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CPA Review School of the Philippines

Manila

FINAL PRE-BOARD EXAMINATION October 2022

TAXATION

Instructions: Choose the BEST answer for each of the following items.

1. Which of the following statement/s is/are correct?

Statement A : Non-resident citizens are taxable on all income derived from sources within
the Philippines.
Statement B : Resident citizens and domestic corporations are taxable on all income derived
from sources within or without the Philippines.
Statement C : Foreign corporations, whether engaged or not in trade or business in the
Philippines are taxable from sources within or without the Philippines.
Statement D : Aliens, whether residents or not of the Philippines, are taxable only from
sources within the Philippines.
a. Statements C and D are correct
b. Statements A, B and D are correct
c. Statements B, C and D are correct
d. Statements A and D are correct

2. Which of the following are basic principles of a sound tax system?

a. Fiscal Adequacy, Economic Feasibility and Theoretical Justice
b. Fiscal Adequacy, Administrative Feasibility and Theoretical Justice
c. Progressive Taxation, Ability to Pay, Symbiotic Relationship
d. Fiscal Deficit, Administrative Feasibility and Ability to Pay

3. How much discount is granted to a senior citizen on his purchase of basic and prime
commodities, subject to limitation?
a. 20%
b. 15%
c. 10%
d. 5%

4. The concept of “situs of taxation” is based on which limitation of taxation?

a. Territoriality
b. International comity
c. Exemption of the government
d. Public purpose

5. Which of the following statements is/are CORRECT?

I. The power to license includes the power to tax.
II. The power to tax may not include the power to destroy
III. The power to tax includes the power to exempt.
a. II and III
b. I and II
c. III only
d. I only
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6. The President of the Philippines and the Prime Minister of Japan entered into an executive
agreement on a loan facility to the Philippines from Japan whereby it was stipulated that
interest on loans granted by private Japanese financial institutions in the Philippines shall not
be subject to Philippine income tax laws. What basic characteristic of taxation has been
violated by this agreement?
a. Theoretical justice
b. Inherent limitation
c. Legislative in character
d. Constitutional limitation

Gorbachev, married, resident citizen had the following for 2021:

a.) Business Income
1.) Rental income from real property, net of 5% W/T P 285,000
Real property tax paid by the lessor 50,000
Note: The lessee reimbursed 50% of the tax, as per agreement in the lease
contract
Deductible expense 120,000

2.) Rental income from real property, net of 5% W/T P 142,500

Real property tax paid by the lessor 20,000
Note: The lessee reimbursed 100% of the tax, as per agreement in the lease
contract
Deductible expense 40,000

b.) Sale of capital assets:

1.) Shares of ABC (domestic) not traded:
Selling Price P 300,000 Cost (2004): P180,000
2.) Shares of DEF (domestic), traded:
Selling Price P 100,000 Cost (2012): P150,000
3.) Shares of XYZ (foreign)
Selling Price P 500,000 Cost (2000): P100,000
4.) Vacant lot
Selling Price P 800,000 Cost (2000): P200,000
5.) Toyota Car
Selling Price P 100,000 Cost (2000): P300,000

c.) Other transactions:

1.) In 2000, he purchased shares of A Corporation for P50,000 which became
worthless and was written off in 2021.
2.) In 2021, he received liquidating dividend from B Corporation in the amount of
P450,000. The investment in 2000 was P300,000.

