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1.Statement I: A non-profit hospital is an exempt corporation taxable only on income from unrelated activities. Statement II: International carriers are subject to a tax of 2% on taxable income.A. Both statement are true B. Both statement are false C. Only statement I is true D. Only statement II is...

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1. Statement I: A non-profit hospital is an exempt corporation taxable only on income from unrelated activities. Statement II: International carriers are subject to a tax of 2.5% on taxable income. A. B. C. D.

Both Both Only Only

statement statement statement statement

are true are false I is true II is true

2. Statement I: Exempt corporations are not required to file income tax returns because they do not pay tax. Statement II: A non-resident owner or lessor of vessel is subject to tax at 7.5% of the gross rental. A. Both statement are true B. Both statement are false C. Only statement I is true D. Only statement II is true 3. Statement I: A regional operating headquarter of a multinational company is subject to 10% on world income. Statement II: A farmer’s or fruit growers’ association is exempt from income tax. A. Both statement are true B. Both statement are false C. Only statement I is true D. Only statement II is true 4. Statement I: The unrelated income of non-profit corporations is exempt from income tax if the same is diverted to its non-profit purpose Statement II: Special corporations can claim optional standard deduction A. Both statement are true B. Both statement are false C. Only statement I is true D. Only statement II is true 5. Statement I: The dominance test is applied to non-profit schools and private hospitals Statement II: A regional area headquarters is exempt from tax because it does not derive income.

A. B. C. D.

Both Both Only Only

statement statement statement statement

are true are false I is true II is true

6. Statement I: A regional operating headquarter of a multinational company is subject to 25% on world income Statement II: To be exempt, all of the net income or asset of a non-profit corporation or association must be devoted to its purposes, and no part of its net income or asset accrues to benefit any member or a specific person. A. Both statement are true B. Both statement are false C. Only statement I is true D. Only statement II is true 7. Statement I: All cooperatives, regardless of classification, are subject to income tax on their income from unrelated activities. Statement II: The gross receipts from transient passengers are excluded from Gross Philippine Billings if they depart from the Philippines through the same carrier within 48 hours from their arrival. A. Both statement are true B. Both statement are false C. Only statement I is true D. Only statement II is true 8. Statement I: Eminent domain may be exercises service corporations Statement II: MCIT shall be imposed whenever zero or negative taxable income, or when the greater than normal income tax due from such A. Both statement are true B. Both statement are false C. Only statement I is true D. Only statement II is true

even by public such corporation has amount of MCIT is corporation.

9. Statement I: For gross income tax purposes, a manufacturing concern's cost of goods manufactured and sold shall include all costs of production of finished goods, such as raw materials used, direct labor and manufacturing overhead, freight cost, insurance premiums, and other costs incurred to bring the new materials to the factory or warehouse.

Statement II: The term "domestic when applied to a corporation, means created or organized in the Philippines or under the laws of a foreign country as long as it maintains a Philippine branch. A. B. C. D.

Both Both Only Only

statement statement statement statement

are true are false I is true II is true

10. Statement I: Associations and mutual fund companies, for income tax purposes, are excluded in the definition of corporations. Statement II: Minimum corporate income tax is not applicable to special corporations. A. Both statement are true B. Both statement are false C. Only statement I is true D. Only statement II is true 11. a. b. c.

A non-resident foreign corporation is taxable on World taxable income World gross income Philippine taxable income

d. Philippine gross income. 12. As a rule non-profit, non-stock corporations are exempt from income tax. Which of these non-profit entities is subject to income tax? a. Association b.

School

c.

Farmer’s cooperative

d. 13. are a.

Hospital Generally, government-owned and controlled corporations

b.

Subject to regular income tax

c.

Subject to both regular and preferential income tax

Subject to preferential income tax

d. Exempt from income tax

14.When applicable, preferential tax rate applies to income

from a. Related activities b. Unrelated activities c. d.

Both related and unrelated activities Neither related and unrelated activities

15. International carriers are taxable on their gross income or receipt from a. Incoming shipment or flight b.

Outgoing shipment or flight

c. d.

