Question 1

1 / 1 pts

The 30% corporate income tax is decreased to 25% by the Congress for the purpose of raising revenue to be used for national road
expansion project near Bonifacio Global City, a private corporation which seems to be illogical since it should be increased instead
of decrease. Is the exercised of the taxing power unconstitutional?

Yes, because taxing power must be exercised exclusively for public purpose without any incidental benefit to any private entity.

Yes, because the increase in tax rate constitutes deprivation of right to property of corporation without due process of law for
being excessive and unreasonable.

No, because the constitution does not expressly state that the power of taxation must be used only for public purpose, thus, it
may be used to benefit a private entity.

Correct!

No, because it is exercised directly for public purpose and the benefit to a private entity is only incidental.

Question 2

2 / 2 pts

Use the following data for the next (two) questions:

The Constitution requires that all revenue bills shall originate “exclusively” from the house of Representatives. Assume that in
2021, Albay 2nd District Representative Joey Sarte Salceda proposed an act to grant tax relief for companies in financial need,
provide transparent tax provisions, and further increase the competitiveness of the Philippines. The proposed bill was approved
by the House of Representative later that year. However, the CREATE version of the Senate became the CREATE law.

Both I and I Which of the following statements will justify the enacted CREATE law?

I. The Constitution simply means that the initiative for filing revenue, tariff or tax bills must come from the House of
Representatives on the theory that, elected as they are from the districts, the Members of the House can be expected to be more
sensitive to the local needs and problems.

II. It is not the law but the revenue bill which is required by the Constitution to “originate exclusively” in the House of
Representatives because a bill originating in the House may undergo such extensive changes in the Senate that the result may be a
rewriting of the whole, and a distinct bill may be produced.
I, II and III Assuming Senator Angara filed in the Senate a substitute CREATE bill “in anticipation” of its receipt of the bill from the
House. The proposal is totally different from the version of the lower house. Which of the following statements will justify the
filing of a substitute bill by Honorable Senator Angara?
I. To insist that a revenue statute not only the bill which initiated the legislative process culminating in the enactment of the law-
must substantially be the same as the House Bill would be to deny the Senate’s power not only to “concur with amendments” but
also to “propose amendment”.

II. It would be to violate the coequality of legislative power of the two houses of Congress and in fact make the House superior to
the Senate. Given the power of the Senate to propose amendments, it can propose its own version even with respect to bills
which are required by the Constitution to originate in the House.

III. Filing in the Senate of a substitute bill in anticipation of its receipt of the bill from the House is not prohibited under the
Constitution, so long as the action by the Senate as a body is withheld pending receipt of the House Bill.

Answer 1:

Correct!

Both I and I

Answer 2:

Correct!

I, II and III

Question 3

1 / 1 pts

If a BOI-registered enterprise has a “registered” and an “unregistered” activity, the Minimum Corporate Income Tax (MCIT) shall
apply to:

registered activity only

both registered and unregistered activities

Correct!

unregistered activity only

neither registered nor unregistered activity

Question 4

0 / 1 pts

Statement 1: Tax exemption is an immunity from civil liability only. It is retrospective in application.

Statement 2: Tax amnesty is an immunity from all criminal civil and administrative liabilities arising from non-payment of taxes. It
is prospective application.

Both statements are correct.

Only statement 1 is correct.

Correct Answer

Both statements are incorrect.

You Answered

Only statement 2 is correct.

Question 5

0 / 1 pts

Milagros donated a piece of farm land to son Mauricio, 19 years old, and single. The donor’s tax on the donated property was not
paid but Mauricio just the same took the possession of the property and operated it himself. After a year after donation, an
assessment on the income derived from the land was issued against Mauricio. The assessment against Mauricio is:

You Answered

Valid, because Mauricio owns the farm land.

Invalid, because Milagros was the one who earned the income.

Invalid, because Milagros owns the farm land.

Correct Answer

Valid, because Mauricio was the one who earned the income.

Question 6

0 / 1 pts

The income of a resident alien is subject to the basic tax.

Correct Answer

Prizes from SM (P10,000), Rustan’s (P10,000), and Robinsons (P10,000) or a total of P30,000.

Interest income from Philippine currency deposit in PNB.

Winnings from PCSO and Philippine lotto.

You Answered

Fringe benefits given to managerial employees.

Question 7

1 / 1 pts

The improperly accumulated earnings tax imposed on corporation is:

Based on the net income per books before tax.

Based on the net income per books after tax.

Correct!

Calculated to encourage corporations to pay dividends.

10% of excess retained earnings over the paid in capital.

Question 8

1 / 1 pts

Which of the following statement is not correct?

Correct!

Holiday pay, overtime pay, night shift differential pay and hazard pay received by individuals shall be exempt from income tax.

