
2ND QTR
12,000
25,000
3,000
THE INCOME TAX PAYABLE BY ADY CORPORATION FOR THE 1ST QUARTER
ISA)
B)
C)
D)
P7,000
4,000
3,000
2,000
143.
IN NUMBER 142, THE INCOME TAX PAYABLE FOR THE 2ND
QUARTER ISA)
B)
C)
D)
P15,000
20,000
27,000
23,000
144.
RELLY CORPORATION HAD THE FOLLOWING ITEMS OF
INCOME AND EXPENSES DURING THE YEAR:
GROSS RECEIPTS
COST OF SERVICES
DIVIDENDS FROM A DOMESTIC CO.
GENERAL AND ADMINISTRATIVE EXPENSES
P1,000,000
850,000
35,000
120,000
THE INCOME TAX DUE ON RELLY CORPORATION ISA) P10,500
B) 3,000
C) 9,000
D) 30,000
145.
MASAGANA CORPORATION, A DOMESTIC CORPORATION
ORGANIZED IN 2004 HAS THE FOLLOWING RECORDS OF
COMPUTATION OF ITS INCOME TAX DURING THE THREE(3)
CONSECUTIVE TAXABLE YEARS:
2007
P3,000,000
(1,800,000)
80,000
1,280,000
800,000
480,000
35%
168,000
SALES
LESS: COST OF SALES
ADD: NET CAPITAL GAIN
GROSS INCOME
LESS: DEDUCTIONS
TAXABLE INCOME
TAX RATE
NORMAL INCOME TAX
MCIT:
2007-NONE
2008-(1,150,000 X 2%)
2009-(2,060,000 X 2%)
TAX PAYABLE
2008
P3,600,000
(2,450,000)
1,150,000
925,000
225,000
35%
78,750
2009
P4,300,000
(2,250,000)
10,000
2,060,000
1,945,000
115,000
30%
34,500
23,000
168,000
78,750
41,200
41,200
BASED ON THE ABOVE DATA, WHICH OF THE FOLLOWING STATEMENTS IS
FALSE?
A) THE MCIT SHALL NOT BE APPLIED ON MASAGANA CORPORATION
UNTIL 2007. IT SHALL BE APPLIED EFFECTIVE IN 2008.
B) THE EXCESS MCIT IN 2009 CAN BE CARRIED TO THE SUCCEEDING
YEAR EVEN IF THE CORPORATION SUFFERS A LOSS IN 2010
C) THE TERM “GROSS INCOME” INCLUDES OTHER INCOME
D) THE EXCESS MCIT OF P6,700 IN 2009 CAN BE CARRIED OVER UNTIL
2012 ONLY
NUMBERS 146
INFORMATION:
AND
147
ARE
BASED
ON
THE
FOLLLOWING
146.
IZA CORPORATION, A DOMESTIC CORPORATION, HAS THE
FOLLOWING DATA:
2008
2009
GROSS INCOME
P3,500,000 2,400,000
TAXABLE INCOME
125,000
500,000
THE INCOME TAX DUE ON IZA CORPORATION FOR 2008 IS:
A)
B)
C)
D)
P43,750
70,000
26,250
40,000
147.
IS:
A)
B)
C)
D)
THE INCOME TAX PAYABLE BY IZA CORPORATION FOR 2009
P150,000
48,000
148,750
123,750
SPECIAL
TOPIC-IMPROPERLY
EARNINGS TAX
ACCUMULATED
148.
A PENALTY AND A FORM OF DETERRENT TO THE AVOIDANCE
OF TAX UPON SHAREHOLDERS WHO ARE SUPPOSED TO PAY
DIVIDENDS TAX ON THE EARNINGS DISTRIBUTED TO THEM BY THE
STOCKHOLDERS
A)
B)
C)
D)
MINIMUM CORPORATE INCOME TAX
FRINGE BENEFIT TAX
IMPROPERLY ACCUMULATED EARNINGS TAX
GROSS INCOME TAX
149.
A)
B)
C)
D)
IMPROPERLY ACCUMULATED EARNINGS TAX IS-
10% OF TAXABLE INCOME
10% OF NET INCOME
10% OF IMPROPERLY ACCUMULATED TAXABLE INCOME
10% OF GROSS INCOME
150.
WHICH OF THE FOLLOWING IS SUBJECT TO IMPROPERLY
ACCUMULATED EARNINGS TAX?
A)
B)
C)
D)
INSURANCE COMPANIES
BUSINESS PARTNERSHIPS
BANKS
CLOSELY-HELD COMPANIES
151.
ALL OF THE FOLLOWING, EXCEPT ONE, ARE ADDITIONS TO
TAXABLE INCOME FOR PURPOSES OF COMPUTING IMPROPERLY
ACCUMULATED TAXABLE INCOMEA)
B)
C)
D)
INCOME SUBJECT TO FINAL TAXES
RESERVED FOR REASONABLE NEEDS OF THE BUSINESS
INCOME EXCLUDED FROM GROSS INCOME
NOLCO DEDUCTED IN COMPUTING TAXABLE INCOME
NUMBERS 152 AND 153 ARE BASED ON THE FOLLOWING INFORMATION:
LABATIBA CORPORATION,
FOLLOWING DATA IN 2009:
A
DOMESTIC
CORPORATION,
GROSS INCOME (GROSS OF WHT OF 1%)
BUSINESS EXPENSES
GAIN ON SALE OF BUSINESS ASSET
INTEREST OF DEPOSIT WITH METROBANK, NET OF TAX
SALE OF SHARES OF STOCKS, NOT LISTED AND TRADED:
SELLING PRICE
P150,000
COST
115,000
DIVIDENDS FROM CASTOR OIL CORP., DOMESTIC CORP.
DIVIDENDS PAID DURING THE YEAR
RESERVED FOR BUILDING ACQUISITION
HAS
THE
P1,500,000
600,000
60,000
5,000
35,000
120,000
300,000
IN 2008, THE CORPORATION SUFFERED AN OPERATING LOSS OF P130,000.
THIS AMOUNT WAS CARRIED FORWARD AND CLAIMED AS DEDUCTION
FROM GROSS INCOME IN 2009.
152.
A)
B)
C)
D)
THE INCOME TAX PAYABLE IN 2009 IS-
P234,000
265,600
275,500
249,000
153.
THE IMPROPERLY ACCUMULATED EARNINGS TAX ISA) P64,415
B) 34,765
C) 36,425
D) 32,275
NUMBERS 154 TO 155 ARE BASED ON THE FOLLOWING INFORMATION:
SARADO CORPORATION, A CLOSELY HELD CORPORATION, REVEALS THE
FOLLOWING DATA:
2008: GROSS INCOME
EXPENSES
2009: GROSS INCOME
EXPENSES
ROYALTY
DIVIDENDS PAYABLE
154.
A)
B)
C)
D)
P3,400,000
3,800,000
3,960,000
3,100,000
340,000
56,000
THE INCOME TAX PAYABLE IN 2009 IS-
P81,800
93,000
301,000
70,000
155.
HOW MUCH IS THE IMPROPERLY ACCUMULATED EARNINGS
TAX IN 2009?
A)
B)
C)
D)
P81,500
93,800
91,500
NONE
156.
CORPORATIONS
CAN
CLAIM
OPTIONAL
STANDARD
DEDUCTION IN AN AMOUNT NOT EXCEEDING
A) 10% OF GROSS INCOME
B) 10% OF GROSS SALES OR GROSS RECEIPTS, AS THE CASE MAYBE
C) 40% OF GROSS INCOME
D) 40% OF THE GROSS INCOME OR GROSS RECEIPTS, AS THE CASE
MAYBE
157.
ANA CORPORATION HAS THE FOLLOWING DATA DURING THE
YEAR:
GROSS SALES
COST OF SALES
EXPENSES
P1,540,000
645,000
460,460
IF ANA CORPORATION AVAILED OF THE
DEDUCTION, THE TAXABLE INCOME SHALL BE-
OPTIONAL
STANDARD
A)
B)
C)
D)
P537,000
434,540
741,000
279,000
CHAPTER 13-INCOME TAX OF PARTNERSHIPS, JOINT
VENTURE, ESTATES AND TRUSTS
158.
WHEN NINA MATHAY DIED, SHE LEFT REAL PROPERTIES TO
HER HUSBAND AND THREE(3) SMALL CHILDREN. THE HUSBAND
ADMINISTERED THE PROPERTY, THE RENTAL INCOME OF WHICH HE
ACCUMULATED AND LATER USED IN BUYING A PASSENGER BUS.
ARE THE INCOME OF THE INHERITED PROPERTIES AND THE BUS SUBJECT
TO TAX?
A)
B)
C)
D)
INHERITED PROPERTIES
YES
YES
NO
NO
BUS
YES
NO
YES
NO
159.
MAX AND CHOOK CONTRIBUTED MONEY AND PURCHASED
FIVE(5) HECTARES OF LAND IN 2008. IN THE SAME YEAR, THEY SOLD
THE LAND AT A HIGHER PRICE. IN 2009, THEY BOUGHT A BIGGER
PARCEL AND SOLD IT AFTER THREE(3) MONTHS AT DOUBLE THE
PRICE. THEY PAID THE CORRESPONDING CAPITAL GAINS TAXES.
QUESTION 1: HAVE THEY FORMED AN UNREGISTERED PARTNERSHIP
SUBJECT TO TAX?
QUESTION 2: ARE THEIR RESPECTIVE SHARES IN THE INCOME TAXABLE TO
THEM?
Q#1
Q#2
A) YES
YES
B) NO
YES
C) YES
NO
D) NO
NO
160.
WHEN THEIR PARENTS DIED,
CHERRY AND GERRY
INHERITED FIVE(5) HECTARES OF LAND IN ANTIPOLO CITY. THEY
DECIDED TO INVEST CAPITAL AND DEVELOPED THE LAND INTO A
SUBDIVISION WHICH THEY NAMED AS CHERRY-GIL SUBDIVISION.,
WITH SMALL LOTS BEING SOLD EITHER ON INSTALLMENT OR IN
CASH BASIS.
QUESTION 1: IS A PARTNERSHIP CREATED BY CHERRY AND GERRY?
QUESTION 2: ARE THEY SUBJECT TO FINAL TAX ON THEIR RESPECTIVE
SHARE IN THE INCOME?
Q#1
Q#2
A) YES
NO
B) NO
YES
C) YES
YES
D) NO
NO
161.
Q#1: IS A CO-PARTNERSHIP TAXABLE? NO, BECAUSE THE
ACTIVITIES OF THE CO-OWNERS ARE LIMITED TO THE
PRESERVATION OF THE PROPERTY AND THE COLLECTION OF
INCOME THEREFROM.
Q#2: IS THE SHARE OF A CO-OWNER IN THE NET INCOME OF A COOWNERSHIP TAXABLE? YES, BECAUSE EACH CO-OWNER IS TAXED
INDIVIDUALLY ON HIS DISTRIBUTIVE SHARE IN THE INCOME OF THE COOWNERSHIP.
A)
B)
C)
D)
ANSWERS TO BOTH QUESTIONS ARE CORRECT
ANSWER TO Q#1 IS WRONG, ANSWER TO Q#2 IS CORRECT
ANSWER TO Q31 IS CORRECT, ANSWER TO Q#2 IS WRONG
ANSWER TO BOTH QUESTIONS ARE WRONG
162.
THE MEMBERS OF THIS FORM OF BUSINESS ORGANIZATION
SHALL BE LIABLE FOR INCOME TAX ONLY ON THEIR INDIVIDUAL
CAPACITY, AND THEIR SHARE IN THE PROFITS, WHETHER
DISTRIBUTED OR OTHERWISE, SHALL BE RETURNED FOR TAXATION.
THIS APPLIES TO-(RPCPA)
A)
B)
C)
D)
DULY REGISTERED GENERAL CO-PARTNERSHIP
UNREGISTERED GENERAL CO-PARTNERSHIP
GENERAL PROFESSIONAL PARTNERSHIP
JOINT-STOCK COMPANIES
163.
THE SHARE OF A PARTNER IN THE PROFITS OF A GENERAL
PROFESSIONAL PARTNERSHIP IS REGARDED AS RECEIVED BY HIM
AND THUS TAXABLE ALTHOUGH NOT YET DISTRIBUTED. THIS
PRINCIPLE IS KNOWN ASA)
B)
C)
D)
ADVANCE REPORTING OF INCOME
ACTUAL RECEIPT OF INCOME
ACCRUAL METHOD OF ACCOUNTING
CONSTRUCTIVE RECEIPT OF INCOME
164.
UNDER THE NIRC, INCOME IS RECEIVED NOT ONLY WHEN IT IS
AC TUALLY OR PHYSICALLY TRANSFERRED TO A PERSON BUT EVEN
WHEN IT IS CONSTRUCTIVELY RECEIVED BY HIM. AN EXAMPLE OF
INCOME CONSTRUCTIVELY RECEIVED IS-(RPCPA)
A) RENTAL PAYMENTS REFUSED BY THE LESSOR, WHEN THE LESSEE
TENDERED PAYMENT AND THE LATTER MADE A JUDICIAL DEPOSIT
OF THE RENTAL DUE
B) INTEREST COUPONS NOT YET DUE AND PAYABLE
C) INTEREST ON SAVINGS DEPOSIT NOT YET CREDITED TO THE
ACCOUNT OF THE DEPOSITOR
D) ADVANCE DEPOSIT MADE BY THE LESSEE
165.WHICH OF THE FOLLOWING IS CONSIDERED OR CONSTRUED AS AN
EXAMPLE OF CONSTRUCTIVE RECEIPT?-(RPCPA)
A) RETIREMENT BENEFITS, PENSIONS, GRATUITIES
B) FEES PAID TO A PUBLIC OFFICIAL
C) INTEREST COUPONS THAT HAVE MATURED AND ARE PAYABLE BUT
HAVE NOT BEEN CASHED
D) DEPOSITS FOR RENTALS TO ANSWER FOR DAMAGES, RESTRICTED
AS TO USE
NUMBERS 166 AND 167 ARE BASED ON THE FOLLOWING INFORMATION:
BINGBONG AND COMPANY , A BUSINESS PARTNERSHIP, HAD THE
FOLLOWING DATA OF INCOME AND EXPENSES:
GROSS INCOME
EXPENSES
DIVIDEND FROM A DOMERTIC CORP.
INTEREST ON BANK DEPOSIT(GROSS OF TAX)
P750,000
200,000
75,000
10,000
PARTNERS BING AND BONG SHARE PROFITS AND LOSSES IN THE RATIO OF
55% AND 45%, RESPECTIVELY.
166.THE INCOME TAX PAYABLE BY BINGBONG AND COMPANY –
A)
B)
C)
D)
P218,750
187,500
165,000
192,500
167. THE FINAL TAXES ON THE RESPECTIVE SHARE OF BING AND BONG IN
THE PARTNERSHIP INCOME-
A)
B)
C)
D)
BING
P25,740.00
31,157.50
24,227.50
30,250.00
BONG
21,060.00
25,492.50
19,822.50
55.045.00
NUMBERS 168 AND 169 ARE BASED ON THE FOLLOWING INFORMATION:
PING, PONG AND COMPANY, A PARTNERSHIP OF CPAs, HAD A GROSS
INCOME OF P220,000 AND EXPENSES OF P85,000 DURING THE YEAR:
SHARE IN PROFIT AND LOSS RATIO
INCOME FROM OTHER BUSINESSES
EXPENSES
AMOUNT WITHDRAWN
FROM PARTNERSHIP
FILING STATUS
DEPENDENT CHILDREN
PING
75%
P125,000
80,000
30,000
MARRIED
NONE
PONG
25%
P325,000
190,000
12,500
UNMARRIED
2
168. THE INCOME TAX PAYABLE BY THE PARTNERSHIP ISA)
B)
C)
D)
P72,600
NONE
44,550
45,900
169. THE TAXABLE INCOME OF PING AND PONG ISA)
B)
C)
D)
P69,250 AND P0, RESPECTIVELY
114,250 AND 127,750, RESPECTIVELY
101,250 AND 33,750, RESPECTIVELY
96,250 AND 68,750, RESPECTIVELY
NUMBERS 170 AND 171 ARE BASED ON THE FOLLOWING INFORMATION:
PANDAY, SINGLE, AND PANDAK, MARRIED WITH TWO DEPENDENT
CHILDREN, ARE PARTNERS IN THE FOLLOWING PARTNERSHIPS:
PANDAY HOLDS A 60% INTEREST WHILE 40% INTEREST BELONGS TO
PANDAK.
