lOMoARcPSD|14968358 Quizzers on Percentage Taxation ACCOUNTANCY (Manuel L. Quezon University) StuDocu is not sponsored or endorsed by any college or university Downloaded by MAUREEN CHAYE TOLEDO (maureenchaye.toledo@cvsu.edu.ph) lOMoARcPSD|14968358 Northern CPAR: Taxation – Quizzer on Percentage Tax NORTHERN CPA REVIEW th 4 Floor Pelizloy Centrum, Lower Session Road, Baguio City, Philippines Mobile Numbers: SMART 09294891758 & GLOBE 09272128204 E-mail Address: ncpar@yahoo.com REX B. BANGGAWAN, CPA, MBA TAXATION PERCENTAGE TAX QUIZZER 1. A tax on business is – a. Direct tax b. Indirect tax the above c. Property tax d. None of 2. A is the owner of a small variety store. His gross sales in any one year do not exceed P1,500,000. He is not VAT registered. The following data are taken from the books of the variety store for the quarter ending March 31, 2007: Merchandise inventory, December 31, 2006 P100,000 Gross sales 450,000 Purchase from VAT-registered supplies 350,000 The percentage tax due is a. P10,000 b. P13,500 c. P16,500 d. None 3. In the third quarter of 2007, a tax payers engaged in the sale of services whose annual gross receipts do not exceed P1,500,000 has the following data Accounts receivable, beginning of the quarterP 50,000 Sales during the quarter 100,000 Accounts receivables, end of the quarter 75,000 Purchase of supplies, total invoice amount 11,200 The percentage tax due for the quarter is a. P2,250 b. P3,000 c. P7,500 d. P6,500 4. Which of the following statements is incorrect? a. A taxpayers whose annual gross receipts/sales exceed P1,500,000 shall pay VAT even if he is not VAT registered b. A taxpayer whose annual gross receipts/sales do not exceed P1,500,000 but who is VAT-registered shall pay VAT c. Percentage tax maybe imposed together with VAT d. Percentage tax maybe imposed together with excise tax 5. Which of the following taxes is not replaced by the value added tax law? a. Common carrier’s tax b. compensating tax c. Contractor’s tax d. Sales tax on original sales 6. Benjamin owns the following businesses/establishments: Annual Gross Receipts I. Restaurant P1,350,000 II. Barbershop 625,000 III. Seller of agricultural food products 1,875,000 Which combination will subject Benjamin to VAT? a. I only b. I and II c. I, II and III d. None Jansen owns a restaurant which has annual gross receipts ranging from P400,000 to P450,000. In January, the gross receipts amounted to P27,500 while purchases of goods subject to VAT is P6,000 and not subject to VAT, P13,000. 7. If Jansen is a non-VAT registered taxpayer, his percentage tax due for the month is – a. P12,000 b. P1,900 c. P825 d. P2,500 8. Assuming that Jansen is a VAT-registered taxpayer and the amounts indicated are exclusive of VAT, the value-added tax due is – a. P12,000 b. P1,900 c. P2,580 d. P2,500 9. Johnny operates two (2) pedicabs, two (2) passenger jeepneys plying the route Trinidad-Baguio in Baguio City, and three (3) cargo trucks. The gross receipts for the month are: Jeepney No. 1 – P22,000 Jeepney No. 2 – 23,300 Driven for real excellence! Truck No. 1 – P 7,250 Truck No. 2 – 8,500 TAX by Rex B. Banggawan, CPA, MBA 1 TAX – 4th Batch – Q13-2 Downloaded by MAUREEN CHAYE TOLEDO (maureenchaye.toledo@cvsu.edu.ph) lOMoARcPSD|14968358 Northern CPAR: Taxation – Quizzer on Percentage Tax Pedicab No. 1 – Pedicab No. 2 – 800 1,000 Truck No. 3 – 14,000 The percentage tax due on Johnny is – a. P831 b. P795 c. P1,359 d. P1,413 Benny Transport Company is a transportation contractor. During the month, it had the following gross receipts: From transport of passengers P 485,000 From transport of cargo 220,000 From rental of its cargo trucks to individual lessees 33,000 From rental of its “rent-a-car” to balikbayans (with chauffeur) 30,000 Payments to VAT registered persons during the month amount to P 99,000 10.The percentage tax due is – a. P22,740 b. P21,150 c. P7,590 d. P15,450 11.Assuming that the amounts given do not include the tax, the