Minimum wage earners who are receiving only the statutory minimum wage are not subject to withholding tax and consequently
to income tax.

Compensation income of individuals that do not exceed the statutory minimum wage is exempt from the requirement of
withholding tax on compensation.

Compensation income of individuals that do not exceed ten thousand pesos per month is exempt from the requirement of
withholding tax on compensation.
Question 9

1 / 1 pts

One of the following is not a fiscal incentive to PEZA-registered economic zone enterprises.

exemption from wharfage dues, export tax, impost or fee

tax credit for import substitution

Correct!

exemption from national taxes only

exemption from duties and taxes on importation of merchandise

Question 10

1 / 1 pts

One of the following does not qualify as Senior Citizen for the Philippine Income tax purposes.

resident Filipino citizen aged 60 years old and above.

Filipino citizen aged 60 years old and above with “dual citizenship” status provided they prove their Filipino citizenship and have at
least 6 months residency in the Philippines.

None of the choices.

Correct!
resident alien aged 60 years old and above.

Question 11

0 / 1 pts

Genoe Corporation filed its income tax return and paid the tax due for calendar year 2021 showing a tax liability of P175,000.
However, upon audit, it was discovered that its income tax return was false or fraudulent because it did not report other taxable
income. Per investigation the correct income tax due is P350,000. The corporation was duly informed of this finding through a
preliminary assessment notice. Failing to protest on time against the preliminary assessment notice, a formal letter demand and
assessment notice was issued on May 31, 2023 calling for payment of the deficiency income tax on or before July 15, 2023.

The amount due on July 15, 2023 is:

You Answered

P306,250

P341,250

P218,750

Correct Answer

P288,750

Question 12

1 / 1 pts

Aseana College, a private educational institution in 2020 had the following data in 2022:

Tuition fees P4.80M

Rental income (net of 5% of W/T) 4.94M

Total school expenses 9.45M

The income still due (excess W/T) for 2022 is:

P200,000

(P60,000)

Correct!

(P122,500)

(P95,000)

Question 13

1 / 1 pts

The income is subject to final tax:

Correct!

Cash dividend received by a non-resident alien from a domestic corporation.

Share of a partner from the undistributed net income of general professional partnership.

Marriage fees, baptismal offerings received by a clergyman, evangelist or religious worker for services rendered.

Fringe benefits received by rank and file employees

Question 14

2 / 4 pts

The next 4 questions are based on the following information:

The following data pertain to taxable year 2022:

PHIL USA

Sales 500,000 600,000

Sales discounts, returns & allowances 20,000 50,000

Cost of sales 230,000 250,000

Rent expense 50,000 80,000

Salaries & wages 50,000 60,000

Interest expense 10,000

Entertainment & representation 10,000

Contribution to charitable institution 10,000

Interest on bank deposit 10,000 20,000

Royalties – musical 20,000 20,000

Dividends from domestic corporation 10,000

d The taxable income if the taxpayer is a MSME domestic corporation, and resident citizen:

MSME Domestic Resident Citizen

a. 320,000 320,000

b. 324,850 326,850

c. 280,000 280,000

d. 288,150 288,150

["", "", "", ""] The taxable income if the taxpayer claim optional standard deduction

MSME Domestic Resident Citizen

a. 354,000 642,000
b. 330,000 330,000

c. 378,000 378,000

d. 330,000 618,000

["", "", "", ""] The taxable income if the taxpayer is a resident foreign corporation & resident citizen:

Corporation Resident Citizen

a. 160,000 160,000

b. 130,900 130,900

c. 133,855 130,900

d. 120,000 120,000

["", "", "", ""] The total final tax if the taxpayer is

Domestic Corporation Resident Citizen

a. 8,000 12,000

b. 14,000 14,000

c. 18,000 4,000

d. 6,000 4,000

Answer 1:

Correct Answer

You Answered

Answer 2:

Correct Answer

You Answered

d
Answer 3:

Correct!

Answer 4:

Correct!

Question 15

1 / 1 pts

Which of the following is not true about the waiver of statute of limitations under the tax code.

It must be accepted by the Commissioner of Internal Revenue or his duly authorized representative, and the date of acceptance
must be duly indicated.

It is derogation of the taxpayer’s right to security against prolonged and unscrupulous investigations.

Correct!

It is a waiver of the right to invoke the defense of prescription.

It is a bilateral act by the Bureau of Internal Revenue and the taxpayer.

Question 16

1 / 1 pts

Which of the following is incorrect?

All BMBEs shall be exempt from income tax for income arising from the operations of the enterprise.
The LGUs are encouraged either to reduce the amount of local taxes, fees and charges imposed or to exempt the BMBEs from
local taxes, fees and charges

Correct!

