Module 10: Activity
I.
True or False
1. Loss on sales of stocks through the PSE is deductible against gross income.
2. Land is an ordinary asset that cannot be depreciated.
3. Personal expenses is not deductible against gross income.
4. When pertaining about material expenditure, it should always been capitalized.
5. Business franchise acquisition cost is an example of deductible expense.
II.
Computation
1. During the year 2020, the taxpayer paid the following salaries:
Administrative employees' salaries
Sales and marketing employees' salaries
Salaries of factory production workers
100,000
120,000
90,000
Compute the deductible salaries expense.
2. Compute the deduction limit using the following income and expenses.
Mining Gross Income
Other deductible expenses
Exploration and drilling cost on non-producing
mines
2017
2018
2019
15,500,000 17,000,000 20,250,000
11,000,000 14,500,000 16,500,000
750,000
3. Find the EDD Carry-over, ending for 2017 using the given above.
1,300,000
1,500,000