7. Determine the operational net income of Gorbachev:

A. 265,00
B. 290,000
C. 245,000
D. None of the above

8. Determine the Net Capital Gains of Gorbachev:

A. 150,000
B. 125,000
C. 175,000
D. None of the above.
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9. Determine the net taxable income of Gorbachev in his Annual Income Tax Return for 2021.
A. 415,000
B. 689,000
C. 440,000
D. 690,000

10. A, a real estate dealer sold a house and lot for P600,000 on November 20, 2021. The cost of
the property is P375,000. Terms are: a) Down payment of P100,000 and b) Balance payable
in monthly instalments of P25,000 beginning December 20, 2021. The income to be reported
in 2021 is
a. P225,000 b. P125,000 c. P46,875 d. P37,500

11. Using the preceding number, except that the asset above is a capital asset, the capital gains tax
payable in 2021 is
a. P36,000 b. P7,500 c. P6,000 d. P3,750

12. On December 1, 2021, a real estate dealer sold a residential land for P6M (cost is P3.6M)
receiving P2M as down payment and a promissory note for the P4M balance payable at
P400,000 a month beginning January 1, 2021. The promissory note has fair market value equal
to 75% of its face value. If the income is to be reported under the deferred payment method,
the income in 2021 is
a. P2,400,000 b. P1,400,000 c. P800,000 d. P1,200,000

13. On June 1, 2020, A sold shares of stocks of a resident foreign corporation held as capital assets
for 24 months for P500,000 (cost of P300,000), payable as follows: P200,000 on the date of
sale and the balance is secured by a promissory note where fair market value is 85% of its face
value. Payments on the note were as follows:
January 1, 2021 P100,000
June 1, 2021 100,000
December 1, 2021 100,000

The capital gain in 2020 is

a. P200,000 b. P85,000 c. P77,500 d. P155,000

Dong Company, engaged in restaurant business, uses accrual basis of accounting in its
financial statements. Its operation for the year ended shows the following:
Gross Revenue on account to customers 3,700,000
Gross Receipts from senior citizens, net of 20% discount 400,000
Purchases, directly attributable to customers other than senior citizens, net of VAT 300,000
Purchases, cannot be attributed, net of VAT 200,000
Direct Cost 2,000,000
Purchase of Equipment, used for all services rendered 600,000
Increase in Accounts Receivable (VAT inclusive) 224,000
Operating Expenses 1,000,000

14. Compute the Output VAT?

a. 420,000
b. 468,000
c. 396,000
d. 372,000
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15. Compute the creditable input VAT?

a. 132,000
b. 116,000
c. 123,000
d. 120,000

16. Determine the amount of Gross Income?

a. 900,000
b. 2,200,000
c. 3,500,000
d. 4,000,000

17. Determine the amount of allowable deduction?

a. 1,000,000
b. 1,112,000
c. 1,500,000
d. 1,600,000

Wener Company is engaged in a hardware business. It uses accrual basis of accounting in its
financial statements.
Gross Revenue 3,500,000
Sales Returns 200,000
Increase in Accounts Receivable, VAT inclusive 224,000
Increase in Inventory, net of VAT 150,000
Purchases 1,000,000
Supplies (40% from VAT sales), VAT exclusive 600,000
Services (60% from VAT sales), VAT exclusive 500,000
Other Operating Expenses 200,000

18. Compute the Output VAT?

a. 420,000
b. 396,000
c. 372,000
d. 360,000

19. Determine the creditable input VAT?

a. 120,000
b. 184,800
c. 166,800
d. 108,000

20. Determine the Taxable Income?

a. 1,000,000
b. 1,082,800
c. 1,350,000
d. 1,500,000
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Anthony Cabe, single, an American but resident of Friendship Road, Angeles, Pampanga,
died in year 2021 left the following properties:
Gross estate in Philippines
Family Home P7,000,000
Agricultural land inherited P8,000,000
Cash and investment P15,000,000
Gross estate Foreign country
Dodge Calibre P12,000,000
Tiny House P8,000,000
Funeral expenses P200,000
Administrative expenses P2,000,000
Claims against the estate P5,000,000
Unpaid mortgage P2,000,000