THE PARTNERSHIP’S INCOME AND EXPENSES ARE GIVEN BELOW:
PARTNERSHIP
GROSS
INCOME
EXPENSES
W/DRAWAL,
PANDAY
W/DRAWAL,
PANDAK
PROF. PART. A
PROF. PART. B
BUS.PART. C
BUS. PART. D
P400,000
300,000
500,000
200,000
250,000
500,000
200,000
300,000
60,000
40,000
-
40,000
20,000
-
THE PARTNERSHIPS REMITTED TO THE BIR THE CORRESPPONDING
WITHHOLDING TAXES ON THE WITHDRAWALS OF PANDAY AND PANDAK.
THE PARTNERS’ PERSONAL INCOME AND EXPENSES ARE SHOWN BELOW:
PANDAY
PANDAK
GROSS INCOME FROM
SOLE PROPRIETORSHIP
P400,000
600,000
BUSINESS EXPENSES
250,000
370,000
OTHER INCOME:
RENT , NET OF 5% WHT
57,000
ROYALTY
50,000
DIVIDEND FROM DOMESTIC CO.
30,000
50,000
170. THE INCOME TAX PAYABLE BY PANDAY ISA)
B)
C)
D)
P20,500
18,500
11,500
59,000
171. THE INCOME TAX PAYAB LE B Y PANDAK ISA)
B)
C)
D)
P12,500
48,000
16,500
24,000
172. THE TOTAL FINAL TAXES DUE ON PANDAY ISA)
B)
C)
D)
P3,000
4,000
7,000
22,000
173. THE TOTAL FINAL TAXES DUE ON PANDAK ISA)
B)
C)
D)
P17,000
14,600
22,200
15,200
174. THE PROPERTY, RIGHTS AND OBLIGATIONS OF A PERSON WHICH ARE
NOT EXTINGUISHED BY HIS DEATH AND ALSO THOSE WHICH HAVE
ACCRUED THERETO SINCE THE OPENING OF THE SUCCESSIONA)
B)
C)
D)
ESTATE
LEGACY
TRUST
WILL
175. AN HEIR WHO INHERITS PERSONAL PROPERTY BY WILL IS CALLEDA)
B)
C)
D)
LEGATEE
DEVISEE
TRUSTOR
BENEFICIARY
176. AN HEIR WHO INHERITS REAL PROPERTY BY WILL IS CALLEDA)
B)
C)
D)
LEGATEE
DEVISEE
TRUSTOR
BENEFICIARY
177. TONYING DIED ON JANUARY 1, 2007. HE LEFT A GROSS ESTATE WITH A
COST OF P4,000,000 BUT VALUED AT P3,500,000 UNDER AN
ADMINISTRATOR. DURING THE YEAR, THE GROSS INCOME DERIVED FROM
THE BUSINESS OF THE ESTATE WAS P400,000 WHILE THE RELATED
EXPENSES AMOUNTED TO P150,000. BENEFICIARIES FELIPE AND KHADAFI
WERE GIVEN P100,000 EACH.
THE INCOME TAX DUE ON THE ESTATE OF TONYING ISA)
B)
C)
D)
P30,000
2,500
5,500
50,000
178. AN ARRANGEMENT UNDER WHICH TITLE TO PROPERTY IS PASSED TO
ANOTHER FOR INVESTMENT, WITH THE INCOME AND ULTIMATELY THE
PRINCIPAL TO BE DISTRIBUTED IN ACCORDANCE WITH THE DIRECTION OF
THE CREATOR ISA)
B)
C)
D)
A WILL
A TRUST
AN INHERITANCE
PACTO DE RETRO
179. WHICH OF THE FOLLOWING IS NOT SUBJECT TO TAX?
A)
B)
C)
D)
ESTATES UNDER JUDICIAL SETTLEMENT
IRREVOCABLE TRUST
UNREGISTERED PARTNERSHIPS
REVOCABLE TRUST
NUMBERS 180 AND 181 ARE BASED ON THE FOLLOWING INFORMATION:
DURING THE YEAR, LUCAS CREATED TWO SEPARATE FUNDS FOR HIS SON
BARABAS, AND APPOINTED CAIPAS AND JUDAS AS TRUSTEES, THE
BUSINESS INCOME OF THE TRUSTS ARE AS FOLLOWS:
NET INCOME
INCOME FROM TRUSTS
DISTRIBUTED DURING THE
YEAR
TRUSTEE CAIPAS
TRUSTEE JUDAS
P120,000
200,000
50,000
75,000
180. THE CONSOLIDATED TAXABLE INCOME OF TRUSTS ISA)
B)
C)
D)
P143,000
23,250
175,000
300,000
181. THE INCOME TAXES PAYABLE BY TRUSTEE CAIPAS AND TRUSTEE
JUDAS ARE-
A)
B)
C)
D)
CAIPAS
24,375
24,375
26,000
65,000
JUDAS
24,375
40,625
39,000
23,250
CHAPTER 7-DEALINGS IN PROPERTY
182. THE TERM “CAPITAL ASSETS” INCLUDES-(RPCPA)
E) STOCK IN TRADE OR OTHER PROPERTY INCLUDED IN THE
TAXPAYER’S INVENTORY
F) REAL PROPERTY NOT USED IN THE TRADE OR BUSINESS OF
TAXPAYER
G) PROPERTY PRIMARILY FOR SALE TO CUSTOMERS IN THE
ORDINARY COURSE OF TRADE OR BUSINESS
H) PROPERTY USED IN THE TRADE OR BUSINESS OF THE
TAXPAYER AND SUBJECT TO DEPRECIATION
183. WHICH OF THE FOLLOWING REAL PROPERTIES IS CLASSIFIED AS A
CAPITAL ASSET?
A) REAL PROPERTY INITIALLY ACQUIRED BY A TAXPAYER ENGAGED
IN REAL ESTATE BUSINESS BUT SUBSEQUENTLY ABANDONED OR
BECOME IDLE
B) REAL PROPERTY TRANSFERRED THROUGH SUCCESSION OR
DONATION TO THE HEIR OR DONEE WHO IS NOT ENGAGED IN THE
REAL ESTATE BUSINESS WITH RESPECT TO THE REAL PROPERTY
INHERITED OR DONATED, AND WHO DOES NOT SUBSEQUENTLY USE
SUCH PROPERTY IN TRADE OR BUSINESS
C) REAL PROPERTIES OF THE REAL ESTATE LESSOR, WHETHER LAND
AND/OR IMPROVEMENTS, WHICH ARE FOR LEASE OR BEING
OFFERED FOR LEASE, OR OTHERWISE FOR USE OR BEING USED IN
THE TRADE OR BUSINESS
D) REAL PROPERTIES ACQUIRED IN THE COURSE OF TRADE OR
BUSINESS BY A TAXPAYER HABITUALLY ENGAGED IN THE SALE OF
REAL ESTATE
184. UNDER SECTION 39(B) OF THE TAX CODE, HOW MUCH SHALL BE
TAKEN INTO ACCOUNT IN COMPUTING NET INCOME, IF A GAIN IS
REALIZED BY AN INDIVIDUAL TAXPAYER FROM THE SALE OR EXCHANGE
OF CAPITAL ASSETS( OTHER THAN REAL PROPERTIES AND SHARES OF
STOCKS) HELD FOR MORE THAN 12 MONTHS?-(RPCPA)
A)
B)
C)
D)
50% OF NET CAPITAL GAIN
5% OF THE CAPITAL ASSETS SOLD
P50,000
5,000
185. LOTS BEING RENTED WHEN SUBSEQUENTLY SOLD ARE CLASSIFIED
AS-(RPCPA)
A)
B)
C)
D)
CAPITAL ASSETS
LIQUID ASSETS
ORDINARY ASSETS
FIXED ASSETS
186. A FEATURE OF ORDINARY GAINS AS DISTINGUISHED FROM CAPITAL
GAINS-(RPCPA)
A) GAIN FROM SALE OF ASSETS NOT STOCK IN TRADE
B) MAY OR MAY NOT BE TAXABLE IN FULL
C) SOURCES ARE CAPITAL ASSETS
D) NO HOLDING PERIOD
187. WHICH OF THE FOLLOWING TAXPAYERS IS ALLOWED TO OBSERVE
“NO HOLDING PERIOD AND NO CARRY OVER OF NET CAPITAL LOSS”
A)
B)
C)
D)
INDIVIDUAL
ESTATES
CORPORATION
TRUSTS
188. RULES ON CAPITAL GAINS AND LOSSES OF CORPORATIONS, EXCEPT:(RPCPA)
A) CAPITAL GAINS AND LOSSES ARE RECOGNIZED TO THE EXTENT OF
100% REGARDLESS OF THE HOLDING PERIOD
B) THE NET CAPITAL LOSS CARRY OVER IS NOT APPLICABLE
C) CAPITAL LOSSES ARE DEDUCTIBLE ONLY TO THE EXTENT OF
CAPITAL GAINS
D) THERE IS A FINAL TAX OF 5% ON REAL PROPERTY SOLD
189. STATEMENT 1: CAPITAL LOSSES ARE DEDUCTIBLE ONLY FROM
ORDINARY GAINS
STATEMENT 2: CORPORATIONS ARE NOT ALLOWED TO OBSERVE THE
HOLDING PERIOD AND TO CARRY OVER NET CAPITAL LOSS
A)
B)
C)
D)
ONLY THE FIRST STATEMENT IS CORRECT
ONLY THE SECOND STATEMENT IS CORRECT
BOTH STATEMENTS ARE CORRECT
BOTH STATEMENTS ARE INCORRECT
190. JOAHNA CORPORATION REALIZED AN ORDINARY GAIN OF P400,000.
ITS CAPITAL ASSET TRANSACTIONS DURING THE YEAR ARE AS FOLLOWS:
CAPITAL GAIN
CAPITAL GAIN
CAPITAL LOSS
CAPITAL LOSS
HOLDING PERIOD
6 MONTHS
2 YEARS
12 MONTHS
10 YEARS
AMOUNT
P50,000
45,000
23,000
28,000
WHAT IS JOAHNA CORPORATION’S TAXABLE INCOME?
A)
B)
C)
D)
P484,000
444,000
435,500
447,000
191. JOSE SIO, SINGLE, HAD THE FOLLOWING DATA
LOSSES:
2008
ORDINARY BUSINESS INCOME
P56,700
INTEREST ON TIME DEPOSIT WITH PNB
2,000
SHORT-TERM CAPITAL GAIN
5,000
LONG-TERM CAPITAL GAIN
3,600
SHORT-TERM CAPITAL LOSS
8,000
LONG-TERM CAPITAL LOSS
4,400
ON INCOME AND
2009
P60,800
3,000
8,500
5,200
2,900
-
IN 2008, THE TAXABLE INCOME BEFORE PERSONAL EXEMPTION OF JOSE
SIOA)
B)
C)
D)
P58,700
53,300
36,700
56,700
192. IN 2009, THE TAXABLE INCOME OF JOSE SIO ISA)
B)
C)
D)
P15,600
69,000
36,000
45,600
193. SANTINO QUALIFIED AS HEAD OF A HOUSEHOLD FOR 2008 TAX
PURPOSES. SANTOS’ 2009 TAXABLE INCOME WAS P200,000 EXCLUSIVE OF
CAPITAL GAINS AND LOSSES. SANTINO HAD A NET LONG-TERM LOSS OF
P8,000 IN 2009. WHAT AMOUNT OF THIS CAPITAL LOSS CAN SANTINO
OFFSET AGAINST 2009 ORDINARY INCOME?-(RPCPA)
A)
B)
C)
D)
ZERO
3,000
4,000
8,000
NUMBERS 194 AND 195 ARE BASED ON THE FOLLOWING INFORMATION:
194. ROSE, SINGLE, HAD THE FOLLOWING DATA ON INCOME AND LOSSES:
NET INCOME
CAPITAL GAINS
CAPITAL LOSSES
2008
P25,000
8,000
40,000
2009
P95,000
40,000
5,000
THE TAXABLE INCOME IN 2008 ISA)
B)
C)
D)
P5,000
ZERO
P(25,000)
(57,000)
195. THE TAXABLE INCOME IN 2009 ISA)
B)
C)
D)
P78,000
55,000
115,000
10,000
196. ALL OF THE FOLLOWING, EXCEPT ONE, RESULTS TO A CAPITAL GAIN
OR LOSS
A)
B)
C)
D)
GAIN ON SHORT SALES
OPTION LOSS
WORTHLESS SECURITIES
ORDINARY GAINS
197. A TRANSACTION IN WHICH THE SPECULATOR SELLS SECURITIES
WHICH HE DOES NOT OWN (HE MERELY BORROWS THE STOCK
CERTIFICATES THROUGH OR FROM HIS STOCK BROKER) IN ANTICIPATION
OF A DECLINE IN ITS PRICE, AND WITHIN A REASONABLY SHORT PERIOD
OF TIME BUYS OR COVERS THE STOCK TO COMPLETE THE TRANSACTION
A) WASH SALE
B) SHORT SALE
C) AUCTION SALE
D) RESCISSIBLE SALE
198. ABC BOUGHT FROM XYZ CORPORATION TEN SHARES OF STOCK.
SIXTY DAYS THEREAFTER, THE CORPORATION WAS ADJUDGED
BANKRUPT AND ITS STOCK AS WORTHLESS. THE LOSS OF ABC TO BE
REPORTED FOR INCOME TAX PURPOSES IS CLASSIFIED AS:-(RPCPA)
A)
B)
C)
D)
A WAGERING LOSS
NON-DEDUCTIBLE LOSS FOR INCOME TAX PURPOSES
SHORT-TERM CAPITAL LOSS
CASUALTY LOSS
199. ON CAPITAL GAINS TAX ON REAL PROPERTY, WHICH OF THE
FOLLOWING STATEMENTS IS NOT CORRECT?-(RPCPA)
A) THE TAX SHOULD BE PAID, IF IN ONE LUMP SUM, WITHIN 30 DAYS
FROM THE DATE OF SALE
B) THE
TERM
“INITIAL
PAYMENT”
IS
SYNONYMOUS
TO
“DOWNPAYMENT”
C) THE INSTALLMENT PAYMENT OF THE TAX SHOULD BE MADE
WITHIN 30 DAYS FROM RECEIPT OF EACH INSTALLMENT PAYMENT
ON THE SELLING PRICE
D) THE TAX MAY BE PAID IN INSTALLMENT IF THE INITIAL PAYMENTS
DO NOT EXCEED 25% OF THE SELLING PRICE
200. VIOLETA SOLD HER PRINCIPAL RESIDENCE FOR P5,000,000 WHEN ITS
FAIR MARKET VALUE WAS P6,000,000. THE HOUSE WAS PURCHASED
FIVE(5) YEARS AGO FOR P3,000,000. OUT OF THE PROCEEDS OF P5,000,000,
VIOLETA UTILIZED THE P4,000,000 FOR THE PURCHASE OF A NEW
RESIDENTIAL HOUSE.
THE CAPITAL GAINS TAX ON THE SALE ISA)
B)
C)
D)
P360,000
300,000
72,000
60,000
201. BASED ON THE PROBLEM IN NUMBER 200 ABOVE, WHAT IS THE COST
BASIS OF THE NEW RESIDENCE?
A)
B)
C)
D)
P3,000,000
2,400,000
4,000,000
5,000,000
NUMBERS 202 AND 203 ARE BASED ON THE FOLLOWING INFORMATION:
202. MARIA HAS THE FOLLOWING DATA IN 2008:
SALE OF PROPERTY
HOLDING PERIOD
GAIN/LOSS
APARTMENT HOUSE
RESIDENTIAL HOUSE
VACANT LOT
JEWELRY FOR PERSONAL USE
JEWELRY IN A JEWELRY STORE
CAR FOR PERSONAL USE
TRANSPORTATION EQUIPMENT
10 YEARS
6 YEARS
12 YEARS
6 MONTHS
2 MONTHS
4 YEARS
12 MONTHS
P35,000
120,000
72,500
4,200
8,000
(20,000)
(10,000)
DURING THE YEAR, MARIA HAD A NET INCOME FROM BUSINESS (OTHER
THAN THE SALE OF THE PROPERTIES ABOVE) IN THE AMOUNT OF P5,000.