All employees of BMBEs shall not be entitled to the same benefits given to any regular employee such as social security and
healthcare benefits

all BMBEs shall be exempt from the coverage of Minimum Wage Law

Question 17

0 / 1 pts

Marissa, a compensation income earner, filed her income tax return for the taxable year 2018 on March 30, 2019. On May 20,
2022, Marissa received an assessment notice and letter of demand covering the taxable year 2018 but the postmark on the
envelope shows April 10, 2022. Her return is not a false and fraudulent return. Can Marissa raise defense of prescription?

You Answered

Yes, the 3 year prescriptive period started to run on April 15, 2018, hence, it has not yet expired on May 20, 2022.

No, the prescriptive period started to run on March 30, 2018, hence, the 3 year period expired on April 10, 2022.

Correct Answer

No, the 3 year prescriptive period started to run on April 15, 2019, hence, it has not yet expired on April 10, 2022.

Yes, since the 3 year prescriptive period started to run on March 30, 2018, it already expired by May 20, 2022.
Question 18

1 / 1 pts

Which statement is false? Under Oplan Kandado, the closure order shall only be lifted by the BIR when there has been:

Correct!

sufficient evidence against the taxpayer to file charges under the RATE Program.

subsequent filing or amendment of returns with the payment of the tax inclusive of statutory penalties.

payment of deficiency taxes inclusive of penalties corresponding to the sales where no invoices/ receipts have been issued.

subsequent registration with the payment of the corresponding compromise penalties.

Question 19

0 / 1 pts

May the Philippine government require tax withholding on the salaries of Filipino employees working in the American Embassy in
the Philippines?

a. No, because this will violate the rule on international comity.

b. No, because if the Philippine government would impose the requirement of tax withholding on the salaries of Filipino
employees working in the Philippine Embassy in the Philippines, this would in effect require that the American government be
constituted as the government withholding agent of the Philippine government insofar as the taxes on the salaries of the Filipino
employees are concerned.
c. Both a and b
d. None of the above

Correct Answer

You Answered

c
a

Question 20

1 / 1 pts

Mapagbigay Aral School, a non-stock non-profit educational institution, bought from Pedrito, a resident citizen, his residential
house and lot. Pedrito would be using the proceeds of the sale to buy his new residential house and lot. On the other hand, the
school will use the parcel of land to construct a new building for its dormitory for its medical students. Which of the following
statements regarding liability for the payment of capital gains tax is correct?
i. Pedrito is liable to capital gains tax. However, if what was sold was his principal residence, he may apply for tax exemption,
provided that he complies with the requirements laid down in the Tax Code.

ii. Pedrito is not liable to capital gains tax because the sale was made in favor of a non-stock, non profit educational institution and
that the property will be used for educationally-related functions.

iii. Pedrito is liable to capital gains tax because the tax is imposed on the seller; thus, notwithstanding any exemption enjoyed by
the buyer, the tax shall still be imposed.

ii only

i only

i and ii only

Correct!

i and iii only

Question 21
0 / 1 pts

Urduja Hospital is a 100 bed hospital organized for patients. However, out of 100-bed capacity, 40 beds are allotted for paying
patients, while the rest are intended for charity patients. The revenues generated from these paying patients, however, are being
used to improve the facilities of the hospital. Can said hospital claim exemption from income tax as well as real property tax?

a. Urduja Hospital can claim exemption from real property tax. As a general principle, a charitable institution does not lose its
character as such and its exemption from taxes simply because it derives income from paying patients, whether out-patient, or
confined in the hospital, or receives subsidies from the government, so long as the money received is devoted or used altogether
to the charitable object which it is intended to achieve; and no money inures to the private benefit of the persons managing or
operating the institution.
b. Urduja Hospital is subject to 10% on its net income, subject to compliance with the “predominance test”.
c. Both a and b are correct
d. Neither a nor b is correct

Correct Answer

You Answered

Question 22

0 / 1 pts

Peter sold a parcel of land classified as capital asset to John. The parties agreed that the capital gains tax shall be shouldered by
John. Is this form of Shifting? Is the stipulation valid?

SHIFTING STIPULATION

a. YES YES

b. NO NO

c. YES NO
d. NO YES

Correct Answer

You Answered

Question 23

1 / 1 pts

Statement 1: The Constitution cannot take away the inherent powers of the State but may only prescribe its limitations.

Statement 2: No laws are necessary to confer the inherent powers of the State upon the government exercising sovereignty.

Correct!