21. How much is the gross estate?

a. P50,000,000
b. P30,000,000
c. P20,000,000
d. 0

22. How much are the total ordinary deductions?

a. P5,000,000
b. P7,000,000
c. P9,000,000
d. P9,200,000

23. How much is the special deduction?

a. P12,000,000
b. P15,000,000
c. P7,500,000
d. P7,000,000

24. How much is the estate tax due?

a. P1,680,000
b. P1,860,000
c. P2,160,000
d. P2,610,000

25. Consider the following statements

A. A special assessment is an enforced proportional contribution from the owners of real
property especially or peculiarly benefited by public instruments.
B. The power of eminent domain may be exercised even by the private entities while the
power of taxation and police power may be exercised only by the government.
C. Unlike tax, a debt draws interest, if stipulated.
D. The police power, power of taxation and power of eminent domain being fundamental
powers of the state may be exercised by the government even without any constitutional
grant.
a. A and B are correct
b. Only C is not correct
c. B and D are correct
d. Only D is correct.
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26. Situs of taxation literally means place of taxation. Which of the following statements about
situs is wrong?
a. Poll tax may properly be levied upon persons who are inhabitants or residents of the state,
whether citizens or not.
b. Real estate is subject to taxation in the state in which it is located, whether the owner is a
resident or non-resident.
c. Tangible personal property is taxable where it has actual situs, or where it is physically
located, even if the owner resides in another jurisdiction.
d. Intangible personal property is taxable where the property is located.

27. The ABC Bank is a domestic bank authorized by the BSP to operate as foreign currency
deposit unit. For the year 2021, it earned interest income of P100,000 from foreign currency
transactions with residents, OBUs, and other FCDUs. The rate of tax applicable to such
interest income is
a. 20%
b. 25%
c. 10%
d. 15%

28. A cash dividend of P100,000 received by a taxpayer in 2021 from a foreign corporation whose
income from Philippine sources is 40% of its total income is
Statement 1- Partly taxable if he is a resident citizen
Statement 2- Partly taxable if he is a non-resident alien
a. Both statements are true
b. Both statements are false
c. Only Statement 1 is true
d. Only Statement 2 is true

29. Using the above data, which of the following is correct? The cash dividend is
a. Exempt from income tax if he is a resident citizen
b. Partly taxable if he is a resident alien
c. Taxable in full if he is a non- resident citizen
d. Exempt from income tax if he is a non- resident alien

30. Tips for gratuities paid directly to an employee by a customer of the employer which are not
accounted for by the employee to the employer are
Statement 1- Considered as passive income
Statement 2- Subject to creditable withholding tax
a. Both statements are true
b. Both statements are false
c. Only Statement 1 is true
d. Only Statements 2 is true
31. Which of the following statements is correct?
a. The monetized value of unutilized vacation leave credits of ten (10) days or less which
were paid to the employee during the year are not subject to income tax and to withholding
tax
b. The salary of an employee on vacation or on sick leave, which are paid notwithstanding
his absence from work is an exclusion from income.
c. Any amount which is required by law to be deducted by the employer from the
compensation of an employee excluding the withheld tax is considered as part of the
employee’s compensation and is deemed to be paid to the employee as compensation at
the time the deduction is made
d. If living quarters or meals are furnished to an employee for the convenience of the
employer, the value thereof should be included as part of compensation income.
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32. “A Marketing” incurred the following expenses in relation to its business during the taxable
year:
Provision for bad debts P15,000
Research and development cost, treated as deferred expense 500,000
Contributions during the year:
To the government for priority 50,000
To the government for public purposes 10,000
To the Catholic church for charitable purposes. 25,000
Additional Information:
A. Allowance for doubtful accounts per aging of accounts receivable revealed a beginning
and ending balances of P20,000 and P30,000, respectively.
B. Accumulated depreciation on machine at the beginning and end of the year amounted to
P100,000 and P110,000, respectively.
C. During the year, the firm sold a machine with a cost and accumulated depreciation of
P300,000 and P30,000, respectively.
D. The research and development cost was incurred in the preceding year but the benefit was
received during the taxable year
E. Taxable income before A to D and contributions amounted to P300,00
If “A Marketing” is a sole proprietorship, the allowable contributions is:
a. P80,000
b. P85,000
c. P57,000
d. P65,500