THE TAXABLE INCOME BEFORE PERSONAL EXEMPTION OF MARIA IN 2008
ISA)
B)
C)
D)
P32,000
38,000
22,200
42,200
203. ASSUMING THAT THE NET INCOME OF MARIA IN 2009 WAS P130,000
WHICH INCLUDES A CAPITAL GAIN OF P6,000. THE TAXABLE INCOME
BEFORE PERSONAL EXEMPTION IN 2009 ISA)
B)
C)
D)
P125,000
130,000
124,200
120,000
NUMBERS 204 TO 205 ARE BASED ON THE FOLLOWING INFORMATION:
ON AUGUST 15, 2009, MR. CRUZ SOLD A 500 SQUARE METER RESIDENTIAL
HOUSE FOR P3,000,000. THE HOUSE WAS ACQUIRED IN 2000 FOR P2,000,000.
ON THE DATE OF SALE, THE FAIR MARKET VALUE OF THE HOUSE AS
SHOWN IN THE REAL PROPERTY DECLARATION WAS P2,500,000 AND THE
ASSESSED VALUE AMOUNTED TO P2,200,000. THE ZONAL VALUE WAS
P7,000 PER SQUARE METER.
204. THE CAPITAL GAINS TAX ISA)
B)
C)
D)
P180,000
120,000
150,000
210,000
205. THE CAPITAL GAINS TAX OF MR. CRUZ IF THE PROCEEDS OF SALE WAS
UTILIZED IN ACQUIRING A NEW RESIDENCEA)
B)
C)
D)
P210,000
150,000
180,000
ZERO
206. THE AMOUNT TO BE DEPOSITED IN ESCROW IF THE PROCEEDS OF THE
SALE SHALL BE UTILIZED IN ACQUIRING A NEW RESIDENCEA)
B)
C)
D)
P210,000
150,000
180,000
ZERO
207. THE CAPITAL GAINS TAX PAYABLE ASSUMING THAT MR. CRUZ WILL
UTILIZE ONLY P1,500,000 OF THE PROCEEDS IN ACQUIRING A NEW
RESIDENCE?
A)
B)
C)
D)
P90,000
210,000
ZERO
105,000
208. MR. LEX CANLAS IS NOT ENGAGED IN REAL ESTATE BUSINESS. HE
SOLD A 1,000 SQUARE METER RESIDENTIAL LAND FOR P300,000 ON MARCH
15, 2009. THE LAND WAS ACQUIRED BY PURCHASE ON MARCH 5, 2006 FOR
P120,000. AFTER ACQUISITION, THE LAND WAS FENCED AT A COST OF
P30,000. A COMMISSION OF 5% OF THE SALES PRICE WAS PAID TO THE
SALES AGENT.-(RPCPA)
HOW MUCH IS THE CAPITAL GAINS TAX DUE?
A)
B)
C)
D)
P18,000
18,900
7,200
9,000
209. LITO HAS THE FOLLOWING RECORDS OF TRANSACTIONS:
CAPITAL GAINS(SHORT TERM) ON SALE OFDOMESTIC SHARES LISTED AND TRADED\
IN THE STOCK EXCHANGE
VACANT LOT, THRU A BROKER, LOCATED IN
MANILA(MARKET VALUE-P700,000)
RESIDENTIAL HOUSE IN NEW YORK CITY
CAPITAL LOSS(LONG-TERM) ON SALE OFLAND IN VANCOUVER, CANADA
FAMILY CAR
P22,400
150,000
100,000
125,000
50,000
THE NET CAPITAL GAIN/(LOSS) OF LITO ISA)
B)
C)
D)
P12,500
(75,000)
148,500
(25,000)
210. ATTY. MOISES PADILLA SOLD TO JESS ABALUYAN NOT TRADED
SHARES OF STOCKS FOR A CONSIDERATION OF P200,000. AT THE TIME OF
SALE, ITS FAIR MARKET VALUE IS P500,000. ATTY. PADILLA SHOULD PAYA)
B)
C)
D)
CAPITAL GAINS TAX
DONOR’S TAX
DOCUMENTARY STAMP TAX
ALL OF THE ABOVE
211. IN THE PRECEDING PROBLEM, IF LATER ON JESS ABALUYAN SELLS
THE SAME SHARES OF STOCKS TO ED DEL ROSARIO FOR P400,000, THE
GAIN SUBJECT TO TAX SHALL BE DETERMINED BY DEDUCTING THEA)
B)
C)
D)
P200,000 FROM THE P500,000
200,000 FROM THE 400,000
400,000 FROM THE 500,000
400,000 FROM THE 200,000
212. ROCKY SOLD 1,500 SHARES OF STOCKS OF ACHIEVERS CORPORATION.
THE PAR VALUE PER SHARE WAS P85 BUT WERE ACQUIRED BY HIM AT P90.
ON THE DATE OF SALE, THE SHARES HAD A SELLING PRICE OF P120 PER
SHARE.
THE CAPITAL GAINS TAX ON THE SALE IF THE SHARES ARE NOT LISTED
AND TRADED IN THE PHILIPPINES STOCK EXCHANGE ISA) P2,250
B) 2,625
C) 14,000
D) 11,375
213. ROLLY SOLD 1,000 NOT LISTED AND TRADED SHARES OF STOCKS. THE
DATA OF WHICH ARE AS FOLLOWS:
SELLING PRICE
FAIR MARKET VALUE
EXPENSES ON THE SALE
PURCHASE PRICE
EXPENSES UPON ACQUISITION
P600,000
620,000
10,000
440,000
3,000
THE CAPITAL GAINS TAX DUE ISA)
B)
C)
D)
P13,000
14,000
9,700
12,850
214. NARDA SOLD THE FOLLOWING SHARES OF STOCKS DURING THE
YEAR:
SELLING PRICE
COST
DATE SOLD
LISTED &
TRADED
P1,500,000
1,230,000
01-02-02
NOT LISTED
& TRADED
630,000
570,000
03-16-02
LISTED &
& TRADED
210,000
170,000
11-14-02
THE CAPITAL GAINS TAX PAYABLE ISA)
B)
C)
D)
P3,000
32,000
11,550
3,150
NUMBERS 215
INFORMATION:
THRU
218
ARE
BASED
ON
THE
FOLLOWING
DATE OF SALE
DATE OF ACQUISITION
COST
SELLING PRICE
FEB 13, 2009
APRIL 5, 2009
JULY 20, 2009
OCT 13, 2009
JAN 18, 2007
NOV 30, 2008
SEPT 3, 2007
AUG 7, 2009
P80,000
256,000
175,000
144,500
P135,000
360,000
115,000
150,000
215. THE CAPITAL GAINS TAX ON THE FEB. 13, 2009 SALE ISA)
B)
C)
D)
P2,750
1,375
675
55,000
216. THE CAPITAL GAINS TAX ON THE APRIL 5, 2009 SALE ISA)
B)
C)
D)
P10,400
5,400
5,200
ZERO
217. THE CAPITAL GAINS TAX/REFUND ON THE JULY 20, 2009 SALE ISA)
B)
C)
D)
P3,000
(3,000)
1,500
ZERO
218.THE FINAL CAPITAL GAINS TAX/REFUND IN THE 2009 TRANSACTIONS
ISA)
B)
C)
D)
TAX PAYABLE OF P1,350
TAX REFUND OF P1,350
TAX PAYABLE OF P2,725
TAX REFUND OF P2,725
219. ON DECEMBER 1, 2007, MAT OBESE WHOSE TAXABLE YEAR IS THE
CALENDAR YEAR, PURCHASED 100 SHARES OF COMMON STOCK OF
MICHELLE COMPANY FOR P10,000. ON DECEMBER 16, 2007, HE PURCHASED
100 ADDITIONAL SHARES FOR P9,000. ON JANUARY 3, 2008, HE SOLD THE
100 SHARES PURCHASED ON DECEMBER 1, 2007 FOR P9,000.
WHICH OF THE FOLLOWING STATEMENTS IS CORRECT ON MAT OBESE?
A)
B)
C)
D)
HE CAN CLAIM A DEDUCTIBLE LOSS OF P1,000 IN 2008
HE MUST REPORT A TAXABLE CAPITAL GAIN OF P1,000 IN 2008
HE MUST REPORT A TAXABLE CAPITAL GAIN OF P9,000 IN 2008
HE IS NOT ALLOWED TO CLAIM A DEDUCTIBLE LOSS ON THE LOSS
ON SALE IN 2008
220. MISS BEAUTY, WHOSE TAXABLE YEAR IS THE CALENDAR YEAR, HAD
THE FOLLOWING STOCK TRANSACTIONS:




ON SEPTEMBER 20, 2008 PURCHASED 100 SHARES OF THE COMMON
STOCK OF UGLY COMPANY FOR P5,000 OR AT P50 PER SHARE
ON DECEMBER 11, 2008, SHE PURCHASED 50 SHARES OF
SUBSTANTIALLY IDENTICAL STOCK FOR P2,750 OR AT P55 PER
SHARE
ON DECEMBER 26,2008, SHE PURCHASED 25 ADDITIONAL SHARES OF
SUCH STOCK FOR P1,125 OR AT P45 PER SHARE
ON JANUARY 2, 2009, SHE SOLD FOR P4,000 THE SHARES PURCHASED
ON SEPTEMBER 20 OR AT P40 PER SHARE
HOW MUCH IS THE DEDUCTIBLE LOSS AND NON-DEDUCTIBLE LOSS ON
JANUARY 2, 2009 SALES?
A)
B)
C)
D)
DEDUCTIBLE
P1,000
0
125
250
NON-DEDUCTIBLE
P0
1,000
0
750
NUMBERS 221 AND 222 ARE BASED ON THE FOLLOWING INFORMATION:
MAUI HAS THE FOLLOWING DATA IN 2009:
CAPITAL LOSS
ON 2 WEEKS OPTION CONTRACT______
CAPITAL GAIN
ON SALE OF BONDS(HOLDING PERIOD: 6 MOS.)_____
LOSS ON SALE OF DELIVERY TRUCK HELD
FOR 3 ½ YEARS____
GAIN ON SALE OF PERSONAL CAR HELD
FOR 5 YEARS______
CAPITAL GAIN ON DIRECT SALE TO BUYERS
OF SHARES OF STOCKS___
SALE OF 2-YEAR OLD RESIDENTIAL HOUSE
(COST:P540,000)____
P5,000
6,000
40,000
16,000
4,000
550,000
IN 2008, MAUI HAD A NET INCOME OF P5,000 AND A CAPITAL LOSS OF P7,500
221. THE NET CAPITAL GAIN/CAPITAL LOSS (BEFORE CARRY-OVER) IN 2009
ISA)
B)
C)
D)
P17,000
9,000
2,000
(7,000)
222. THE NET CAPITAL LOSS CARRY-OVER FROM 2008 ISA)
B)
C)
D)
P7,500
ZERO
9,000
5,000
223. IN COMPUTING GAIN OR LOSS FROM THE SALE OR OTHER
DISPOSITION OF PROPERTY ACQUIRED AS GIFT OR DONATION, THE BASIS
OF COST SHALL BE-(RPCPA)
A)
B)
C)
D)
THE FAIR MARKET VALUE AS OF THE DATE OF ACQUISITION
THE PURCHASE PRICE PLUS EXPENSES OF ACQUISITION
THE LATEST INVENTORY VALUE
THE SAME AS IT WOULD BE IN THE HANDS OF THE DONOR
224. PAULO RECEIVED A RESIDENTIAL HOUSE VALUED AT P2,500,000 FROM
HIS PARENTS AS A GIFT. AFTER A MONTH, HE SOLD IT TO RUDY FOR
P2,000,000 ONLY. HOW MUCH IS THE TAX LIABILITY ON THE SALE?
A)
B)
C)
D)
P150,000
120,000
100,000
ZERO
225. IT IS IMPORTANT TO KNOW THE SOURCE OF INCOME FOR TAX
PURPOSES (I.E. FROM WITHIN OR WITHOUT THE PHILIPPINES) BECAUSE(RPCPA)
A) SOME INDIVIDUALS AND CORPORATE TAXPAYERS ARE TAXED ON
THEIR WORLDWIDE INCOME WHILE OTHERS ARE TAXABLE ONLY
UPON INCOME FROM SOURCES WITHIN THE PHILIPPINES
B) THE PHILIPPINES IMPOSES INCOME TAX ONLY ON INCOME FROM
SOURCES WITHIN
C) SOME INDIVIDUAL TAXPAYERS ARE CITIZENS WHILE OTHERS ARE
ALIENS
D) EXPORT SALES ARE NOT SUBJECT TO INCOME TAX
226. MR. SHOLI, A NON-RESIDENT ALIEN STOCKHOLDER, RECEIVED A
DIVIDEND INCOME OF P300,000 IN 2009 FROM A FOREIGN CORPORATION
DOING BUSINESS IN THE PHILIPPINES. THE GROSS INCOME OF THE
FOREIGN CORPORATION FROM WITHIN AND WITHOUT THE PHILIPPINES
FOR THREE YEARS PRECEDING 2009 ARE AS FOLLOWS(RPCPA)
\
SOURCES OF INCOME
2006
2007
2008
FROM W/IN THE PHIL.
FROM W/OUT THE PHIL.
16,000,000
8,000,000
12,000,000
14,000,000
14,000,000
16,000,000
HOW MUCH OF THE DIVIDEND INCOME RECEIVED BY MR. SHOLI IS
CONSIDERED INCOME FROM SOURCES WITHIN THE PHIL.?
A)
B)
C)
D)
ZERO
P157,500
150,000
300,000
227. THE WIDOW OF YOUR BEST FRIEND HAS JUST BEEN PAID P1,000,000 ON
ACCOUNT OF THE LIFE INSURANCE POLICY OF THE DECEASED HUSBAND.
SHE ASKS YOU WHETHER SHE SHOULD DECLARE THE AMOUNT FOR
INCOME TAX PURPOSES OR FOR ESTATE TAX PURPOSES-(RPCPA)
1ST ADVICE: THE PROCEEDS OF LIFE INSURANCE PAID TO THE
BENEFICIARY UPON THE DEATH OF THE INSURED ARE
EXEMPT FROM INCOME TAX AND NEED NOT BE DECLARED
FOR INCOME TAX PURPOSES
2ND ADVICE: THE PROCEEDS OF LIFE INSURANCE WOULD HAVE TO BE
DECLARED FOR ESTATE TAX PURPOSES IF THE DESIGNATION
OF THE BENEFICIARY WAS IRREVOCABLE, OTHERWISE IT
NEED NOT BE DECLARED
A)
B)
C)
D)
BOTH ADVICE ARE CORRECT
1ST ADVICE IS CORRECT, 2ND ADVICE IS WRONG
BOTH ADVICE ARE WRONG
1ST IS WRONG, 2ND ADVICE IS CORRECT
CHAPTER 8-DEDUCTIONS FROM GROSS INCOME
228. AN ORDINARY AND NECESSARY EXPENSE WHICH IS FULLY
DOCUMENTED AND SUPPORTED BY RECEIPTS MAY BE FULLY DEDUCTED
FOR INCOME TAX PURPOSES OVER AND ABOVE THE LIMIT SET BY LAW(RPCPA)
A)MEDICAL EXPENSES
B)CONTRIBUTION
C)REPRESENTATION
D)HIGH SCHOOL FEE
229. LANGHAP CORPORATION INCURRED THE FOLLOWING EXPENSES.
WHICH OF THESE EXPENSES IS NON-DEDUCTIBLE?
A)
B)
C)
D)
INSURANCE PREMIUMS ON THE BUILDING
SALARIES OF THE OFFICIALS AND EMPLOYEES
ENTERTAINING PROSPECTIVE CUSTOMERS
GIFTS GIVEN TO PUBLIC OFFICIALS WHO FAVORED LANGHAP
CORPORATION’S CONTRACT WITH THE GOVERNMENT
230. WHICH OF THE FOLLOWING IS A DEDUCTIBLE EXPENSE FOR INCOME
TAX PURPOSES?-(RPCPA)
A) SALARIES OF DOMESTIC SERVANTS
B) ORDINARY REPAIR OF THE PERSONAL CAR
C) PROVISION FOR DOUBTFUL ACCOUNTS
D) NONE OF THE ABOVE
231. ONE OF THE FOLLOWING EXPENSES IS DEDUCTIBLE FROM GROSS
INCOME
A) PERSONAL, LIVING AND FAMILY EXPENSES
B) AMOUNT PAID OUT FOR NEW BUILDING OR FOR PERMANENT
IMPROVEMENT OR BETTERMENT, MADE TO INCREASE THE VALUE
OF ANY PROPERTY OR ESTATE
C) PREMIUMS PAID ON A LIFE INSURANCE POLICY COVERING THE LIFE
OF THE EMPLOYEE WHEN THE MEMBERS OF THE FAMILY OF THE
EMPLOYEE ARE THE DIRECT BENEFICIARY UNDER SUCH POLICY
D) ANY AMOUNT EXPENDED IN RESTORING PROPERTY OR IN MAKING
GOOD EXHAUSTION THEREOF FOR WHICH AN ALLOWANCE IS OR
HAS BEEN MADE
232. ALL OF THE FOLLOWING, EXCEPT ONE, ARE NOT DEDUCTIBLE FROM
GROSS INCOME
A) TUITION FEES AND OTHER EXPENSES OF THE TAXPAYER’S
CHILDREN
B) REPLACEMENT OF THE ROOF OF THE OFFICE BUILDING
C) PREMIUMS PAID IN INSURING THE LIFE OF THE CORPORATE
PRESIDENT, APPOINTING THE CORPORATION AS THE BENEFICIARY
OF THE POLICY
D) PREMIUMS PAID ON A LIFE INSURANCE OF A RANK-AND-FILE
EMPLOYEE WITH THE LATTER’S CHILDREN AS THE APPOINTED
BENEFICIARY
.
