88u BAMM 6202 -Final Exam Use this as backup guide PDF

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Final Exam Week 10/Submitted by: Mr. Alfie G. Rellon (FB and Messenger) (AMA OED Student) (agrsaudi: username in the site) Which of the following statement is not correct? Select one: a. Benefits received from or enjoyed under the Social Security System are exclusions from gross income. b. Prizes an...

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Final Exam Week 10/10 Submitted by: Mr. Alfie G. Rellon (FB and Messenger) (AMA OED Student) (agrsaudi: username in the site) 1. Which of the following statement is not correct? Select one: a. Benefits received from or enjoyed under the Social Security System are exclusions from gross income. b. Prizes and awards granted to athletes in local and international sports competitions and tournaments whether held in the Philippines or abroad and sanctioned by their national sports association are exclusions from gross income c. Holiday pay, overtime pay, night shift differential and hazard pay shall be exempt from income tax d. Minimum wage earners shall be exempt from the payment of income tax 2. The ABC Bank is a domestic bank authorized by the BSP to operate as foreign currency deposit unit. For the year 2017, it earned interest income of P100,000 from foreign currency transactions with non-residents, OBUs and other FCDUs. The rate of tax applicable to such interest income is Select one: a. 20% b. 10% c. 7.5% d. 25% 3. Fiscal adequacy means that revenue should always meet the demands of public expenditures even during adverse economic condition. Select one: True False 4. Compensation income is earned when an employee-employer relationship exists. Which of the following represents compensation income? Select one: a. All of the answers correct b. Sick leave pay c. Honorarium of the company lawyer as guest speaker in company sponsored seminar d. Emergency pay 5. The following are the sources of taxation laws ordinances except: Select one: a. Judicial decisions b. Contracts or agreements c. Philippine Constitution d. Statutes or Presidential Decree 6. A taxpayer is classified as head of the family under the following situations, except: Select one: a. Legally separated spouse with a brother who is not more than 21 years old, unmarried and not gainfully employed b. Widow with a minor child of her deceased husband on his first marriage dependent upon her for chief support c. Unmarried woman with illegitimate daughter d. Unmarried man with parents dependent upon him for chief support 7. Which of the following is not a compensation income? Select one: a. Allowances b. Professional fees c. Retirement pay d. Wages 8. Provisions in the Philippine Constitution on taxation are grants of power. Select one:

True False 9. Statement I - A child, regardless of age, qualifies as dependent if he/she is incapable of self-support because of mental or physical defects Statement II - Married individual can each claim the basic and additional exemptions Select one: a. Only Statement II is correct b. Only Statement I is correct c. Both statements are correct d. Neither statement is correct 10. Which of the following real properties is classified as a capital asset? Select one: 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 done who is not engaged in the real estate business with respect to the real property inherited or donated and who subsequently use such property in trade or business c. Real property transferred through succession or donation to the heir or done 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 d. Real properties of the real estate lessor whether land and/or improvements, which are for lease or being offered for lease. 11. Jake Galamay, single supporting the following: Princess Ilaga, illegimitate daughter, 16 years old, studying in the University of Sydney in Australia and living with Jake Galamay's diplomat brother in Sydney, Australia Noemi Galamay, mother, living with him and giving 60% of the entire support needed: the other 40% is being furnished by his sister, Tina Galamay How much is the additional personal exemption to be recognized by Jake Galamay? Select one: a. P25,000 b. P75,000 c. P50,000 d. P100,000 12. Northern Medical College, a proprietary educational institution, had the following financial data for 2017: Gross receipts from tuition fee paymentsP14,000,000 Itemized expenses 9,000,000 The income tax liability for 2017 would be: Select one: a. Tax exempt b. P1,500,000 c. P500,000 d. P280,000 13. Which of the following compensation payments to a minimum wage earner is subject to income tax? Select one: a. Night differential pay b. No correct answer c. Holiday pay d. Overtime pay 14. The taxpayers is not allowed to claim additional exemptions, Select one: a. Legally adopted daughter, 25 years old but incapable of self support due to mental defect b. Illegitimate son, minor who died January 1 of the taxable year c. Recognized natural son who celebrated his 21st birthday January 1 of the taxable year d. Legitimate daughter who got married on December 30 of the taxable year, one day before she turned 22

