Taxation-reviewer.docx

TAXATION REVIEWER 1. In this power of State, the person who is parting with his money or property is presumed to have received a benefit. a. Taxation c. Eminent domain b. Police power d. Forfeiture power 2. The basic principle of taxation, where, “Taxes must be based on the taxpayer’s ability to pay” is called; a. Equality in taxation c. Theoretical justice b. Ability to pay theory d. equity in taxation 3. Which one of the following is not a characteristic of the State’s power to tax? a. It is inherent in sovereignty b. It is legislative in character c. It based on the ability to pay d. It is subject to constitutional and inherent limitations 4. That the legislative body can impose a tax at any amount underscores the legal truism that taxation is: a. An inherent power of the State b. Very broad as a power of the State c. Essentially a legislative power d. For public purpose 5. A tax does not meet the public purpose limitation if it: a. Is for the welfare of the nation of greater portion of the population. b. Affects the areas as a community rather than as individuals. c. Is for the benefit principally of limited subjects or objects d. Is designed to support the services of government for some of its recognized objects. 6. Which of the following is not a remedy against multiplicity of situs? a. Provision of exemptions and allowance of deduction o tax credit for foreign taxes. b. Not reporting income earned outside the Philippines c. Treaties with other states d. All of the choices 7. The City Council of Masbate passed an ordinance imposing an occupation tax on air-conditioning technician. Antonio 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 Antonio is tenable. b. The ordinance is unconstitutional because Antonio is denied of his right to equal protection of the law. c. The contention of Antonio of Antonio is not justified because the rule on uniformity is not violated considering that the ordinance would also be imposed on all air-conditioning technicians who may come with the jurisdiction of the city. d. The issue on validity or invalidity of the ordinance should be set aside. 8. The final income tax return for the taxable year 2018 which was due on April 15, 2019 was filed earlier on March 15, 2019. A Substantially amended return was filed on May 31, 2019. when is the last day to make a valid assessment? a. March 15, 2022 b. April 15, 2022 c. May 31, 2022 d. May 31, 2025 9. First statement: The law on prescription, being a remedial measure, should be liberally construed in order to afford protection.

Second statement: The exceptions to the law on prescription should be clearly construed. a. Both statements are correct c. Only the first statement is correct b. Both statements are incorrect d. Only the second statement is correct 10. The Commissioner of Internal Revenue has the authority to do all of the following except: a. Compromise the payment of any internal revenue tax b. Cancel or abate tax liability c. Credit or refund tax d. Review the decisions of the Court of Tax Appeals

11. For cases involving financial incapacity, which of the following is not subject to 20% compromise rate based on the basic assessed tax? a. Dissolved corporation b. Already non-operating companies for a period of less than 3 years. c. Already non-operating companies for 3 years or more as of the date of application for compromise settlement. d. Taxpayer is declared insolvent or bankrupt. 12. A taxpayer is complaining of harassment because the BIR pursues both summary and judicial proceedings simultaneously. Is his complaint valid? a. Yes. Because the BIR can only pursue summary proceedings after judicial proceedings are finally resolved. b. Yes. Because the BIR can only pursue judicial proceedings after summary proceedings are finally resolved. c. No. Because either of the summary or judicial proceedings or both simultaneously may be pursued in the discretion of the authorities charged with the collection of such taxes. d. No. Because the BIR is presumed to have acted in good faith when it pursues both summary and judicial proceedings. 13. Who shall order the distraint of personal property if the amount of delinquent tax or delinquent revenue is P1,000,000 or less? a. Secretary of Finance b. Commissioner of Internal Revenue exclusively c. Commissioner of his daily authorized representative d. Revenue District Officer 14. Warrant of levy as distinguished from warrant of distraint. a. It is on real property owned by and in possession of the taxpayer. b. It is on personal property owned by and in possession of the taxpayer. c. It is on property owned by the taxpayer but in the possession of a third party. d. It does not require advertisement 15. If the taxpayer falls to respond withing fifteen (15) days from the date of receipt of the PAN, he shall be considered in default, in which case , what shall be issued calling for payment of the taxpayer’s deficiency tax liability, inclusive of the applicable penalties? a. Formal letter of Demand and Final Assessment Notice (FLD / FAN) b. Preliminary Assessment Notice (PAN) for the proposed assessment. c. Notice of Informal Conference d. Letter of Authority 16. For requests for reinvestigation, the taxpayer shall submit all relevant supporting documents in support of his protest within how many days from date of filling of his letter of protest, otherwise, the assessment shall become final? a. Sixty (60) days c. Twenty (20) days

