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Midterm-Assignment-4
Accountancy (National University (Philippines))
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PROBLEMS
P8-1.
For 2022 taxable year, determine the applicable business tax of the following:
Lease of Residential Units.
Case
Monthly Rental
A
P14,000
B
16,000
C
16,000
D
18,000
Lease of Commercial Units.
Case
Monthly Rental
E
P12,000
F
16,000
G
16,000
H
10,000
Aggregate annual rental
3,200,000
2,800,000
3,000,000
3,200,000
Answer
Exempt
OPT
OPT
Vatable
Aggregate annual rental
3,200,000
2,800,000
3,000,000
3,500,000
Answer
Vatable
OPT
OPT
Vatable
P8-2
Determine whether or not the transaction described below is subject to VAT. Write "V" in the space
provided if the transaction is subject to vat. Write "X" if the transaction is vat exempt or subject to other
types of tax.
Case
Transaction
A. Sale by agricultural cooperatives of their produced to members and non-members.
B. Receipts from lending activities by credit multipurpose cooperatives duly registered and in good
standing with Cooperative Development Authority.
C. Importation by non-agricultural, non-electric, non-credit cooperatives of machineries and
equipment to be used by them.
D. Publication of magazines devoted principally to the publication of paid advertisements.
E. Sale of parking lots in a condominium (SP is not more than P3,000,000).
F. Isolated sale of goods or services for a gross selling price of P2,800,000.
G. Export sale by a vat registered exporter not exceeding the vat threshold of P3,000,000.
H. Transport of passengers and cargo by air or sea vessels
I. Sale of drugs and medicines
J. Services of banks, non-bank financial intermediaries performing quasi-banking functions, and
other non- bank financial intermediaries such as money changers and pawnshops
P8-3.
For 2022 taxable year, determine whether the following is subject to vat. Write "V" in the space
provided if the transaction is subject to vat. Write "E" if the transaction is vat exempt.
Case
Transaction
V A. Sale by a real estate dealer of residential lot with a selling price of P800,000.
V B. Sale by a real estate dealer of residential lot with a selling price of P3,500,000.
V C. Sale by a real estate dealer of commercial lot with a selling price of P2,800,000.
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V
V
V
V
V
D.
E.
F.
G.
H.
Sale of residential lot classified as capital asset.
Sale by a real estate dealer of residential house and lot with a selling price of P3,000,000)
Sale by a real estate dealer of condominium unit with selling price of P3,250,000)
Sale by a real estate dealer of parking lot in a condominium unit with a selling price of P850,000)
Sale of residential house and lot classified as capital asset with a selling price of P8,000,000)
P8-4.
Assume the following transactions with the corresponding invoice cost, inclusive of vat, if applicable:
Apol, non-vat taxpayer, sells to LJ, Vat taxpayer
P89,600
LJ, vat taxpayer, sells to Chris, Vat taxpayer
134,400
Chris, vat taxpayer, sells to Abi
201.600
Abi, nonvat taxpayer, exported the goods in Canada
300,000
REQUIRED: DETERMINE THE FOLLOWING:
a. Vat payable of Apol - Exempt
b. Vat payable of LJ – 14,400
c. Vat payable of Chris – 7,200
d. Vat payable of Abi - Exempt
P8-5.
Omega Corporation is a vat registered taxpayer. It had the following data for the month of December
(vat inclusive)
Cash sales, invoice amount
P660,800
Sales on account Purchases
246,400
Purchases
291,200
Consignment shipments:
Less than 60 days
38,500
More than 60 days
22,400
Goods paid to creditors (dacion en pago)
16,800
Goods given as Christmas gift to employees
19,040
Property dividend to stockholders
8,960
REQUIRED: DETERMINE THE VAT PAYABLE FOR THE MONTH.
Cash Sales
Sales on account
Transactions deemed sale (22,400+16,800+19,040+8,960)
Total sales subject to vat
Output Vat (974,000/1.12 x 12%)`
Less: Input vat (Purchases P291,200/1.12 x 12%)
Vat Payable
660,800
246,400
67,200
974,400
104,400
(31,200)
P 73,200
P8-6.
