Income Taxation by Ballada PDF

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Summary

1. T 6. F 11. T2. T 7. F 12. F3. T 8. T 13. F4. T 9. F 14. T5. F 10. F 15. T1. F 6. T 11. T 1. D 6. C 11. B 16. A 21. A2. F 7. T 12. T 2. D 7. D 12. D 17. D 22. D3. F 8. F 13. T 3. B 8. B 13. C 18. B 23. C4. F 9. T 14. F 4. C 9. C 14. D 19. B 24. A5. T 10. F 15. F 5. B 10. B 15. C 20. B 25. A26. B1....

Description

Chapter 1 True or False 1. 2. 3. 4. 5.

T T T T F

6. 7. 8. 9. 10.

F F T F F

11. 12. 13. 14. 15.

T F F T T

6. 7. 8. 9. 10.

T T F T F

11. 12. 13. 14. 15.

T T T F F

1. 2. 3. 4. 5.

6. 7. 8. 9. 10.

F T F T T

11. 12. 13. 14. 15.

T F F F F

16. 17. 18. 19. 20.

6. 7. 8. 9. 10.

T F F T T

11. 12. 13. 14. 15.

F T T T T

11. 12. 13. 14. 15.

6. 7. 8. 9. 10.

True or False 1. 2. 3. 4. 5.

F F F F T

Multiple Choice D D B C B

6. 7. 8. 9. 10.

C D B C B

11. 12. 13. 14. 15.

B D C D C

T F T T T

21. 22. 23. 24. 25.

T T T F F

26. 27. 28. 29. 30.

F F F T T

16. 17. 18. 19. 20.

T T T F T

21. 22. 23. 24. 25.

T T T F T

D D D B D

16. 17. 18. 19. 20.

C D D A B

21. 22. 23. 24. 25.

B D B B D

26. 27. 28. 29. 30.

D D D D C

Basic 50,000 50,000 50,000 50,000 50,000

Additional 75,000 25,000 25,000 25,000 25,000

11. 12. 13. 14. 15.

Basic 50,000 50,000 50,000 50,000 50,000

Additional 75,000 100,000 -

16. 17. 18. 19. 20.

A D B B B

31. 32. 33. 34.

D A D C

16. 17. 18. 19. 20.

Basic 50,000 50,000 50,000 50,000 50,000

21. 22. 23. 24. 25. 26.

A D C A A B

Chapter 2 True or False 1. 2. 3. 4. 5.

T T T F T

True or False 1. T 2. F 3. T 4. T 5. T

Multiple Choice-Theory 1. D 6. D 2. D 7. A 3. C 8. A 4. B 9. A 5. A 10. A Multiple Choice 1. B 6. A or B 2. C 3. B

7. A 8. D

4. B

9. D

5. B

10. C

Exemptions Basic 1. 50,000 2. 50,000 3. 4. 50,000 5. 50,000

Additional 50,000 -

Additional 25,000 75,000 50,000 100,000

21. 22. 23. 24. 25.

Basic Additional 50,000 50,000 50,000 50,000 50,000 50,000 -



Essay 1. The husband should be the one to take the health insurance for his family. For married taxpayers, the spouse entitled to claim for additional exemption, who is generally the husband, is allowed the health and/or hospitalization premium payment deduction.

Assuming that it is the husband who took the health insurance, he still is not qualified because the family gross income, which is P780,000 (wife’s P180,000 + husband’s P600,000) far exceeded the limit of P250,000. 2. Sela’s annual gross income of P72,000 qualifies her for the premium payment deduction she being the sole bread winner. But she can only deduct P2,400, the maximum allowable amount. 3. The hospitalization insurance taken was not intended for Jamie’s family, hence it cannot be deducted. Assuming that the health insurance income is for Jamie’s family, she may deduct P2,200 from her gross compensation, the actual amount of premium paid.