b. Thirty (30) days

d. Ten (10) days

17. Under the TRAIN (R.A No. 10963), there shall be levied, collected and paid for each taxable year upon the income received by every alien individual employed by regional or area headquarters and regional operating headquarters established in the Philippines by multinational companies from such regional or area headquarters and regional operating headquarters, a tax equal to: a. Twenty-five percent (25%) of such gross income b. Twenty percent (20%) of such gross income c. Fifteen percent (15%) of such gross income d. Regular income tax rate under Section 24 (A) (2) (a) of the Tax Code 18 and 19 are based on the following Ruth Leslie is employed in LAB Corporation and is also a part-time real estate broker. In addition to the SMW of P180,000 she received from her employer, she likewise received P75,000 as commission from her real estate dealings for the year 2018 18. How much is the income tax due if she is under the graduated income tax regime? a. P20, 400 c. Zero b. P6,000 d. Some other amount 19. How much is the income tax due if she is under the 8% income tax regime? a. P20,400 c. Zero b. P6,000 d. Some other amount 20. A married individual deriving income within the Philippines whose spouse is unemployed or is a nonresident citizen deriving income from foreign source, shall be entitled to a personal exemption in 2018 of: a. P 100,000 only c. P 50,000 only b. P 64,000 only d. None 21. A married individual deriving income within the Philippines whose spouse is unemployed or is a nonresident citizen deriving income from foreign sources, shall be entitled to a personal exemption in 2017 of: c. P 100,000 only c. P 50,000 only d. P 64,000 only d. None 22 to 24 are based on the following: A married resident citizen has five (5) qualified dependent children. The following information pertains to his income and expenses in the year 2019: Salary, net of P20,000 withholding tax P380,000 Interest income, bank deposit-BPI, Manila 50,000 Yield from money market placement, State Investment House, Manila 30,000 Rent expense, apartment house 36,000 Health insurance premium paid 5,000 22. How much is the gross compensation income? a. P400,000 c. P250,000 b. P336,000 d. P230,000 23. How much is the taxable compensation income? a. P430,000 c. None, exempt from tax b. P400,000 d. None of the choices 24. Using the same data in the preceding number and assuming the information pertains to his income and expenses in the year 2017, how much is the taxable compensation income? a. P400,000 c. P250,000 b. P336,000 d. P230,000 25. Which of the following government-owned or enrolled corporations, agencies or instrumentalities shall pay such

rate of tax upon their taxable income as are imposed upon corporations or associations engaged in similar business, industry or activity? a. Government Service Insurance System (GSIS) b. Social Security System (SSS) c. Philippine Health Insurance Corporation (PHIC) d. Philippine Charity Sweepstake Office (PCSO) 26. One of the following is included in the “Gross Philippine Billings” for Income Tax purposes of an international air carrier. a. Tickets sold outside the Philippines for passengers originating from outside the Philippines b. Passage documents sold outside the Philippines for excess baggage originating from the Philippines c. Tickets sold in the Philippines but are nor actually flown d. Passage documents sold in the Philippines for cargoes originating from outside the Philippines 27. 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 shall declare the amount for income tax and need not be declared for income tax purpose. First Advice: The proceeds of the 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. Second Advise: The proceeds of life insurance will have to be declared for estate tax purposes if the designation of the Beneficiary is revocable, otherwise, they need not be declared. 28 to 29 are based on the following: Mr. Juan Jose, married, resident citizen with two qualified dependent children, has the following data for the year2018: Salaries, net of P50,000 withholding tax Tuition of children Rent of apartment Household expenses Health and Hospitalization insurance premium paid