ABC Corporation (vat reg.) has the following data for the month of March 2022:
Gross Sales (vat exclusive)
Sales Return
Goods shipped on consignment (net)
Unit
Price
P8,000,000
400,000
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March 25
40
February 14
30
January 8
20
Goods withdrawn for use by the company
Goods taken as payment to creditor
Purchases for the month of (net of vat):
Goods
Supplies
Capital goods (U.Life 4 years)
Freight and insurance
Salaries of employees
P10,000
10,000
10,000
P50,000
30,000
P600,000
75,000
1,100,000
8,500
385,000
Additional information:
Received cash representing payment for ten (10) units delivered on February 14. The amount received
was net of ten percent (10%) commission.
A consignee reported and remitted R200,000 (gross of 10% commission) representing 20 units sold from
goods consigned in March.
REQUIRED: Determine the Vat Payable for the month of March.
Sales
Sales from consignment
Transactions deemed sales
Goods withdrawn
Goods taken as payment to creditors
Total Output VAT:
Purchases
Capital Goods
VAT PAYABLE
912,000
36,000
24,000
6,000
3,600
981,600
82,080
2,750
(84,830)
P 896,770
P8-7. (MIXED TRANSACTIONS)
Bobs Bookstore, vat registered, is engaged in the business of selling books, school supplies and gift
items. The following were provided to you during the month of October (inclusive of vat, if applicable):
Sale of school supplies
P1,680,000
Sale of books
1,200,000
Sale of gift items
1,008,000
Purchase of school supplies and gift items for sale
1,344,000
Purchase of books
600,000
Purchase of computers used in vatable and non-vatable transactions
448,000
Purchase of office supplies used in vatable and non- vatable transactions
from non-vat registered suppliers
200,000
REQUIRED: DETERMINE THE VAT PAYABLE FOR THE MONTH OF OCTOBER.
Purchases of goods, vat business, invoice amount
Purchases of goods for non vat business, inclusive of input vat
Purchase of depreciable asset for common use, vat included
Purchases of supplies for common use, vat included
Rental of premises for both types of business. The lessor is non-vat registered
REQUIRED: DETERMINE THE VAT PAYABLE FOR THE YEAR
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224,000
33,600
112,000
2,240
22,400
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Sale of school supplies
Sale of gift items
Sales subject to output vat
Output Vat (divide by 1.12 x 12%)
Less: Purchase of school supplies and gift items
Purchase of computers
Purchase of office supplies used in vatable and
non-vatable transactions from non-vat registered suppliers
Vat Payable
1,680,000
1,008,000
2,688,000
288,000
144,000
32,000
0
(176,000)
P 112,000
P8-8. (MIXED TRANSACTIONS)
Omega Corporation is engaged in a business subject to value added tax and another business which is
not subject to value added tax. Omega's business data for the current year were provided as follows:
Sales, vat business, invoice amount
P896,000
Sales, non-vat business
200,000
Purchases of goods, vat business, invoice amount
224,000
Purchases of goods for non vat business, inclusive of input vat
33,600
Purchase of depreciable asset for common use, vat included
112,000
Purchases of supplies for common use, vat included
2,240
Rental of premises for both types of business. The lessor is non-vat registered 22,400
REQUIRED: DETERMINE THE VAT PAYABLE FOR THE YEAR
Output Vat (P896,000 / 1.12 x 12%)
Less: Input vat. P224,000 / 1.12 x 12%
P112,000 / 1.12 x 12% x 80
P2,240 / 1.12 x 12% x 80%
Vat Payable
96,000
(24,000)
(9,600)
(192)
P 62,208
P8-9.
The following data during the month relates to William Company, a VAT registered person (amounts are
vat inclusive, if applicable):
Domestic sales
330,000
Other domestic sales (sales to export traders)
274,996
Export sales
200,000
Purchases of goods for domestic sales
374,000
Purchases of supplies on domestic sales
69,848
Purchase of service
154,000
Purchase of goods for export
55,000
REQUIRED:
a) Determine the total input tax
(P374,000 + 69,848 + 154,000 + 55,000) /1.12 x 12% = P69,948
b) Determine the value added tax payable if excess input taxes on exports are claimed as tax credit
Output vat (P330,000 + P274,996) / 1.12 x 12%
64,821
Less: Input vat (P374,000 + 69,848 + 154,000) / 1.12 x 12%
(69,984)
Vat Payable
(P5,163)
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P8-10. (INPUT TAX ON IMPORTATION)
ABC Company imported merchandise for resale. Using the following information, determine the value
added tax on the importation before the same can be release from customs custody.