Passive Income Tax Due Tax Rate 1. 20% 30,000 2. Exempt 3. Exempt 4. 10% 20,000 5. 20% 10,000

Tax Rate 6. Sec. 24(A) at 5% 7. 20% 8. 10% 9. 20% 10. Exempt

Tax Due 400 1M 2,000 15,000

Problems 1. 50,000 2. 50,000 3. 425,000 4. 50,000 5. 50,000 6. 625,000 7. 102,500 8. 165,000 9. 117,667 10. 36,813

11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

Comprehensive Problems

36,813 475,288 100,000 143,000 23,250 0 0 0 1,200,000 180,000

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

37,500 1,592,500 474,600 9,900 2,800,000 800,000 125,000 0 1,875,000 565,000

MC Theory

1. 100,000

6. 385,000

1. C

2. 0

7. 1,045,000

2. B

3. 0

8. 435,000

4. 21,600 5. 3,375,000

31 10,000 32. 2,353,023 33. 63,125 34. 0 35. 588,256

3. C 4. B



Chapter 3 True or False 1. 2. 3. 4. 5.

T T T T F

Multiple Choice-Theory 6. 7. 8. 9. 10.

F T T F T

11. 12. 13. 14. 15.

T F F T F

16. 17. 18. 19. 20.

F T F T T

21. 22. 23. 24. 25.

T T T F F

1. 2. 3. 4. 5.

B D D D B

6. 7. 8. 9. 10.

C C D A D

11. 12. 13. 14. 15.

D D A D B

16. 17. 18. 19. 20.

D C B C F

21. D

Problems 1 2 3 4 5

400,000 120,000 230,000 69,000 1,000,000

6 7 8 9 10

300,000 450,000 135,000 435,000 43,500

11 12 13 14 15

125,000 37,500 1,700,000 42,500 800,000

16 17 18

240,000 600,000 45,000

Dynasty Corporation

Gross Income Deductions Taxable Income Tax Rate Tax Due If NRFC (On Gross)Tax Rate Tax Due

q3 q4 q5 q6

2011 Phils. 1,000,000 770,000 230,000 30% 69,000

2011 China 700,000 530,000 170,000 30% 51,000

2011 Total 1,700,000 1,300,000 400,000 q1 30% 120,000 q2

1,000,000 30% 300,000

Empire Corporation Phils. 700,000 580,000 120,000 30% 36,000

If Domestic CorporationGross Income Deductions Taxable Income Tax Rate Tax Due

2010 Phils. (Unrelated) 625,000 475,000 150,000 10%

If Private SchoolAssume that: Gross Income Deductions Taxable Income Tax Rate (test limitations first) Tax Due

15,000

Test of Limitation (50%)Gross Income, Unrelated Gross Income, All Sources % of Unrelated to All Sources

Thailand 800,000 650,000 150,000 30% 45,000

2010 HK

2010 Thailand

Total 2,400,000 1,950,000 450,000 q7 30% 135,000 q8

600,000 485,000 115,000 10%

900,000 730,000 170,000 10%

Total (All Sources) 2,125,000 1,690,000 435,000 q9 10%

11,500

17,000

43,500

q10

625,000 2,125,000 29.41%

Limitation is

50.00%

If GI from Unrelated exceeds 50%, then normal rate.

30%

If GI from Unrelated doesn't exceed 50%, then special rate. Rate to Use after Test

10%

10% 2011 Phils.

If Resident Foreign CorporationGross Income Deductions Taxable Income Tax Rate Tax Due