P200,000 10,000 24,000 60,000 3,400

28. How much is the optional standard deduction? a. P100,000 c. P25,000 b. P80,000 d. None 29. How much is the taxable compensation income? a. P250,000 c. P147,600 b. P200,000 d. P 47,600

30. Under the TRAIN (R.A. No. 10963), the books of account are required to be audited and examined yearly by an independent CPA if the gross quarterly sales, earnings, receipts or output exceed: a. P5,000,000 c. P2,500,000 b. P3,000,000 d. P1,500,000 31. Examination and inspection of boxes of accounts and other accounting records shall be done in the: a. Taxpayer’s office or place of business only. b. Office of the Bureau of Internal Revenue only. c. Taxpayer’s office or place of business or in the office of the Bureau of Internal Revenue d. None of the choices 32. Under the TRAIN (R.A. No. 10963) How much is the allowable standard deductive for non-resident alien decedent?

a. Five Million Pesos (P5,000,000) b. Three Million Pesos (P3,000,000) c. Five Hundred Thousand Pesos (P500,000) d. None, not allowed to deduct standard deduction 33. Vanishing deduction is availed of by taxpayers to: a. Correct his accounting records to reflect the actual deductions made b. Reduce his gross income c. Reduce his output value-added tax d. Reduce his gross estate 34. One of the following deductions physically diminishes the gross estate of the decedent. a. Standard deduction c. Vanishing deductions b. Family home deductions d. None of the choices 35. The decedent is a married man with a surviving spouse, died on February 4, 2018. The estate presented the following data: Conjugal real and personal properties P14,000,000 Exclusive family home P30,000,000 Conjugal ordinary deductions 2,000,000 The taxable net estate is: a. P42,000,000 b. P32,000,000

c. P27,000,000 d. P21,000,000

36. A decedent who died on March 15, 2018. He left a gross estate of P20,000. One of the heirs inquired from you whether or not a notice of death was required to be filed. What would be your answer? a. There was no need to file a notice of death because the value of the gross estate did not exceed P20,000 b. There was a need to file a notice of death because according to Regulations a notice would be required if the value of the gross estate was P20,000 or more. c. Filing of a notice of death would be discretionary on the part of the heirs of the decedent. d. Filing of notice of death had been deleted under the TRAIN so there would be no need to file it under any circumstances. 37. Under the TRAIN (R.A. No. 10963), when is the time for filing of the estate tax return? a. Thirty (30) days from the decedent’s death b. Two (2) months from the decedent’s death c. Six (6) months from the decedent’s death d. One (1) year from the decedent’s death 38. LA Corporation donated P1,000,000 to a government agency which was created to generate profit to the government. The agency’s total expenses amounted to P15,000,000, 30% of which were for administrative purposes? How much was the exempt gift? a. P4,500,000 c. P1,000,000 b. P3,000,000 d. None of the choices 39. A resident citizen of the Philippines made the following donations on one date: Donations on account of marriage: To legitimate son P100,000 To a legitimate daughter and her husband-to-be, on account of marriage P 15,000 To a recognized natural son P 30,000 To an adopted child P 60,000 To an illegitimate daughter P 40,000 To a sister P 12,000 To a charitable institution P 20,000

The deductions from the gross gift is: a. P67,000 b. P60,000

c. P57,000 d. P20,000

40 and 43 are based on the following on January 15,2018, Daisy gave a piece of land to her brother-in-law who is getting married on February 14,2018. The assessed value and zonal value of the land were P750,000 and P1,000,000 respectively. The land had an unpaid mortgage of P200,000 which was not assumed by the donee and an unpaid realty tax of P10,000 which was assumed by the donee. 40. What value shall be reflected in the gross gift? a. P1,000,000 c. P750,000 b. P 800,000 d. None of the choices 41. How much shall be the total deductions? a. P210,000 b. P200,000