CIF (cost, insurance, freight) value P229,195
Charges/expenses incurred in claiming the goods:
Wharfage 1,540
Arrastre 2,295
Customs duty 4,090
Brokerage fee and documentary stamps 330
Facilitation expense 3,000
Marine cargo insurance 2,550
Other charges:
Freight from customs to warehouse (vat exclusive) 5,000
REQUIRED: Determine the following:
a) Vat on importation
- 229,195 + 1,540 + 2,295 + 4,090 + 330 + 3,000 + 2,550) x 12% = 28,800
b) The value added tax payable assuming the goods were subsequently sold for P350,000.
Output Vat
Less: Input VAT on Importation
CIF (cost, insurance, freight) value
Wharfage
Arrastre
Customs duty
Brokerage fee and documentary stamps
Marine cargo insurance
Total
350,000
229,195
1,540
2,295
4,090
330
2,550
Output VAT
Less: Input VAT
VAT Payable
240,000
110,000
x 12%
13,200
(600)
12,600
P8-11. (INPUT TAX ON CAPITAL GOODS)
The following data (vat exclusive) are available for the first two (2) quarters of 2021 :
1st Quarter
Sales P3,000,000
Purchases other than capital goods 1,200,000
Purchase of machinery on Jan. 1 with useful life of 3 yrs 2,500,000
Unused input vat as of end of 2020 125,000
2nd Quarter
Sales 4,800,000
Purchases other than capital goods 3,000,000
The machinery bought on January 1 was sold on June 30.
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REQUIRED
a) Determine the vat payable/excess input tax for the 1st quarter
Output Vat (P3M x 12%)
Input VAT:
Purchases (P1.2M x 12%)
Purchase of machinery (P2.5M x 12%) / 36 x 3mos.
Unused input vat as of end of 2020
Vat Payable
P360,000
(144,000)
(25,000)
(125,000)
P66,000
b) Determine the value added tax payable/excess input tax for the second quarter.
Output Vat (4.8M x 12%)
P576,000
Input Vat:
Purchases (P3M x 12%)
(360,000)
Unused input vat on capital goods (P2.5M x 12%-25,000)
(275,000)
Excess Input VAT
(59,000)
c) Determine the vat payable/excess input tax for the 1st quarter assuming the taxable year is
2022
Output Vat (P3M x 12%)
P360,000
Input VAT:
Purchases (P1.2M x 12%)
(144,000)
Purchase of machinery (P2.5M x 12%) / 36 x 12mos.
(100,000)
Unused input vat as of end of 2022
(125,000)
Excess Input VAT
(9,000)
d) Determine the value-added tax payable/excess input tax for the second quarter assuming the
taxable year is 2022
Output Vat (4.8M x 12%)
P576,000
Input Vat:
Purchases (P3M x 12%)
(360,000)
Unused input vat on capital goods (P2.5M x 12% - 100,000)
(200,000)
VAT Payable
16,000
P8-12. (TRANSITIONAL INPUT VAT)
An owner of warehouse, which used to be vat exempt, because its annual receipts never exceeded the
vat threshold, decided to register under the system on January 2, 2022. The following data were from
the 1 quarter vat ending March 31, 2022:
Rental from warehousing services, net of vat
Purchases of supplies in February, gross of vat
Inventory of supplies, January 1, 2022
Vat on inventory of supplies, January 1, 2022
P336,000
112,000
100,000
10,000
REQUIRED DETERMINE THE VAT PAYABLE FOR THE QUARTER ENDING MARCH 31, 2022
Output vat (P336,000 x 12%)
Input vat:
P40,320
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On purchases (P112,000 x 3/28)
Transitional input vat:
Higher between 2% of beg. Invty vs. P10,000
Vat Payable
(12,000)
(10,000)
P18,320