15. Which of the following is subject to 10% final tax? Select one: a. Royalty income from patent b. Royalty income from franchise c. Royalty income from literary works d. Interest income from savings account 16. During the taxable year, Mr. Francis Ko separated legally from his wife, Andrea. The legally separated spouses have five qualified dependent children. Both spouses were earning with the following gross taxable income: Mr. Francis Ko, P380,000; Ms. Andrea, P250,000. For custody, the court granted Mr. Ko the two children and Ms. Andrea the remaining three children. Meanwhile, Mr. Francis Ko is supporting his niece who is 21 years old, unmarried, and not gainfully employed. Both spouses have monthly premium payment of P150 for health and insurance. The allowable deduction for health and hospitalization insurance of Ms. Andrea is: Select one: a. P1,800 b. P3,000 c. P2,400 d. Zero 17. Miss Cruz had recently joined the ABC Corporation 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 Cruz 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 Cruz chose to resign from the company and received the sum of P100,000 as separation pay. The above amount is Select one: a. Exempted from income tax b. Non-deductible expense on the part of the company c. Taxable in full d. Partially taxable 18. Who among the following is a non-resident alien? Select one: a. An alien who lives in the Philippines with no definite intention as to his stay b. An alien who has acquired residence in the Philippines c. An alien who comes to the Philippines for a definite purpose which in its nature would require an extended stay d. An alien who comes to the Philippines for a definite purpose which in its nature may be promptly accomplished 19. This is a taxable income Select one: a. Separation pay due to resignation b. Retrenchment pay c. SSS/GSIS benefits d. Refund of Philippine Income Tax 20. Which of the following is a taxable compensation income? Select one: a. Terminal pay by fact of death b. Separation pay due to disability c. Retirement pay under BIR approved retirement plan d. Separation pay due to resignation 21. The minimum corporate income tax shall be used in computing and paying corporate income tax if the corporation has been Select one: a. The normal income tax is lesser than minimum corporate income tax b. In its third year c. Incurred net loss or zero taxable income

d. The normal income tax is equal than minimum corporate income tax 22. Opinions of legal personalities are sources of tax laws. Select one: True False 23. Which of the following taxpayers whose personal exemption is subject to law on reciprocity under Tax Code? Select one: a. Nonresident alien not engaged in trade or business in the Philippines whose country allows personal exemption to Filipinos who are not residing but are deriving income from said country. b. Resident alien deriving income from a foreign country c. Nonresident citizen with respect to his income derived from outside the Philippines d. Nonresident alien who shall come to the Philippines and stay herein for an aggregate period of more than 180 days during any calendar year 24. From the following data compute for the gross business income of a servicing business: Professional fee, accounting service P500, 000 Salaries of accounting staff 150, 000 Salaries of office assistant 60, 000 Accounting Supplies 10, 000 General Supplies 5, 000 Select one: a. P280, 000 b. P275, 000 c. P335, 000 d. P340, 000 25. Statement 1 Sale or disposition of shares of stock outside the local stock exchange is subject to final tax Statement 2 Gain on shares surrendered by the investor upon dissolution of the corporation is subject to final tax Select one: a. Only Statement 2 is correct b. Only Statement 1 is correct c. Both statements are correct d. Neither statement is correct 26. After 10 years of romantic relationship, A decided to end his relationship with B. B with anger in her eyes, kicked and berated A. A tried to pacify B, but B slipped, lost control and fell to the ground requiring hospitalization. To buy peace, A decided to shoulder the medical expenses for the injuries suffered by B. Such transaction is Select one: a. Exempt from income tax b. Taxable income of B, subject to final tax c. Taxable income of B, subject to basic tax 27. X received the following prizes and winnings 1st prize - raffle draw P 50, 000 Philippine Lotto winnings 1, 000, 000 Gambling winnings 300, 000 Beauty contest winnings 100,000 How much is the taxable prizes and winnings? Select one: a. P450, 000 b. P350, 000 c. P300, 000 d. P50, 000 28. How much shall be taken into account in computing the net income tax if a gain is realized by an individual taxpayer from the sale or exchange of capital assets (other than shares of stocks)? Select one: a. 6% of the selling price or fair market value whichever is higher b. 5% of the net capital gain