c. P10,000 d. None of the choices

42. How much was the donor’s tax due? a. P297,000 b. P237,000

c. P44,400 d. P31,400

43. When shall be the due date for the filing of donor’s tax return? a. February 14, 2018 c. March 15, 2018 b. February 15, 2018 d. July 15, 2018 44. Which of the following sales of residential property where the instrument of sale (whether the instrument is nominated as a deed of absolute sale, deed of conditional sale or otherwise) is executed on or after January 01, 2018, shall be subject to VAT? a. Sale of residential lot the value of which does not exceed P1,500,000 b. Sale of residential house and lot or other residential dwellings the value of which exceed P2,500,000 c. Sale of parking lot which may or may not be included in the sale of condominium units regardless of amount of selling price. d. All of the choices 45. Sales of orchids and other ornamental plants is: a. Subject to 12% VAT c. Exempt from VAT b. Subject to 0% VAT d. None of the above 46. A lessor rents his 15 residential units for P14,500 per month. During the taxable year, his accumulated gross receipts amounted to P2,610,000. To what business taxes will he be liable? I- Value Added Tax II- 3% Percentage under Section 116 of the Tax Code a. Both I and II b. Neither I nor II

c. I only d. II only

47 and 48 are based on the following: A manufacturer purchased capital goods on different occasions as follows: Month of Purchase Monthly January 2018 60 February 2018 48

Amount

12% Input Tax

Useful

P8,500,000

P1,020,000

Life Amortization 6 years

P8,500,000

P1,020,000

4 years

No. of

December 2021 January 2022

P10,000,000 P10,000,000

P1,020,000 P1,020,000

5 years 5 years

60 -

47. When is the last month of amortization of the capital good purchased on January 2018? a. December 2022 c. November 2026 b. January 2022 d. None of the choices 48. When is the last month of amortization of the capital good purchased on January 2022? a. December 2022 c. November 2026 b. January 2022 d. None of the choices

49 to 52 are based on the following: Sweet Tooth, Inc. manufactures refined sugar. The following selected data are taken from its books: Sale of refined sugar, NET of VAT P2,000,000 Purchase of sugar cane from farmers 500,000 Purchases of packaging material, gross of VAT 784,000 Purchase of labels, gross of VAT 112,000 Advance payment of VAT before release from refinery 60,000 49. How much is the presumptive input tax if any? a. P60,000 c. P10,000 b. P20,000 d. None of the choices 50. How much are total input taxes? a. P116,000 b. P104,000

c. P96,000 d. None of the choices

51. How much is the VAT payable using 12% VAT rate? a. P124,000 c. P64,000 b. P84,000 d. P20,000 52. How much is the common carrier’s tax payable? a. P120,000 c. P 60,000 b. P90,000 d. P 30,000 53. How much is the Value Added Tax? a. P360,000 b. P240,000

c. P120,000 d. P30,000

54. When shall the Monthly VAT Declaration be filed? a. March 25, 2017 c. March 21, 2017 b. March 24, 2017 d. March 20, 2017 55. Can the VAT-registered taxpayer register his carriage of passengers under the VAT system? a. Yes. Any person who is VAT- registered but enters into transactions which are exempt from VAT (mixed transactions) may opt that the VAT apply to his transactions which would have been exempt from VAT b. No. Any person who is VAT-registered but enters into transactions which are exempt from VAT (mixed transactions) cannot optionally register his transactions which would have been exempt from VAT c. Yes. As a rule, it is mandatory for VAT-registered taxpayers to register all transactions under the VAT system d. No. It is the other way, the taxpayer may opt that the VAT-subject transactions be exempted from VAT