33. Total allowable deductions:

a. P210,500
b. P220,500
c. P202,750
d. P225,000

34. Furthermore, the amount of taxable income

a. P220,000
b. P89,500
c. P97,250
d. P115,000

35. A, single, had the following from January 1 to June 30, 2020
Compensation income (net of payroll deductions) P360,000
Deductions made by the employer:
SSS housing loan 48,000
SSS premiums contributions 7,200
Philhealth contributions 4,800
Pag-ibig contributions 3,600
Union dues 4,400
Premiums payments on Life insurance policy 6,000
Health insurance policy 4,800
The taxable compensation income is
a. 292,000
b. 340,000
c. 418,800
d. 370,800
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36. The following are excluded from the gross estate of a decedent except:
(a) Transfers before the decedent’s death, not in contemplation of death.
(b) Bona fide sale for an adequate and full consideration in money or money’s worth before
the decedent’s death.
(c) Exclusive properties or capital of the decedent.
(d) Proceeds of life insurance where the designation of the third party beneficiary is
irrevocable.

37. Kris Llamas, resident citizen, died on October 8, 2021, and left 100,000 shares of stock of
Jolly Roger Foods (JRF) Company, a publicly-listed domestic corporation. At the day of her
death, JRF shares traded in the Philippine Stock Exchange at a range of ₱4.50 to ₱5.20, and
eventually closing at ₱4.80 per share.
JRF has an authorized capital stock of 1,200,000 shares with par value of ₱4.00 per share.
Unissued shares total 400,000 shares. Retained earnings shown its 2020 audited financial
statements amount to ₱600,000.
How much will be included in the gross estate of Kris Llamas?
(a) ₱485,000 (c) ₱475,000
(b) ₱480,000 (d) None of the above.

38. Mr. A died leaving a gross estate of ₱870,000. Among the amounts included in the gross
estate were: (1) a receivable from B, businessman, in the amount of ₱24,000, net of the
uncollectible amount of ₱16,000; and (2) another receivable from C, a cousin, in the amount
of ₱30,000.
B was previously declared an insolvent by a court. The court determined that B’s assets that
were available for payment to his creditors totalled ₱60,000, while his total liabilities totalled
₱100,000.
On the other hand, C, without properties, will be able to pay only ₱10,000 out of the ₱30,000.
How much can the estate deduct as claims against insolvent persons for purposes of computing
the net estate?
(a) ₱70,000 (c) ₱20,000
(b) ₱36,000 (d) None of the above.

39-40) J. Rosal, Filipino, single, died on September 1, 2022 leaving the following properties:
House and lot (family home) ₱ 25,000,000
Collection of Omega watches 1,500,000
Shares of San Miguel Corp. 300,000
Commercial land 7,000,000
Ford Mustang muscle car 2,000,000

The last 3 properties, namely the SMC shares, the commercial land, and the Ford Mustang were
acquired by the decedent by gratuitous title with the following fair market values:

Date FMV on FMV in estate

Acquired date acquired of J. Rosal

San Miguel shares (donated) July 1, 2016 ₱ 400,000 ₱ 300,000

Commercial land (inherited) October 1, 2020 6,500,000 7,000,000
Ford Mustang (inherited) October 1, 2020 2,500,000 2,000,000
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Expenses:
Funeral expenses ₱ 200,000
Medical expenses on last illness 8,000,000

Other information:
a. The commercial land which J. Rosal inherited had a mortgage of ₱300,000 which he paid
before he died.
b. The amount of ₱700,000 mortgage on the family home remained unpaid upon his death.
c. The Ford Mustang was totally destroyed in a crash on September 12, 2022.

39. Compute the vanishing deduction that may be availed of in computing the estate tax.
(A) ₱6,065,251
(B) ₱4,548,939
(C) ₱6,010,279
(D) None of the above.

40. Compute the estate tax.

(A) ₱722,085
(B) ₱813,064
(C) ₱707,383
(D) None of the above.

