TASK SHEEET AND EXERCISES IN PARNETRSGIP AND CORPORATION PDF

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Module 19 VALUE-ADDED TAX – 1 A domestic corporation in real estate business sold a building. Statement 1. The sale is not subject to the value-added tax because it is not a sale of goods or services; Statement 2. The sale is subject to the value-added tax because sale of goods and properties are su...

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Module 19 VALUE-ADDED TAX – 1 1. A domestic corporation in real estate business sold a building. Statement 1. The sale is not subject to the value-added tax because it is not a sale of goods or services; Statement 2. The sale is subject to the value-added tax because sale of goods and properties are subject to the value-added tax, and real estate is within the meaning of property. a. True, true b. False, false c. True, false d. False, true 2. Prices/costs of a VAT taxpayer with purchases from VAT suppliers, VAT not included: Gross sales P700,000 Sales returns and allowances 30,000 Sales discounts 40,000 Purchases 210,000 Purchase returns and allowances 20,000 Purchase discounts 10,000 How much is the VAT payable? a. 76,600 b. 54,000 c. 25,200 d. Some other amount 3. A VAT taxpayer had the following sales in a month: Cash sales P200,000 Open account sales 500,000 Consignment sales (at suggested retail prices 0-30 days old on which there were remittances from consignees of P200,000) 600,000 31-60 days old 700,000 61 days old and above 900,000 How much is the taxable sales? a. 2,900,000 b. 1,800,000 c. 2,200,000 d. Some other amount 4. Taxpayer is a VAT taxpayer: Sales, VAT not included VAT included: Purchases of goods sold From VAT taxpayers From non-VAT taxpayers

P800,000

224,000 20,000

Purchases of services from VAT taxpayers 56,000 Payments for utilities (water subject to percentage tax) 19,000 Salaries of employees 80,000 Operating expenses (no VAT component) 100,000 How much is the VAT payable? a. 96,000 b. 72,000 c. 66,000 d. Some other amount 5. The following are data, VAT not included, of Country Appliances Marketing Co. for the last quarter of 2011: Sales up to December 15, total invoice value P300,000 Purchases up to December 15 200,000 Additional information: On December 16, 2011, the Country Appliances Marketing Co., retired from its business and the inventory valued at P190,000 net of input taxes was taken and transferred to New World Appliances Co. There is a deferred input taxes from the third quarter of P3,500. How much is the total value added taxes due and payable by Country Appliances Marketing Co. in its operations in the last quarter and its retirement from business? a. 12,000 b. 8,500 c. 34,800 d. 31,300 6. Which of the following is not a sale and therefore is not subject to the value-added tax? a. Transfer, use or consumption not in the ordinary course of business of goods or properties ordinarily intended for sale or use in the course of business; b. Distribution or transfer to shareholders or investors of share in the profits of a VATregistered person; c. Distribution or transfer to creditors in payment of debt; d. Consignment of sales. 7. Which statement is correct? The value-added tax on goods on properties sold: a. is based on gross sales and not on net sales. b. may be due even if the goods or properties were not actually sold. c. is not imposed on goods exported. d. is a selling expense of the trader. 8. Under the value-added tax law, which of the following sales may not be zero-rated? a. Export sales b. Foreign currency denominated sales c. Sale of goods to the Asian Development Bank d. Sale of goods to an export-oriented enterprise

9. Which of the following statements is wrong? The value-added tax is: a. not an expense. b. a tax credit. c. not a part of the gross selling price. d. on purchases, is a part of the cost of inventory. 10. Which of the following are not account titles with balances in the books of accounts of a VAT taxpayer? a. Output taxes b. Input taxes c. Excess input taxes carry-over d. VAT payable 11. The formula: Output taxes (less) Input taxes (equals) Value-added tax payable means that: a. Value-added taxes are not deductible from gross income. b. Value-added taxes paid on purchases are prepayments. c. Value-added taxes during a taxable period may not appear in the financial statements; d. All the above statements are correct. 12. Statement 1. The output VAT is computed by multiplying the gross selling price by 12%; or multiplying the total amount indicated in the invoice by 12/112. Statement 2. The output VAT is computed by multiplying the total amount indicated in the invoice by 12%. a. True, true b. False, false c. True, false d. False true 13. Statement 1. In the books of accounts of a VAT-registered taxpayer, purchases are recorded net of input taxes. Statement 2. In the books of accounts of a VAT-registered taxpayer, sales are recorded net of output taxes. a. True, true b. False, false c. True, false d. False true 14. Statement 1. A VAT payment is not an expense in the books of accounts of the VAT taxpayer. Statement 2. The excess of input taxes over output taxes in a given month or quarter is a deferred charge. a. True, true b. False, false c. True, false d. False true