P8-13. (PRESUMPTIVE INPUT VAT)
JJ is a vat registered processor of sardines. The following data were provided for purposes of
determining the taxpayer's vat payable:
SALES (processed sardines, exclusive of vat) P800,000
PURCHASES/PAYMENTS
Sardines purchased from fish dealers (invoice amount)
Tomatoes purchased from farmers
Purchased of olive oil (invoice amount)
Purchased of can containers (excl. of vat)
Payments for paper labels (excl. of vat)
Purchased of cardboard for boxes (inclusive of vat)
Payments for hauling services from non-vat registered forwarders
REQUIRED:
a) Determine the presumptive input vat
= 3,400
b) Determine the value added tax payable/excess input tax of JJ
Output vat (P800,000 x 12%)
Less: Input Vat Presumptive I.V (P85,000 x 4%)
Purchased of olive oil (P67,200 x 3/28)
Purchased of can containers (P25,000 x 12%)
Payments for paper labels (P12,000 x 12%)
Purchased of cardboard for boxes (P8,960 x 3/28)
Payments for hauling services
Vat Payable
200,000
85,000
67,200
25,000
12,000
8,960
100,000
P96,000
(3,400)
(7,200)
(3,000)
(1,440)
(960)
nil
P80,000
P8-14. (PRESUMPTIVE INPUT VAT)
JJ is a vat registered processor of fruits. The following data were provided for purposes of determining
the taxpayer's vat payable:
SALES (processed fruits, inclusive of vat)
P672,000
PURCHASES/PAYMENTS:
Purchased of fruits from farmers
200,000
Purchased of raw sugar from millers
60,000
Purchased of bottles (invoice amount
22.400
Purchased of can containers (excl. of vat)
50,000
Payments for paper labels (incl. of vat)
5,600
Purchased of cardboard for boxes (incl. of vat)
3,600
Payments for hauling services from vat registered forwarders (excl. of vat)
60,000
REQUIRED:
a) Determine the presumptive input vat
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- The taxpayer (processor of fruits) is not entitled to presumptive vat
b) Determine the value added tax payable/excess input tax of JJ.
Output vat (672,000 x 3/28)
Less: Input Vat Purchased of bottles (P22,400 x 3/28)
Purchased of can containers (P50,000 x 12%)
Payments for paper labels (P5,600 x 3/28)
Purchased of cardboard for boxes (P3,360 x 3/28)
Payments for hauling services (P60,000 x 12%)
Vat Payable
P72,000
(2,400)
(6,000)
(600)
(360)
(7,200)
P55,440
P8-15.
A vat registered hotel offers different services to its guests. The following data were taken from the
books of the taxpayer for the 1 quarter of 2022 (exclusive of tax):
Revenues
P2,000,000
Hotel rooms
Dining Hall:
Sale of food and refreshments
2,500,000
Sale of wine, beer and liquor
1,000,000
Disco:
Sale of food and refreshments
1,600,000
Sale of wine, beer and liquor
1,200,000
Other revenues (rentals, massage, spa)
800,000
REQUIRED: Determine the correct business tax due for the quarter
Collection
1,800,000
2,200,000
950,000
1,600,000
1,200,000
700,000
Subject to Value Added Tax
Hotel rooms (P1.8M x 12%)
Dining Hall: Sale of food and refreshments (P2.2M x 12%)
Sale of wine, beer and liquor (P950,000 x 12%)
Other revenues (P700,000 x 12%)
P216,000
264,000
114,000
84,000
Subject to Percentage Tax (Amusement Tax)
Disco: Sale of food and refreshments (P1.6M x 18%)
Sale of wine, beer and liquor (P1.2M x 18%)
TOTAL BUSINESS TAXES
288,000
216,000
P1,182,000
P8-16.
