Quiz No. 1 6. Which is the best answer?

A tax reform at any given time underscores the fact that:

a. Taxation is an inherent power of the state.
Instruction: Write your answer in the space provided in every item. b. Taxation is essentially a legislative power.
c. The State can and should adopt progressive taxation.
1. Which statement refers to police power as distinguished from taxation? d. Taxation is a power that is very broad
a. It can only be imposed on specific property or properties.
b. The amount imposed depends on whether the activity is useful or not. 7. The government's ability to serve the people depends on taxation. Wince taxes are
c. It involves the taking of property by the government. collected, for their benefit, taxes may be imposed even in the absence of constitutional grants
d. The amount imposed has no limit. and collection of taxes cannot be stopped.
a. Government is a necessity theory
2. (Phil. CPA) Which of the following may not raise money for the government? b. Benefits received theory
a. Power of taxation c. Ability to pay
b. Police power d. Lifeblood theory
c. Power of eminent domain
d. Privatization of governments capital assets 8. That taxation is based on the principle of reciprocal duties of protection and support
between the State and its inhabitants.
3. Which one of the following is not a characteristic of the State's power to tax? a. Government is a necessity theory
a. It is inherent in sovereignty. b. Benefits received theory
b. It is legislative in character. c. Ability to pay
c. It based on the ability to pay d. Lifeblood theory
d. It is subject to constitutional and inherent limitations
9. First statement: In the exercise of the power of taxation, the State can tax anything, at
4. Statement 1: The power of taxation is inherent in sovereignty being essential to the any time, and at any amount.
existence of every government. Hence, even if not mentioned in the constitution, the State Second statement: Taxes may be imposed not only to raise revenue, but also to
can still exercise the power. provide incentives and disincentives to certain activities within the State.
Statement 2: Taxation is essentially a legislative function. Even in the absence of any a. Both statements are correct
constitutional provision, taxation power falls on Congress as part of the general b. Both statements are incorrect
power of lawmaking. c. The first statement is correct, the second is incorrect
a. Both statement are false d. The first statement is incorrect, the second is correct.
b. Only statement l is false
c. Both statements are true 10. (Adapted) First statement: Symbiotic relation is the reason why the government
d. Only statement 1 is true could impose taxes on the income of the resident citizens derived from sources outside the
Philippines.
5. (Phil. CPA) Which of the following statement is not correct? Second statement: Jurisdiction is the reason why citizens must provide support to the
a. Taxes may be imposed to raise revenue or to provide incentives or disincentives State so the latter could continue to give protection
for certain activities within the State a. Both statements are correct.
b. The State can have the power of taxation even if the Constitution does not b. Both statements are incorrect
expressly give it the power of tax. c. Only the first statement is correct.
c. For the exercise of the power of taxation, the state can tax anything at any time. d. Only the second statement is correct.
d. The provisions of taxation in the Philippine Constitution are grants of power and
not limitation on the taxing power.
11. (Adapted) The City of Masbate passed an ordinance imposing a license fee on all 15. An annual tax of Pl,000 was imposed upon all residents of the Philippines, who are
motor vehicles entering the city between the hours of 9: 00 a.m. and 5:00 p.m. Owners of above 21 years of age, with a gross income of P250,000, whether or not they send their
motor vehicles assailed the validity of the law. Is the law valid? children to public schools, for the purpose of raising funds in order to improve public school
a. Yes, because it was issued as a source of revenue. buildings. The tax is:
b. Yes, because it is a legitimate exercise of police power. a. Violative of the equal protection clause of the constitution.
c. No, because it discriminates against those who are not able to pay the license fee, b. Confiscatory
particularly, the low-salaried employees, and is, therefore, class legislation. c. For public purpose
d. No, because it is not imposed by any other municipality. d. Contradicts the inherent limitations.