c. 5% for the first P100,000 and additional 10% for any excess of P100,000 d. 6% of the net capital gain 29. Which of the following ceilings of de minimis benefits is correct? Rice SubsidyUniform Allowance Select one: a. P1,000 P4,000 b. P1,500 P4,000 c. P1,200 P3,000 d. P1,500 P3,500 30. The "benefits-received theory" is the source of the "doctrine of symbiotic relationship". Select one: True False 31. Which of the following is not correct income tax? Select one: a. 30% income tax on net taxable business income of resident foreign corporation b. Minimum corporate income tax on domestic corporation incurring operating loss for the year c. 10% income tax on proprietary educational institution d. Zero income tax on business income of all government owned and controlled corporation such as PAGCOR. 32. Sue reported the following retirement: First employment for 30years received at the age of 50 P500, 000 Second Employment for 10 years received at the age of 60 400, 000 Third employment for 10 years received at the age of 70 300, 000 How much is the nontaxable retirement for Sue? Select one: a. P300, 000 b. P400, 000 c. P500, 00 d. P -033. During the taxable year, Mr. Francis Ko separated legally from his wife, Andrea. The legally separated spouses have five qualified dependent children. Both spouses were earning with the following gross taxable income: Mr. Francis Ko, P380,000; Ms. Andrea, P250,000. For custody, the court granted Mr. Ko the two children and Ms. Andrea the remaining three children. Meanwhile, Mr. Francis Ko is supporting his niece who is 21 years old, unmarried, and not gainfully employed. Both spouses have monthly premium payment of P150 for health and insurance. The filing status of Ms. Andrea is: Select one: a. Married b. Single c. It's complicated d. Head of the family 34. The classifications of the taxpayer according to filing status are the following except: Select one: a. Single b. Exempted c. Married d. Head of the family 35. The following taxpayers with income within and outside the Philippines may claim basic personal exemption, except: Select one: a. Non-resident alien engaged in trade or business b. Resident alien engaged in trade or business c. Resident alien

d. Citizen, whether resident or not 36. Hollywood Film, a non-resident foreign corporation distributing cinematographic films, had the following data in its Philippine operation for 2017: Gross receipts from film distributionP8,000,000 Cost of films and other distribution expenses5,000,000 Operating expenses1,500,000 The amount of income tax payable in the Philippines would be: Select one: a. P750,000 b. P2,000,000 c. P375,000 d. P450,000 37. The following are the gross royalty income of a resident citizen for the period: Royalty income as authorP100,000 Royalty income from franchising200,000 Royalty income from gold mine500,000 Royalty income from the use of its patent100,000 The total final tax on Royalty income is Select one: a. P170,000 b. P100,000 c. P130,000 d. P150,000 38. The following statements are true except: Select one: a. The maximum amount allowed for health and hospitalization premium is P2,400 b. A non-resident citizen with income purely from foreign sources is not entitled of the basuc personal exemption c. A widower who supports his mother is classified as head of the family d. Filipino citizen employed in an offshore banking unit in the Philippines is classified as special alien 39. Statement 1 A child, regardless of age, qualifies as dependent if he/she is incapable of self-support because of mental or physical defects Statement 2 Married individual can each claim the basic and personal exemptions Select one: a. Only Statement 1 is correct b. Both statements are correct c. Neither statement is correct d. Only Statement 2 is correct 40. The following tax payers with income within the Philippines may claim additional exemption, except: Select one: a. Non-resident citizen b. Resident alien with qualified dependent children living in the Philippines c. Resident citizen d. Non-resident alien with qualified dependent children living in the Philippines 41. A corporation which is taxable on business income after deducting business, except: Select one: a. Domestic Corporation b. Non Resident Foreign Corporation c. Foreign Corporation d. Resident Foreign Corporation 42. A minimum wage earner is working at an advertising firm in Makati. During the year, she received P10,000 a month as salary or a total of P120,000. In addition, she also received 13th month pay, Christmas bonus, productivity bonus, mid-year bonus and 14th month pay amounting to P30,000. The total deductions for her SSS premiums, PhilHealth,