233. IN 2009, AZKAL CORPORATION PAID THE FOLLOWING PREMIUMS TO
AN INSURANCE COMPANY IN INSURING THE LIFE OF ITS OFFICIALS AND
EMPLOYEES:
OFFICIAL/EMPLOYEE
BENEFICIARY
PREMIUMS PAID
RANK-AND-FILE
PERSONNEL MANAGER
TREASURER
GENERAL MANAGER
BOARD CHAIRMAN
CHILDREN
PARENTS
CORPORATION
CORPORATION
CORPORATION
P5,000
10,000
15,000
15,000
15,000
THE DEDUCTIBLE EXPENSE ON THE INSIURANCE PREMIUMS PAID BY THE
CORPORATION ISA)
B)
C)
D)
P60,000
45,000
5,000
15,000
234. THE FOLLOWING ARE EXAMPLES OF CORPORATE EXPENSES
DEDUCTIBLE FROM GROSS INCOME, EXCEPT ONE(-RPCPA)
A)REPRESENTATION EXPENSES DESIGNED TO PROMOTE BUSINESS
B) CONTRIBUTIONS TO DRUM UP BUSINESS LIKE CONTRIBUTION OF SOFT
DRINKS TO BARRIO FIESTAS
C) EXPENSES PAID TO AN ADVERTISING FIRM IN ORDER TO CREATE A
FAVORABLE IMAGE FOR THE CORPORATION
D) PREMIUMS ON LIFE INSURANCE COVERING THE LIFE OF AN EMPLOYEE
IF THE BENEFICIARY IS HIS HEIRS
235. FLOR CORPORATION TOOK TWO KEYMEN INSURANCE ON THE LIFE OF
ITS PRESIDENT, MR. CHAN. IN ONE POLICY, THE BENEFICIARY IS THE
CORPORATION TO COMPENSATE IT FOR ITS EXPECTED LOSS IN CASE OF
DEATH OF ITS PRESIDENT. THE OTHER POLICY DESIGNATES MR. CHAN’S
WIFE AS ITS IRREVOCABLE BENEFICIARY.-(RPCPA)
Q#1: ARE THE INSURANCE PREMIUMS PAID BY FLOR CORPORATION IN
BOTH POLICIES DEDUCTIBLE?
Q#2: WILL THE INSURANCE PROCEEDS BE TREATED AS INCOME SUBJECT
TO TAX BY THE CORPORATION AND BY THE WIFE?
A) YES TO Q#1 AND NO TO Q#2
B) YES TO BOTH QUESTIONS
C) NO TO Q#1 AND YES TO Q#2
D) NO TO BOTH QUESTIONS
NUMBERS 236
INFORMATION:
THRU
238
ARE
BASED
ON
THE
FOLLOWING
IN 2009, LEXUS CORPORATION MADE SOME REPAIRS ON A BUILDING
BEING LEASED TO LESLIE, TO WIT:
MINOR REPAIRS(EXPENSED)
MAJOR REPAIRS
P30,000
60,000
THE MAJOR OR EXTRAORDINARY REPAIR DID NOT ADD VALUE TO THE
PROPERTY BUT APPRECIABLY PROLONGED ITS USEFUL LIFE BY FIVE(5)
YEARS.
236. THE ENTRY IN THE BOOKS OF LEXUS TO RECORD THE EXPENSES
INCURRED FOR MINOR REPAIRS ISA) BUILDING
P30,000
CASH
B) LEASE EXPENSE-LESLIE 30,000
CASH
C) REPAIRS EXPENSE
30,000
CASH
D) NO ENTRY
P30,000
30,000
30,000
237. THE ENTRY IN THE BOOKS OF LEXUS TO RECORD THE EXPENSES
INCURRED FOR MAJOR REPAIR ISA) BUILDING
CASH
B) REPAIRS EXPENSES
CASH
C) ALLOWANCE FOR DEP’N
CASH
D) NO ENTRY
P60,000
P60,000
60,000
60,000
60,000
60,000
238. SUPPOSE THE MAJOR REPAIR INCREASED THE VALUE NBY P40,000 AND
IT ALSO PROLONGED THE LIFE OF THE ASSET, THE ACCOUNTING ENTRY
TO RECORD THE REPAIR IN THE BOOKS OF LEXUS CORPORATION ISA) ALLOWANCE FOR DEPRECIATION
CASH
B) BUILDING
CASH
P60,000
P60,000
40,000
40,000
C) BUILDING
ALLOWANCE FOR DEPRECIATION
CASH
D) NONE OF THE ABOVE
40,000
20,000
60,000
239. CHOOSE THE BEST ANSWER: RGF COLLEGE, INC. A PROPRIETARY
EDUCATIONAL INSTITUTION, SPENT P10 MILLION FOR THE CONSTRUCTION
OF A NEW SCHOOL BUILDING. THE AMOUNT SPENT FOR THE
CONSTRUCTIONA) MUST BE CLAIMED AS EXPENSE IN THE YEAR OF COMPLETION
B) CAPITALIZED AND CLAIM ANNUAL DEPRECIATION OVER THE LIFE
OF THE BUILDING
C) CAPITALIZED OR EXPENSE OUTRIGHT AT THE OPTION OF THE
SCHOOL
D) CAPITALIZED OR EXPENSE OUTRIGHT AT THE OPTION OF THE BIR
240. RELAX CORPORATION IS ENGAGED IN SALE OF GOODS AND SERVICES
WITH NET SALES/NET REVENUE OF P400,000 AND P200,000, RESPECTIVELY.
THE ACTUAL ENTERTAINMENT, AMUSEMENT AND RECREATION EXPENSE
FOR THE TAXABLE QUARTER AMOUNTED TO P6,000.
RELAX CORPORATION CAN CLAIM AN ENTERTAINMENT, AMUSEMENT
AND RECREATION EXPENSE ON THE SALE OF GOODS AND SERVICES,
RESPECTIVELY OFA)
B)
C)
D)
P4,000 AND P4,000
4,000 AND 2,000
2,000 AND 4,000
2,000 AND 2,000
INTEREST EXPENSE PROBLEMS:
241. WHICH OF THE FOLLOWING ITEM IS CORRECT?
A) INTEREST INCURRED ON LOAN FROM A BROTHER IS DEDUCTIBLE
B) INTEREST EXPENSE INCURRED ON UNPAID VALUE-ADDED TAX IS
REDUCED BY 42% OF INTEREST INCOME SUBJECTED TO FINAL TAX
C) INTEREST PAYABLE WHICH HAD ALREADY PRESCRIBED IS
DEDUCTIBLE IF PAID VOLUNTARILY BY THE TAXPAYER
D) INTEREST INCURRED TO ACQUIRE A BUSINESS ASSET MAY BE
ADDED TO THE COST OF THE PROPERTY
242. INTEREST ON BUSINESS IS DEDUCTIBLE FOR INCOME TAX PURPOSES.
HOWEVER, ONE OF THE FOLLOWING IS NOT DEDUCTIBLE-(RPCPA)
A) INTEREST ON DELINQUENCY TAX
B) INTEREST ON INDEBTEDNESS INCURRED TO PURCHASE DELIVERY
EQUIPMENT
C) INTEREST ON INDEBTEDNESS SECURED TO PURCHASE A TAXEXEMPT SECURITY
D) NONE OF THE ABOVE
243. WHICH INTEREST IS DEDUCTIBLE?
A) INTEREST INCURRED ON UNPAID VALUE-ADDED TAX
B) INTEREST ON LOAN BY AN INDIVIDUAL FROM A CORPORATION IF
60% OF THE OUTSTANDING STOCK OF THE LATTER IS OWNED
INDIRECTLY BY SUCH INDIVIDUAL
C) INTEREST ON LOAN BETWEEN MEMBERS OF A FAMILY
D) INTEREST ONN LOAN BY A FIDUCIARY OF A TRUST AND A
BENEFICIARY OF SUCH TRUST
244. A DEDUCTIBLE INTEREST EXPENSEA) INTEREST ON LOAN BETWEEN MEMBERS OF A FAMILY
B) INTEREST ON LOAN THAT WAS USED TO FINANCE THE
CONSTRUCTION OF THE TAXPAYER’S RESIDENTIAL HOUSE
C) INTEREST ON TAX DELINQUENCY
D) INTEREST ON INDEBTEDNESS TO FINANCE PETROLEUM OPERATIONS
245. ON JANUARY 2, 2009, MANG OTANG CONTRACTED A 1-YEAR P100,000
LOAN FROM METROBANK FOR THE PURCHASE OF COMPUTERS. THE
EQUIPMENTS WHICH HAD A DEPRECIABLE LIFE OF EIGHT(8) YEARS WERE
ACQUIRED ON APRIL 1, 2009. THE INTEREST EXPENSE FOR ONE(1) YEAR
AMOUNTED TO P15,000.
IN THE SAME YEAR, HIS BANK DEPOSIT WITH PNB EARNED AN INTEREST
INCOME OF P2,000. DURING THE YEAR, HE INCURRED AN INTEREST
EXPENSE ON UNPAID BUSINESS TAX OF P600.
THE DEDUCTIBLE INTEREST EXPENSE OF MANG OTANG IN 2009 ISA)
B)
C)
D)
P14,240
14,760
13,600
14,940
246. IN NUMBER 245, THE DEDUCTION OF MANG OTANG IN 2008 ASSUMING
THAT THE INTEREST ON LOAN WAS CAPITALIZEDA)
B)
C)
D)
P14,375
15,000
10,781.25
NONE
247. IN DECEMBER 2006, A TAXPAYER DONATED TO HIS SON 3,000 SHARES
OF STOCK OF SAN MIGUEL CORPORATION. FOR FAILURE TO FILE A
DONOR’S TAX RETURN ON THE DONATION WITHIN THE STATUTORY
PERIOD, THE TAXPAYER WAS ASSESSED THE SUM OF P100,000, AS DONOR’S
TAX PLUS 25% SURCHARGE OR P25,000 AND 20% INTEREST OR P20,000
WHICH HE PAID JANUARY 2009.
ON JUNE 20, 2009, HE FILED HIS INCOME TAX RETURN FOR 2008 CLAIMING,
AMONG OTHERS, A DEDUCTION FOR INTEREST AMOUNTING TO P1,500.
ON JUNE 5, 2009, THE TAXPAYER FILED AN AMENDED INCOME TAX
RETURN FOR THE SAME CALENDAR YEAR 2008, CLAIMING THEREIN AN
ADDITIONAL DEDUCTION IN THE AMOUNT OF P20,000 REPRESENTING
INTEREST PAID ON THE DONOR’S TAX.
A CLAIM FOR REFUND OF ALLEGED OVERPAID INCOME TAX FOR TAXABLE
YEAR 2008 WAS FILED WITH THE CIR WHICH WAS SUBSEQUENTLY DENIED.
THE CIR POINTED OUT THAT A TAX IS NOT INDEBTEDNESS AND THAT
THERE IS A FUNDAMENTAL DISTINCTION BETWEEN A “TAX” AND A
“DEBT”. ACCORDING TO THE CIR, THE DEDUCTIBILITY OF INTEREST ON
INDEBTEDNESS FROM A PERSON’S INCOME TAX CANNOT EXTEND TO
INTEREST ON TAXES.
Q#1: IS THE INTEREST ON THE DONOR’S TAX DEDUCTIBLE?
Q#2: IS THE INTEREST ON THE INCOME TAX DEDUCTIBLE?
A)
B)
C)
D)
YES, YES
NO, YES
YES, NO
NO,NO
248. IF A STOCKHOLDER RECEIVES A TAXABLE STOCK DIVIDEND, WHAT IS
THE MEASURE OF INCOME APPLICABLE TO HIM?-(RPCPA)
A) PAR VALUE OF THE SHARES ON THE DATE HE RECEIVES THEM
B) FAIR MARKET VALUE OF THE SHARES ON THE DATE OF
DECLARATION
C) THE ADJUSTED COST OF THE OLD SHARES AND THE NEW SHARES OF
THE CORPORATION
D) THE BOOK VALUE OF THE SHARES OF THE PRECEDING CALENDAR
YEAR
249. GENERALLY, SALES OF REAL PROPERTY ARE SUBJECT TO TAX. WHICH
OF THE FOLLOWING SALES OF LAND IS NOT ALLOWED BY THE LAW TO BE
SUBJECTED TO TAX?-(RPCPA)
A)
B)
C)
D)
LAND SOLD BY THE CHURCH
LAND FORECLOSED BY THE BANK
LAND SOLD TO GOVERNMENT CORPORATIONS
NONE OF THE ABOVE
TAX EXPENSE/TAX CREDIT PROBLEMS:
250. ONE IS NOT A DEDUCTIBLE TAX-(RPCPA)
A)
B)
C)
D)
BUSINESS TAX
VALUE-ADDED TAX
PRIVILEGE TAX
OCCUPATION TAX
251. ONE IS A DEDUCTIBLE TAX-(RPCPA)
A)
B)
C)
D)
ESTATE TAX
FRANCHISE TAX
DONOR’S TAX
SPECIAL ASSESSMENT
252. ONE IS ENTITLED TO TAX CREDIT FOR TAXES PAID TO FOREIGN
COUNTRY-(RPCPA)
A) RESIDENT ALIENS
B) DOMESTIC CORPORATION
C) NON-RESIDENT ALIENS WITH RECIPROCITY
D) NON-RESIDENT CITIZENS
253. ONE IS ENTITLED TO TAX CREDIT FOR TAXES PAID TO FOREIGN
COUNTRY-(RPCPA)
A) NON-RESIDENT ALIENS
B) FOREIGN CORPORATIONS
C) RESIDENT ALIENS WITH INCOME DERIVED SOLELY FROM SOURCES
WITHIN THE PHILIPPINES
D) BENEFICIARIES OF THE ESTATES AND TRUSTS
254.THE FOLLOWING TAXPAYERS CAN CLAIM TAX CREDIT EXCEPT ONE(RPCPA)
A)
B)
C)
D)
DOMESTIC CORPORATIONS
MEMBERS OR BENEFICIARIES OF PARTNERSHIP OR TRUST
RESIDENT FILIPINO CITIZENS
NON-RESIDENT ALIENS
255. IN 2009, VICTOR CO., A DOMESTIC CORPORATION HAS NET INCOME
FROM WITHIN THE PHILIPPINES, P200,000 AND FROM THE U.S.A., P300,000.
INCOME TAX PAID ON INCOME FROM THE U.S.A. IS P95,000. THE TAX
CREDIT ON INCOME TAX PAID TO U.S. GOVERNMENT IS-(RPCPA)
A)
B)
C)
D)
P105,000
60,000
90,000
110,000
256. GLOBAL CORPORATION, A DOMESTIC CORPORATION , HAS THE
FOLLOWING DATA FOR THE CALENDAR YEAR. THE CORPORATION
SIGNIFIED ITS INTENTION TO CLAIM TAX CREDITS ON INCOME TAXES PAID
TO THE FOREIGN COUNTRIES:
COUNTRY
GROSS
INCOME
ALLOWABLE
DEDUCTIONS
TAX PAID
PHIL.
U.S.A.
JAPAN
1,000,000
400,000
300,000
800,000
200,000
200,000
P80,000
25,000
THE INCOME TAX PAYABLE BY GLOBAL CORPORATION IS:
A)
B)
C)
D)
P75,000
65,000
60,000
72,000
257. PENNY GARCIA , SINGLE HAS THE FOLLOWING DATA DURING THE
YEAR:
GROSS INCOME, PHIL.
GROSS INCOME, USA
EXPENSES, PHIL.