12. (Phil. CPA) The President of the Philippines and the Prime minister of Japan entered 16. That there should be no improper delegation of the legislative authority to tax is
into an executive agreement in respect of a loan facility to the Philippines from Japan a. A principle of a sound tax system.
whereby it was stipulated that interest on loans granted by private Japanese financial b. A constitutional limitation on the power of taxation.
institutions in the Philippines shall not be subject to Philippines income tax laws What basic c. An inherent limitation of on power of taxation.
characteristic of taxation has been violated by this agreement? d. Both a constitutional and inherent limitation on the power of taxation.
a. Inherent limitation
b. Theoretical justice 17. Being legislative in nature, the power to tax may not be delegated, except,
c. Legislative in character a. To local government (to be exercised by the local legislative bodies thereof) or
d. Administrative feasibility political subdivisions.
b. When allowed by the constitution.
13. A tax must be imposed for the public purpose. Which of the following is not a public c. When delegation relates merely to administrative implementation that may call
purpose? for some degree of discretionary powers under a set of sufficient standards
a. National defense expressed by law or implied from the policy and purpose of the act.
b. Public education d. All of the choices.
c. Improvement of sugar industry
d. None of the choices 18. The place or authority that has the right to impose and collect taxes.
a. Situs of taxation
14. Is it possible for the tax to be used partly for public and partly private without b. Sources of taxable income
violating the limitation that a tax must be for public purpose? c. Scope of taxation
a. Yes. The purpose to be accomplished by taxation need not be exclusively public. d. None of the choices
Although private individuals are directly benefited (e g giving aid to flood
victims), the tax will still be valid provided such benefit is only incidental. 19. Which of the following is a remedy against multiplicity of situs?
b. No. the purpose to be accomplished by taxation need to be exclusively public. To a. Provision of exemptions
benefit private individuals will be tantamount to deprivation of property of those b. Allowance of deduction or tax credit for foreign taxes
wo paid the tax without due process. c. Treaties with other states
c. Yes. The purpose is not important as long as the use of the tax can be property d. All of the choices
accounted for.
d. No. the purpose shall either be public or private. It cannot be both.
20. Government agencies performing governmental functions are exempt from tax unless 23. The power to decide disputed assessments, refunds of internal revenue taxes, fees or
expressly taxed while those performing proprietary functions are subject to tax unless other charges or other administered by the BIR is vested in the Commissioner of Internal
expressly exempted. Revenue, subject to the exclusive appellate jurisdiction of the:
a. The tax imposed should be for public purpose. a. Secretary of Finance
b. There should be no improper delegation of the taxing power. b. Court of tax Appeals
c. The power to tax is limited to the territorial jurisdiction of the taxing government. c. Court of Appeals
d. Exemption of government entities from taxation. d. Municipal courts