41. Which of the following does not escape the estate tax?
(A) Devise of real property in favor of Iglesia ni Cristo.
(B) Merger of usufruct in the owner of the naked title to the property
(C) Transmission via a special power of appointment of personal property to the City of
Manila.
(D) Legacy transmitted by the fiduciary heir to the second heir in a fideicommissary
substitution.

42-43) J. Cruz, Filipino, married, died testate on October 8, 2021. Records show the following
assets and deductions on the date of death:

Note receivable, debtor in Manila, gross of uncollectible amount of ₱30,000 ₱ 60,000

Note receivable, debtor in HongKong, gross of uncollectible amount of
₱10,000 40,000
House in Laguna (family home), net of unpaid mortgage of ₱100,000 24,900,000
Condominium unit in Taiwan, net of unpaid mortgage of ₱50,000 10,450,000
Jollibee shares (exclusive property of J. Cruz) 700,000

Deductions claimed:
Judicial costs in the probate of the estate ₱350,000
Cost of cemetery lot 35,000
Expenses of internment 25,000
Note payable, contracted 2020, not notarized 30,000
Note payable, contracted 2020, notarized, fully paid on Jan. 22, 2021 100,000
Note payable, contracted 2020, notarized, fully paid on Jan. 4, 2021 50,000
Unpaid mortgage on family home 100,000
Unpaid mortgage on apartment in Taiwan 50,000
Legacy of Jollibee shares to J. Cruz's brother 40,000
Legacy of Jollibee shares to Municipality of Pateros for schoolhouse 100,000
Legacy of Jollibee shares to social welfare organization 30,000
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42) Determine the gross estate of J. Cruz.

(A) ₱36,300,000
(B) ₱36,150,000
(C) ₱36,260,000
(D) None of the above.

43) Determine the net estate of J. Cruz subject to the estate tax.
(A) ₱3,200,000
(B) ₱3,255,000
(C) ₱3,275,000
(D) None of the above.

44-46) Maria L. Dy, single, died on December 6, 2018, leaving the following assets, expenses,
charges, and obligations:
Assets:
Domestic shares ₱ 5,000,000
Shares of a US corporation, 90% of business in the Phils. 700,000
Investment in a domestic partnership 1,000,000
Cash in bank, Manila 1,200,000
Account receivable from a debtor residing in the U.S. (The
account is worthless. Debtor is fully insolvent.) 100,000
Car, model 2017 700,000

Expenses, charges, and obligations:

Funeral expenses 150,000
Judicial expenses incurred in settlement of the estate 100,000
Unpaid income tax for 2016 160,000
Loss through robbery 2 months after death 200,000
Loss in business 80,000
Legacy in favor of Philippine National Red Cross
("PNRC") 50,000
Legacy to City of Makati for children's playground. 100,000

44) Compute the taxable net estate and the estate tax due if decedent was a resident of the
Philippines at the time of her death.
(A) ₱3,090,000; ₱185,400
(B) ₱3,790,000; ₱227,400
(C) ₱2,840,000; ₱170,400
(D) ₱2,850,000; ₱175,400

45) Compute the taxable net estate and the estate tax due if decedent was a non-resident alien,
and there was no reciprocity.
(A) ₱7,594,138: ₱455,648
(B) ₱3,090,000; ₱185,400
(C) ₱6,923,103; ₱415,386
(D) ₱6,523,103; ₱417,386

46) Compute the taxable net estate and the estate tax due if decedent was a non-resident alien, and
there was reciprocity.
(A) ₱21,034; ₱1,262
(B) ₱521,034; ₱31,262
(C) (₱310,000); ₱0
(D) None of the above.
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47) In which of the following cases will filing an estate tax return be unnecessary?
(A) When the gross estate does not include any registrable property and is valued at
₱640,000. Total deductions amount to ₱530,000.
(B) When the gross estate consists of the following properties: Cash, ₱40,000; Second hand
jeep parked in Manila with FMV of ₱90,000; and jewelry worth ₱130,000. Standard
deduction of ₱5,000,000 was claimed.
(C) When the gross estate, which does not include any registrable property, is valued at
₱450,000. Standard deduction is claimed.
(D) None of the above.