value-added tax due is – a. P23,000 b. P18,480 c. P59,909 d. None Pagong Lines is engaged in provincial transport operation. It has the following gross receipts in June: Bus 1 (carriage of goods, P8,000) P 100,000 Bus 2 (carriage of goods, P3,500) 65,000 Salaries of drivers an conductors 25,000 Cost of oil and gasoline 160,000 Taxi 30,000 Jeepney 22,000 Cargo truck 45,000 Sea vessel 250,000 During the month, Bus 1 was bumped by another bus owned by D Tulak Lines and paid Pagong Lines P20,000 for the damage done. 12.The percentage tax due on Pagong Line in June is – a. P6,180 b. P6,165 c. P14,430 d. P5,730 13.The output tax on Pagong Lines is – a. P37,380 b. P31,150 d. P36,780 c. P33,375 Love Bus Transport Company operates ten (10) units of buses. During the month, it had the following data in its books: Receipts from passengers Receipts from cargoes Receivables for transport of passengers Receivables for transport of cargoes Payments for repair of transport units Salaries of personnel Purchase of spare parts Registration with LTO Premiums on insurance P2,000,000 500,000 15,000 5,000 30,000 300,000 60,000 10,000 15,000 14.How much is the percentage tax payable? a. P60,000 b. P60,450 c. P39,000 d. None 15.How much is the VAT payable? a. P39,600 b. P43,800 d. P57,480 c. P39,000 16.Common carrier 1: Domestic sea or air carriers for passengers or cargoes. Common carrier 2: International sea or air carriers for passenger or cargoes. What is the respective business tax rate on the common carriers identified above if they travel from the Philippines to a foreign country? a. b. c. d. Common Carrier 1 Common Carrier 2 0% 3% 3% 3% 0% 0% 12% 3% Driven for real excellence! TAX by Rex B. Banggawan, CPA, MBA 2 TAX – 4th Batch – Q13-2 Downloaded by MAUREEN CHAYE TOLEDO (maureenchaye.toledo@cvsu.edu.ph) lOMoARcPSD|14968358 Northern CPAR: Taxation – Quizzer on Percentage Tax 17.ABC Corporation is a holder of franchise to operate transporation units in land. The records for the month show (net of any tax): Cargo Passenger Gross receipts from transporting P 2,000,000 P 3,000,000 VAT Supplier’s P800,000 Payments to The percentage tax due is a. P150,000 b. P60,000 Non-VAT Supplier’s P300,000 c. P90,000 d. P144,000 18.Using the preceding number, but the franchise is for air and sea transport, within the Philippines, the VAT due is a. P144,000 b. PP600,000 c. P468,000 d. P504,000 19.Using the preceding number, but the route is from the Philippines to foreign country, which of the following is correct? a. The corporation is exempt from VAT b. The corporation is subject to percentage tax c. The output VAT is 0, hence the corporation cannot claim input tax d. May claim a refund or credit the input taxes against other internal revenue taxes 20.One of the following is subject to common carrier’s tax a. Owners banca b. Owners of animal-drawn two wheeled vehicles c. Common carriers by land for transport of goods or cargoes d. Common carriers by land for transport of passengers 21.A person whose business is to keep automobile for hire or keep them stored for use or order a. Keepers of garage c. Taxicab operators b. Common Carrier d. Tourist bus operator 22.What is the proper business tax for A and B who are both engage in keeping automobile for hire. a. b. c. d. Keepers of Garage A with gross receipts exceeding P1,500,000 Value added tax Value added tax Percentage tax Percentage tax Keepers of Garage B with gross receipts not exceeding P1,500,000 Value added tax Percentage tax Value added tax Percentage tax 23.A, operates a ferryboat. During a particular quarter, its receipts consists of the following Gross receipts: (without VAT) Transport of passengers P 1,000,000 Transport of goods 1,500,000 Transport of cargoes 500,000 The common carrier’s tax payable is a. P30,000 b. P90,000 c. P100,000 d. None 24.Using the data above, the output VAT is a. P360,000 b. P90,000 c. P100,000 d. P240,000 25.The franchise tax of grantees of radio and television