HK 900,000 720,000 180,000 30% 54,000

q11 q12

800,000 675,000 125,000 30% 37,500

2011 HK 820,000 635,000 185,000 30% 55,500

2011 Total Thailand 600,000 485,000 115,000 30% 34,500

2,220,000 1,795,000 425,000 30% 127,500



If NRFC (On Gross)Tax Rate Tax Due

q15 q16

800,000 30% 240,000 2009 HK 900,000

If International CarrierGross Income Tax Rate Tax Due

2009 Thailand 800,000

Total 1,700,000 q13 3% 42,500 q14

2011

If non-resident lessor of aircraftTax Rate Tax Due

600,000 q17 7.50% 45,000 q18

Problems Regime Corporation Sales, this quarter Less: Cost of sales, this quarter Gross income, this quarter Less: Deductions Taxable income, this quarter Add: Taxable income, first quarter Sales Less: Cost of sales Gross income, first quarter Less: Deductions Total taxable income to date Multiply by tax rate Tax due Less: Tax payment, first quarter Creditable tax withheld, this quarter Tax payable Add: Penalties Surcharge (25%) Interest (20% for 8 days) Compromise penalty Total amount payable

(1) (2)

(3)

630,000 318,150 311,850 215,932

(5)

95,918 268,118 30% 80,435

(6)

46,625 33,810

(7) (8)

19,103 52,913

(1)

490,000 246,400 243,600 157,500 86,100

(4)

28,775 17,850

8,452 150 10,500

System Corporation Sales, this quarter Less: Cost of sales, this quarter Gross income, this quarter Less: Deductions Taxable income, this quarter Add: Taxable income, second quarter Sales Less: Cost of sales Gross income, second quarter Less: Deductions Total taxable income to date Multiply by tax rate Tax due Less: Tax payment, second quarter Creditable tax withheld, this quarter Tax payable Add: Penalties Surcharge (25%) Interest (20% for 4 days) Compromise penalty Total amount payable

(2)

(3)

315,000 159,075 155,925 107,966

(5)

47,959 134,059 30% 40,218

(6)

23,313 16,905

(7) (8)

11,764 28,669

(4)

14,388 8,925

4,226 38 7,500

980,000 492,800 487,200 315,000 172,200

Empire Corporation Gross Income Less: Business expenses Taxable income Income tax at Less: Income tax withheld previous quarters Income tax due

(1) 30%

1st Q 1,920,000 1,440,000 480,000 144,000 (36,000) 108,000

(2)

2nd Q 3,840,000 2,880,000 960,000 288,000 (48,000) (144,000) 96,000

(3)

3rd Q 5,760,000 4,080,000 1,680,000 504,000 (72,000) (288,000) 144,000

Year 7,440,000 5,040,000 2,400,000 720,000

(4)

(120,000) (504,000) 96,000



Kingdom Corporation Gross Income Less: Business expenses Taxable income Income tax at Less: Income tax refundable withheld previous quarters Income tax due

30%

(5)

1st Q 2,560,000 1,920,000 640,000 192,000

2nd Q 5,120,000 3,840,000 1,280,000 384,000

(32,000) (48,000) 112,000

(6)

(7)

(64,000) (192,000) 128,000

3rd Q 7,680,000 5,440,000 2,240,000 672,000

Year 9,920,000 6,720,000 3,200,000 960,000

(96,000) (384,000) 192,000

(160,000) (672,000) 128,000

(8)

(9) 12,800 (P64,000 x 20%) PBC Corporation Gross Income Less: Business expenses Taxable income Income tax at Less: Income tax refundable withheld previous quarters Income tax due

1st Q 3,200,000 2,400,000 800,000 240,000

30%

(40,000) (60,000) (1)

140,000

(2)

2nd Q 6,400,000 4,800,000 1,600,000 480,000

3rd Q 9,600,000 6,800,000 2,800,000 840,000

Year 12,400,000 8,400,000 4,000,000 1,200,000

(80,000) (240,000) 160,000

(120,000) (480,000) 240,000

(200,000) (840,000) 160,000

(3)

(4)

(5) 15,000 [(P100,000 x 5%) + (P100,000 x 10%)] (6) zero (7) 16,000 (P80,000 x 20%) Family Corporation Sales Less: Cost of sales Gross Income Add: Dividend from resident corp. Rent income Gross income Municipal taxes Business expenses Allowable deductions Normal tax taxable income Normal income tax Less: Income tax for previous quarters Income tax due