Both statements are correct

Only statement 2 is correct

Both statements are incorrect

Only statement 1 is correct

Question 24

1 / 1 pts

Which of the following is/are the purpose of donor’s tax?

i. To supplement and prevent circumvention of estate tax.

ii. To prevent avoidance of income tax through a devise of splitting income to numerous donees to escape the effect of
progressive rates of income taxation.
iii. To tax the act of receiving a gift.
iv. To subject properties wherever situated to donor’s tax.

all of the foregoing

Correct!

i and ii only

ii only

i only

Question 25

1 / 1 pts

Statement 1: The right to succession is effected at the time of transfer of the decedent’s property or rights to the heir.

Statement 2: Ana is the surviving spouse of Jose. Her share in their community property is classified as her exclusive property and
shall form part of the decedent’s distributable estate.

Only statement 2 is correct.

Both statements are correct.

Only statement 1 is correct.

Correct!

Both statements are incorrect.

Question 26

1 / 1 pts

What is the tax implication if a corporation condones the debt of a shareholders because of a good thing done by the latter to the
corporation?

Correct!

It is tantamount to a declaration of dividend. Therefore, it is an income which is subject to 10% final withholding tax on the
shareholder. However, it is not subject to donor’s tax on the corporation.

The condonation is subject to donor’s tax on the corporation because it is based on its liberality. Moreover, it is equivalent to a
payment of dividend income on the shareholder, which is therefore, subject to a final withholding tax on income of 10%.

It is just a simple case of extinguishment of an obligation which is neither subject to income tax on the part of the shareholder nor
a donor’s tax on the corporation.

The condonation is based on the liberality of the corporation, therefore, it is subject to donor’s tax.

Question 27

1 / 1 pts

Miakil went to Azcona Hotel and Resort and was given a prize of P25,000 for being its 10th guest. The P50,000 prize is:
 A B C D

Subject to donor’s tax YES YES NO NO

Subject to income tax YES NO NO YES

Correct!

Question 28

1 / 1 pts

On February 5, Bimbo wrote a letter to Letty donating his laptop worth P75,000. The letter was received by Letty on February 10
who immediately accepted the donation. The letter of acceptance was received by Bimbo on February 14. The donor’s tax was not
paid until February 25. The donation was consummated on:

Correct!

February 14

February 25

February 10
February 5

Question 29

1 / 1 pts

Which of the following is not a factor in determining the taxable gift?

Application of exempt transfers.

Identification of transfers included in the gross gifts.

Subtraction of allowed deductions.

Correct!

Multiplying net gift by the applicable rates.

Question 30

1 / 2 pts

Mr. CSO, a minimum wage earner, works for G.O.D. Inc. He is not engaged in business nor has any other source of income other
than his employment. For 2022, Mr. CSO earned a total compensation income of P185,000. Mr. CSO earned, aside from his basic
wage, additional pay of P160,000 which consists of the overtime pay of P80,000, night shift differential pay of P30,000, hazard pay
of P15,000 and holiday pay of P15,000.

["", "", "", ""] How much is his tax liability?

GRADUATED TAX RATE under the TRAIN LAW

TAXABLE YEAR 2018-2022 TAXABLE YEAR 202

INCOME TAX TAX

 Not over P250,000 Exempt Exempt

Over P250,000 but not over P400,000 20% of excess over P250,000 15% of excess over

Over P400,000 but not over P800,000 P30,000 + 25% in excess of P400,000 P22,500 + 20% in e

Over P800,000 but not over P2M P130,000 + 30% in excess of P800,000 P102,500 + 25% in

Over P2,000,000 but not over P8M P490,000 + 32% in excess of P2M P402,500 + 30% in

Over P8,000,000 P2,410,000 + 35% in excess of P8,000,000 P2,202,500 + 35% i

["", "", "",

""] U
sing the same data above, does Mr. CSO has the option to be taxed at 8%?

Answer 1:

Correct!

None

Answer 2:

You Answered

Yes, because the 8% option applies to a minimum wage earner, provided that his income does not exceed P3,000,000 in one year.

Correct Answer

No, because he is not a self-employed and professional

Question 31

0 / 1 pts

On February 5, 2022, Emong Corporation declares 20% stock dividend and issued shares of stocks amounting to P100,000. On
March 20, 2022, the corporation redeemed the stock dividend by virtue of which the stockholders surrendered their certificates in
return for the cash paid to them by Emong Corporation in the amount of P100,000.

You Answered

The distribution and the redemption of the stocks are not taxable because stock dividends are exempt from the income tax.

Correct Answer
The redemption of the stock dividend is essentially equivalent to the distribution of a taxable dividend. Hence, the amount to be
distributed in redemption shall be considered as taxable income.

The dividends are taxable to the stockholders because they are actually property dividends.

The stock dividends declared are taxable because generally, stock dividends are subject to income tax.