56. Which of the following statements is incorrect? a. The provision under Local Government Taxation shall govern the exercise by provinces, cities, municipalities and Barangays of their taxing and other revenue-raising powers b. Taxation shall be uniform in each local government unit. c. The collection of local taxes, fees, charges and other impositions may be delegated to any private person provided such delegation is approved by the Sanggunian d. The revenue collected pursuant to the provisions of the Local Government Code shall inure solely to the benefit of, and be subject to disposition by, the local government unit levying the tax, fee, charge or other imposition unless otherwise specifically provided herein. 57. Local taxes, fees, and charges may be paid: a. Annually only b. In quarterly installments c. Monthly d. Weekly 58. Which of the following is incorrect with respect to local transfer tax? a. It must not exceed 50% of 1% b. It is based on total consideration or the fair market value, whichever is higher c. It is accrued from effective date of transfer of ownership of title over real property d. It is paid in the province where the owner of the property resides. 59. The 20% discount on sales of goods and services to senior citizens and PWDs shall be: a. Deducted from gross sales for income tax purposes. b. Deducted from gross income for income tax purposes c. Shall be claimed as input tax credit for VAT purposes d. Shall either deducted from gross sales for income tax purposes or claimed as input tax for VAT purposes 60. Subject to the Regulations to be issued by the Secretary of Finance, upon the recommendation of the Commissioner of theBureau of Internal Revenue, the 5% special income tax on gross income earned, in lieu of all taxes (except real property tax on land owned by developer) pursuant to Section 24 of R.A 7916 as amended, shall be directly paid and remitted by registered ECOZONE enterprises as follows: I- 3% to the national government II- 2% to the Treasurer’s office of the Municipality or City where the ECOZONE registered enterprise is located. (Section 1, IRR, Omnibus Investment Code; Revenue Regulations No. 1-2000) a. Yes to both I and II b. No to both I and II

c. Yes to I only d. Yes to II only

61 and 62 are based on the following: A PEZA-registered enterprise under the 5% special tax regime engaged as an export enterprise provided you with the following information for the taxable year 2018: Export sales P40,000,000 Direct costs 20,000,000 Administrative expenses 5,000,000 Marketing expenses 2,500,000 Other operating expenses 1,200,000 Incidental losses 400,000 61. How much is tax due to the National Government? a. P1,000,000 b. P600,000

c. d.

P400,000 None of the choices

62. How much is the tax due to the city or municipality where the enterprise is located? a. P1,000,000 b. P600,000

c.

P400,000

d.

None of the choices

63. A person applying to be registered as a BMBE shall meet the following qualifications except: a. With an asset of not more than Three Million Pesos (P3,000,000.00) excluding land; b. Engaged in the production, processing, or manufacturing of products or commodities, including agroprocessing, trading and services; c. Registered with the Department of Trade and Industry (DTI) for sole proprietorships, for juridical persons; with Securities and Exchange Commission (SEC) for corporations. d. For natural persons, passed a licensure examination administered by the government. 64. The Income Tax Holiday (ITH) of newly registered non-pioneer firms shall be: a. six (6) years from commercial operations. b. four (4) years from commercial operations. c. three (3) years from commercial operations. d. two (2) Six (6) years from commercial operations. 65. The 20% discount on sales of goods and services to senior citizens and PWDs shall be: a. deducted from gross sales for income tax purposes. b. deducted from gross income for income tax purposes. c. shall be claimed as input tax credit for VAT purposes. d. shall either be deducted from gross sales for income tax purposes or be claimed as input tax for VAT purposes. 66. Bikes Are Us, an importer of bicycles from USA, imported 10 racing bikes. The importer agreed to pay US$10,000 for the shipment. The amount was exclusive for US$400 freight cost and US$200 insurance, packed ready for the Philippines. No selling commission, assist or royalty or limitation was imposed on the Bikes Are Us as buyer. Assuming a forex rate of P50:US$1 and a 15% rate of customs duty, how much is the customs duty on the importation? a. P79,500 c. P75,000 b. P78,000 d. None of the choices 67. Bureau of Customs is a principal subdivision of the: a. Department of Finance. b. Department of Trade and Industry. c. Department of Labor and Employment. d. Department of Interior and Local Government. 68. Which of the following is not among the functions of the Bureau of Customs? a. The assessment and collection of customs revenues from imported goods and other dues, fees, charges, fines, and penalties accruing under The Customs Modernization and Tariff Act. b. Simplification and harmonization of customs procedures to facilitate movement of goods in international trade. c. Supervision and control over the entrance and clearance of vessels and aircraft engaged in foreign commerce. d. Provide the President and the Congress with independent analysis, information and technical support on matters related to tariff and non-tariff measures affecting Philippine industries and exports for policy guidance.