15. Naidsky, a Korean-Japanese residing in the Philippines, bought garments from ABC Corp., a domestic corporation, and exported the same to Japan. Total value of export is P100,000. VAT (output tax) due on the transaction is: a. 10,000 b. 5,000 c. None, because 0% applies d. None, because the sale is exempt from VAT 16. Statement 1. Tax pyramiding is a situation where some or all of the stages of distribution of goods or services are taxed, with the accumulation borne by the final consumer. Statement 2. A characteristic of the VAT is that it is a consumption tax, borne ultimately by the users of goods or services. a. True, true b. False, false c. True, false d. False true 17. All amounts given are VAT not included: A, Non-VAT taxpayer, sells to B, VAT taxpayer B, VAT taxpayer, sells to C, VAT taxpayer C, VAT taxpayer, sells to D, VAT taxpayer, an exporter D, VAT taxpayer, exports

P60,000 90,000 150,000 300,000

The value-added tax of B: a. Payable of P10,000 b. Payable of P9,200 c. Payable of P10,800 d. Payable of P7,200 18. Ms. XC is a VAT-registered person, with the following data for a taxable month, VAT not included: Sales, domestic, to consumers – P600,000; Sales, direct exports – P300,000; Purchases, total invoice cost, from VAT-registered persons: Of goods of P550,000 and of services of P330,000. The sales subject to the value-added tax is: a. P600,000 b. P400,000 c. P300,000 d. P900,000 19. The Pareda Shop sells cakes and pastry items to well-known hotels around the Metro Marawi area. The hotels are allowed credit based on the track record of the hotels. The total amounts received or receivable from sales by the Pareda Shop in April of Year X were P220,000, including the value-added tax. 75% of the sales are normally on account. How much is the value-added tax on the sales amount for the month of April, Year X? a. P22,100.52 b. P21,050.35

c. P16,250.32 d. P23,571.43 20. Statement 1. Sales of certain goods and services to senior citizens are exempt from the valueadded tax, hence the value-added tax on the transactions id P0; Statement 2. Sales of certain goods and service to senior citizens are zero-rated VAT sales, hence the VAT on the transactions is P0. a. True, true b. False, false c. True, false d. False true 21. Ms. Babayo is a producer of cooking oil from coconut and corn. For January 2011, with sales, VAT not included, of P700,000, he had the following other data for the month: Corn and coconut purchased from farmers: P100,000 Purchases during the month of coconut and corn from farmers 330,000 Purchases during the month from VAT suppliers, VAT included: Packaging materials 56,000 Supplies 16,800 The value-added tax payable for the month: a. P56,060 b. P54,900 c. P60,650 d. P63,600 22. Sarap Products is a processor of refined sugar. It purchases sugarcane from farmers for processing into intermediate stages until it becomes refined sugar. In a month, it had the following sales and purchases, no tax included: Sales Purchases of sugarcane Purchases of containers and paper labels

P880,000 220,000 100,000

The VAT payable is: a. P66,000 b. P88,000 c. P74,700 d. P84,800 23. Taxpayer is a VAT-registered processor of fruit and canned sardines. Selling prices, invoice prices not including VAT: Processed units Processed sardines Costs (VAT not included, if from vatable suppliers):

P200,000 300,000

Fruits purchased from farmers Sardines (fresh) purchased from fishermen Raw cane sugar, purchased from millers Tomatoes purchased from farmers Olive oil purchased from processors of olive oil Bottles Tin for tin can containers Paper labels Cardboard for boxes Hauling services of forwarders

Fruits 30,000

Fish 20,000

12,000 7,000 8,000 4,000 7,000 5,000 8,000 4,500

15,000 7,000 9,000 10,000

How much is the VAT payable? a. P30,040 b. P20,580 c. P5,960 d. Some other amount 24. On instalment sale of real property by a real estate dealer, the instalment VAT is allowed only if the initial payments on the sale do not exceed twenty-five percent of the gross selling price. Statement 1. Gross selling price to which the initial payments are related is the consideration stated in the deed of sale. Statement 2. Initial payments do not include notes or other evidences of indebtedness issued by the purchaser to the seller at the time of sale. a. True, true b. False, false c. True, false d. False true 25. Which is the best answer? In the case of a sale, barter, or exchange of real property on instalment by a real estate dealer, subject to VAT: a. The gross selling price shall mean the consideration stated in the sales document. b. The gross selling price shall mean the consideration in the sales document of the fair market value, whichever is higher. c. The fair market value shall mean the fair market value as determined by the Commissioner of Internal Revenue/zonal value, or the fair market value as shown in the assessment rolls of the Provincial or City Assessors, whichever is higher. d. The gross selling price is the consideration stated in the sales document, or the zonal value, or the fair market value in the assessment rolls, whichever is the highest. 26. Statement 1.On a sale of real property on instalments by a real estate deal, the seller shall be subject to VAT on the instalment payment received, including interests and penalties for late payment. Statement 2.On a sale of real property on instalments by a real estate dealer, where the VAT is computed not on the consideration in the deed of sale but on the higher fair market value,

a. b. c. d.