21. First statement: A violation of inherent limitations can amount to taking of property 24. The reduction in the selling price of income-producing property by an amount equal
without due process of law. to the capitalized value of future taxes that may be paid by the purchaser.
Second statement: Any tax law contravening any of the inherent limitations of' a. Shifting
taxation, in effect, will likewise be constitutional. b. Capitalization
a. Both statements are correct c. Transformation
b. Both statements are incorrect d. Tax exemption
c. Only the first statement is correct
d. Only the second statement is correct 25. Which of the following is not a scheme of shifting the incidence of taxation?
a. The manufacturer transfers the tax to the consumer by adding the tax to the
22. Ms. Rita Dayag is the owner of various real estate properties in Cagayan. These selling price of the goods sold
properties are for lease and yield rental income to Miss Dayag. Every year, she pays value- b. The purchaser asks fora discount or refuses to buy the regular prices unless it is
added tax to the BIR. The Cagayan government enacts an ordinance imposing on her a lessor reduced by the amount equal to the tax he will pay
tax in accordance with the schedule of amounts related to her gross rental income from the c. Changing the terms of the sale like FOB shipping point in the Philippines to FOB
same real properties. destination abroad, so that the title passes abroad instead in the Philippines
First question: Does the local ordinance, constitute, in effect, direct double taxation? d. The manufacturer transfers the sales tax to the distributor, then in turn the
wholesaler, to the retailer and finally to the consumer
Answer: Yes, there is direct double taxation because there are two kinds of taxes
levied on the same person for the same occupation or business.
The Province of Cagayan enacts an ordinance which imposes an occupation tax upon
owners of prawn farms. The validity of the ordinance is being challenged on the
ground that it constitutes double taxation because the prawn farm is already subject to
land tax
Second question: is the ordinance valid?
Answer: Yes, because there are two different taxes involved, a tax on occupation and
a tax on the land. Hence, there is no double taxation.
a. Answer to first question wrong. answer to 2nd question correct.
b. Answer to both questions are correct.
c. Answer to both questions are wrong.
d. Answer to question is right, answer to 2nd question is wrong.
ANSWER KEY
Quiz No. 1
Quiz No. 2 6. One of the following is not a national tax:
a. Income tax
1. Which of the following statements is not correct? b. Value-added tax
a. An inherent limitation of taxation may be disregarded by the application of a c. Documentary stamp tax
constitutional limitation. d. Community tax
b. The property of an educational institutions operated by a religious order is
exempted from property tax, but its income is subject to income tax. 7. Tax on business is:
c. The prohibition of delegation by the state of the power of taxation will still allow a. A direct tax
the Bureau on Internal Revenue to modify the rules regarding time for filling b. An indirect tax
returns and payment of taxes. c. A property tax
d. The power of taxation is shared by the legislative and executive departments of d. A poll tax
government.
8. Which of the following is not a direct tax?
2. One of the characteristics of our internal revenue laws is that they are: a. Immigration tax
a. Political in nature b. Transfer tax
b. Penal in nature. c. Income tax
c. Generally prospective in operation although the tax statute may nevertheless d. Contractor's tax (now value-added tax)
operate retrospectively, provided it is clearly the legislative intent.
d. Criminal in nature. 9. The basic community tax of P5.00 of an individual is:
a. A property tax
3. A franchise cannot be amended by: b. A direct tax
a. An amendment of a special law, which granted the franchise. c. A national tax
b. An amendment of a law of general application. d. An ad valorem tax
c. An amendment of tax laws.
d. None of the choices. 10. One of the following is not a general or revenue tax:
a. Income tax
4. Taxpayer gives the following reasons for refusing to pay a tax. Which of his reasons b. Donor's tax
is not acceptable for legally refusing to pay tax? c. Customs duty
a. That he has been deprived of due process of law. d. None of the choices
b. That there is lack of territorial jurisdiction.
c. That the prescriptive period for the tax has elapsed. 11. Which of the following is not, an example of excise tax?
d. That he will derive no benefit from the tax. a. Transfer tax
b. Sales tax (non value-added tax)
5. One of the following is, not a characteristic or an element of tax: c. Real property tax
a. It is levied by the legislature d. Income tax
b. It is payable in money or in kind
c. It is proportionate in character 12. As to rate, value added is an example of:
d. It is an enforced contribution. a. Graduated tax
b. Regressive tax
c. Progressive tax
d. Proportional tax
13. Toll as distinguished from tax. d. Liberally in favor of the government
a. Demand of sovereignty
b. Imposed by government only 19. The least source of our tax laws.
c. Amount is based on the cost of construction of public improvement used a. Statutes
d. Paid for the support of the government b. Court decisions
c. Constitution
14. Which of the following terms describes the statement, "that the state has complete d. BIR rulings
discretion on the amount to be imposed, after distinguishing between a useful and non-useful
activity?" 20. In ascertaining the correctness of any return, or in making a return when none has
a. Tax been made, or in determining the liability of any person for any internal revenue tax, or in
b. License fee collecting any such liability, or in evaluating tax compliance, the commissioner is authorized
c. Toll to do the following, except:
d. Customs duty a. To examine any book, paper, record, or other data which may be relevant or
material to such inquiry.
15. Which of the following distinguishes tax from license fee? b. To summon the person liable for tax or required to file a return, or any officer or
a. Non-payment does not necessarily render the business illegal employee of such person, or any person having possession, custody, or care of
b. A regulatory measure the books of accounts and other accounting records containing entries relating to
c. Imposed in the exercise of police power the business of the person liable to tax, or any other person, to appear before the
d. Limited to cover cost of regulation Commissioner or his duly authorized representative at a time and place specified
in the summons and to produce such books, papers, records, or other data, and to
16. There can be a classification of the subject matter being required to shoulder the give testimony.
burden. c. To inquire into bank deposits of taxpayers under investigation for violations of
a. Which is the exception? the tax Code.
b. Tax d. None of the choices.
c. License fee
d. Toll 21. Which of the following is within the power of the Commissioner to obtain
e. Eminent domain information, to summon, examine and take testimony of persons?
a. To obtain on a regular basis from any person other than the person whose internal
17. Which of the following refers to the term tariff? revenue tax liability is subject to audit or investigation
a. A book of rates drawn usually in alphabetical order containing the names of b. To take such testimony of the persons concerned, under oath. As may be relevant
several kinds of merchandise with the corresponding duties to be paid for the or material to such inquiry
same c. To cause revenue officers to canvass from time to time of any revenue district or
b. The duties payable on goods imported or exported region and require after and concerning all persons therein who may be liable to
c. The system or principle of imposing duties on the importation and exportation of pay any internal revenue tax, and all persons owning or having the care,
goods management or possession of any object with respect to which a tax is imposed
d. All of the choices d. All of the choices