EXPENSES, USA
TAX PAID IN THE STATE OF CALIFORNIA
FEDERAL INCOME TAX PAID
P120,000
200,000
80,000
160,000
40,000
8,500
IF THE FOREIGN TAX PAID IS CLAIMED AS DEDUCTION, THE INCOME TAX
DUE ISA)
B)
C)
D)
P51,500
5,725
12,800
1,650
258. IN NUMBER 257, IF YOU ARE THE TAXPAYER, WILL YOU OPT TO CLAIM
THE FOREIGN TAX PAID AS TAX CREDIT OR AS A DEDUCTION?
A) TAX CREDIT BECAUSE THE TAX LIABILITY WOULD BE P1,250 ONLY
B) TAX CREDIT BECAUSE THE TAX LIABILITY WOULD BE P2,500 ONLY
C) DEDUCTION BECAUSE THE TAX LIABILITY WOULD BE P2,150 ONLY
D) DEDUCTION BECAUSE THE TAX LIABILITY WOULD BE P7,000 ONLY
CHAPTER 9-LOSSES
259. ONE IS NOT A DEDUCTIBLE LOSS-(RPCPA)
A) LOSS DUE TO REMOVAL OR DEMOLITION OF OLD BUILDING, THE
SCRAPPING OF OLD MACHINERY OR EQUIPMENT INCIDENT TO
RENEWAL OR REPLACEMENT
B) LOSS DUE TO REMOVAL OF
BUILDING OR REAL ESTATE
PURCHASED WHEN THE PURCHASE WAS FOR THE ACQUISITION OF
THE LAND AND WITHOUT INTENDING TO USE THE BUILDING
C) LOSS IN VALUE OF SECURITIES OF SUCH EXTENT THAT THE
SECURITIES HAVE BECOME WORTHLESS AND ARE WRITTEN OFF
D) LOSS IN USEFULNESS IN BUSINESS OF AN ASSET SO THAT THE
BUSINESS IS DISCONTINUED OR THE ASSET IS DISCARDED
260.MAX AND JESS ARE BUSINESS COMPETITORS. MAX PURCHASED A
LAND BESIDE THE BUSINESS PREMISES OF JESS WITH THE INTENTION OF
ERECTING A NEW 4-STOREY BUILDING. THE LAND WHICH WAS VALUED
AT P1,000,000 HAD AN ALMOST DILAPIDATED BUILDING THEREON
ASSESSED AT P150,000. HE SPENT P40,000 FOR ITS DEMOLITION AND SOLD
ITS SCRAP FOR P25,000. THE CONSTRUCTION OF THE NEW BUILDING COST
HIM P10,000,000.
WHEN JESS KNEW THE INTENTION OF MAX, HE DECIDED ALSO TO
DEMOLISH HIS 20-YEAR OLD BUILDING AND TO PUT UP A NEW ONE. THE
DEMOLITION COST HIM P80,000 BUT RAISED P35,000 FROM THE SCRAP, AND
THE CONSTRUCTION COST OF THE NEW 6-STOREY BUILDING WAS
P15,000,000.
AS BETWEEN MAX AND JESS, WHO IS ENTITLED TO CLAIM LOSS AS
DEDUCTION FROM GROSS INCOME?
A)
B)
C)
D)
MAX ONLY
JESS ONLY
BOTH OF THEM
NEITHER OF THEM
261. DELTA COMPANY PURCHASED A PIECE OF LAND WITH A BUILDING
THEREON FOR P1,500,000 ALLOCATED UNDER A CONTEACT OF SALE AT
P1,000,000 FOR THE LAND AND P500,000 FOR THE BUILDING. IT HAD NO USE
FOR THE BUILDING AT THE TIME OF PURCHASE AND IT WAS ITS
INTENTION TO REMOVE THE BUILDING IN ORDER TO BUILD ITS FACTORY.
IT INCURRED DEMOLITION COST OF P50,000. IT SOLD ITS SCRAP FOR
P15,000. THE CONSTRUCTION OF THE NEW BUILDING COST THE COMPANY
P2,500,000.
THE TOTAL VALUE OF THE LAND ISA)
B)
C)
D)
P1,000,000
2,615,000
1,615,000
1,535,000
262. DINA COMPANY HAD AN OLD WAREHOUSE WHICH HAD A COST OF
P1,200,000. THE COMPANY DEMOLISHED THE WAREHOUSE WHEN IT HAD A
BOOK VALUE OF P200,000 IN ORDER TO CONSTRUCT A NEW AND BIGGER
WAREHOUSE. THE DEMOLITION COST AMOUNTED TO P25,000 WHILE THE
SCRAP VALUE WERE SOLD FOR P10,000. IN ITS ACCOUNTING ENTRY, DINA
COMPANY SHOULD DEBIT A LOSS ON RETIREMENT OF OLD BUILDING OF
A)
B)
C)
D)
NONE
P200,000
185,000
215,000
263. A BUILDING WAS PARTIALLY DESTROYED BY FIRE IN 2008. IT HAD A
BOOK VALUE OF P4,000,000. THE INSURANCE COMPANY WAS WILLING TO
PAY P3,000,000 WHICH WAS REFUSED BY THE OWNER OF THE BUILDING.
FINALLY, THE CLAIM WAS SETTLED IN 2009 FOR P3,500,000. THE P3,500,000
PROCEEDS IS-(RPCPA)
A)
B)
C)
D)
EXEMPT FROM INCOME TAX
TAXABLE IN FULL
SUBJECT TO FINAL TAX
PARTLY TAXABLE, PARTLY EXEMPT
264. REFER TO ITEM 263 DATA. THE TAXPAYER CAN CLAIM S DEDUCTIBLE
LOSS OF-(RPCPA)
A)
B)
C)
D)
P1,000,000 IN 2008
1,000,000 IN 2009
500,000 IN 2008
500,000 IN 2009
265. IN 2008, POPOY’S RESIDENCE WAS TOTALLY DESTROYED BY FIRE. THE
PROPERTY HAD AN ADJUSTED BASIS AND A FAIR MARKET VALUE OF
P130,000 BEFORE THE FIRE. DURING 2008, POY RECEIVED INSURANCE
REIMBURSEMENT OF P120,000 FOR THE DESTRUCTION OF HIS HOME.
POPOY’S 2008 ADJUSTED GROSS INCOME WAS P70,000. POPOY HAD NO
CASUALTY GAINS DURING THE YEAR.. WHAT AMOUNT OF THE FIRE LOSS
WAS POPOY ENTITLED TO CLAIM AS AN ITEMIZED DEDUCTION ON HIS 2009
TAX RETURN?-(RPCPA)
A)
B)
C)
D)
ZERO
8,500
8,600
10,000
266. IN 2007, VIOLETA CONSTRUCTED AN OFFICE BUILDING WORTH
P2,000,000. IN 2009 WHEN IT HAD AN ACCUMULATED DEPRECIATION OF
P72,000 THE BUILDING WAS TOTALLY DESTROYED BY FIRE. ASSUMING
THAT THE AMOUNT RECOVERABLE FROM STAN INSURANCE COMPANY IS
P500,000, THE DEDUCTIBLE LOSS OF VIOLETA ISA)
B)
C)
D)
P1,928,000
2,000,000
ZERO
1,428,000
267.BASED ON THE DATA IN NO. 266 ABOVE, THE ACCOUNTING ENTRY IN
THE BOOKS OF VIOLETA
A) FIRE LOSS
BUILDING
B) FIRE LOSS
ALLOWANCE FOR DEPRECIATION
BUILDING
C) FIRE LOSS
RECEIVABLE FROM INS. CO.
2,000,000
2,000,000
1,428,000
72,000
1,500,000
500,000
500,000
D) RECEIVABLE FROM INS. CO.
ALLOWANCE FOR DEPRECIATION
FIRE LOSS
BUILDING
500,000
72,000
1,428,000
2,000,000
268. THE FOLLOWING PROPERTIES WERE BURNED IN A FIRE WHICH BROKE
OUT IN THE COMPANY PREMISES:
TYPE OF LOSS
COST
ACCUM. DEP’N
INSURANC RECOVERY
REPLACEMENT COST OF
DAMAGED PORTION
PROPERTY A
TOTAL
800,000
550,000
200,000
PROPERTY B
PARTIAL
1,200,000
600,000
150,000
-
500,000
THE DEDUCTIBLE LOSS ON PROPERTY A ISA)
B)
C)
D)
P250,000
800,000
50,000
600,000
269. BASED ON THE DATA IN NUMBER 268 ABOVE, THE DEDUCTIBLE LOSS
ON PROPERTY B ISA)
B)
C)
D)
P600,000
350,000
500,000
1,200,000
270. KATRINA CONSTRUCTION CORPORATION, A DOMESTIC CORPORATION
HAD THE FOLLOWING DATA:
YEAR 2008:
GROSS INCOME FROM SERVICES
P3,200,000
OPERATING EXPENSES
3,450,000
RENT INCOME OF HEAVY EQUIPMENTS
70,000
DIVIDEND RECEIVED FROM JOHNA CORP.
36,500
CAPITAL GAIN ON SALE OF SHARES OF STOCKS
(NOT LISTED)
12,250
YEAR 2009:
GROSS INCOME FROM SERVICES
OPERATING EXPENSES
3,560,000
1,250,000
IN 2009, KATRINA CORPORATION INCURRED THE FOLLOWING LOSSES:
FIRE LOSS OF A COMPANY BUILDING: TOTAL LOSS
COST
P5,000,000
ACCUM. DEP’N
3,000,000
AMOUNT RECOVERED FROM INSURANCE CO.
750,000
SCRAP(TAKEN AWAY BY THE INS. CO.)
5,000
ACCIDENT LOSS OF A COMPANY DUMP TRUCK: PARTIAL LOSS
COST OF DUMP TRUCK
P500,000
ACCUM. DEP’N
250,000
RESTORATION COST
150,000
AMOUNT RECOVERED FROM INS. CO.
65,000
271. HOW MUCH IS THE NET OPERATING LOSS CARRY-OVER TO 2009?
A)
B)
C)
D)
(P131,250)
(119,000)
(180,000)
(250,000)
272. HOW MUCH IS THE CASUALTY LOSS IN 2009?
A)
B)
C)
D)
P1,335,000
2,150,000
1,400,000
1,435,000
273. HOW MUCH IS THE INCOME TAX DUE IN 2009?
A)
B)
C)
D)
P238,500
278,250
130,462.50
97,387.50
274. JOE, A SALES AGENT ON COMMISSION BASIS OF CONTRADE
ENTERPRISES WHICH IS ENGAGED IN THE SALE OF PAPER AND PAPER
PRODUCTS, WHILE IN THE COURSE OF HIS TRAVEL TOWARDS BICOL
REGION WAS APPREHENDED BY MEMBERS OF THE NEW PEOPLE’S ARMY
(NPA) UNDER MELITO GLOR COMMAND ALONG QUEZON PROVINCE. HIS
SERVICE CAR OWNED BY CONTRADE ENTERPRISES WAS SEIZED. THE
NEXT DAY, HE LEARNED THAT THE NPAS AND THE MEMBERS OF THE PHIL.
ARMY UNDER 51ST BRIGADE HAD A CHANCE ENCOUNTER. USING HEAVY
WEAPONS, THE MILITARY FIRED AT THE NPAS THAT TRIED TO ESCAPE
WITH THE USE OF HIS CAR. ALL THE MEMBERS OF THE NPA WERE KILLED
AND THE CAR WAS A TOTAL WRECK. IS THE VALUE OF THE CAR
DEDUCTIBLE AS CASUALTY LOSS?
A) YES. IT IS DEDUCTIBLE TO JOE BEING IN POSSESSION OF THE CAR AT
THE TIME IT WAS SEIZED
B) YES. IT IS DEDUCTIBLE TO CONTRADE ENTERPRISES PROVIDED
THAT THE OTHER REQUISITES FOR DEDUCTIBILITY MUST BE
SATISFIED
C) NO. CASUALTY LOSS REFERS ONLY TO FIRE, EARTHQUAKE,
VOLCANIC ERUPTION AND OTHER NON-MAN MADE CALAMITIES
D) NO, BECAUSE IT WAS INTENTIONALLY WRECKED BY THE MEMBERS
OF THE PHIL. ARMY
275. QUENNIE COMPANY ACQUIRED MACHINERY AT A PURCHASE PRICE
OF P500,000. FREIGHT AND INSTALLATION COST AMOUNTED TO P20,000. AT
A DATE IN A TAXABLE YEAR WHEN THE ACCUMULATED DEPRECIATION
WAS P300,000, QUENNIE COMPANY RETIRED THE MACHINERY FROM THE
BUSINESS BECAUSE THE INCREASE IN THE COST OF PRODUCTION AND
THE CHANGE OF MANUFACTURE OF THE PRODUCT TO WHICH THE
MACHINERY IS EXCLUSIVELY DEVOTED MADE ITS CONTINUED
PROFITABLE USE IMPOSSIBLE. THE SCRAP VALUE OF THE MACHINERY
WAS P10,000.
THE LOSS ON THE RETIREMENT OF THE MACHINERY ISA)
B)
C)
D)
P220,000
280,000
200,000
210,000
276. FLORENCIO HAD THE FOLLOWING RECORDS OF INCOME, EXPENSES
AND LOSSES DURING THE YEAR:
WAGERING GAINS(WAGERING LOSSES, P50,000)
TEMPORARY DECLINE IN VALUE OF STOCKS OF TY CORP
SALE OF TYPEWRITERS WHICH WERE RENDERED
OBSOLETE BTY COMPUTERS(BOOK VALUE:P115,000)
P30,000
12,500
80,000
HOW MUCH WAS THE LOSS IS DEDUCTIBLE BY FLORENCIO?
A)
B)
C)
D)
P97,500
35,000
55,000
110,000
277. ALL OF THE FOLLOWING, EXCEPT ONE, ARE REQUISITES IN THE
CARRY-OVER OF NET OPERATING LOSS
A) THERE MUST BE NO SUBSTANTIAL CHANGE IN THE OWNERSHIP OF
THE BUSINESS
B) CARRY-OVER IS NOT ALLOWED IF THE CORPORATION IS SUBJECT
TO MCIT DURING THE TAXABLE YEAR
C) EVEN IF THE CORPORATION PAID TAX BASED ON MCIT, THE
RUNNING OF THE PRESCRIPTION PERIOD IS NOT INTERRUPTED
D) THE CARRY-OVER IS GOOD ONLY FOR ONE(1) YEAR
278. STATEMENT 1: THE TERM “NET OPERATING LOSS” SHALL MEAN THE
EXCESS OF ALLOWABLE DEDUCTION OVER GROSS INCOME OF THE
BUSINESS IN A TAXABLE YEAR.
STATEMENT 2: NON-RESIDENT FOREIGN CORPORATIONS ARE NOT
ENTITLED TO DEDUCT NOLCO FROM THEIR GROSS INCOME
STATE,MENT 3: THE NOLCO WHICH HAD NOT BEEN OFFSET AS DEDUCTION
FROM GROSS INCOME SHALL BE CARRIED OVER AS A DEDUCTION FROM
GROSS INCOME FOR THE NEXT TAXABLE YEAR IMMEDIATELY
FOLLOWING THE YEAR OF SUCH LOSS
WHICH OF THE ABOVE STATEMENTS IS/ARE FALSE?
A)
B)
C)
D)
STATEMENT 1 ONLY
STATEMENTS 1 AND 2
STATEMENT 3 ONLY
NONE
NUMBERS 279 TO 281 ARE BASED ON THE FOLLOWING INFORMATION:
THE FOLLOWING ARE THE RECORDS OF BRIDGET COMPANY:
GROSS SALES
COST OF SALES
DIVIDEND-RESIDENT
FOREIGN CORP.
INTEREST INCOME ON
NOTES RECEIVABLE
CAPITAL GAIN
CAPITAL LOSS
2007
P3,300,000
2,400,000
2008
2,340,000
1,070,000
2009
825,000
380,000
140,000
-
32,000
28,000
20,000
16,400
13,000
-
18,500
22,000
279. THE TAXABLE INCOME/OPERATING LOSS IN 2007 ISA) (P575,000)
B) (407,000)
C) (427,000)
D) 1,068,000
280. IN QUESTION 279, THE TAXABLE INCOME/OPERATING LOSS IN 2008 ISA)
B)
C)
D)
ZERO
274,400
(132,600)
254,400
281. THE NET OPERATING LOSS CARRY-OVER IN 2009 ISA)
B)
C)
D)
P18,000
ZERO
170,600
18,000
NUMBERS 282 AND 283 ARE BASED ON THE FOLLOWING INFORMATION:
THE FOLLOWING ARE THE RECORDS OF BETTY, SINGLE, RESIDENT
CITIZEN:
2008
2009
GROSS SALES
P2,560,000
1,920,000
COST OF SALES
1,360,000
895,000
DIVIDEND FROM\ \
RESIDENT FOREIGN CORP.