48. Where property is transferred for less than an adequate and full consideration in money or
money’s worth, then the amount by which the fair market value of the property exceeded the
value of the consideration shall be deemed a gift, and shall be included in computing the
amount of gifts made during the calendar year. The legislative intent of the deemed gift
provision under Section 100 of the Tax Code is to discourage parties in a transaction from
controlling their selling price in order to reduce their income taxes to be paid to the
government.
The deemed gift provision does not apply to the following, except:
(A) Sale by individual taxpayers of real property located in the Philippines and classified as
an ordinary asset.
(B) Sale thru the stock exchange of listed domestic shares.
(C) Arm’s length sales transactions.
(D) Property dividends.

49. In 2018, Alberto, a printer, sold a printing press to Bimbo, his brother, the particulars of which
are as follows:
Market value of the printing press ₱ 230,000
Selling price 170,000
Cost in 20015 160,000
Book value in 2018 140,000

Which statement/s is/are true?

(A) Seller Alberto is deemed a donor and buyer Bimbo a donee by operation of law.
(B) The printing press being an ordinary or business asset, the entire gain on the sale is taxable
income to Alberto and must be included in his income tax return.
(C) If seller Alberto is able to prove that the sale is an arm’s length transaction, there will be
no insufficient consideration. Because of the absence of donative intent on the part of
Alberto, there shall be no donor’s tax consequence.
(D) All of the above.

50-53) Donor gave the following donations in 2020:

May 14 To Marilyn, legitimate child, a lot with an
unpaid mortgage of ₱50,000 assumed
by Marilyn, and with a fair market value of ₱ 800,000

June 20 To Olsen, brother, on account of marriage

on October 8, 2020 50,000

Sept. 21 To Yeda, sister-in-law 140,000

November 19 To Xavier, legitimate child, as birthday gift 18,000

To the Philippine National Red Cross ("PNRC") 50,000

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50) Compute the donor's tax and the donor’s tax payable on May 14, 2020.
(A) ₱30,000; ₱30,000
(B) ₱45,000; ₱45,000
(C) ₱45,000; ₱0
(D) None of the above.

51) Compute the donor's tax and the donor’s tax payable on June 20, 2020.
(A) ₱33,000; ₱3,000
(B) ₱33,000; ₱0
(C) ₱20,400; ₱20,400
(D) None of the above.

52) Compute the donor's tax and the donor’s tax payable on September 21, 2020.
(A) ₱41,400; ₱0
(B) ₱41,400; ₱8,400
(C) ₱2,400; ₱590,000
(D) None of the above.

53) Compute the donor's tax and the donor’s tax payable on November 19, 2020.
(A) ₱42,480; ₱0
(B) ₱42,480; ₱1,080
(C) ₱22,800; ₱600
(D) None of the above.

54-56) The tax records of Donor B, a resident alien, show the following information during the
year:
Net gifts, Philippines ₱600,000
Net gifts, U.S.A. 160,000
Net gifts, Hong Kong 40,000
Donor's tax paid in U.S.A. 9,200
Donor's tax paid in Hong Kong 1,050

54) Compute Limit (A) for the foreign tax credit.

(A) ₱6,600
(B) ₱7,650
(C) ₱1,650
(D) None of the above.

55) Compute Limit (B) for the foreign tax credit.

(A) ₱ 8,250
(B) ₱10,250
(C) ₱ 7,650
(D) None of the above.