18. In case of ambiguity, tax laws shall be interpreted:

a. Strictly against the government
b. Liberally against the government
c. Liberally in favor of the taxpayer
 circumstances or after considering other relevant information may prescribe a minimum
amount of such gross receipts, sales and taxable base, and such amount so prescribed shall be
22. Which of the following statement is incorrect? prima facie correct for purposes of determining the internal revenue tax liabilities of such
a. After a return has been filed as required under the provisions of the Tax Code, person when:
the Commissioner or his duly authorized representative may authorize the I. It is found that a person has failed to issue receipts and invoices in violation of
examination of any taxpayer and the assessment of the correct amount of tax. the requirements of Sections 113 and 237 of this Code.
b. Failure to file a return shall prevent the Commissioner from authorizing the II. There is reason to believe that the books of accounts or other records do not
examination of any taxpayer. correctly reflect the declarations made or to be made in a return required to be
c. The tax or any deficiency tax so assessed shall be paid upon notice and demand filed under the provisions of the tax Code.
from the Commissioner or from is duly authorized representative. a. Either l or Il
d. Any return, statement or declaration filed in any office authorized to receive the b. Neither I nor Il
same shall not be withdrawn. c. I only
d. II only

23. First statement: Cooperative Development Authority shall submit to the Bureau of
Internal Revenue a tax incentive report, which shall include information on the income tax,
value- added tax, and other tax incentives availed of by cooperatives registered and enjoying
incentives under republic Act No. 6938, as amended.
Second statement: the information submitted by the Cooperative Development
Authority to the Bureau of Internal revenue shall be submitted to the Department of
Finance and shall be included in the database created under republic Act No. 10708,
otherwise known as The Tax Incentives management and Transparency Act
(TIMTA)".
a. Both statements are correct
b. Both statements are incorrect
c. Only the first installment is correct
d. Only the second installment is correct

24. If there is reason to believe that such person is not declaring his correct income, sales
or receipts for internal revenue tax purposes, the Commissioner may:
I. order inventory-taking of goods of any taxpayer as a basis for determining his
internal revenue tax liabilities
II. may place the business operations of any person, natural or juridical, under
observation or surveillance.
a. Neither I nor II
b. Either I or Il
c. I only
d. Il only