Question 32

1 / 1 pts

Ocampo Corporation which commenced business operations in 2019 has a gross income of P650,000 and allowable deductions of
P615,000 in 2019. The journal entry in 2024 to record excess MCIT is-

a. Deferred charges-MCIT 2,500

Income tax payable 2,500

b. Deferred charges-MCIT 13,000

Income tax payable 13,000

c. Provision for income tax 10,500

Income tax 10,500

d. Income tax payable 13,000

Cash 13,000

GRADUATED TAX RATE under the TRAIN LAW

TAXABLE YEAR 2018-2022 TAXABLE YEAR 202

INCOME TAX TAX

Not over P250,000 Exempt Exempt

Over P250,000 but not over P400,000 20% of excess over P250,000 15% of excess over
 Over P400,000 but not over P800,000 P30,000 + 25% in excess of P400,000 P22,500 + 20% in e

Over P800,000 but not over P2M P130,000 + 30% in excess of P800,000 P102,500 + 25% in

Over P2,000,000 but not over P8M P490,000 + 32% in excess of P2M P402,500 + 30% in

Over P8,000,000 P2,410,000 + 35% in excess of P8,000,000 P2,202,500 + 35% i

Correct!

Question 33

1 / 1 pts

One of the following expenses is deductible from gross income

Any amount expended in restoring property or in making good exhaustion thereof for which an allowance is or has been made

Personal, living and family expenses

Correct!
Premiums paid on a life insurance policy covering the life of the employee when the members of the family of the employee is the
direct beneficiary under such policy

Amount paid out for new building or for permanent, made to increase the value of any property or estate

Question 34

1 / 1 pts

The following are examples of corporate expenses deductible from gross income, except one:

Representation expenses designed to promote business.

Correct!

Contributions to drum up business like contribution of soft drinks to barrio fiestas.

Premiums on life insurance covering the life of an employee if the beneficiary is his heirs

Expenses paid to an advertising firm in order to create a favorable image for the corporation.

Question 35

1 / 1 pts

Generally, sales of real property are subject to tax. Which of the following sales of land is not allowed by the law to be subjected
to tax?

Land sold to government corporation

Correct!
Land foreclosed by the bank

None of the above

Land sold by the church

Question 36

1 / 1 pts

When the refund of a tax supposedly due to the taxpayer has already been barred by prescription, and the said taxpayer is
assessed with a tax at present, the two taxes may be set-off with each other. This doctrine is called

Doctrine of reciprocity

Set-off doctrine

Tax sparing doctrine

Correct!

Equitable recoupment

Question 37

1 / 1 pts

Your client owns a row of apartments. He complains to you that he is being required to pay four (4) kinds of taxes on this line of
business alone. From the list given by your client, which of the following taxes has been wrongly imposed on him?
Income tax on income from rent

Correct!

Community tax based on the assessed value of the apartment house

Real estate tax on the land and building

Value-added on the gross receipts from rent

Question 38

0 / 1 pts

Which of the following constitute objectionable double taxation?

A tax imposed both on the occupation of fishing and on fishpond operation

You Answered

A license fee and a tax imposed on the same business or occupation for selling the same articles

Persons engaged in leasing or selling real property are subject to real estate dealer tax and their sales are also subject to 12% VAT

Correct Answer

A tax of 1% is imposed for bank reserve deficiency while a penalty of 1/10 of 1% is also imposed as a consequence of such reserve
deficiency.
Question 39

1 / 1 pts

Which of the following is not true about the waiver of statute of limitations under the tax code

Correct!

It is a waiver of the right to invoke the defense of prescription

It must be accepted by the Commissioner of Internal Revenue or his duly authorized representative, and the date of acceptance
must be duly indicated

It is a bilateral act by the Bureau of Internal Revenue and the taxpayer

It is a derogation of the taxpayer’s right to security against prolonged and unscrupulous investigations

Question 40

0 / 1 pts

1st statement: In case tax-exempt products are sold domestically to a VAT registered person, the VAT otherwise due on such
product shall be considered as input tax creditable against his output tax payable.

2nd statement: Export sales by a VAT registered person are subject to zero-rating and so he can claim and enjoy a credit for the
tax invoiced to him on his purchases. If he is not VAT registered, his export sales are exempt, but he is not entitled to tax credit for
inputs.

You Answered

Both statements are true.

Correct Answer

1st statement is false, 2nd statement is true.

1st statement is true, 2nd statement is false.

Both statements are false.

Question 41

1 / 1 pts

Carrier 1: Domestic sea or carrier for passengers or cargoes.

Carrier 2: International air or sea carrier for cargoes.

What is the respective business tax and tax rates on the common carriers identified above assuming they travel from Philippines
to Canada?

A B C D

Carrier 1 0% VAT 0% VAT 3% OPT 3% OPT

Carrier 2 0% VAT 3% OPT 3% OPT 0% VAT

Correct!