41,200
INTEREST INCOME ON
NOTES REC’BLE
12,500
INTEREST FROM DEPOSIT WITH
CHINABANK
2,350
1,680
CAPITAL GAIN
11,450
13,650
CAPITAL LOSS
17,800
DEDUCTIONS
1,160,000
458,350
ADDITIONAL INFORMATION:
A. IN 2007, THE TAXPAYER HAD AN OPERATING LOSS OF P300,000
B. IN 2009, THE TAXPAYER AVAILED OF OPTIONAL STANDARD
DEDUCTION
282. THE TAXABLE INCOME/OPERATING LOSS IN 2008 ISA)
B)
C)
D)
P261,400
ZERO
274,400
1,286,400
283. THE TAXABLE INCOME/OPERATING LOSS IN 2009 OF BETTY ISA)
B)
C)
D)
P190,700
939,580
248,200
232,500
284. HOLY WORD COMPANY PURCHASED SHARES OF STOCK OF NUEVA
CACERES COMPANY FOR P60,000 AND OF ATENEO COMPANY FOR P30,000.
AT THE END OF THE TAXABLE YEAR, IT ASCERTAINED THAT ITS NUEVA
CACERES COMPANY STOCK WAS WORTHLESS BECAUSE OF THE
COMPLETE INSOLVENCY OF THE CORPORATION, AND ITS ATENEO
COMPANY HAD DECLINED OIN VALUE OF P28,000. HOLY WORD COMPANY
SHOULD RECOGNIZE A LOSS ON ITS INVESTMENT IN NUEVA CACERES AND
ATENEO COMPANY SHARES OFA)
B)
C)
D)
ZERO
P62,000
60,000
90,000
285. NINI COMPANY WAS MERGED INTO OTOY COMPANY. NINI COMPANY
TRANSFERRED ALL ITS PROPERTIES WITH A BOOK VALUE OF P4,000,000 TO
OTOY COMPANY FOR WHICH IT RECEIVED SHARES OF THE LATTER WITH A
FAIR MARKET VALUE OF P3,600,000. SANKO WAS A STOCJHOLDER OF NINI
COMPANY (WHICH HE ACQUIRED AT A COST OF P500,000) WHEN THE
MERGER WAS EFFECTED AND RECEIVED SHARES OF OTOY COMPANY
WITH A FAIR MARKET VALUE OF P360,000. THE AMOUNT OF LOSS
DEDUCTIBLE BY NINI COMPANY ISA)
B)
C)
D)
P400,000
4,000,000
140,000
ZERO
286. IN NUMBER 285 ABOVE, THE AMOUNT OF LOSS DEDUCTIBLE BY OTOY
ISA)
B)
C)
D)
P400,000
140,000
500,000
ZERO
287. KIRING-KING COMPANY TRANSFERRED PROPERTY TO RAYRAY
COMPANY. AS A RESULT OF THE TRANSFER, KIRING-KING COMPANY
ACQUIRED CONTROL OVER RAYRAY COMPANY. THE PROPERTY HAD A
BOOK VALUE OF P1,000,000 TO KK COMPANY. AS A CONSIDERATION, IT
RECEIVED SHARES OF STOCK OF RR WITH A FAIR MARKET VALUE OF
P960,000. AS A CONSEQUENCE OF THE TRANSACTION, KK COMPANY SHALL
CLAIM A DEDUCTIBLE LOSS OFA)
B)
C)
D)
P1,000,000
960,000
40,000
ZERO
288. SHASHA, SINGLE, HAS THE FOLLOWING DATA IN 2008 AND 2009:
2008
NET INCOME BEFORE
PERSONAL EXEMPTION
AND BAD DEBT
LESS: BAD DEBT
WRITTEN OFF
NET INCOME AFTER
BAD DEBT
2009
BAD DEBT
RECOVERED
CASE1
CASE2
CASE3
50,000
50,000
50,000
70,000
68,000
30,000
(20,000)
(18,000)
20,000
70,000
60,000
30,000
IN 2009, THE TAXABLE AMOUNTS BEFOREW PERSONAL EXEMPTION ARE:
CASE1
CASE2
CASE3
A) 50,000
50,000
50,000
B) 50,000
42,000
30,000
C) 70,000
68,000
30,000
D) (20,000)
(8,000)
20,000
289. THE FOLLOWING WERE TAKEN FROM THE INCOME STATEMENT OF
ABC CORPORATION FOR THE TAXABLE YEAR 2009:-((RPCPA)
GROSS PROFIT ON SALES
LESS: DEDUCTIBLE EXPENSES
PROVISION FOR BAD DEBTS
NET INCOME BEFORE INCOME TAX
P800,000
440,000
80,000
520,000
280,000
ADDITIONAL INFORMATION:
A. ACCOUNTS WRITTEN OFF DURING THE YEAR AND CHARGED TO
ALLOWANCE FOR BAD DEBTS-P50,000
B. RECOVERIES ON ACCOUNTS RECEIVABLE PREVIOUSLY WRITTEN
OFF IN 2008 AND CREDITED TO ALLOWANCE FOR BAD DEBTS
ALLOWED AS DEDUCTION BY BIR=P30,000
DISALLOWED BY BIR AS DEDUCTION=P20,000
THE NET INCOME BEFORE INCOME TAX OF ABC CORPORATION ISA)
B)
C)
D)
P280,000
260,000
330,000
340,000
290. WHICH OF THE FOLLOWING METHODS OF DEPRECIATION IS NOT
EXPRESSLY ALLOWED UNDER THE LAW?
A)
B)
C)
D)
OUTPUT OR PRODUCTION METHOD
SUM-OF-YEARS DIGITS METHOD
STRAIGHT LINE METHOD
DECLINING BALANCE METHOD
291. WHICH OF THE FOLLOWING ASSETS IS SUBJECT TO DEPRECIATION
FOR INCOME TAX PURPOSES?-(RPCPA)
A)
B)
C)
D)
INVENTORIES OR STOCK IN TRADE
GOODWILL
EQUIPMENT USED IN BUSINESS
RESIDENTIAL HOUSE
292. A STORE BUILDING WAS CONSTRUCTED ON JANUARY 2, 2004 WITH A
COST OF P570,000. ITS ESTIMATED USEFUL LIFE IS 16 YEARS WITH SCRAP
VALUE OF P70,000 AFTER 16 YEARS. IN JANUARY 2009, REPLACEMENT OF
SOME WORN-OUT PARTS OF THE BUILDING COSTING P50,000 WAS SPENT.
AFTER THE RAPAIRS, THE BUILDING WAS APPRAISED WITH A FAIR
MARKET VALUE OF P770,000. THE ALLOWABLE DEDUCTION FOR
DEPRECIATION FOR THE YEAR 2009 IS-(RPCPA)
A)
B)
C)
D)
P35,795.45
43,750
49,431.82
31,250
CHARITABLE CONTRIBUTION PROBLEMS:
293.WHICH OF THE FOLLOWING IS DEDUCTIBLE FROM GROSS INCOME
EVEN IF THE PAYMENT IS NOT CONNECTED WITH BUSINESS?
A) CONTRIBUTION OF THE EMPLOYER TO THE PENSION TRUST OF THE
EMPLOYEE
B) CHARITABLE CONTRIBUTIONS
C) INCOME TAX PAID IN FOREIGN COUNTRY
D) TRAVELLING EXPENSES
294. THE AMOUNT OF CHARITABLE CONTRIBUTION OF PROPERTY OTHER
THAN MONEY SHALL BE BASED ON
A)
B)
C)
D)
FAIR MARKET VALUE
BOOK VALUE
LOWER OF COST OR MARKET
ACQUISITION COST
295. ANGELO IS A CASH BASIS, SELF-EMPLOYED AIR-CONDITIONING
REPAIRMAN WITH 2009 GROSS BUSINESS RECEIPTS OF P200,000. ANGELO’S
CASH DISBURSEMENT WERE AS FOLLOWS:-(RPCPA)
AIR CONDITIONING PARTS
YELLOW PAGES LISTING
ESTIMATED NATIONAL INCOME TAXES ON
SELF-EMPLOYMENT INCOME
BUSINESS LONG-DISTANCE TELEPHONE CALLS
CHARITABLE CONTRIBUTIONS
P25,000
20,000
10,000
4,000
2,000
WHAT AMOUNT SHOULD ANGELO REPORT AS SELF-EMPLOYMENT INCOME
BEFORE PERSONAL EXEMPTION?
A)
B)
C)
D)
P151,000
149,000
141,000
139,000
296. WHAT WOULD BE THE ALLOWABLE DEDUCTION FOR P10,000
CONTRIBUTION MADE BY A RESIDENT CITIZEN TO A CHARITABLE
INSTITUTION, FROM HIS P60,000 NET INCOME BEFORE CONTRIBUTION?
A)
B)
C)
D)
P6,000
7,000
3,000
10,000
297.NOTRADAMUS CORPORATION HAD THE FOLLOWING DATA IN 2009:
GROSS INCOME
DEDUCTIONS(EXCEPT CONTRIBUTIONS)
P500,000
400,000
DONATIONS TO CULTURAL CENTER OF THE PHIL.
DONATIONS TO REHABILITATION OF VETERANS, INC.
DONATION TO ROMAN CATHOLIC CHURCH
DONATIONS TO VICTIMS OF PAYATAS TRAGEDY
THE TAXABLE INCOME OF THE CORPORATION ISA)
B)
C)
D)
3,000
2,000
1,500
5,000
P92,000
93,500
88,500
100,000
298. DOMINGO HAD THE FOLLOWING DATA DURING THE YEAR:
GROSS INCOME FROM BUSINESS
P1,000,000
CAPITAL GAIN
50,000
CAPITAL LOSS
20,000
DEDUCTIONS
400,000
DONATION TO ACCREDITED NGO
30,000
DONATION TO CHURCH
20,000
THE TAXABLE INCOME OF DOMINGO IF HE IS AN INDIVIDUAL TAXPAYER,
SINGLE, WITH A COMPENSATION INCOME DURING THE YEAR OF P40,000A)
B)
C)
D)
P550,000
600,000
560,000
570,000
299. IN NUMBER 299 DATA, HOW MUCH IS THE TAXABLE INCOME IF
DOMINGO IS A CORPORATION (DISREGARD COMPENSATION INCOME)A)
B)
C)
D)
P670,000
640,000
580,000
570,000
300. SANDY MADE A CONTRIBUTION OF P15,000 TO ST. JUDE PARISH
CHURCH. HE HAD A GROSS INCOME FROM BUSINESS OF P500,000 AND
DEDUCTIONS (EXCLUDING CONTRIBUTION) OF P400,000. FROM THIS
CONTRIBUTION, HOW MUCH WILL HE BE ALLOWED AS DEDUCTION FROM
HIS GROSS INCOME?
A)
B)
C)
D)
P15,000
ZERO
10,000
100,000
301. AN INDIVIDUAL TAXPAYER MADE THE FOLLOWING CONTRIBUTIONS:
TO FATIMA CATHOLIC CHURCH
TO BEGGARS
TO POLYTEHCNIC UNIVERSITY OF THE PHIL.
TO BGY TIKAPO
P20,000
500
25,000
10,000
THE AMOUNT OF CONTRIBUTIONS DEDUCTIBLE SUBJECT TO 10%
LIMITATION ISA)
B)
C)
D)
P20,000
30,000
55,000
55,500
302. THE CANCER HOSPITAL OF THE PHILIPPINES IS A CHARITABLE
INSTITUTION. MR. BIGLANG-AWA VISITED THE HOSPITAL ON HIS 60TH
BIRTHDAY. HE DONATED P500,000 TO THE HOSPITAL AND P10,000 TO A
CANCER VICTIM WHO IS ONLT TEN(10)YEARS. HE ALSO BROUGHT WITH
HIM A CHAIN RESTAURANT MASCOT THAT PLAYED WITH THE CHILDREN
PATIENTS WHILE EATING THE POPULAR PRODUCT OF THE RESTAURANT.
IT HAD COST HIM P15,000.
WHICH OF THE ABOVE CONTRIBUTIONS IS QUALIFIED AS DEDUCTION
FROM THE GROSS COMPENSATION INCOME OF BIGLANG-AWA IF HE IS A
NEWLY RETIRED GOVERNMENT OFFICIAL WHO IS NOT ENGAGED IN
BUSINESS?
A)
B)
C)
D)
ONLY THE P500,000
THE P500,000 AND THE P10,000
THE P500,000, P10,000 AND P15,000
NONE OF THEM
OPTIONAL STANDARD DEDUCTION PROBLEMS:
303. THE TAXPAYER HAD THE FOLLOWING DATA IN 2009:
GROSS RECEIPTS
COST OF SERVICES
DEDUCTIONS
CAPITAL GAIN
CAPITAL LOSS
P1,450,000
565,300
325,800
25,500
6,000
IF THE TAXPAYER IS SINGLE, WITH ONE DEPENDENT CHILD, THE TAXABLE
INCOME IF HE AVAILED OF THE OPTIONAL STANDARD DEDUCTION IS-
A)
B)
C)
D)
P870,000
814,500
475,320
503,400
305. IN NUMBER 304, THE TAXABLE INCOME IF THE TAXPAYER IS A
CORPORATION ISA)
B)
C)
D)
P550,320
814,500
542,520
889,500
ACCOUNTING METHODS PROBLEMS:
306. A HYBRID METHOD OF ACCOUNTING ISA)THE METHOD UNDER WHICH EXPENSES IN THE PRODUCTION OF CROPS
ARE DEDUCTED IN THE YEAR IN WHICH THE GROSS INCOME FROM THE
CROP HAS BEEN REALIZED
B)A METHOD UNDER WHICH THE TAXPAYER REPORTS HIS INCOME AND
EXPENSES BY EMPLOYING THE COMBINATION OF CASH AND ACCRUAL
METHOD
C)ALSO KNOWN AS CASH RECEIPTS AND DISBURSEMENTS METHOD
D)A METHOD IN WHICH THE TAXPAYER REPORTS INCOME IN THE YEAR IT
IS EARNED
307. TAXPAYER IS REQUIRED TO REPORT INCOME FOR THE TAX YEAR IN
WHICH PAYMENTS ARE ACTUALLY OR CONSTRUCTIVELY RECEIVED
WHILE EXPENSES ARE DEDUCTED IN THE YEAR PAID
A)
B)
C)
D)
ACCRUAL BASIS
CASH BASIS OR CASH RECEIPTS AND DISBURSEMENTS METHOD
HYBRID METHOD
CROP YEAR BASIS
308. UNDER THIS METHOD OF ACCOUNTING, INCOME IS REPORTED IN THE
YEAR IT IS EARNED
A)
B)
C)
D)
CASH BASIS
CROP YEAR BASIS
CONSTRUCTIVE RECEIPT OF INCOME
ACCRUAL METHOD
309. ESTRELLA USES ACCRUAL METHOD OF ACCOUNTING. SHE OWNS A
LAND WHICH SHE LEASED TO GORDON FOR 2 YEARS AT AN ANNUAL
RENTAL OF P100,000. ON JULY 1, 2007, SHE RECEIVED P200,000 FROM
GORDON REPRESENTING THE RENTAL COVERING THE PERIOD JULY 1, 2007
TO JUNE 30, 2009.
IN 2007, ESTRELLA WILL REPORT AN INCOME SUBJECT TO TAX OF –
A)
B)
C)
D)
P50,000
200,000
100,000
150,000
310. BASED ON THE DATA IN NO. 309 ABOVE, GORDON, USING CASH
METHOD CAN DEDUCT AN EXPENSE OFA)
B)
C)
D)
P50,000
200,000
100,000
150,000
311. ALL OF THE FOLLOWING, EXCEPT ONE, ARE CONSIDERED AS
“CONSTRUCTIVE RECEIPTS” FOR INCOME TAX PURPOSES. WHICH IS THE
EXCEPTION?