Omega Construction Company (vat registered) provided the following data for the 1st quarter of 2022
(net of vat):
Contract with Bobads Hotel
• Contract Price, P25,000,000
• Collections, P15,000,000
• Construction started in 2018 and finished during the 1st quarter of the current year
Contract with City Condo
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• Contract Price, P20,000,000
• Collections, P10,000,000
• Construction was completed in 2021
Contract with Urban Development
• Contract Price, P30,000,000
• Collections, P5,000,000
• Construction will begin in the last quarter of the current year
Payments to suppliers and subcontractors (net of vat):
• Payments for the purchase of construction materials from Alpha Corporation (vat registered
supplier), P12,000,000
• Payments for the purchase of construction materials from Bravo, Incorporated (non-vat
registered supplier), P500,000
• Payments to Charlie Company (subcontractor) for services rendered, P4,000,000
• Advances to Delta Corporation (subcontractor), P2,000,000
• Operating expenses, P3,000,000
Additional information:
• 10% of purchases from Alpha were returned during the quarter
• Payments made to Charlie Corporation was overstated by P1,000,000
REQUIRED:
DETERMINE THE VAT PAYABLE FOR THE 1ST QUARTER OF THE 2022
OUTPUT VAT based on collections
(15M + 10M + 5M)
INPUT VAT
on purchases from: Alpha (P12M – 1.2M) x 12%
Charlie (P4M – 1M) x 12%
Delta (P2M x 12%)
Vat Payable
P3,600,000
(1,296,000)
(360,000)
(240,000)
P1,704,000
P8-17.
A dealer in securities has the following for the year 2022:
Sale of securities held for sale in the course of business
Cos of securities held for sale in the course of business
Supplies expense, net of vat
Rent expense, net of vat
REQUIRED: DETERMINE THE VAT PAYABLE
Output vat ((P4M – 2.5M) x 12%
Less: input vat (P800,000 x 12%)
Vat Payable
P4,000,000
2,500,000
300,000
500,000
P180,000
(96,000)
P84,000
P8-18.
Delta is a real estate dealer, sold three (3) lots on November 2021 with the following terms (net of vat):
Lot A
Lot B
Lot C
Selling Price
250,000
200,000
300,000
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Cost
Terms:
Downpayment, Nov 5
Due:
Dec. 5, 2021
Jan to Dec 2022
150,000
130,000
175,000
25,000
50,000
40,000
25,000
200,000
20,000
130,000
20,000
240,000
REQUIRED: DETERMINE THE FOLLOWING:
Ratio of Initial Payment over Selling Price:
Lot A = 50/250 = 20% ; Installment Sale
Lot B = 70/200 = 35%; Deferred Sale; Treated as Cash Sale
Lot C = 60/300 = 20%; Installment Sale
a. Vat payable - November 2021
b. Vat payable December 2021
Lot A: P25,000 x 12%; P25,000 x 12%
Lot B: P200,000 x 12%
Lot C: P40,000 x 12%; P20,000 x 12%
Vat Payable
Nov. 2018
P3,000
24,000
4,800
P31,800
Dec. 2018
P3,000
2,400
P5,400
P8-19.
A VAT registered real estate dealer sold a residential lot on September 2021. The following information
was made available on the terms of the sale:
Gross selling price (zonal value, P2,800,000)
P3,000,000
Initial payments consisting of down payment and installments in the year of sale.
900,000
Balance to be paid in equal installments of starting January 2022
2,100,000
REQUIRED: DETERMINE THE FOLLOWING:
a. Output Vat-September 2021
Output vat September 2018 = P3M x 12% = P360,000
The sale is a Deferred sale. Ratio of initial payments over SP is 30%.
b. Output Vat- January 2022
Output vat January 2019 = P0
P8-20. (HOTEL SERVICES)
Rest With Me Hotel, a UK based Motel and Restaurant, had the following collections from its customers
during the month:
Room charges
P1,000,000
Laundry services
25,000
Food and beverages
1,500,000
Corkage
15,000
Handling charges for providing telephone, telex, cable or fax services
4,500
Actual cost of long distance and overseas calls collected by the establishment for PLDT 35,000
Cake shop sales 80,000
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Vat passed on to customers
Local taxes charged to customers
REQUIRED: DETERMINE THE OUPUT VAT of the taxpayer
Room charges
Laundry services
Food and beverages
Corkage
Handling charges for providing telephone, telex, cable or fax services
Cake shop sales
Total
Vat rate
Output Vat for the month
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125,000
18,000
P1,000,000
25,000
1,500,000
15,000
4,500
80,000
P2,624,500
x
12%
P314,940