1st Q 180,000 45,000 135,000 1,800 7,200 144,000

2nd Q 405,000 108,000 297,000 3,600 14,400 315,000

3rd Q 675,000 166,500 508,500 5,400 21,600 535,500

Year 1,080,000 270,000 810,000 7,200 28,800 846,000

4,500 108,000 112,500

9,000 234,000 243,000

13,500 369,000 382,500

18,000 657,000 675,000

153,000 45,900 21,600 24,300

171,000 51,300 45,900 5,400

31,500 9,450

30% (1)

9,450

72,000 21,600 9,450 12,150

1st Q 220,000 55,000 165,000 2,200

2nd Q 495,000 132,000 363,000 4,400

3rd Q 825,000 203,500 621,500 6,600

8,800 176,000

17,600 385,000

26,400 654,500

Year 1,320,000 330,000 990,000 8,800 13,200 35,200 1,047,200

5,500 132,000 137,500

(7)

11,000 286,000 297,000

16,500 451,000 467,500

22,000 803,000 825,000

(8)

88,000 26,400 11,550 14,850

(2)

(3)

(4)

Line Corporation Sales Less: Cost of sales Gross Income Add: Dividend from resident corp. Refund of city taxes Rent income Gross income

(5)

City taxes Business expenses Allowable deductions Normal tax taxable income Normal income tax Less: Income tax for previous quarters Income tax due

(6) 30%

38,500 11,550 11,550

(9)

187,000 56,100 26,400 29,700

(10)

(11)

222,200 66,660 56,100 10,560



Chapter 4 Multiple Choice-Theory 1. B 2. E 3. D

6. A 7. D 8. E

11. D 12. A 13. A

16. D 17. D 18. A

21. D 22. B 23. D

26. D 27. D 28. D

31. D 32. D 33. D

4. F

9. B

14. C

19. A

24. A

29. C

34. E

5. B

10. C

15. A

20. A

25. A

30. D

35. C

Problems Mega Specialties Corp 1. D 2. D 3. A Gross sales Less: Sales returns & allowances Sales discounts Net sales Less: Cost of goods manufactured & sold Gross income Multiply by Minimum corporate income tax Demi Bridal Consultancy 1. D 2. A Cash basis:

2,463,500 27,500 42,750 (1) (2) (3)

70,250 2,393,250 1,313,600 1,079,650 2% 21,593

Gross receipts Less: Sales returns & allowances Sales discounts Net receipts Less: Cost of services Gross income Multiply by Minimum corporate income tax

250,000 5,000 7,500

(2)

12,500 237,500 95,000 142,500 2% 2,850

(3)

250,000 2% 5,000

(1)

Accrual basis:

2,956,200 33,000 51,300 (4) (5) (6)

84,300 2,871,900 1,576,320 1,295,580 2% 25,912

6. D

Gross receipts Less: Sales returns & allowances Sales discounts Net receipts Less: Cost of services Gross income Multiply by Minimum corporate income tax

187,500 3,750 5,625

9,375 178,125 71,250 106,875 2% 2,138

(4) (5)

Accrual basis:

Gross receipts Multiply by Minimum corporate income tax

(1) (3)

Gross receipts Multiply by Minimum corporate income tax

Destiny, Inc. Sales Cost of sales Gross income Multiply by Minimum corporate income tax

2,000,000 1,000,000 1,000,000 2% 20,000

(higher than normal income tax*) * Sales Cost of sales Gross income Less: Business expenses Normal tax taxable income Multiply by Normal income tax

Charity, Inc. 4. A 5. C 6. D Gross sales Less: Sales returns & allowances Sales discounts Net sales Less: Cost of goods manufactured & sold Gross income Multiply by Minimum corporate income tax Austerity, Inc. 4. A 5. B Cash basis:

3. B

Miscellaneous Corp. Sales Cost of sales Gross income Multiply by Minimum corporate income tax

36. C

(4) (6)

(6)

2,200,000 1,100,000 1,100,000 2% 22,000

Essence Company Sales Cost of sales Gross income Multiply by Minimum corporate income tax (9)

2,200,000 1,100,000 1,100,000 1,045,000 55,000 30% 16,500

* Sales Cost of sales Gross income Less: Business expenses Normal tax taxable incom Multiply by Normal income tax

(higher than normal income tax*)

(2)

* Sales Cost of sales Gross income Less: Business expenses Normal tax taxable income Multiply by Normal income tax

2,000,000 1,000,000 1,000,000 950,000 50,000 30% 15,000

Variety Corp.