broadcasting whose annual gross receipts of the preceding year do not exceed P10,000,000 shall be a. 2% of the gross receipts c. 4% of the gross receipts b. 3% of the gross receipts d. 5% of the gross receipts 26.LAS Corporation is a common carrier operating several units of transportation by land, air and sea. It had the following data on gross receipts for the month of April (tax not included): From To Land Cargoes Passenger Cargoes Passenger Phils Phils P400,000 P1M P1M Phils Abroad P1.8M Driven for real excellence! Air Cargoes P800,000 TAX by Rex B. Banggawan, CPA, MBA Sea Passenger P2M P1.6M P1.4M 3 TAX – 4th Batch – Q13-2 Downloaded by MAUREEN CHAYE TOLEDO (maureenchaye.toledo@cvsu.edu.ph) lOMoARcPSD|14968358 Northern CPAR: Taxation – Quizzer on Percentage Tax Required: Determine the output VAT due for the month. 27.Sealiner Ferries transports passengers, goods and cargoes between the islands of Cebu and Bohol. During 2009, it disclosed the following gross receipts, net of any business taxes: Transport of passengers P2,000,0 00 Transport of goods 1,000,00 0 Transport of cargoes 500,000 Compute the Output Vat and the percentage tax respectively. a. P420,000; P105,000 c. P180,000; P60,000 b. P0; P105,000 d. P420,000; P0 28.Congress enacted a law imposing a 5% tax on gross receipts of common carriers. The law does not define the term ‘gross receipts’. Express Transport, Inc., a bus company plying the Manila – Baguio route, has time deposits with ABC Bank. In 2005, Express Transport earned P1,000,000 after deducting the 20% final withholding tax from its time deposits with the bank. The BIR wants to collect a 5% gross receipt tax on the interest income of Express Transport deducting the 20% final withholding tax. Is BIR correct? a. Yes, gross receipts mean cash collected whether actually or constructively without any deductions. b. Yes, gross receipts means all cash collections actually received without any deductions c. No, gross receipts means actual receipts after deducting the withholding tax d. No, gross receipts means actual receipts after deducting tax credits. 29.One of the following is not subject to the 3% percentage tax a. International air carrier doing business in the Philippines b. International shipping carrier doing business in the Philippines c. Domestic carriers and keepers of garage d. Franchise grantee of the electric utilities 30.Franchise grantees of the city gas and water utilities are subject to franchise tax of a. 2% b. 3% c. 4% d. 5% 31.A, is a holder of franchise to sell electricity. In a particular quarter, its gross receipts amounted to P2,000,000 from sale of electricity. It has also receipts from the lease of its auditorium and theater amounting to P600,000. The percentage tax due for the quarter is a. P40,000 b. P60,000 c. P100,000 c. None 32.A is a Radio-TV broadcasting franchise grantee. During the preceding year, its gross receipts did not exceed P10,000,000. Durin gthe first quarter of the currents year, it has the following data: Gross receipts, sale of airtime P2,000,000 Gross receipts, use of radio station’s communication facilities 500,000 Business expenses 700,000 The franchise tax due for the first quarter is a. P60,000 b. P40,000 c. P75,000 d. P39,000 33.The franchise tax on grantees of radio and television broadcasting companies whose annual gross receipts in any year do not exceed P10,000,000 shall be a. 1% of gross receipts c. 3% of gross receipts b. 2% of gross receipts d. 4% of gross receipts Radio station DZWT has an annual gross receipts ranging from P4,000,000 to P5,000,000. During the month, it had a gross receipts from advertisements of P330,000 (net of tax), while the disbursements subject to VAT amounted to P224,000, inclusive of tax. 34.How much franchise tax is payable by DZWT? a. P30,000 b. P9,900 c. P50,000 d. P10,000 35.How much is the VAT payable if it is registered under the VAT system? a. P10,000 b. P9,900 c. P11,357 d. P15,600 36.Amounts received