25. The Commissioner, after taking into account the sales, receipts, income or other
taxable base of other persons engaged in similar businesses under similar situations or
ANSWER KEY
Quiz No. 2
Quiz No. 3 Installment sales P500,000 P800,000
Cost of installment sales 250,000 440,000
1. Beth negotiated a P1,000,000 noninterest bearing promissory note to Candy. Candy
Collections 300,000 600,000
paid Beth P950,000. On due date, Beth paid Candy P1,000,000.
How much is the return on capital? Marooner's 2020 collection is inclusive of P100,000 accounts from 2019.
_________________________________________ Using the installment method, compute Marooner's gross income subject to tax in
2020.________________________________________________________________
2. Andrew received total sum of P42,000 from his employer consisting of the following:
 P5,000 reimbursements for employer's expenses paid by Andrew 8. In 2019, Dark Inc., a dealer of soap, sold its parking lot for P2,400,000-pagáble on
installment. The lot was previously acquired for P1,500,000. The buyer has an outstanding
 P15,000 payment of Andrew's computer set purchased by the employer
unpaid balance of P1,800,000 as of December 31, 2019, Dark's year- end.
 P22,000 monthly salary
Compute Dark Inc.'s gross income in 2019 using installment method._____________
Andrew's computer set cost him P12,000. Compute the total return on capital which
can be subjected to income 9. Grover constructs residential properties for clients and reports income by the
tax.____________________________________________ percentage of completion method. In 2019, Grover started a P2,000,000 construction contract.
Details of his 2019 and 2020 construction follow:
3. Onyoc insured his newly constructed building costing P1,000,000. Within a few
2019 2020
days, the building was totally destroyed by a fire. The insurance company reimbursed Onyoc
Annual construction cost P200,000 P800,000
P1,500,000, which represents the fair value of the building.
Estimated cost to finish 800,000 250,000
How much is the total return?
Extent of completion 20% 80%
_____________________________________________
Compute the construction income in 2019_____________and
4. Guildarts is worried that his entire potato plantation which is expected to yield 2020_______________
P400,000 income will be totally devastated by bad weather conditions. He obtained P300,000
crop insurance cover for P30,000. Just before harvest, a rare frost totally destroyed Guildarts' 10. Mang Gorio, a farmer, uses crop-year method in reporting his income from long-term
plantation. The insurance company paid the policy proceeds. crops. The following data are relevant to his farming operations in 2020:
How much is the recovery of lost profits to be recognized by Guildarts as income?  Sales of crops harvested, P900,000
______________________________________________________________  Expenses on harvested crops, P400,000
 Expenses on maturing crops, P200,000
5. US, Inc. reported the following during the year:  Expenses on newly planted crops, P100,000
 P800,000 interest income, exclusive of P200,000 uncollected and accrued interest  Sales of tree branches for firewood, P50,000
 P300,000 increase in value of investment in stocks Compute Mang Gorio's total income subject to tax in 2020._____________________
 Receipts from service billings to clients P400,000
 Advances from clients P100,000 which services will be rendered next year 11. An individual taxpayer received a notice from the BIR on January 2, 2018 to file his
Compute the gross income during the year under cash basis.____________________ 2016 income tax return not later than January 15, 2018. The tax due per his return is
P500,000. The taxpayer filed the income tax return on January 15, 2018.
6. Using information from item number 5. Compute the gross income during the year Compute for the total surcharge
using accrual basis._____________________________________________________ penalty,_____________________________________
Interest
7. Marooner is a dealer of used household appliances. He reported the following in penalty,________________________________________________________
2019 and 2020: Total tax assessment to be paid, excluding compromise penalty__________________
2019 2020
 payment.
_________ 14. Initial payment includes downpayment and installments in the year of sale
_________ 15. Final tax generally covers passive income.

Check () the appropriate box whether the following are exempt or taxable
Item Taxable Exempt 1. Which is not a scheme in taxing income?
1. Winnings from gambling a. Ordinary gain taxation
2. Income from swindling b. Regular income taxation
3. Harvested fruit from an orchard c. Capital gains taxation
4. Compensation income d. Final income taxation
5. Interest income
6. Gain on sale of goods by the home office to its branch 2. Capital asset means
7. Gain on sale of goods and services between relatives a. Real properties used in business
b. Personal properties used in business
8. Appreciation in the value of land
c. real properties not used in business
9. Discovery of hidden treasure
d. any property, real or personal, not used in business
10. Receipt of bank loan
3. Which is not a special feature of regular income taxation?
True or False. Write True if the statement is correct, otherwise, Write False. a. Use of accounting methods
_________ 1. Both active and passive income do not require direct participation of the b. Use of accounting periods
taxpayer in earning the income. c. Annual payment of income tax
_________ 2. Regular income tax generally covers active income and capital gains. d. Final withholding tax at source
_________ 3. Capital gains arise from the sale, exchange, and other disposition of any
assets. 4. Mang Pula died on September 19, 2019. Which is a correct statement?
_________ 4. Regular accounting periods are calendar and fiscal. a. Mang Pula's 2019 income tax return shall cover January 1, 2018 to December 31,
_________ 5. Individuals file their annual income tax returns on or before April 15 of 2019.
the following calendar year. b. Mang Pula's 2019 income tax return shall cover January 1, 2019 to December 31,
_________ 6. Advanced income is an item of gross income for accrual basis taxpayers. 2019.
_________ 7. Prepayments are deductible but in the future period they are expired or are c. Mang Pula's 2019 income tax return shall cover January 1, 2019 to September
consumed in the business or trade of the taxpayer. 19, 2019.
_________ 8. The depreciated value of the property upon termination of the lease d. Mang Pula's 2019 income tax return shall cover September 20, 2019 to
constitutes income to the lessee. December 31, 2019,
_________ 9. The crop year method is an accounting period.
_________ 10. Only large taxpayers shall file under eFPS. 5. Effective March 1, 2019, ER Company changed its calendar year to a fiscal year
_________ 11. All taxpayers can change their accounting period when there is a change ending every June 30. An adjustment return shall be filed covering the period
in the nature of their business, but the BIR must be notified in all cases. a. March l to June 30, 2019
_________ 12. The interest on unpaid taxes is computed on the basic tax only excluding b. January I to June 30, 2019
the surcharge. c. January 1 to March 1, 2019
_________ 13. Both manual filing and filing through e-BIR forms makes use of manual
 d. January 1 to December 31, 2019