187,500 2% 3,750

1,800,000 900,000 900,000 2% 18,000

(higher than normal income tax*)

(5)

(7) (8)

1,800,000 900,000 900,000 855,000 45,000 35% 15,750

Fulfillment, Inc. 2009

Gross profit from sales Multiply by Minimum corporate income tax

600,000 2% 12,000

2010

(3)

2009 Gross profit from sales Business expenses Normal tax taxable income Multiply by Normal income tax

(1)

600,000 580,000 20,000 30% 6,000

Income tax due

(2)

12,000

700,000 2% 14,000

2009 Gross profit from sales Multiply by Minimum corporate income tax

2010 700,000 650,000 50,000 30% 15,000 (4)

15,000

2010

900,000 2% 18,000

1,050,000 2% 21,000

2009

2010

Gross profit from sales Business expenses Normal tax taxable income Multiply by Normal income tax

(5)

900,000 870,000 30,000 30% 9,000

(7)

1,050,000 975,000 75,000 30% 22,500

Income tax due

(6)

18,000

(8)

22,500



Grace Company 2009 Gross profit from sales Multiply by Minimum corporate income tax

2010

300,000 2% 6,000

350,000 2% 7,000

2009 Gross profit from sales Business expenses Normal tax taxable income Multiply by Normal income tax Income tax due

2010

(9)

300,000 290,000 10,000 30% 3,000

(11)

350,000 325,000 25,000 30% 7,500

(10)

6,000

(12)

7,500

Humility, Inc. Net income per books Add: Non-deductible expenses Provision for bad debts Total Less: Non-taxable income Intercompany dividend Taxable income Minimum corporate income tax 517,500 x 2% Normal income tax 201,250 x 30% Normal income tax (higher than MCIT Less: Quarterly income tax paid Income tax still due Add: Penalties Surcharge (P27,600 x 25%) Interest (P27,600 x 20% x 5/360) Compromise penalty Total amount payable

5,750 212,750

(1)

(2)

153,000 4,250 255

4,505 157,505

8,500 7,395 (1)

15,895 141,610

(4)

42,483 24,225 18,258

(6) (7)

10,136 28,394

60,375

(3) (4)

6,900 77 8,000 (5)

Minimum corporate income tax 382,500 x 2% Normal income tax 141,610 x 30%

60,375 32,775 27,600

Normal income tax (higher than MCIT) Less: Quarterly income tax paid Income tax still due Add: Penalties Surcharge (P18,258 x 25%) Interest (P18,258 x 20% x 7/360) Compromise penalty Total amount payable

14,977 42,577

(2)

7,650

(3)

42,483

(5)

4,565 71 5,500

8,100,000 2,700,000 5,400,000 1,350,000 4,050,000

108,000

(1)

1,215,000 1,215,000

(2)

5,000 6,200 11,200

Capital gains tax on shares of stock of a domestic corporation On P100,000 x 5% P 62,000 x 10% Final tax withheld on passive income On Phil. currency bank deposit 67,500 x 20%

11,500 201,250

10,350

Jubilation, Inc. Sales Less: Cost of sales Gross profit from sales Less: Business expenses Normal tax taxable income Minimum corporate income tax 5,400,000 x 2% Normal income tax 4,050,000 x 30% Income tax due

Hope Corp. Net income per books Add: Non-deductible expenses Provision for bad debts Interest on money borrowed to buy government bonds Total Less: Non-taxable income Intercompany dividend Income subject to final tax Inter...