for overseas dispatch, message or conversations originating from the Philippines are subjects to a. 3% franchise tax c. 2% franchise tax b. 10% overseas communication tax d. 10% VAT Driven for real excellence! TAX by Rex B. Banggawan, CPA, MBA 4 TAX – 4th Batch – Q13-2 Downloaded by MAUREEN CHAYE TOLEDO (maureenchaye.toledo@cvsu.edu.ph) lOMoARcPSD|14968358 Northern CPAR: Taxation – Quizzer on Percentage Tax Too Big Company, a public service company, is a holder of a franchise to engage in the business of supplying water to several towns and cities in Luzon. As recorded in its books during the month, its total gross receipts from the sale of water amounted to P 2,550,000, while the receipts from rental of equipments and other services was P280,000. The operating expenses amounted to P2,000,000, 11% of which was paid to VAT registered persons. 37.The percentage tax due is – a. P51,000 b. P5,000 c. P16,500 d. P56,500 38.The value-added tax payable for the month is – a. P33,600 b. P5,000 c. P16,500 d. P7,200 39.A tax on the right or privilege to enter places of amusement a. VAT c. Amusement tax b. Franchise tax d. Income tax 40.One of the following is not subject to amusement tax on gross receipts a. Disco houses c. Professional basketball b. Cockpits d. Bowling alleys 41.A operates a cockpit. Inside the cockpit, he also operates a restaurant. Data for the particular quarter follow Gross receipts: Cockpit operations P 500,000 Restaurant operation: Sale of foods 100,000 Sale of liquor 150,000 The amusement tax due from A is a. P90,000 b. P135,000 c. P225,000 d. P75,000 42.Using the above data, except the restaurant is not owned by A but is owned by another person, B, not VAT registered and whose annual gross sales never exceeded P1,500,000. The amusement tax due from A is a. P90,000 b. P135,000 c. P225,000 d. P75,000 43.Continuing the preceding number, the percentage tax due from B is a. P90,000 b. P135,000 c. P225,000 d. P7,500 44.A promoted a world boxing championship in Manila featuring B, a Filipino champion. Gate receipts amounted to P3,000,000 and additional receipts from television coverage was P2,000,000. The amusement tax due is a. None b. P500,000 c. P300,000 d. P900,000 45.Assuming that the above data is not a world championship but a Philippine national boxing championship, how much is the amusement tax? a. None b. P500,000 c. P300,000 d. P900,000 Panda Hotel offers the following services to its guests and from which revenues were derived for the month, as follows: Revenues Collections Hotel rooms P1,250,000 P984,000 Dining hall: Sale of food and refreshments 940,000 860,000 Sale of wine, beer and liquors 780,000 620,000 Disco: Admission fee 25,000 15,000 Sale of food and softdrinks 250,000 115,000 Sale of wines, beer and liquor 650,000 540,000 46.The amusement tax due is – a. P110,700 b. P120,600 c. P552,240 d. P386,640 47.If Panda Hotel is subject to value-added tax, the output tax thereon is (assume the amounts are tax inclusive) – a. P295,680 b. P264,000 c. P218,000 d. P120,600 48.Boy Arana is the operator of Arana Coliseum. During the month, it had the following gross receipts fro various activities, to wit: Concert by Rosa Mia Professional basketball Driven for real excellence! P 85,000 120,000 TAX by Rex B. Banggawan, CPA, MBA 5 TAX – 4th Batch – Q13-2 Downloaded by MAUREEN CHAYE TOLEDO (maureenchaye.toledo@cvsu.edu.ph) lOMoARcPSD|14968358 Northern CPAR: Taxation – Quizzer on Percentage Tax Amateur basketball Billiard 36,700 45,000 The percentage tax payable by Boy Arana on the coliseum is – a. P18,000 b. P23,505 c. P43,005 d. P24,750 49.ABC Insurance Corporation, a domestic corporation, received the following premiums (net of any tax): INSURANCE Life Fire Marine P 400,000 P 300,000 P 200,000 100,000 100,000 P 500,000 P 400,000 P 200,000 Cash received Promissory notes TOTALS Required: Determine the following: 1) The percentage tax due is a. P45,000 b. P55,000 c. P20,000 2) The output vat is a. P0 