Both incoming and outgoing flight Any sources

16. A domestic proprietary educational institution improved its library facilities by adding a new wing to its old library building. The capital outlay on library improvement, for income tax purposes, may be: a. Deducted at full at the time of completion of the improvement b. Capitalized or expensed outright at the option of the school owners C. Capitalized and depreciated over the estimated life of the improvement d. Capitalized or expensed outright at the option of the Government 17. Pioneer College, a private educational institution has presented the following data for the year 2018: Gross income, related activities P5, 000,000 Gross income, unrelated activities (except rental income) Rental income (gross of 5% WT) Expenses, related activities Expenses, unrelated activities Dividend income from a domestic corporation Quarterly income tax paid for the first 3 quarters How much is the income tax payable? a. P700,000 b. P1,850,000

5,000,000.00 2,000,000 2,000,000.00 3,000,000.00 100,000 500,000

c. P2,100,000 d. P1,500,000 18. Advance Learning Institute, an educational institution provided the following data for current taxable year 2017 Income from tuition fees

P3,500.00 0

School miscellaneous fees 1,500,000 Dividend income: Domestic corporation 2,000,000 Foreign corporation 2,000,000 Rent income(net of 5% 1,900,000 withholding tax) Operating expenses 4,000,000 The income tax payable of the school is: a. P1,750,000 b. P1,650,000 c. P500,000 d. P400,000 19. A private educational institution duly recognized by CHED has the following data for the fiscal year ending March 30, 2020: Tuition and other fees P 5,000,000 Rent income from canteen and bookstore 47 500 concessionaire, net of withholding tax Dividend from domestic corporation 500,000 Interest on bank deposit, net of tax 16,000 Operating expenses 1,500 000 During the year, the school constructed a 2 storey school building costing P2,000,000. It is the school's policy to deduct this cost in full during the taxable year. The income tax due and payable is: a. P152,500 b. 496,000 c. P205,000 d. 500,000 20. A proprietary hospital had the following data for 2019:

Gross receipts from patients and P8,500,000 laboratory services Rental income net of 5% withholding tax 1,425,000 Hospital operating expenses 8,200,000 The income tax payable of the hospital for 2019 is: a. P105,000 b. P180,000 c. P465,000 d. P540,000 21. Masigasig University is a private educational institution had the following data for the year 2016: P4,800,00 Tuition fees 0 Rental Income (net) 4,940,000 9,450,000 Total school expenses The income a. b. c. d.

tax payable should be: P165,000 (P95,000) (P60,000) P200,000

22. A corporation organized and created under the laws of a foreign country and is authorized to do business trade in the Philippines is: a. Domestic corporation b. Resident foreign corporation c. Government owned and controlled corporation d. Non-profit hospital 23. A domestic corporation may employ, as a basis for filing its annual corporate income tax return the: a. Calendar year only b. Fiscal year only

c. Either calendar or fiscal year d. Neither calendar nor fiscal year 24. A corporation files a quarterly return within a. Calendar year only b. Fiscal year only c. Either calendar or fiscal year d. Neither calendar nor fiscal year

25. A corporation files a quarterly return within a. 30 days after the end of each of the first 3 quarters b. 60 days after the end of each of the first 3 quarters c. 30 days, after the end of each of the first 4 quarters d. 60 days after the end of each of the first 4 quarters 26. One of the general principles of income taxation: a. A foreign corporation engaged in business in the Philippines is taxable on all income derived from sources within and without the Philippines. b. A foreign corporation engaged in business in the Philippines is taxable on all income sources within the Philippines only c. A domestic corporation is taxable on income derived from sources within the Philippines only. d. A domestic corporation is taxable on income derived from sources without the Philippines only. 27. One of the following does not fall under the definition of a "corporation" for income tax purpose: a. General partnership b. Joint stock company c. Insurance company d. Sole proprietorship 28. Which of the following is subject to the income tax? a. A non-stock and non-profit educational institution

b. Public educational institution c. Civic league or organization not organized for profit and operated exclusively for the promotion of social welfare d. Mutual savings bank and cooperative bank having a capital stock represented by shares organized and operated for mutual purposes and profit. 29. Which of the following statements is not correct? a. MCIT is not applicable to resident foreign corporations. b. The corporate quarterly return shall be filed within 60 days following the close of each of the first three quarters of the taxable year. c. Resident foreign corporations would be taxed on net income from within the Philippines only. d. Non-resident foreign corporations are taxed on gross income from within the Philippines only. 30. If the gross income from unrelated activity exceeds 50% of the total gross income derived by any private educational institution, the tax rate shall be the regular 30% based on the entire taxable income. This is known as the a. Constructive receipt b. Tax benefit rule c. End trust doctrine d. Predominance test (31-34) For the year 2018 a corporation has the following data:

Quarter

First Second Third Fourth

Normal Income Tax per Quarter

MCIT per Quarter

Taxes Withheld per Quarter

P 100,000

P 80,000

P 20,000

120,000 250,000 200,000

250,000 100,000 100,000

30,000 40,000 35,000

Excess Excess Withholding MCIT Prior Tax Prior Year Year P 30,000

P 10,000

31. The income tax due and income tax payable, respectively, for the first quarter are a. P100,000; P100,000

b. P100,000; P80,000 c. P100,000; P50,000 d. P100,000; P40,000

32. The income tax due and income tax payable, respectively, for the second quarter are a. P330,000; P 120,000 b. P330,000; P 250.000 c. P330.000; P 150.000 d. P330,000; P 230,000 33. The income tax due and income tax payable, respectively, for the third quarter are a. P470,000; P 250,000 b. P470,000; P 100,000 c. P470,000; P 140,000 d. P470,000; P 70,000 34. The income tax due and income tax payable, respectively, for the year are a. P670,000; P 200.000 b. P670,000; P 100,000 c. P670,000; P 135.000 d. P670,000; P 165,000 35. CPA University, a proprietary educational institution organized in 2006, had the following data for 2022 Tuition Fees

P 850,000

Rental Income (net of 5% cwt)

142,500

School related expenses

820,000

The income tax still due for 2022 is a. P 54,000

b. P 10,500 c. P 18,000 d. P (5,700) 36.CPA College,with a total assets of 50 Million, a proprietary educational institution organized in 2006, had the following data for 2020. Tuition Fees Rental Income (net of 5% cwt) School related expenses

480,000 494,000 945,000

The income tax still due for 2020 is a. P 13,750 b. (P 12,250) c. (P11,000) d. (P 15,000) 37. UCC Airlines, a resident foreign international carrier has the following records of income for the period. (The income represents gross billings.) a. Continuous flight from Manila to Tokyo = 1,000 tickets at P2,000 per ticket b. Flight from Manila to Taipei, transfer flight (on CPAR Airlines) from Taipei to Tokyo = 2,000 tickets at P2,000 per ticket c. Continuous flight from Manila to Taipei = 3,000 tickets at P1,000 per ticket The income tax due is a. P 225,000 b. P 125,000 c. P 100,000 d. P 175,000

38 – 46. The A Corporation, with 250million assets including 100million land, provided the following data for the calendar year ending December 31,2021 ($1=P50) Philippin e USA

Gross Income Deductions Income Tax

4,000,000 2,500,000

Paid

$40,000 $15,000 $3,000

38. If it is a domestic corporation, its income tax after tax credit is a. P 812,500 b. P 537,500 c. P 962,500 d. P 675,000 39. If it is a resident foreign corporation, its income tax is a. P375,000 b. P 450,000 c. P 480,000 d. P 525,000 40. If it is a non-resident foreign corporation, its income tax is a. P 730,000 b. P 1,000.000 c. P 1,200,000 d. P 1,400,000 41. If it is a resident international carrier, its income tax is a. P100,000 b. P 10,000 c. P 37,000 d .P 125,000 42.If it is a non-resident cinematographic film owner/lessor, its income tax is a. P 1,000,000 b. P 100,000 c. P 300,000 d. P 128,000 43.It is a non-resident lessor of vessels, its income tax is a. P 100,000 b. P 180,000 c. P 300,000 d. P128,000 44.If it is a non-resident lessor of aircrafts, machineries and equipment, its income tax is a. P100,000 b. P180,000

c. P300,000 d. P 128,000 45. If it is a resident foreign corporation but its expenses within and outside the Philippines is P3m, unallocated (disregard original data on expense) its income tax is a. P640,000 b. P600.000 c. P480,000 d. P500,000

46. If it is a resident foreign corporation and it remitted 60% of its net profit to its head office abroad, its total tax liability is (Original data) a. P 480,000 b. P 571,800 c. P 476,250 d. P 612,750 47. A Corporation, a resident foreign corporation, provided the following data for taxable year 2021:

Gross Income

PH

USA

40M

20M

Dividend from: Domestic corporation

5M

Foreign corporation (100%

4M

of its business is in the Phils.) Business expenses

12M

8M

A's investment in the foreign corporation was deemed necessary for its own business. The corporation remitted to its head office the P5M dividend income and 40% of its net profit to its head office in USA. The corporation's total tax liability including the tax on the profit remitted is a. P10,944,000 b. P12,448,000 c. P12,944,000 d. P9,944,000

48. BSAT Corporation, a domestic retailer, has a gross sales of 1,400,000 with cost of sales 960,000 and allowable deductions of 150,000 for the calendar year 2020, its 4th year of business operations. Its total asset of 180,000,000 which include land amounting to 5,000,000. How much is the tax due/credit a 87,000.00 b 79,750.00 c 72,500.00 d 81,200.00 49. FMGT Corporation incurred interest of 500,000 in 2020 on its bank loan The loan loan was secured in 2019 to finance the construction of its warehouse In 2020 its gross assets amounted to 50,000,0000 including land with a cost of 5,500,000. It recorded gross income of 10,000,000 and operating expense of 6,000,0000 inclusive of the interest expense. It had interest income earned for the same year amounting to 150,000. Compute the allowable interest expense a 480,000 b 475,250 c 475,500 d 475,275 For the calendar year 2020, 3rd year of operation, X Corporation had the following data Gross Sales Cost of Sales

100,000,000.00

Direct Materials Direct Labor Manufacturing Overhead

30,000,000.00 20,000,000.00 10,000,000.00

Total

60,000,000.00

Operating Expenses Salaries and Wages

7,000,000.00

Taxes

300,000.00

Depreciation

3,500,000.00

Professional Fees Advertising Expense Training Expense Office Supplies Total

200,000.00 3,000,000.00 6,000,000.00 500,000.00 20,500,000.00

Assume that the prescribed requirements in this section have been complied with Apprenticeship Agreement, Certification from DepEd, CHED or TESDA whichever is applicable. 50. How much is the Total operating expense a

20,500,000.00

b

22,500,000.00

c

23,500,000.00

d 22,000,000.00 51. How much is the taxable income a

17,500,000.00

b

19,500,000.00

c

16,500,000.00

d

18,500,000.00

52. How much is the tax due? a

5,250,000.00

b

4,125,000.00

c

4,812,500.00

d

4,537,500.00

For the Fiscal Year ended June 30,2021, Y Corporation had the following data: Gross Sales 100,000,000.0

0 Cost of Sales

Direct Materials

30,000,000.0 0

Direct Labor

20,000,000.0 0

Manufacturing Overhead

10,000,000.0 0

Total

60,000,000.00

Gross Income Operating Expenses

40,000,000.00 Salaries and Wages

7,000,000.00

Taxes

300,000.00

Depreciation

3,500,000.00

Professional Fees Advertising Expense

200,000.00 3,000,000.00

Training Expense

6,000,000.00

Interest Expense

400,000.00

Office Supplies 500,000.00 Assume that the prescribed requirements in this section have been complied with Apprenticeship Agreement, Certification from DepEd, CHED or TESDA whichever is applicable. Y Corp. also earned 200,000 interest income net of tax 53. How much is the Total operating expense a b c d

22,833,750.00 22,850,000.00 21,850,000.00 22,825,750.00

54. How much is the taxable income

a b c d

17,150,000.00 17,175,000.00 16,175,000.00 16,675,000.00

55. How much is the tax due? a b c d

4,287,500.00 5,145,000.00 4,167,500.00 4,487,500.00

Calendar year 2020

Z Corporation had the

Following data

Gross Income Operating Expenses

30,000,000.00

Salaries and Wages Taxes Depreciation Professional Fees Advertising Expense Training Expense Interest Expense Office Supplies

7,000,000.00 300,000.00 3,500,000.00 200,000.00 3,000,000.00 3,000,000.00 400,000.00 500,000.00

Total 17,900,000.00 Assume that the prescribed requirements in this section have been complied with Apprenticeship Agreement, Certification from DepEd, CHED or TESDA whichever is applicable. Z Corp. also earned 200,000 interest income net of tax

56. How much is the Total operating expense a b c d

19,833,750.00 19,333,750.00 21,833,750.00 21,333,750.00

57. How much is the taxable income a b c d

10,666,250.00 10,166,250.00 8,166,250.00 8,666,250.00

58. How much is the tax due? a 2,933,218.75 b 2...