A) THE SHARE OF THE PROFITS OF THE PARTNER IN A GENERAL
PROFESSIONAL PARTNERSHIP
B) INTEREST CREDITED ON BANK SAVINGS DEPOSIT
C) BOND INTEREST COUPONS WHICH HAVE MATURED BUT WHICH
HAVE NOT BEEN REDEEMED
D) PROPERTY BORROWED BY THE TAXPAYER
312. UNDER THIS METHOD OF REPORTING INCOME, THE TAXPAYER
REPORTS A PERCENTAGE OF THE GROSS INCOME FROM A LONG-TERM
CONTRACT BASED ON THE PORTION OF WORK THAT HAS BEEN
COMPLETED
A)
B)
C)
D)
ACCRUAL BASIS
CASH BASIS
PERCENTAGE OF COMPLETION METHOD
HYBRID METHOD
313. GROSSS INCOME IS REPORTEDLY PARTIALLY IN EACH TAXABLE YEAR
IN PROPORTION TO COLLECTIONS MADE IN SUCH PERIOD AS IT BEARS TO
THE TOTAL CONTRACT PRICE REFER TO-(RPCPA)
A)
B)
C)
D)
CROP YEAR BASIS METHOD
PERCENTAGE OF COMPLETION BASIS METHOD
ACCRUAL METHOD
INSTALLMENT SALES METHOD
314. ALL OF THE FOLLOWING, EXCEPT ONE, ARE NOT TAKEN INTO
ACCOUNT IN DETERMINING THE CORRECT AMOUNT OF INITIAL
PAYMENTS
A)
B)
C)
D)
COMMISSIONS
OTHER SELLING EXPENSES
INSTALLMENT PAYMENTS IN THE YEAR OF SALE
GROSS PROFIT
315. UNDER INSTALLMENT METHOD OF REPORTING INCOME TAX, THE
AMOUNT OF TAX PAYABLE IN THE YEAR OF SALE OF A VACANT LOT IS
COMPUTED BY APPLYING THE FOLLOWING FORMULA:
A)
B)
C)
D)
(DOWNPAYMENT/CONTRACT PRICE) X FINAL TAX DUE
(INITIAL PAYMENT/SELLING PRICE) X FINAL TAX DUE
(FINAL TAX DUE/SELLING PRICE) X COLLECTION
(INITIAL PAYMENT/CONTRACT PRICE) X FINAL TAX DUE
NUMBERS 316 TO 318 ARE BASED ON THE FOLLOWING INFORMATION:
ALONSO OWNS A PERSONAL CAR WHICH HE SOLD IN INSTALLMENT ON
NOVEMBER 1, 2008 AS FOLLOWS:
DATE OF ACQUISITIONACQUISITION COSTTERMS OF PAYMENT:
DOWNPAYMENTDUE ON DUE ONDUE ON-
MARCH 20, 2006
P300,000
NOVEMBER 1, 2008 DECEMBER 1, 2008JANUARY 1, 2009FEBRUARY 1, 2009-
316. THE INITIAL PAYMENT IN 2008 ISA)
B)
C)
D)
P50,000
100,000
300,000
400,000
P50,000
50,000
150,000
150,000
317. THE AMOUNT OF GAIN TO BE REPORTED IN 2008 ISA)
B)
C)
D)
P50,000
25,000
37,500
12,500
318. THE AMOUNT OF GAIN TO BE REPORTED IN 2009 ISA)
B)
C)
D)
P50,000
25,000
37,500
12,500
NUMBERS 319 TO 323 ARE BASED ON THE FOLLOWING INFORMATION:
MARLYN SOLD A VACANT LOT TO HER SISTER MICA. THE DETAILS OF
WHICH ARE AS FOLLOWS:
ACQUISITION COST OF LAND, MARCH 5, 2006
CASH PAYMENTS:
DATE OF SALE, DEC. 15, 2008
P100,000
PAYMENT, JANUARY 15, 2009
100,000
MORTGAGE ASSUMED BY MICA
500,000
319. THE INITIAL PAYMENT ISA)
B)
C)
D)
P100,000
250,000
150,000
200,000
320. THE SELLING PRICE OF THE PROPERTY ISA)
B)
C)
D)
P150,000
550,000
700,000
250,000
321. THE CONTRACT PRICE ISA)
B)
C)
D)
P150,000
550,000
700,000
250,000
P450,000
322. THE FINAL TAX PAYABLE IN 2008 ISA)
B)
C)
D)
P42,000
25,200
9,000
NONE
323. THE FINAL TAX PAYABLE IN 2009 ISA)
B)
C)
D)
P42,000
25,200
16,800
NONE
NUMBERS 324 AND 325 ARE BASED ON THE FOLLOWING INFORMATION:
ABUNDA SOLD HIS WAREHOUSE BUILDING TO ABELINDE. THE PROPERTY
WAS ACQUIRED BY HIM IN 2001 FOR P250,000. AT THE TIME OF SALE, ITS
ACCUMULATED DEPRECIATION AMOUNT TO P50,000. THE TERMS OF THE
SALE ARE AS FOLLOWS:
CASH PAID, JUNE 1, 2008
INSTALLMENT, SEPT 1, 2008
INSTALLMENT, DEC 1, 2008
INSTALLMENT, MARCH 1, 2009
INSTALLMENT, JUNE 1, 2009
P50,000
20,000
20,000
155,000
155,000
324. THE INCOME TO BE REPORTED BY ABUNDA IN 2008 ISA)
B)
C)
D)
P45,000
90,000
200,000
NONE
325. THE INCOME TO BE REPORTED BY ABUNDA IN 2009 ISA)
B)
C)
D)
P200,000
155,000
45,000
NONE
326. JOSEPH SAN JOSE SOLD A COMMERCIAL BUILDING ON OCTOBER 15,
2008 FOR P2,000,000. THE COST OF THE PROPERTY WAS P1,200,000 WHILE
THE ACCUMULATED DEPRECIATION WAS P400,000. THE TERMS OF THE
SALE WERE:
DOWN PAYMENT
P300,000
BALANCE IS PAYABLE IN MONTHLY INSTALLMENTS OF P100,000
BEGINNING NOVEMBER 15, 2008 UNTIL FULLY PAID.
THE INCOME TO BE REPORTED IN 2008 –
A)
B)
C)
D)
P75,000
300,000
45,000
30,000
SPECIAL TOPIC-FRINGE BENEFIT TAX
327. THE FRINGE BENEFIT TAX IS NOT IMPOSED ONI)
J)
K)
L)
RANK AND FILE EMPLOYEE
SUPERVISORY EMPLOYEE
MANAGERIAL EMPLOYEE
ALL EMPLOYEES
328.FRINGE BENEFIT TAX IS IMPOSED ONA)
B)
C)
D)
RANK AND FILE EMPLOYEE
DE MINIMIS BENEFITS
SUPERVISORY AND MANAGERIAL EMPLOYEES
FRINGE BENEFITS GRANTED FOR THE CONVENIENCE OF THE
EMPLOYER
329. WHICH OF THE FOLLOWING IS SUBJECT TO FRINGE BENEFIT TAX?(RPCPA)
A) COMPENSATION OF THE RANK AND FILE EMPLOYEE
B) COMPENSATION OF THE SUPERVISORY AND
EMPLOYEE
C) FRINGE BENEFIT OF THE RANK AND FILE EMPLOYEE
D) FRINGE BENEFIT OF THE SUPERVISORY OF
EMPLOYEES
MANAGERIAL
MANAGERIAL
330. THE FOLLOWING EARNINGS ARE SUBJECT TO FRINGE BENEFIT TAX,
EXCEPT:-(RPCPA)
A) SALARY OF RANK AND FILE EMPLOYEE
B) HOUSING NECESSARY FOR THE TRADE AND FOR THE CONVENIENCE
OF THE EMPLOYER
C) FOOD ALLOWANCE FOR THE CONVENIENCE OF THE EMPLOYER AND
NECESSARY IN THE CONDUCT OF THE BUSINESS
D) ALL OF THE ABOVE
ITEMS 331 AND 332 ARE BASED ON THE FOLLOWING INFORMATION:
331. DITSO IS EMPLOYED BY HOLY CROSS HOSPITAL AS AN AMBULANCE
DRIVER WITH A SALARY OF P4,000 A MONTH. IN ADDITION, HE IS GIVEN
MEALS WITH A MONTHLY VALUE OF P1,500 AND LIVING QUARTERS
WITHIN THE HOSPITAL COMPOUND WITH AN EQUIVALENT VALUE OF
P1,000 A MONTH
THE MONTHLY COMPENSATION INCOME OF DITSO ISA)
B)
C)
D)
P6,500
4,000
5,000
5,500
332. IF THE BENEFITS GIVEN TO DITSO IN NUMBER 331 ABOVE IS
FURNISHED BY HIS EMPLOYER SO THAT HIS SERVICES COULD EASILY BE
AVAILED OF WHENEVER SOME PATIENTS WILL NEED THE URGENT
SERVICES OF AN AMBULANCE, HIS MONTHLY COMOENSATION INCOME ISA)
B)
C)
D)
P6,500
4,000
5,000
5,500
333. THE FOLLOWING STATEMENTS ARE TRUE, EXCEPT:-(RPCPA)
A) FRINGE BENEFIT TAX SHALL BE TREATED AS A FINAL INCOME TAX
ON THE EMPLOYEE WITHHELD AND PAID BY THE EMPLOYER ON A
QUATERLY BASIS
B) THE GROSSED-UP MONETARYVALUE OF THE FRINGE BENEFIT IS THE
ACTUAL AMOUNT RECEIVED BY THE EMPLOYEE
C) THE GROSSED-UP MONETARY VALUE OF THE FRINGE BENEFIT
SHALL BE DETERMINED BY DIVIDING THE MONETARY VALUE OF
THE FRINGE BENEFIT BY THE GROSS MONETARY VALUE FACTOR
D) THE PERSON LIABLE FOR FRINGE BENEFIT TAX IS THE EMPLOYER,
WHETHER HE IS INDIVIDUAL, PROFESSIONAL PARTNERSHIP OR A
CORPORATION REGARDLESS OF WHETHER THE CORPORATION IS
TAXABLE
OR
NOT
OR
THE
GOVERNMENT
AND
ITS
INSTRUMENTALITIES
334. STATEMENT 1: A FRINGE BENEFIT THAT IS EXEMPT FROM BENEFIT
TAX IS LIKEWISE EXEMPT FROM ANY OTHER FORM OF INCOME TAX
STATEMENT 2: ANY AMOUNT GIVEN BY THE EMPLOYER AS DEMINIMIS
BENEFITS TO ITS EMPLOYEES, SHALL NOT CONSTITUTE AS DEDUCTION
UPON SUCH EMPLOYER
A)
B)
C)
D)
STATEMENT 2
STATEMENT 1
STATEMENTS 1 AND 2
NEITHER STATEMENTS
335.SARAH BUKAS, MARRIED WITH THREE(3) QUALIFIED DEPENDENT
CHILDREN, A REGULAR EMPLOYEE OF CONFEDERATE, INC., RECEIVES ON
JULY 6, 2009 P30,000 AS REGULAR MONTHLY SALARY AND HALF OF HIS
13TH MONTH PAY AMOUNTING TO P15,000 PLUS OTHER BENEFITS SUCH AS
RICE ALLOWANCE FOR JULY OF P2,000, INCENTIVE PAY OF P20,000,
HAZARD PAY OF P1,000, OVETRTIME PAY OF P4,000 AND NIGHT SHIFT
DIFFERENTIAL OF P2,000.
COMPUTE THE INCOME SUBJECT TO WITHHOLDING TAX IN JULY
A)
B)
C)
D)
P57,000
30,000
45,500
72,500
336. MAYAMAN COMPANY OWNS A FLEET OF MOTOR VEHICLES. IN 2008,
ONE OF THE CARS WHICH WAS ACQUIRED AT A COST OF P400,000 WAS
ALLOWED AS SERVICE VEHICLE BY ONE OF ITS OFFICIALS. DURING THE
YEAR, ITS BOOK VALUE AMOUNTED TO P375,000. HOW MUCH WAS THE
FRINGE BENEFIT TAX DUE THEREON?
A)
B)
C)
D)
P96,969
18,823
17,767
88,235
337. BASED ON THE DATA IN NUMBER 336 ABOVE, SUPPOSE MAYAMAN
COMPANY IS JUST LEASING THE CAR THAT IS BEING USED PARTLY FOR
PERSONAL AND FOR BUSINESS PURPOSES AND IS PAYINH AN ANNUAL
RENTAL OF P100,000. THE ANNUAL FRINGE BENEFIT TAX ISA) P28,229
B) 23,529
C) 73,529
D) 25,760
338. IN MAY 2008, A NON-STOCK, NON-PROFIT UNIVERSITY PROVIDED A 3DAY VACATION TRIP TO BORACAY ISLAND TO THE UNIVERSITY’S EVP.
THE TOTAL EXPENSES INCURRED BY THE SCHOOL WAS P20,000. THE
FRINGE BENEFIT TAX ISA)
B)
C)
D)
P6,400
9,412
10,303
NONE
ITEMS 339 AND 340 ARE BASED ON THE FOLLOWING DATA:
339. XYZ CORPORATION ASSIGNED MR. PASSO ONE OF THE EMPLOYEES IN
THE HEAD OFFICE IN MANILA TO MANAGE THEIR BRANCH OFFICE IN
DAGUPAN. THE COMPANY PROVIDED FOR THE RESIDENTIAL HOUSE OF
THE MANAGER PAYING A MONTHLY RENTAL OF P34,000.
THE MONTHLY FRINGE BENEFIT TAX THEREON ISA) P16,000
B) 10,880
C) 25,000
D) 8,000
340. BASED ON THE SAME DATA IN NO. 339 ABOVE, THE DEDUCTIBLE
EXPENSE FROM THE GROSS INCOME OF XYZ CORPORATION ISA)
B)
C)
D)
P8,000
25,000
42,000
34,000
NUMBERS 341 AND 342 ARE BASED ON THE FOLLOWING INFORMATION:
341. EXTRA CORPORATION FURNISHED AND GRANTED THE USE OF ITS
CONDOMINIUM UNIT TO ITS EVP. THE FAIR MARKET VALUE OF THE
PROPERTY IS P4,800,000 WHILE THE ACQUISITION COST IS P3,000,000.
THE MONTHLY FRINGE BENEFIT TAX DUE ISA) P2,941.18
B) 4,705.88
C) 88,235
D) 58,823.53
342. BASED ON NUMBER 341 ABOVE, THE DEDUCTIBLE EXPENSE FROM THE
GROSS INCOME OF EXTRA COPORATION ISA)
B)
C)
D)
P14,705.88
4,705.88
12,132.35
2,941.18
343. BRAVO COMPANY PROVIDED FRINGE BENEFIT TO ITS MANAGERIAL
EMPLOYEES IN THE AMOUNT OF P136,000 AND TO ITS RANK AND FILE
EMPLOYEES AMOUNTING TO P50,000. THE DEDUCTIBLE EXPENSE BY
BRAVO COMPANY ISA)
B)
C)
D)
P186,000
136,000
50,000
250,000
344. THE CORPORATION GAVE A BRAND NEW CAR TO ITS SALES
MANAGER. THE FRINGE BENEFIT GIVEN ISA) SUBJECT TO FRINGE BENEFIT TAX BASED ON THE PROVISIONS OF
THE TAX CODE
B) SUBJECT TO FRINGE BENEFIT TAX BECAUSE IT WAS GIVEN TO A
RANK-AND-FILE EMPLOYEE
C) EXEMPT FROM THE FRINGE BENEFIT TAX BECAUSE IT IS REQUIRED
BY THE NATURE OF OR NECESSARY TO THE TRADE OR BUSINESS OF
THE EMPLOYER
D) EXEMPT FROM THE FRINGE BENEFIT TAX BECAUSE IT WAS GIVEN
FOR THE CONVENIENCE OF THE EMPLOYER
345. FRANCINE CORPORATION GAVE THE FOLLOWING FRINGE BENEFITS
TO ITS EMPLOYEES:
TO SUPERVISORY EMPLOYEES
TO MANAGERIAL EMPLOYEES
TO RANK-AND-FILE EMPLOYEES
P220,000
120,000
60,000
THE ENTRY TO RECORD THE ABOVE TRANSACTION ISA) FRINGE BENEFITS TAX
FRINGE BENEFIT EXPENSE
CASH
FRINGE BENEFIT TAX PAYABLE
56,471
400,000
400,000
56,471
B) FRINGE BENEFIT TAX
FRINGE BENEFIT TAX PAYABLE
400,000
400,000
C) FRINGE BENEFITS TAX
560,000
FRINGE BENEFIT TAX PAYABLE
560,000
D) FRINGE BENEFIT TAX EXPENSE
160,000
FRINGE BENEFIT EXPENSE
400,000
CASH
400,000
FRINGE BENEFIT TAX PAYABLE
160,000
346. IVY CORPORATION HAS THE FOLLOWING JOURNAL ENTRY ON FRINGE
BENEFITS:
FRINGE BENEFITS EXPENSE
P186,000
FRINGE BENEFIT TAX EXPENSE
64,000
CASH
FRINGE BENEFIT TAX PAYABLE
186,000
64,000
BASED ON THE ABOVE ACCOUNTING ENTRY, THE AMOUNT OF FRINGE
BENEFIT GIVEN TO RANK AND FILE EMPLOYEESA)
B)
C)
D)
P64,000
50,000
186,000
250,000
347. ADRIAN, A SUPERVISORY EMPLOYEE OF BOGBOG CORPORATION
BORROWED P50,000 FROM THE COMPANY PAYABLE IN FOUR MONTHS
THRU SALARY DEDUCTION. IF THE CORPORATION IS CHARGING 4%
INTEREST PER ANNUM ON THE LOAN, THE FRINGE BENEFIT TAX EXPENSE
ISA) P2,000
B) 666.67
C) 627.45
D) 313.73
CHAPTER 2-TAX ADMINISTRATION, TAX RETURNS,
FILING AND PAYMENT
348. WHICH OF THE FOLLOWING STATEMENTS IS FALSE?
A) INDIVIDUAL TAXPAYERS SHALL FILE THEIR INCOME TAX RETURNS
ON OR BEFORE APRIL 15 OF EACH YEAR
B) EXTENSION OF TIME FOR FILING INCOME TAX RETURNS MAY BE
GRANTED BY THE COMMISSIONER OF INTERNAL REVENUE(CIR)
C) SECOND INSTALLMENT IN THE PAYMENT OF INCOME TAX MUST BE
PAID ON OR BEFORE JULY 15 OF THE SAME YEAR
D) IN PLACES WHERE THERE ARE NO ACCREDITED BANKS, THE
RETURN CAN BE FILED WITH THE MUNICIPAL TREASURER WHERE
THE PLACE OF BUSINESS IS LOCATED
349. THE INCOME TAX RETURN MUST BE FILED IN-(RPCPA)
A)
B)
C)
D)
DUPLICATE
TRIPLICATE
QUADRUPLICATE
QUINTUPLICATE
350. ONE OF THE FOLLOWING IS NOT AN ATTACHMENT TO THE INCOME
TAX RETURN OF A COMPANY WHOSE GROSS QUARTERLY SALES IS
P1,500,000.