c. P48,000 b. P72,000 d. P25,000 d. P60,000 Madulag Insurance Company had the following data on collections of premiums and disbursements during the month: Non-life insurance Life insurance Cash collections P150,000 P145,700 Checks 45,000 34,600 Accounts receivable 25,200 58,900 Payments of expenses to VAT businesses 43,000 Payment of expenses to non-VAT businesses 35,000 The amounts indicated pertaining to VAT transactions do not include the value-added tax. 50.The percentage tax due is – a. P8,000 b. P9,750 c. P11,010 d. P9,015 51.The VAT payable is – a. P16,476 c. P28,704 d. P63,730 b. P9,750 52.Bayani’s ticket (daily double) won P42,000, gross of withholding tax and cost of ticket, in a horse race in San Lazaro Hippodrome. His ticket had cost him P250. Bayani had other non-winning tickets costing P2,500. How much tax was withheld on winnings in horse races by Bayani? a. P1,680 b. P4,200 c. P1,670 d. P4,175 53.A horseracing enthusiast has the following winnings during a particular racing day Total winnings (winner take all) P10,000 Cost of winning tickets 500 The tax on winnings is c. P950 d. Zero a. P1,000 b. P400 27. Using the data above, but the total winnings came from double bet, the percentage tax on winnings is a. P1,000 b. P400 c. P950 d. P380 54.All of the following except one are liable to ½ of 1% stock transaction tax. Which one is not? a. Individual tax payers, whether citizens or alien c. Estates and Trust b. Corporate taxpayers, whether domestic or foreign d. Dealers in securities 55.One of the following statements is incorrect a. The ½ of 1% tax shall be collected by the brokers who made the sale and shall be remitted within 5 banking days from the date of collection b. The tax paid on sale of shares through local stock exchange and initial public offering and secondary offering shall not be allowable deduction for income tax purposes c. The ½ of 1% tax stock transportation is a final withholding tax on income d. The ½ of 1% tax stock transaction is collected whether there is an income or loss and is a percentage tax 56.Chess sold the following shares of stock thru his stock broker: Selling Price Market Value Driven for real excellence! TAX by Rex B. Banggawan, CPA, MBA 6 TAX – 4th Batch – Q13-2 Downloaded by MAUREEN CHAYE TOLEDO (maureenchaye.toledo@cvsu.edu.ph) lOMoARcPSD|14968358 Northern CPAR: Taxation – Quizzer on Percentage Tax Ex Company, not traded P 123,670 P 114,850 Why Company, traded 65,980 62,540 See Company, traded 143,750 156,230 The percentage tax due on the above transactions is – a. P1,667.00 b. P1,048.65 c. P1,093.85 d. P1,668.10 57.Stock Addict had the following transactions of shares of stock: Selling Price Cost Sales: Bee Corporation, not traded P 32,450 P31,980 Cee Corporation, traded 69,780 64,321 Dee Corporation, traded 123,820 98,760 Purchases: Eef Corporation, not traded Gee Corporation, traded 32,415 48,657 The total percentage tax on the above transaction is – a. P1,130.25 b. P724.89 c. P968.00 d. P815.40 58.Tito owns shares of stock of domestic corporations which are actively traded in the Philippines Stock Exchange. Due to the unstable prices in the stock exchange, he decided to sell the shares to the public. The data of which are as follows: Selling Price Cost Gain/Loss Vic Corporation P230,000 P220,000 P10,000 Joey Corporation 360,000 395,000 (35,000) The stock transaction tax is – a. P2,950 b. P1,150 c. P50 d. Zero 59.Benzene Corporation, a closely held corporation, decided to open itself to the public. The initial public offering of its shares had a selling price of P6,250,000 which is 22.5%of its total outstanding shares after the listing in the local stock exchange. The percentage tax due is – a. P31,250 b. P125,000 c. P1,406,250 d. P250,000 60.A domestic corporation paid P40,000 stock transaction tax on Initial Public Offering (IPO) of 500,000 shares. After the IPO, there were 800,000 shares outstanding. The selling price per share of IPO shares was b. P8 