Pag-Ibig and Union dues contributions amounted to P5,000. Her taxable income, if she is single with no qualified dependent is Select one: a. P95,000 b. P0 c. P65,000 d. P90,000 43. Mr. Roman Dinero (Single), a Spaniard who is resident general manager of Abbot Laboratories-a multi-national company's regional operating headquarters established in the Philippines-received a monthly salary of P250, 000 What is the amount of Mr. Dinero's income tax payable? Select one: a. P450, 000 b. P12, 500 c. P80, 000 d. P918, 000 44. In 2016, Pedro's wife died of a car accident. His dependents are as follows: A, child, 22 years old, employed on July 12, 2016 B, child, 21 years old on January 2, 2016 C, child, 18 years old, married on January 31, 2016 D, child, 17 years old, gainfully employed on October 1, 2016 E, child, 15, afflicted with sore eyes on May 6, 2016 F, child, 13, died together with his wife in a car accident in 2016 G, sibling, 28, paralytic For taxable year 2017, Pedro can claim additional exemptions of: Select one: a. P75,000 b. P125,000 c. P100,000 d. P25,000 45. As a rule, which of the following is subject to 10% tax on net income Select one: a. Proprietary educational institutions b. Royalty income from musical composition received by a resident alien c. Off-shore banking units d. Dividend received by a resident citizen from a domestic corporation 46. The lease dated January 1, 2017 provided for constructions of improvements at the cost of the lessee, and the ownership will belong to the lessor at the end of 5-year lease contract. The construction of improvement which was completed at the end of the 3rd month of the contract amounted of P240, 500. The improvement has an economic life of 8 years and estimated scarp value of P560. The rent income on improvement for year 1 under each method is Outright Spread- Out Select one: a. P240, 500 P18, 107.50 b. P239, 940 P14, 754.75 c. P147, 620 P22, 140 d. P -0- P18, 107.50

47. Statement I: All vacation leave and sick leave taken with pay are taxable compensation income Statement II: All unused vacation leave converted into cash are taxable Select one: a. Both statements are correct b. Only statement I is correct c. Both statements are incorrect d. Only statement II is correct 48. The following corporations are not subject to MCIT, except: Select one: a. Corporations under a special income tax regim b. Banking institutions under expanded foreign currency deposit system c. Private and publicly listed corporations d. Proprietary educational institutions 49. Juana, widow, earning an annual gross compensation income of P300,000 has the following dependent children in 2017 Aubrey – baby, born on January 31 Barbara – celebrated her 21st birthday last June 12 Cristeta – married on January 1 Diana – gainfully employed effective July 1 Eliza – died of dengue fever on September 30 The taxable income of Juana in 2018 is: Select one: a. P120,000 b. P95,000 c. P225,000 d. P87,000 50. How much of the following amounts received in 2017 will be included in the tax return for the year 2017? Rent for year 2015 P480, 000 Rent for year 2016 480, 000 Rent for year 2017 480, 000 Refundable Deposit 120, 000 Select one: a. P720, 000 b. P560, 000 c. P600, 000 d. P520, 000 51. Juana, widow, earning an annual gross compensation income of P300,000 has the following dependent children in 2017: Aubrey - baby, born on January 31 Barbara - celebrated her 21st birthday last June 12 Cristeta - married on January 1 Diana - gainfully employed effective July 1 Eliza -died of dengue fever on September 30 Assuming Juana has two employers, her taxable income in 2017 is: Select one: a. P150,000 b. P32,000

c. P100,000 d. P63,000 52. Mr. Ronald Baden, an American citizen and a resident of California, USA has business income derived in the Philippines amounting to P500, 000 for the year. He is married and has 2 minor children. How much will be allowed as his personal exemption for the computation of his income tax in the Philippines, if his country's tax law is granting the same exemption to Filipino citizens, except for additional exemption where his country's tax law is allowing P10, 000 per dependent child? Select one: a. P100, 000 b. P50, 000 c. P70, 000 d. P -053. 54. 55. 56. 57. 58. 59. 60. 61. 62. 63. 64. 65. 66. 67. 68. 69. 70. 71. 72. 73. 74. 75.

76. 77. 78. 79. 80. 81. 82. 83. 84. 85. 86. 87. 88. 89. 90. 91. 92. 93. 94. 95. 96. 97. 98. 99. 100....