6. Under which of the following will short accounting period not arise?
a. Change of accounting period by a corporate taxpayer
b. Change of accounting period by an individual taxpayer
c. Death of a taxpayer
d. Dissolution and liquidation of a business

7. Guilty Ghosting Corporation (GGC) started business on April 5, 2019 and opted to
report income tax on a fiscal year ending every October 31l. GGC's first income tax return
shall cover
a. April 6, 2019 to October 31, 2019
b. April 5, 2019 to October 31, 2019
c. April 5, 2019 to December 31, 2019
d. April 5, 2019 to April 4, 2020
 ANSWER KEY
Quiz No. 3
Quiz No. 3 pay, and P35,000 for holiday pay. The tax due from his compensation income
is:__________________________________________________________________
1. Elijah Montefalco, married, VAT-registered, had the following data for the taxable
year 2018: 3. Chesca Alde, a part-time exercise trainer, also operates a shoe store while offering
Gross sales, Phils. P2,000,000 her services to clients living in Metro Manila. In 2018, the gross sales of her shoe store
amounted to P1,100,000 while her receipts from her training services amounted to P400,000.
Cost of sales, Phils. 1,600,000 Her total cost of sales and operating expenses amounted to P 150,000 and P35,000,
respectively.
Gross sales, USA 1,500,000 She signified in her 1 Quarterly ITR her intention to be taxed at the 8% income tax
rate.
Compute her income tax due for
Cost of sales, USA 1,200,000
2018.______________________________________
Operating expenses, Phils. 10,000 4. Portia Ignacio owns a pet store specializing in reptiles which is her only source of
income. She signified her intention to be taxed at 849f gross sales in her 1 quarterly ITR of
Operating expenses, USA 35,000 the taxable year. Her sales, cost of sales, and operating expenses for the 4 quarters are as
follows:
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
If the taxpayer is a resident citizen, his tax due is:_____________________________ Sales 400,000 600,000 2,000,000 3,500,000
If the taxpayer is a non-resident citizen, VAT-registered, his tax due Cost of sales (100,000) (200,000) ( 600,000) ( 800,000)
is:____________
Gross income 300000 400000 1400000 2700000
If the taxpayer is a resident alien, VAT-registered, his tax due
Operating expenses (170,000) (190,000) ( 500,000) ( 820,000)
is:_________________
If the taxpayer is a non-resident alien engaged in business in the Philippines, married, Net income 130000 210000 2300000 4580000
VAT-registered and his country allows reciprocity of P30,000 as personal
exemptions for married in individuals, his tax due Compute her income tax payable in her 1st, 2nd, 3rd, Quarterly ITRS and in her
is:____________________________________ Annual ITR.
If the taxpayer in first to third questions, were not VAT-registered, can a hey avail of 1st Quarterly ITR 2nd Quarterly ITR 3rd Quarterly ITR Annual ITR
the 8% income tax rate option?_________________ if yes, his tax due
is:__________________________________________________________________
If the taxpayer is a non-resident alien not engaged in business in the Philippines, 5. Mr. Rolly Gómez operates a small night club in which he employs dancers to dance
married, and his country grants P35,000 as personal exemptions for married with the patrons of his night club. In 2018, his gross receipts, cost of services, and operating
individuals, his tax due expenses amounted P2,800,000/P100,000, and P35,000 respectively. The night club also
is:________________________________________________ earned other non-operating income of P150,000 in 2018.
Can he avail of the 8% income tax rate option?_______________________________
2. Rafael Montefalco, an MWE, works for Jollibeehive, Inc. he has no other source of What is his income tax due for 2018?
income. For the taxable year, his total regular compensation income, inclusive of the 13th _______________________________________
month pay, amounted to P186,000. During the year, he received a 13th month pay equivalent
to P16,000, and contributed to SSS, Philhealth, and Pag-ibig a total amount of P5,000. 6. In 2018, Rozen Elizalde, the CEO of the PHILIPPINE Nuclear Fusion Corporation,
In addition to the above mentioned amounts, he received the following amounts: earned compensation income of P4,000,500. This amount is inclusive of his 13th month pay
P90,000 for overtime pay, P10,000 for night shift differential pay, P25,000 for hazard and other benefits of P250,000, but net of the mandatory contributions to SSS and Philhealth,
 Aside from his employment, he also owns a cafeteria. In 2018, the cafeteria had gross Aside from his CPA/consultancy business, he is a faculty member of Belt University
sales of P1,500,000, cost of sales of P500,000, and operating expenses of P300,000. from which he received the following employment income for the same year.
It also had non-operating income of P700,000.
Compute his income tax due for 2018 if he avails of the 8% income tax rate option on Gross Pay Less CWT Less SSS premiums and union dues Net Pay
his gross sales plus non-operating income arising from his cafeteria P900,000 P75,000 P5,600 P819,400
business._____________________________________________________________
The amount he received from belt university is inclusive of 13th Month pay and other
7. In the previous number, what would be Rozen's total income tax due if he did not benefits of P65,000.
avail of the 8% income tax rate on gross sales plus non-operating income arising from his During the year he also received-P3,000 interest income from his BPI deposit, and
business?_____________________________________________________________ P250,000 in royalties from the publication of his book entitled "The Hungry eyes".
He has excess tax credits from the prior year of P15,500.