D
Question 42

0 / 1 pts

In which of the following cases may refund of input tax be allowed?

1st case: For input tax on purchases of capital goods.

2nd case: For input tax on purchases of goods and services by an exporter.

In both cases.

Correct Answer

Only in the 2nd case

You Answered

Only in the 1st case

Neither in the 1st nor in 2nd case

Question 43

0 / 1 pts

1st Statement: Courts can review or inquire into the wisdom or advisability of a tax law and Power in Judicial Review in Taxation.

2nd Statement: Our constitution does not contain any provisions granting tax exemption to the government.

You Answered

True, False

False, True
Correct Answer

True, True

False, False

Question 44

0 / 1 pts

1st Statement: A taxpayer’s tax-exempt status justifies the non-keeping of books accounts and other accounting records.

2nd Statement: The salaries of the Chief Justice and associate justice of the Supreme Court are tax-exempt.

You Answered

False, True

True, False

True, True

Correct Answer

False, False

Question 45

1 / 1 pts

In 2021, Valdez gave a cash of P80,000 as a birthday gift to his son, John. Valdez has not given any other gifts or donation in 2021
but made a donation to his daughter in the same amount in 2022. Based on the above information in 2021. Valdez is
Correct!

Exempted from paying donor’s tax

Liable to pay donor’s tax

Exempted from paying donee’s tax

Liable to pay donee’s tax

Question 46

1 / 1 pts

For taxable year 2022, Mr. JMLH signified his intention to be taxed at 8% income tax rate on gross sales and other non-operating
income in his 1st quarter income tax return. He has no other source of income. His total sales for the first three quarters
amounted to P3,000,000 and with 4th quarter sales of P3,500,000.

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Total sales P 500,000 P 500,000 P 2,000,000 P 3,500,000

Less: COS 300,000 300,000 1,200,000 1,200,000

Gross Income 200,000 200,000 800,000 2,300,000

Less: Op. Expense 120,000 120,000 480,000 720,000

Taxable Income 80,000 80,000 320,000 1,580,000

How much is his income tax liability at the end of the taxable year?

GRADUATED TAX RATE under the TRAIN LAW

TAXABLE YEAR 2018-2022 TAXABLE YEAR 202

 INCOME TAX TAX

Not over P250,000 Exempt Exempt

Over P250,000 but not over P400,000 20% of excess over P250,000 15% of excess over

Over P400,000 but not over P800,000 P30,000 + 25% in excess of P400,000 P22,500 + 20% in e

Over P800,000 but not over P2M P130,000 + 30% in excess of P800,000 P102,500 + 25% in

Over P2,000,000 but not over P8M P490,000 + 32% in excess of P2M P402,500 + 30% in

Over P8,000,000 P2,410,000 + 35% in excess of P8,000,000 P2,202,500 + 35% i

P126,400

P364,000

Correct!

P289,200

P260,000

Question 47

0 / 1 pts

ABC corporation located at Quezon City had the following selected data in the preceding year:

Cash sales P 3,390,000

Cost of sales 1,400,000

Operating expenses 900,000

Dividend received from domestic corporation 50,000

Original cost of land 800,000

Original cost of building 12,280,000

Accumulated depreciation – building 3,200,000

Original cost of machinery 3,800,000

Accumulated depreciation – machinery 1,450,000

Fair market value of land 4,500,000

Fair market value of building 8,650,000

Fair market value of machinery 2,370,000

The approved ordinance of real property rates of assessment levels in Quezon City is as follows:

(a) On lands:

Class Assessment Levels

Residential 20%

Agricultural 40%

Commercial 50%

Industrial 50%

Mineral 50%

(b) On buildings and other structures:

Residential Buildings

Fair Market Values

Assessment Levels
Over Not Over

- P 175,000 0%

P 175,000 300,000 10%

300,000 500,000 20%

500,000 750,000 25%

750,000 1,000,000 30%

1,000,000 2,000,000 35%

2,000,000 5,000,000 40%

5,000,000 10,000,000 50%

10,000,000 - 60%
Agricultural Buildings

Fair Market Values

Assessment Levels
Over Not Over

P 300,000 25%

P 300,000 500,000 30%

500,000 750,000 35%

750,000 1,000,000 40%

1,000,000 2,000,000 45%

2,000,000 50%

Commercial/Industrial Buildings

Fair Market Values

Assessment Levels
Over Not Over

P 300,000 30%

P 300,000 500,000 35%

500,000 750,000 40%

750,000 1,000,000 50%

1,000,000 2,000,000 60%

2,000,000 5,000,000 70%

5,000,000 10,000,000 75%

10,000,000 - 80%

(c ) On machineries:

Class Assessment levels

Agricultural 40%

Residential 50%

Commercial 80%

Industrial 80%

(d) On special classes: The assessment levels for lands, buildings, machineries and other improvements:
Actual use Assessment Levels

Cultural 15%

Scientific 15%

Hospital 15%

Local water districts 10%

Government owned and controlled corporations engaged in the supply and distribution of water
and/or generation and transmission of electric power. 10%

The tax rate is 2.5% if properly is classified as residential and 3% if classified as commercial/industrial.