69. Which of the following statements is correctly phrased? a. The term “net capital gain” mean the excess of the gains from sales or exchanges of capital assets over the losses from such sales or exchanges.

b. c. d.

The term “net capital gain” meant the excess of the gains from sales or exchanges of capital assets over the losses from such sales or exchanges. The term “net capital gain” means the excess of the gains from sales or exchanges of capital assets over the losses from such sales or exchanges. The terms “net capital gain” means the excess of the gains from sales or exchanges of capital assets over the losses from such sales or exchanges.

70. Which of the following statements is correct? a. One of the factors influencing tax evasion is the benefit of not paying taxes. b. One of the factor influencing tax evasion is the benefit of not paying taxes. c. One of the factors influencing tax evasion are the benefits of not paying taxes. d. One of the factors influencing tax evasion are the benefit of not paying taxes.

END OF EXAMINATION

MULTIPLE CHOICE ANSWER KEY INSTRUCTIONS: Select the correct answer for each of the following questions. Mark only one answer for each item. Strictly no erasures allowed.

1.A 2.C 3.C 4.B 5.C 6.B 7.C 8.C 9.A 10.D

11.C 12.C 13.D 14.A 15.A 16.A 17.D 18.C 19.B 20.D

21.C 22.A 23.B 24.C 25.D 26.B 27.A 28.D 29.A 30.B

31.C 32.C 33.D 34.D 35.D 36.D 37.D 38.D 39.D 40.A

41.C 42.C 43.A 44.A 45.A 46.B 47.A 48.D 49.B 50.A

51.C 52.D 53.B 54.D 55.A 56.C 57.B 58.D 59.B 60.A

61.B 62.C 63.D 64.B 65.B 66.A 67.A 68.D 69.C 70.A

SUPPORTING COMPUTATIONS 8. C If the return is amended substantially different from the original return, the three (3)-year prescriptive period shall be counted from the filing of the amended return. There is substantial amendment when a new return is filed declaring more losses, which can only be done either: 1) In reducing gross income, or 2) In increasing the items of deductions claimed. If the amendment is minimal, the counting of the prescriptive period is still the original period. (CIR vs. Phoenix Assurance, Inc.’ G.R. L-19727, May 20, 1965, 14 SCRA 52) 9. A Negligence or oversight on the part of the BIR cannot prejudice taxpayers, considering that the prescriptive period was precisely intended to give them peace of mind. (CIR vs. Goodrich Phils., Inc. G.R. 104171, February 24, 1999 The normal three (3)-year prescriptive period expires on the 1095 th day, notwithstanding the fact that within the

period, there is a leap year which is 366 days. (Revenue Memorandum Circular (RMC) 48-90) 18. C

Total income received Less: Statutory minimum wage

P255,000 180,000

Taxable income - commission Tax due (first P250,000)

P75,000 Exempt

19. B

Total income received Less: Statutory minimum wage Taxable income – commission Tax due (P75,000 x 8%)

P255,000 180,000 P75,000 P6,000

Taxpayer’s income as MWE does not exceed P250,000; hence, not subject to income tax and the withholding tax. Since taxpayer is a mixed income earner and has received income from other sources in addition to her compensation income, the commission received during the taxable year is subject to income tax and consequently, to withholding tax. In his instant case, if the taxpayer selected the graduated income tax regime, her commission income is subject to income tax at 0% since it did not exceed P250,000 and she is also subject to business. However, if she selected the 8% income tax regime, she is liable for income tax amounting to P6,000, but this is in lieu of the graduated income tax and the percentage tax under Section 116 of the Tax Code, as amended. (Section 6, R.R. No. 11-2018) Likewise, Minimum Wage Earners (MWEs) receiving other income from other sources in addition to compensation income, such as income from other concurrent employers, from the conduct of trade, business, or practice of profession, except income subject to final tax, are subject to income tax only to the extent of income other than Statutory Minimum Wage (SMW), holiday pay, overtime pay, night shift differential pay, and hazard pay earned during the taxable year. 22. A Gross compensation income (P380,000 + P20,000)