c. P4 c. P2 a. P10 61.RFB Corporation, a closely-held corporation, has an authorized capital stock of 100,000,000 shares with par value of P1.00/share as of January 1, 2008. Of the 100,000,000 authorized shares, 25,000,000 thereof is subscribed and fully paid up by the following shareholders: Mr. Estigoy B. Zabala Mrs. Rowena V. Posadas Mr. Conrado G. Cruz Mr. Benedict O. Sison Mrs. Linda O. Evangelista Total shares outstanding 5,000,00 0 5,000,00 0 5,000,00 0 5,000,00 0 5,000,0 00 25,000,0 00 RFB Corporation finally decided to conduct an IPO and initially offers 25,000,000 of its unissued shares to the investing public for P1.50 per share. Compute the percentage tax. a. P380,000 c. P325,000 b. P375,000 d. Exempt 62.At the IPO, Mrs. Linda O. Evangelista has likewise decided to sell her entire 5,000,000 shares to the public at P1.50/share, compute the percentage tax due. a. P300,000 b. P150,000 c. P75,000 d. Exempt 63.After the IPO, RFB Corporation decided to increase the capitalization by offering another 30,000,000 unissued shares for P2.0 to the investing public. Compute the percentage tax. Driven for real excellence! TAX by Rex B. Banggawan, CPA, MBA 7 TAX – 4th Batch – Q13-2 Downloaded by MAUREEN CHAYE TOLEDO (maureenchaye.toledo@cvsu.edu.ph) lOMoARcPSD|14968358 Northern CPAR: Taxation – Quizzer on Percentage Tax a. P 0 b. P600,000 c. P800,000 d. P1,200,000 64.After the IPO, Mr. Conrado G. Cruz decided to sell his entire 5,000,000 shares to the public at P3.0/share, compute the percentage tax due. a. P 0 c. P150,000 b. P 75,000 d. P300,000 65.Gross receipts tax is a business tax paid by a – a. Hotel operator b. Insurance company c. Franchise holder d. Bank 66.The China Bank, a domestic bank, shows the following data for January 2010: Rentals from safety deposit boxes and real property acquired through foreclosure proceeding for bad loans Net foreign exchange gains (difference between the value of foreign currency sold and purchased) Net trading gains from trading of securities, commercial papers and other financial instruments (difference between the yield or selling price and the cost of obtaining the same) Trust fees Dividend from domestic corporation Other service fees Interest income from lending activities from instrument with remaining term of: Five years and less More than five years P 880,000 220,000 660,000 110,000 30,000 220,000 700,000 800,000 The percentage or gross receipt tax for the month is a. P0 c. P43,000 b. P189,300 d. P104,500 67.Big bank has the following income/loss for the months of March and April: March April Interest income maturity of less than 5 yearsP50,000 P 100,000 Rentals 50,000 50,000 Net trading gain/loss (10,000) 20,000 The gross receipts taxes payable for March and April, respectively – a. P500,000; P8,500 c. P6,000; P9,200 b. P6,000; P9,900 d. P5,300; P9,200 68.Johnny executed on December 1, 2005 a long-term 10% loan from BPI amounting to P5,000,000 payable in 10 years with the first installment due on or before December 1, 2006. On December 1, 2009, the loan was preterminated. Assuming that all previous percentage taxes were correctly withheld by BPI, compute the percentage tax on pretermination. a. P80,000 b. P85,000 c. P100,000 d. P125,000 69.Which is not subject to gross receipt tax? a. Development Bank of the Philippines c. Philippine Land Bank b. Philippine National Bank d. Bangko Sentral ng Pilipinas 70.Which of the following is subject to percentage tax? a. Derby winnings c. Premiums on re-insurance contract b. Cinema houses d. Van for hire driven by lessees ----- End of Handouts ----- Driven for real excellence! TAX by Rex B. Banggawan, CPA, MBA 8 TAX – 4th Batch – Q13-2 Downloaded by MAUREEN CHAYE TOLEDO (maureenchaye.toledo@cvsu.edu.ph) lOMoARcPSD|14968358 Northern CPAR: Taxation – Quizzer on Percentage Tax Driven for real excellence! TAX by Rex B. Banggawan, CPA, MBA 9 TAX – 4th Batch – Q13-2 Downloaded by MAUREEN CHAYE TOLEDO (maureenchaye.toledo@cvsu.edu.ph)