How much would be the quarterly real property tax due?

P254,130

You Answered

P211,775

P52,943.75

Correct Answer

P63,532.50

Question 48

1 / 1 pts

Which of the following losses is deductible?

Total wreckage of a car in an accident but was fully compensated by a comprehensive insurance.
Shipwreck, which occurred before the death of the decedent but was only discovered after his burial.

Destruction of a house by an earthquake, which killed the decedent

Correct!

Theft, which occurred during burial of the decedent.

Question 49

0 / 1 pts

Which of the following properties of Cardo Dalisay who died December 4, 2022 is subject to Vanishing deduction?

Property 1 – Car purchased 3 years ago from Honda Motors, Laguna City.

Property 2 – Land inherited from her mother in 2019 the estate tax thereon have not been paid.

Property 3 – Donation from a friend 2017

Property 4 – Community property inherited December 2, 2016 or five (5) days before marriage

Property 1 Property 2 Property 3 Property 4

a. No No Yes Yes

b. No No Yes No

c. Yes No No Yes

d. Yes Yes No No

Correct Answer

c
You Answered

Question 50

0 / 1 pts

Domingo Namayapa died on November 20, 2022. Some of the properties he left are the following:

Market Value Date Market Value Death of

Assets Mode of Acquisition Date of Acquisition
Acquired Domingo Namayapa

Land Donation 7-3-18 P500,000 P350,000

Car Purchase 10-2-21 800,000 980,000

Other information:

The gross estate of the decedent amounts to P3,000,000.

The land was mortgaged for P50,000, which was deducted in prior estate and Domingo Namayapa paid the same before he died.

The allowable deductions total P125,000, which includes medical expenses of P30,000. It excludes bequest to a charitable
institution in the amount of P50,000.

The vanishing deduction is

P67,083

You Answered

P57,500
P67,783

Correct Answer

P58,100

Question 51

0 / 1 pts

Lola Pesyang, a senior citizen, purchased medicines for hypertension, tuberculosis, and skin rashes. Which of the following
purchases are VAT exempt?

You Answered

Purchase of medicines for both hypertension and tuberculosis only

Purchase of medicines for tuberculosis only.

Correct Answer

Purchase of medicines for hypertension, tuberculosis, and skin rashes

Purchase of medicines for hypertension only.

Question 52

0 / 1 pts

For taxable year 2019, A corporation paid P40,000 stock transaction tax on initial public offering of P500, 000 shares. After the IPO,
there were 800, 000 shares outstanding. IPO selling price per share was

Correct Answer

P8
You Answered

P10

P5

P15

Question 53

1 / 1 pts

A race track bettor won on the following bets:

On forecast, a bet of P1,000 and dividend of P100 per P20-ticket

On ordinary, a bet of P500 and dividend of P1,000 per P50-ticket

On double, a bet of P200 and dividend of P200 per P20-ticket

Total percentage tax due from the winnings was

Correct!

P1,182

P1,530

P682

P1,280
Question 54

2 / 2 pts

Frank is a real estate dealer. During the month of November, 2022, he sold three lots under the following terms (VAT exclusive):

Lot 1 Lot 2 Lot 3

Selling price P250,000 P200,000 P300,000

Cost 150,000 130,000 175,000

Gain/Loss 100,000 70,000 25,000

Terms:

Down payment, Nov. 5 25,000 50,000 40,000

Due- Dec. 5 25,000 20,000 20,000

Jan. to Dec., 2023 200,000 130,000 240,000

P31, 800 The value-added tax in November is-

P5, 400 Based on the information given above, the value-added tax for the month of December is-

Answer 1:

Correct!

P31, 800

Answer 2:

Correct!