8. Rozen in number 6 resigned from Philippine Nuclear Fusion in the first week of
January 2019 to concentrate in his cafeteria business. His total compensation income in 2019 Calculate his tax payable Quarterly and Annual ITRS if he does not avail the 8%
amounted to P180,000 inclusive of other benefits (productivity bonus) of P30,000. income tax option. And if he chooses the 40% Optional standard deduction instead of
In 2019, the bakery had gross sales of P2,300,000, cost of sales of P750,000 and itemizing deductions.
operating expenses of P450,000. ]t also had non-operating income of P235,000. 1st Quarterly ITR 2nd Quarterly ITR 3rd Quarterly ITR Annual ITR
What is his income tax due for 2019 if he avails of the 8% income tax rate option on
gross sales plus non-operating income arising from his business?
_____________________________________________________________ Calculate his tax payable in the Quarterly and Annual ITRs if he avails of the 8%
income tax option.
9. Brandon Rockwell is the CEO of Sesame Zoo Corporation. In 2018, he received total
compensation of P10,000,000 inclusive of 13th month pay and other benefits in the amount
of
He also owns a poultry farm which supplies the wet market in his province. Its gross
sales totaled P5,000,000. The farm's cost of sales and operating expenses amounted
P2.300,000 and P580,000 respectively, its non-operating income amounted to
P230,000.
Compute his income tax due in
2018._______________________________________

10. For the taxable year 2018, Joshua, single, Filipino with I dependent child, received
the following as professional fees as a CPA and consultant.

Monthly Fees Less 5% CWT = Net Monthly Fees Received

P250,000 P12,500 P237,500

He is not VAT-registered and instead pays 3% OPT on his gross receipts under
section 116 of the tax Code.
1st Quarterly ITR 2nd Quarterly ITR 3rd Quarterly ITR Annual ITR
ANSWER KEY
Quiz No. 4