P400,000

23. B Taxable compensation income)

P400,000

24. C Gross compensation income (P380,000 + P20,000) Less: Basic personal exemption Additional exemption Taxable compensation income

P400,000 (P50,000) (100,000)

(150,000) P250,000

28. D None, Pure compensation income earners are not allowed optional standard deduction.

29. A Gross compensation income (P200,000 + P50,000)

P250,000

Under the TRAIN, personal exemptions and deduction for health and/or hospitalization insurance premium are no longer allowed. 34. D Standard deduction, family home deduction and vanishing deduction do not physically diminish the gross estate of the decedent. No outflows of property or assets are involved among these three (3) items of deduction. 35. D

Exclusive Gross estate Less: Deductions Net estate before special deductions Less: Special deductions Family home Maximum Standard deductions Net estate after special deductions Less: Share of surviving spouse (1/2x12,000,000*) Net taxable estate

P30,000,000 30,000,000

Common

Total

P14,000,000 (2,000,000) 12,000,000*

30,000,000 10,000,000

P44,000,000 (2,000,000) 42,000,000

(10,000,000) (5,000,000) 27,000,000 (6,000,000) P21,000,000

38. D Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the said Government shall be exempt gifts. 39. D Donation to charitable institution

P20,000

40. A Zonal value

P1,000,000

Unpaid realty tax assumed by the donee

P10,000

41. C

42. C

Gross gift Less: Unpaid realty tax assumed by donee Taxable net gifts

P1,000,000 10,000 P990,000

Tax due

250,000 740,000 x 6%

Exempt P44,400

45. A Orchids and other ornamental plants are agricultural non-food products. 46. B He is not subject to VAT since the monthly rent per unit does not exceed P15,000. He is also not subject to 3% Percentage Tax. Using the same example, assuming he has 20 residential units with the same monthly rent per unit and his accumulated gross receipts during the taxable year amounted to P3,480,000, he is still not subject to VAT even if the accumulated earnings exceeded P3,000,000 since the monthly rent per unit does not exceed P15,000. He is also not subject to 3% Percentage Tax. 47. A For purchase made on January 2018, the amortization shall be for the shorter period of 5 years only or up to December 2022 although the useful life is 6 years. 48. D For purchase made on January 2022, no amortization shall be made and the input VAT shall be claimed on the month of purchase or January 2022. 49. B Presumptive tax on sugar cane

(500,000 x 4%)

P20,000

50. A

Presumptive input tax on sugar cane Passed-on VAT on packaging materials (784,000 x 12/112) Passed-on VAT on labels (112,000 x 12/112) Total input taxes 51. C Output Tax (P2,000,000 x 12%) Less: Input Taxes Presumptive input tax on sugar cane (P500,000 x 4%) P20,000 On packaging materials (P784,000 x 12/112) 84,000 On labels (P112,000 x 12/112) 12,000 (116,000) VAT Payable P124,000 Less: Tax payments/credits Advance VAT paid (60,000) Tax payable P 64,000

P20,000 84,000 12,000 P116,000 P240,000

52. D Gross receipts (transport of passengers) Tax rate Common carrier’s tax

P1,000,000 3% P 30,000

53. B Gross receipts (transport of goods) Gross receipts (transport of cargoes)

P1,500,000 500,000

Total Tax rate Value-added tax

2,000,000 12% P 240,000

61. B 62. C

Export sales Less: Direct costs Gross income Tax rate Tax due Due to the National Government (3/5 x 1,000,000) Due to the Local Government (2/5 x 1,000,000)

P40,000,000 20,000,000 20,000,000 5% P 1,000,000 P 600,000 P400,00

66. A

Agreed price Add: Freight cost Insurance Total Multiplied by Total in Philippine pesos Multiplied by rate of customs duty Customs duty