P5, 400

Question 55

0 / 2 pts

Robert Construction Corporation, is a VAT registered general construction company. Its data for the month of May, 2022 are
revealed below (VAT exclusive):

Contract 1- Residential house

Contract price P1,200,000

Collections during the month P605,000

Contract 2- Warehouse

Contract price P1,000,000

Percentage of completion 70%

Collections during the month 275,000

Importation of construction equipments from Japan:

Invoice cost, Japan ($1 : Php 50) $7,500

Value per Bureau of Customs P340,000

Customs duties 35,000

Freight and insurance 17,000

Brokerage fee 5,000

Processing fee 3,500

Purchase of materials from VAT registered persons 264,000

Purchases of materials from non-VAT registered persons 126,500

Revenue from rent of equipment to another contractor 22,000

P48,060 The value-added tax on importation is-

P24,720 The value-added tax payable for the month of May, 2022 by Robert Construction Company is

Answer 1:

You Answered

P48,060

Correct Answer

P52,260

Answer 2:

Correct Answer

P24,300

You Answered
P24,720

Question 56

1 / 2 pts

Roy, a newly VAT registered taxpayer is a lessor of poles to telephone and cable companies. During the month of January, 2022
Roy had the following receipts from customers (VAT inclusive):

Security deposit from Customer C P112,000

Rent income for January from various customers 89,600

Prepaid rentals received from Customer C (February to June) 134,400

Loan to Roy from Customer B 84,000

During the month, a portion of the security deposit for the faithful compliance by Customer A of its obligations to the lessor was
applied to rental for January in the amount of P11,200.

At the beginning of the year, Roy had P52,000 worth of inventory of supplies and materials for use in the business. VAT paid on
the beginning inventory is P3,500.

["", "", "", ""] The output tax of Roy in January is-

["", "", "", ""] the VAT payable of Roy is-

Answer 1:

Correct!

P25,200

Answer 2:

Correct Answer

P21,700

You Answered

P42,700

Question 57

1 / 1 pts
Mongolia Company, a VAT registered business has the following data on July, 2022 (VAT exclusive):

Domestic sales P709,500

Sales returns 26,400

Goods shipped on consignment:

Units Unit Price

July 5 25 P22,000

June 5 20 22,000

May 5 12 22,000

Goods withdrawn for use by the company 38,500

Goods taken as payment to creditor 26,950

Freight and insurance of goods 4,675

Purchases, exclusive of VAT:

Raw materials 484,000

Supplies 61,600

Capital goods 60,500

Salaries of employees 235,000

During the month, one consignee remitted cash net of 20% commission representing the payment for five (5) units delivered on
June 5.

Another consignee remitted cash of P220,000, gross of 20% commission, representing payment for 10 units sold from June 5 – July
5. Other than the commission, Magnolia company gave 5% discount/rebate to the consignee for selling ten (10) units in a one
month period.

The output tax in July is-

P120,186

Correct!

P151,866
P161,106

P129,426

Question 58

1 / 1 pts

Bernard Company provided fringe benefit to its managerial employee in the amount of P130,000 and to its rank and file employee
amounting to P50,000.

The deductible expense by Bernard Company is –

P180,000

P50,000

P130,000

Correct!

P250,000

Question 59

1 / 1 pts

Allowance Corporation is engaged in sales of goods and services with net sales/ net revenue of P400,000 and P200,000
respectively. The actual entertainment, amusement and recreation expense for the taxable quarter amounted to P6,000.
Allowance Corporation can claim an entertainment, amusement and recreation expense on the sale of goods and services,
respectively, of-
P4,000 and P4,000

Correct!

P2,000 and P2,000

P4,000 and P2,000

P2,000 and P4,000

Question 60

0 / 1 pts

Eugene had the following data during the year:

Gross income from business P1,000,000

Capital gain 50,000

Capital loss 20,000

Deductions 400,000

Donation to an accredited NG 30,000

Donation to church 20,000

The taxable income of Eugene if he is an individual taxpayer, single, with a compensation income during the year of P40,000-

Correct Answer

P620,000

You Answered

P600,000
P610,000

P650,000

Question 61

0 / 1 pts

Kabisa operates a cockpit. Inside the cockpit, he also operates a restaurant. Data for the particular quarter follow:

Gross receipts (cockpit operation) P500,000

Restaurant operation:

Sale of food 100,000

Sale of liquor 150,000

How much is the amusement tax due?

P122,500

P75,000

You Answered

P90,000

Correct Answer

P135,000
Question 62

1 / 1 pts

The Income Tax Return (ITR) of Jessie, single, for taxable year 2022, reported a taxable income of P520,240. A careful scrutiny
revealed that some items included as income and expenses are the following:

Income:

Compensation income P180,000

Cash dividend 122,000

Stock dividends 73,500

Property dividends 27,000

Gambling winnings 23,100

Donation received 16,000

Gain on sale of capital assets – 15 months 8,000

Gain on sale of his vacant lot 120,000

Income on rice land 60,000

Total 630,400

Expenses:

Real estate tax P3,500

Community tax 945

Surcharge for late filling of 2016 income tax return 12,000

Interest on personal loan 24,000

Gambling losses 32,000

Personal and living expenses 50,000

Loss on sale of capital assets – 8 ½ months 5,000

Loss on crops due to flood 27,250

Total 154,695

The correct amount of Jessie’s taxable income is-

P296,940
P306,840

Correct!

P303,740

P286,840