the VAT must be billed separately with a specific mention that it is based on the market value of the property. True, true False, false True, false False true

27. Statement 1. On a sale of real property, if the VAT is not stated separately in the deed of sale, the consideration stated therein shall be deemed to be inclusive of the VAT, hence the selling price net of VAT shall be determined to arrive at the proper tax base for the VAT. Statement 2. On a sale of real property, the zonal or fair market value shall be considered as net of VAT, hence such value shall be used to arrive at the proper tax base of the VAT. a. True, true b. False, false c. True, false d. False true 28. Sale by a real estate dealer: Date of sale Consideration in the deed of sale Fair market value in the assessment rolls Zonal value Payments on the consideration: June 2, 2009 June 2, 2010 June 2, 2011

June 2, 2009 P5,000,000 4,800,000 5,200,000 P1,000,000 2,000,000 2,000,000

Installment output/input tax on payment of June 2, 2011 a. P0 b. P124,800 c. P249,600 d. P624,000 29. On a sale of real property on instalment subject to VAT, if the property sold is subject to a mortgage which is assumed by the buyer: Statement 1.If the mortgage assumed does not exceed the cost of the seller, the assumption of the mortgage is not part of initial payments. Statement 2.If the mortgage assumed exceeds the cost to the seller, the excess shall be part of the initial payments. a. True, true b. False, false c. True, false d. False true 30. Sale by a real estate dealer: Date of sale

January 2, 2010

Consideration in the deed of sale Fair market in the assessment rolls Zonal value Cost to the seller Payments on the consideration Assumption of mortgage by buyer January 2, 2010 June 2, 2010 January 2, 2011

P5,000,000 4,800,000 4,000,000 3,000,000 P2,000,000 600,000 600,000 1,800,000

Installment output/input VAT on the payment on January 2, 2011: a. P240,000 b. P120,000 c. P216,000 d. P0 31. Sale by a real estate dealer: Date of sale Consideration in the deed of sale Fair market in the assessment rolls Zonal value Cost to the seller Payments on the consideration Assumption of mortgage by buyer January 2, 2010 June 2, 2010 January 2, 2011

January 2, 2011 P6,000,000 5,100,000 4,900,000 3,000,000 P2,000,000 500,000 700,000 2,800,000

Installment output/input VAT on the payment on June 2, 2011: a. P720,000 b. P72,000 c. P0 d. P300,000 32. Statement 1. In the case of a sale on a deferred payment basis not qualifying under the instalment plan, the transaction shall be treated as a cash sale and the VAT is payable for the month of sale. Statement 2. In the case of a sale on deferred payment basis not qualifying under the instalment plan, payments subsequent to initial payments shall no longer be subject to VAT. a. True, true b. False, false c. True, false d. False, true 33. Sale by a real estate dealer Date of sale

January 2, 2011

Consideration in the deed of sale Fair market in the assessment rolls Zonal value Cost to the seller Payments on the consideration: January 2, 2011 (date of sale) January 2, 2012-11-24 Output/input VAT on the payment of January 2, 2011: a. P298,000 b. P360,000 c. P300,000 d. P329,000

Module 20 VALUE-ADDED TAX – 2

P6,000,000 5,100,000 4,900,000 1,000,000 2,000,000 2,000,000

1. Which statement is correct? Leasing of property shall be subject to VAT on sale of services: a. if the property is in the Philippines and the lease agreement was executed in the Philippines. b. if the property is in the Philippines and the lease agreement was executed outside the Philippines. c. if the property is in the Philippines and the lease agreement was executed within or outside the Philippines. d. All of the above. 2. In the VAT sale on services, the output tax is computed: a. on billings of the month. b. on collections of the month on all billings made. c. on the contract price of contracts completed during the taxable period. d. only and strictly on labor performed under the contract of services. 3. Mr. A is a VAT-registered building contractor: Gross receipts in a month, any tax not included: From Mr. X, a private property owner, on the final payment on the contract price, net of a 5% agreed retention by Mr. X P2,850,000 From Mr. Y, a payment of a 5% retention on the contract price previously made by Mr. Y From Mr. Z, for materials used in the contracts, on a contract for labor and materials Output VAT? a. P414,000 b. P342,000 c. P72,000 d. Some other amount