US$10,000 400 200 US$10,600 50 PHP530,000 15% PHP79,500 END OF EXAMINATION

ReSA Financial Accounting and Reporting

1. B 2. B 3. A 4. C 5. A 6. B 7. D 8. B

9. B 10. A 11. D 12. D 13. B 14. B 15. C 16. A

17. B 18. C 19. D 20. D 21. B 22. D 23. D 24. B

25. C 26. D 27. B 28. A 29. A 30. C 31. B 32. B

33. D 34. D 35. C 36. C 37. B 38. B 39. C 40. B

41. B 42. C 43. B 44. C 45. A 46. B 47. C 48. C

49. A 50. B 51. A 52. D 53. D 54. B 55. C 56. B

57. C 58. B

60. C 61. B

62. C 63. D

64. C 65. A

66. B 67. B

68. D 69. B

70. C

11. D 12. B 13. A 14. B 15. C 16. D 17. A 18. C 19. A 20. A

21. A 22. A 23. A 24. A 25. A 26. A 27. A 28. A 29. A 30. A

31. A 32. A 33. A 34. A 35. A 36. B 37. B 38. D 39. C 40. C

41. C 42. D 43. A 44. D 45. D 46. D 47. C 48. A 49. B 50. D

51. D 52. C 53. B 54. A 55. B 56. B 57. C 58. A 59. C 60. D

61. D 62. D 63. C 64. C 65. D 66. C 67. C 68. C 69. B 70. D

11. D 12. B 13. A 14. B 15. D 16. A 17. D 18. A 19. D 20. D

21. A 22. D 23. B 24. D 25. B 26. C 27. D 28. B 29. B 30. A

31. C 32. C 33. B 34. B 35. A 36. C 37. C 38. B 39. A 40. C

41. B 42. D 43. B 44. D 45. C 46. C 47. B 48. A 49. D 50. B

51. B 52. B 53. A 54. B 55. C 56. C 57. B 58. C 59. A 60. B

61. D 62. D 63. A 64. D 65. B 66. A 67. C 68. C 69. D 70. D

11. C 12. C 13. D 14. A 15. A 16. A 17. D 18. C 19. B 20. D

21. C 22. A 23. B 24. C 25. D 26. B 27. A 28. D 29. A 30. B

31. C 32. C 33. D 34. D 35. D 36. D 37. D 38. D 39. D 40. A

41. C 42. C 43. A 44. A 45. A 46. B 47. A 48. D 49. B 50. B

51. C 52. D 53. B 54. D 55. A 56. C 57. B 58. D 59. B 60. A

61. B 62. C 63. D 64. B 65. B 66. A 67. A 68. D 69. C 70. A

59.BONUS Auditing

1. C 2. D 3. A 4. A 5. A 6. B 7. C 8. A 9. B 10. A

Management Services

1. D 2. B 3. D 4. C 5. B 6. D 7. B 8. C 9. A 10. B

Tax

1. A 2. C 3. C 4. B 5. C 6. B 7. C 8. C 9. A 10. D

Regulatory Framework for Business Transactions (RFBT)

1. A

2. D

3. C

4. A

5. A

6. B

7. C

8. D

9. D

10. A

20. A 11. C 12. B 13. C 14. C 15. B 16. B 17. B 18. D 19. A

21. D 22. C 23. A 24. C 25. D 26. C 27. B 28. D

29. B 30. C

31. A 32. B 33. C 34. C 35. A 36. A 37. C

38. B 39. A 40. A

41. A 42. B 43. A 44. D 45. C 46. D

47. D 48. C 49. D 50. D

51. C 52. C 53. A 54. B 55. A

56. C 57. A 58. B 59. A 60. B

61. D 62. D 63. C 64. A

65. D 66. D 67. A 68. A 69. D 70. A 71. C 72. B 73. D

74. B 75. B 76. A 77. C 78. D 79. C 80. A

81. A 82. B

83. B 84. A 85. B 86. B 87. A 88. B 89. A 90. D

91. B

92. B 93. B 94. D 95. B 96. C 97. C 98. C 99. C 100. D