A)
B)
C)
D)
CERTIFIED BALANCE SHEETS
PROFIT AND LOSS STATEMENTS
SCHEDULE OF INCOME PRODUCING PROPERTIES
SUMMARY OF TAXES PAID DURING THE TAXABLE YEAR
351. THE INCOME SUBJECT TO THIS WITHHOLDING TAX IS NOT
INCLUDIBLE IN THE COMPUTATION OF TAXABLE INCOMEA)
B)
C)
D)
WITHHOLDING TAX ON COMPENSATIONN INCOME
CREDITABLE WITHHOLDING TAX
FINAL WTHHOLDING TAX
ALL OF THE ABOVE
352. WHICH OF THE FOLLOWING INDIVIDUAL TAXPAYERS IS NOT
REQUIRED TO FILE AN INCOME TAX RETURN?
A) A CITIZEN RECEIVING COMPENSATION AND BUSINESS INCOME
B) AN EMPLOYEE WHOSE SALARY GRADE IN THE GOVERNMENT IS 2
C) AN EMPLOYEE RECEIVING PURELY COMPENSATION INCOME FROM
TWO EMPLOYERS
D) AN INDIVIDUAL RECEIVING PURELY COMPENSATION INCOME FROM
ONE EMPLOYER, THE INCOME TAX OF WHICH HAS BEEN WITHHELD
CORRECTLY, BUT WHOSE SPOUSE IS REQUIRED TO FILE AN INCOME
TAX RETURN
353. ONE OF THE FOLLOWING INDIVIDUALS IS NOT SUBJECT TO
WITHHOLDING TAX ON COMPENSATION
A) AN INDIVIDUAL WHO DERIVES COMPENSATION FROM TWO OR
MORE EMPLOYERS AT ANY TIME DURING THE TAXABLE YEAR
B) AN INDIVIDUAL WHO HAS COMPENSATION AND BUSINESS INCOME
C) AN INDIVIDUAL WHOSE GROSS INCOME IN A YEAR IS MORE THAN
P220,000
D) AN INDIVIDUAL WHOSE MONTHLY GROSS COMPENSATION INCOME
IS P8,000
354. THE SIGNATURE OF THE FOLLOWING PERSONS MUST APPEAR IN THE
INCOME TAX RETURN OF A CORPORATION, EXCEPT:-(RPCPA)
A)
B)
C)
D)
PRESIDENT
GENERAL MANAGER
TREASURER
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
355. THE BOOKS OF ACCOUNTS OR RECORDS OF THE TAXPAYER MUST NOT
BE KEPT IN THE FOLLOWING LANGUAGEA)
B)
C)
D)
FILIPINO
CHINESE
ENGLISH
SPANISH
356. ONE OF THE FOLLOWING IS REQUIRED TO ISSUE RECEIPTS
A) THOSE WHOSE SALES ARE VALUED AT P25 OR MORE
B) MARKET VENDORS SELLING ECLIUSIVELY VEGETABLES, DOMESTIC
MEAT, FRUITS AND OTHER FOOD PRODUCTS
C) WHEN THE VALUE OF THE MERCHANDISE SOLD IS P5
D) VENDORS GIVEN EXEMPTION BY THE COMMISSIONER OF INTERNAL
REVENUE
357. STATEMENT 1: WHERE DONOR’ S TAX HAS BEEN PAID ON PROPERTY
RECEIVED BY A MINOR FROM A LIVING PARENT, INCOME ON SUCH
PROPERTY SHALL BE INCLUDED IN THE INCOME TAX RETURN OF THE
PARENT
STATEMENT 2: THE INCOME TAX RETURN OF A DISABLE PERSON MAY BE
MADE BY A PERSON CHARGED WITH THE CARE OF HIS PROPERTY
STATEMENT 1
A) TRUE
B) FALSE
C) FALSE
STATEMENT 2
TRUE
FALSE
TRUE
D) TRUE
FALSE
358. HOW LONG MUST THE BOOKS OF ACCOUNT BE KEPT?
A) UNTIL THE DEADLINE FOR FILING INCOME TAX RETURN
B) FROM THE CURRENT TO THE LAST DAY OF THE NEXT TAXABLE
YEAR
C) FOR A PERIOD BEGINNING FROM THE LAST ENTRY IN EACH BOOK
UNTIL THREE YEARS
D) FOR A PERIOD BEGINNING FROM THE LAST ENTRY IN EACH BOOK
UNTIL THE LAST DAY PRESCRIBED WITHIN WHICH THE
COMMISSIONER IS AUTHORIZED TO MAKE AN ASSESSMENT
359. BEAUTY
CORPORATION HAD A NET INCOME PER BOOKS ON
DECEMBER 31, 2008 OF P220,000. INCLUDED IN THE NET INCOME ARE THE
FOLLOWING ITEMS:
-DIVIDEND INCOME FROM A DOMESTIC CORPORATION, P50,000
-INTEREST ON BANK DEPOSIT (NET OF TAX), P5,000 AND
-PROVISION FOR BAD DEBTS, P35,000
THE TAXABLE INCOME OF THE CORPORATION FOR THE YEAR ENDED
DECEMBER 31, 2008A)
B)
C)
D)
P130,000
200,000
220,000
165,000
360. THE FOLLLOWING 2009 DATA PERTAINS TO ANALYN COMPANY, A
DOMESTIC CORPORATION:
NET SALES
COST OF GOODS SOLD
GROSS PROFIT
SUNDRY INCOME
GROSS INCOME
OPERATING EXPENSES AND OTHER CHARGES
NET INCOME PER BOOKS
P1,850,000
1,025,000
825,000
70,250
895,250
260,000
635,250
ADDITIONAL INFORMATION:
1.INCLUDED IN THE SUNDRY INCOME ARE THE FOLLOWING:
-DIVIDENDS FROM DOMESTIC CORPORATION
-DIVIDENDS RECEIVED FROM RESIDENT FOREIGN CORP
-PROCEEDS FROM SALE OF COMPANY ASSETS
P42,500
15,000
4,750
2.INCLUDED UNDER OPERATING AND OTHER CHARGES:
-DONATION TO TYPHOOIN VICTIMS
-PROVISION FOR DOUBTFUL ACCOUNTS
-LOCAL TAXES AND LICENSES
-PREMIUMS PAID ON INSURANCE OF BUILDINGS
P12,000
17,500
8,620
4,500
3.THE COMPANY WROTE OFF IN 2008 AGAINST ALLOWANCE FOR BAD
DEBTS UNCOLLECTIBLE RECEIVABLES AMOUNTING TO P15,000 WHICH
WAS ALLOWED AS DEDUCTION FROM GROSS INCOME. THIS AMOUNT WAS
RECOVERED IN 2009.
4. IN OCTOBER 2008, ONE OF THE COMNPANY’S BUILDINGS WAS TOTALLLY
DESTROYED BY FIRE WHEN THE BOOK.VALUE WAS P260,000. THE
LIABILITY OF THE INSURANCE COMPANY WAS SETTLED IN 2009 AND
ANALYZE COMPANY WAS PAID P150,000.
THE INCOME TAX PAYABLE IN 2009 BY ANALYN CORPORATION ISA)
B)
C)
D)
P158,320
184,537.50
35,763.50
158,175
361. THE INCOME TAX RETURN(ITR) OF JANET, SINGLE, FOR TAXABLE
YEAR 2009, REPORTED A TAXABLE INCOME OF P520,240. A CAREFUL
SCRUTINY REVEALED THAT SOME ITEMS INCLUDED AS INCOME AND
EXPENSES ARE THE FOLLOWING:
INCOME:
COMPENSATION INCOME
CASH DIVIDEND
STOCK DIVIDENDS
PROPERTY DIVIDENDS
GAMBLING WINNINGS
DONATION RECEIVED
GAIN ON SALE OF CAPITAL ASSETS-15 MONTHS
GAIN ON SALE OF HIS VACANT LOT
INCOME ON RICE LAND
TOTAL
P180,000
122,800
73,500
27,000
23,100
16,000
8,000
120,000
60,000
630,400
EXPENSES:
REAL ESTATE TAX
COMMUNITY TAX
SURCHARGE FOR LATE FILING OF 2008 ITR
P3,500
945
12,000
INTEREST ON PERSONAL LOAN
GAMBLING LOSSES
PERSONAL AND LIVING EXPENSES
LOSS ON SALE OF CAPITAL ASSETS-8.5 MONTHS
LOSS ON CROPS DUE TO FLOOD
TOTAL
24,000
32,000
50,000
5,000
27,250
154,695
THE CORRECT AMOUNT OF JANET’S TAXABLE INCOME ISA)
B)
C)
D)
P246,940
236,840
66,040
256,840
TRUE OR FALSE QUESTIONS
1.THE BASIC PERSONAL EXEMPTION IS P50,000 REGARDLESS OF WHETHER
THE INDIVIDUAL TAXPAYER IS SINGLE, MARRIED OR HEAD OF THE
FAMILY.
2.A BENEFACTOR OF A SENIOR CITIZEN CAN CLAIM A BASIC PERSONAL
EXEMPTION OF P25,000.
3.CORPORATIONS ARE ALLOWED TO CLAIM OPTIONAL STANDARD
DEDUCTION.
4.THE OPTIONAL STANDARD DEDUCTION ON INDIVIDUAL IS 40% OF GROSS
INCOME.
5. THE MINIMUM CORPORATE INCOME TAX (MCIT) IS 2% OF GROSS
INCOME ON SALES.
6. A SALE OF SHARES WHICH ARE LISTED AND TRADED THROUGH THE
LOCAL STOCK EXCHANGE IS SUBJECT TO INCOME TAX.
7. IN COMPUTING THE CAPITAL GAINS OR LOSSES ON A SALE OF SHARES
OF STOCK WHICH WERE ACQUIRED THROUGH PURCHASE, THE COST BASIS
SHALL BE THE ACTUAL PURCHASE PRICE PLUS ALL COSTS OF
ACQUISITION SUCH AS COMMISSIONS, DOCUMENTARY STAMP TAXES,
TRANSFER TAXES, ETC.
8. THE WASH SALE PROHIBITION DOES NOT APPLY IN THE CASE OF A
DEALER IN STOCK IF THE SALE OR OTHER DISPOSITION OF STOCK IS MADE
IN THE ORDINARY COURSE OF THE BUSINESS OF SUCH DEALER.
9. PERSONS DERIVING CAPITAL GAINS FROM THE SALE OR EXCHANGE OF
LISTED SHARES OF STOCK NOT TRADED THROUGH THE LOCAL STOCK
EXCHANGE SHALL FILE A RETURN WITHIN 30 DAYS AFTER EACH
TRANSACTION
10. THE CEILING OF DE MINIMIS BENEFITS ON RICE ALLOWANCE IS ONE
SACK OF 50 KILOGRAMS RICE OR CASH OF P1,200 PER MONTH.
11. AN EMPLOYEE IN THE PUBLIC SECTOR RECEIVING COMPENSATION
INCOME EQUIVALENT TO SALARY GRADE 5 AND BELOW ARE EXEMPT
FROM WITHHOLDING TAX ON WAGES.
12. MINIMUM WAGE EARNERS ARE NOT REQUIRED TO FILE AN INCOME
TAX RETURN.
13. HOLIDAY PAY, OVERTIME PAY, NIGHT SHIFT DIFFERENTIAL PAY AND
HAZARD PAY RECEIVED BY AN EMPLOYEE WHO IS RECEIVING A
MONTHLY BASIC PAY OF P20,000 ARE EXEMPT FROM INCOME TAX.
14. THE COST OF CONSTRUCTION OF ADDITIONAL FACILITIES MAY BE
CAPITALIZED OR DEDUCTED AS AN EXPENSE BY A PROPRIETARY
EDUCATIONAL INSTITUTION, AT THE OPTION OF THE BIR.
15. FOR PURPOSES OF HEALTH AND/OR HOSPITALIZATION INSURANCE,
THE TERM “TOTAL FAMILY INCOME” INCLUDES PRIMARY INCOME AND
OTHER INCOME FROM SOURCES RECEIVED ALL MEMBERS OF THE
NUCLEAR FAMILY, I.E. FATHER, MOTHER, UNMARRIED CHILDREN LIVING
TOGETHER AS ONE HOUSEHOLD OR A SINGLE PARENT WITH CHILDREN. A
SINGLE PERSON LIVING ALONE IS CONSIDERED AS A NUCLEAR FAMILY.
16. OTHER BENEFITS SUCH AS 13TH MONTH PAY AND PRODUCTIVITY
INCENTIVE PAY ARE NOT INCLUDED IN THE COMPUTATION OF MINIMUM
WAGE.
17. FRINGE BENEFITS RECEIVED BY MANAGERIAL EMPLOYEES ARE NOT
SUBJECT TO INCOME TAX BUT THEY ARE SUBJECT TO FRINGE BENEFIT
TAX.
18. THERE IS AN INCOME TAX ON A SALE OF A VACANT LOT (CAPITAL
ASSET) EVEN IF THERE IS A LOSS ON THE SALE OF THE PROPERTY.
19. AS A RULE, STOCK DIVIDENDS ARE SUBJECT TO INCOME TAX.
20. EXPENSES FOR THE ORGANIZATION OF CORPORATION SUCH AS
INCORPORATION FEES, ATTORNEY’S FEES, AND ACCOUNTANT’S FEES ARE
DEDUCTIBLE FROM GROSS INCOME.
21. COMPENSATION INCOME EARNERS ARE ALLOWED TO USE FISCAL
YEAR AS ACCOUNTING PERIOD.
22. VALUE-ADDED TAX IS DEDUCTIBLE FROM GROSS INCOME.
23. DEFERRED PAYMENT METHOD OF REPORTING INCOME IN
INSTALLMENT IS AVAILABLE TO A TAXPAYER IF THE INITIAL PAYMENTS
DO NOT EXCEED 25% OF THE SELLING PRICE.
24. PROCEEDS OF LIFE INSURANCE ARE EXEMPT FROM INCOME TAX IF THE
DESIGNATED BENEFICIARY IS IRREVOCABLE.
25. TAX SPARING CREDIT APPLIES ONLY TO RESIDENT FOREIGN
CORPORATIONS.