100,000 500,000

4. Taxpayer is a VAT-registered person. Data for a month (no VAT component): Cash received: For building completed with a contract price of P5,000,000 P3,800,000 Advances received for building to be constructed 300,000 Cash received on materials returned to VAT suppliers 100,000 Cash received from owners, for materials used in construction (not included in the figures above) 1,000,000 Cash received from owners for building permit fees 200,000 Cash received from VAT subcontractors for overpayments 300,000 Cash paid: To VAT-registered subcontractors 900,000 To VAT-registered suppliers of materials 1,100,000 To non-VAT suppliers of materials 500,000 To the city government, for building permit fees 200,000 Advances to VAT-registered subcontractors 150,000 Operating expenses 80,000

VAT payable is: a. P402,000 b. P247,900 c. P305,000 d. P325,000 5. Taxpayer is a VAT taxpayer with three building contracts: Contract price, VAT not included: With private property owner, Building No. 1 With private property owner, Building No. 2 With the National Government Billings on the contract price, VAT included, when proper On contracts with private property owner, Bldg. No. 1 On contracts with the National Government Collections on the billings: On contracts with private property owner, Building No. 1 On contracts with the National Government Advances received, Building No. 2 Reimbursement from private property owner, for materials purchased for them. But billed to the VAT taxpayer, on an invoice price (VAT not included), Bldg. No. 1 Payment to VAT taxpayers, VAT not included: For materials for use on buildings of private property owner, Bldg. No. 1 For materials for use on buildings of the National Government For services, for buildings of private property owners For service, for buildings of the National Government VAT payable on contracts with private property owners? a. P288,000 b. P300,000 c. P240,000 d. Some other amount

P 6,000,000 5,000,000 10,000,000 6,000,000 5,000,000 4,000,000 5,000,000 500,000 100,000

100,000 50,000 2,000,000 20,000

Final VAT withheld on contracts with the National Government? a. P250,000 b. P0 c. P500,000 d. Some other amount 6. Statement 1. Withholding VAT is required at five percent (5%) of the gross payment for the purchase of goods by the Government or any of its political subdivision, or by a government-owned or controlled corporation. Statement 2. Withholding VAT is required at five percent (5%) on every release or instalment payment on purchase of services by the Government or any of its political subdivision, or a by a government owned or controlled corporation. a. True, true

b. False, false c. True, false d. False, true

MODULE 21 VALUE-ADDED TAX - 3

4. A Co., in its first month of operations, and as a VAT taxpayer, purchased various fixed assets. Purchases of fixed assets in the first month are as follows: Light equipment, with a useful life of 3 years P 300,000 Heavy equipment, with a useful life of 10 years 4,000,000 How much is the input tax available? (a) P516,000 (b) P9,000 (c) P480,000 (d) Some other amount. 5. B Co., a VAT taxpayer, made sales of P6,000,000 in a month. Goods sold were purchased from VAT taxpayers for P2,000,000. In the same month, it made a purchase of delivery equipment for P1,500,000 which had a useful life of three years. Amount given does not include value added tax. How much is the value-added tax payable? (a) P720,000 (b) P475,000 (c) P480,000 (d) Some other amount. 6. The taxpayer is a VAT taxpayer Data in the month, VAT not included: Sales of goods P 1,500,000 Sale of fixed assets: No. 1 Purchased from VAT taxpayer 200,000 No. 2 Purchased from a non-VAT taxpayer 100,000 Purchases of goods, from VAT supplier 400,000 Purchases of fixed assets, from non-VAT supplier: No. 3, with useful life of 6 years 900,000 No. 4, with useful life of 8 years 2,000,000 No. 5, with useful life of 3 years 1,300,000 Value-added tax payable is? (a) P122,200 (b) P146,200 (c) P204,000 (d) Some other amount. 7. A Co., a VAT taxpayer, had its delivery equipment assembled by a VAT taxpayer. It took six months for the contractor to finish the work. A Co. purchased materials in July from VAT suppliers at a cost of P500,000, VAT not included. Payment to the Contractor in July, 2011 on the CIP (construction in progress), VAT not included was: For services purchased: On contractor’s billing on June 100,000 On contractor’s billing on July 70,000 The input taxes available in July from the CIP? (a) P0 (b) P 80,400 (c) P60,000 (d) P 20,000 REFUND OR CREDIT FOR INPUT TAXES ON GOODS EXPORTED 1. Input tax attributable to Zero-rated sales (e.g., exports) may be:

(a) Refunded; or (b) Credited: (1) Against the output taxes of the VAT taxpayer arising from domestic sales; or (2) Against other internal revenue taxes of the Vat taxpayer. 2. In a month, VAT not Include: Domestic sales P 660,000 Export sales 1,500,000 Purchases from VAT-registered persons: Of goods exported 550,000 Of goods sold in the Philippines 220,000 Operating expenses 110,000 Th...