56) Compute the donor’s tax payable after foreign tax credits.
(A) ₱25,350
(B) ₱33,000
(C) ₱24,750
(D) None of the above.
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57) Statement 1: A separate return shall be filed by each donor for each gift or donation made
on different dates during the year. Any previous gifts made in the same calendar year shall
be reflected in each return. The tax due shall be computed based on the total net gifts made
during the calendar year.
Statement 2: There shall be as many tax returns filed as there are donees for several gifts or
donations made on the same date.
(A) Both statements are true.
(B) Statement 1 is true. Statement 2 is false.
(C) Statement 1 is false. Statement 2 is true.
(D) Both statements are false.

58) Statement 1: If the gift or donation involves conjugal/community property, each spouse shall
file a separate return corresponding to his/her respective share in the conjugal/community
property.
Statement 2: If the gift or donation involves co-owned property, each co-owner shall file a
separate return corresponding to his/her respective share in the co-owned property.
(A) All statements are true.
(B) Statement 1 is true. Statement 2 is false.
(C) Statement 1 is false. Statement 2 is true.
(D) All statements are false.

59) Wargames Corporation is a VAT-registered domestic corporation engaged in the

manufacturing and selling of custom t-shirts. It owns cars which are used by its executives
for business travel. It also owns 2 warehouses in San Miguel, Bulacan.
In 2021, it sold two of its fully-depreciated cars: one to its manager, and the other to its CFO.
It also sold one of its warehouses in 2021.
(A) Only the sale of t-shirts is subject to output VAT.
(B) Only the sale of t-shirts and the sale of the 2 cars are subject to output VAT.
(C) The sale of t-shirts, the sale of 2 cars, and the sale of the warehouse are all subject to
output VAT.
(D) None of the above.

60. The following are the characteristics of VAT, except

(a) Indirect tax

(b) Proportional tax
(c) Consumption or end-user tax
(d) Tax on the value added by the seller.

61. Statement 1: If the importer is a non-VAT person, and the importation of VATable goods is
not in the course of trade or business, such person is not required to register for VAT.
Statement 2: The VAT base for dealers of securities is the Gross Selling Price of the securities
sold, regardless of the terms of payment.
(A) Both statements are true.
(B) Statement 1 is true. Statement 2 is false.
(C) Statement 1 is false. Statement 2 is true.
(D) Both statements are false.
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62. J. Parada operates 9 passenger jeeps, a limousine service, a car detailing shop, and a store
selling car and jeep parts and accessories. His sales and receipts during the year are shown
below:
Receipts, passenger jeeps ₱ 2,500,000
Receipts, limousine service 1,560,000
Receipts, car detailing shop 1,700,000
Sales, store 1,400,000
Total ₱ 5,460,000

(A) Mr. Parada is required to VAT-register.

(B) Mr. Parada is not required to VAT-register.
(C) Mr. Parada may optionally register his VAT-exempt businesses under the VAT
system.
(D) None of the above.

63. In the preceding number, may Mr. Parada optionally register his VAT-exempt businesses
under the VAT system?
(A) Yes.
(B) No.

64. Crisamel Industries Corporation, domestic, paid the following in the current taxable year:
Withholding taxes ₱ 45,000
CGT on sale of real property 15,000
6/10 of 1% stock transaction tax 3,500
Mayor's permit 500
Local business tax 23,800
OPT on its regular sales 75,000
Community tax 10,000
Special assessment imposed by the National Government 7,000
Total ₱ 179,800

Total amount that can be deducted by Crisamel in its ITR:

(A) ₱179,800
(B) ₱109,300
(C) ₱116,300
(D) None of the above.
 15

(65-67) Domestic Inc., VAT-registered, had the following data (net of business taxes) for the last
quarter of 2020 in Philippine peso:
Quarterly
October November December Totals
Sales:
VATable sales to private entities 5,000,000 2,000,000 3,000,000 10,000,000
Exempt sales 400,000 200,000 600,000
Sales to the government 300,000 100,000 400,000
Export sales 200,000 50,000 250,000
Total 5,900,000 2,200,000 3,150,000 11,250,000

Quarterly
October November December Totals
Purchase of goods
from VAT suppliers related to:
VATable sales to private entities 40,000 50,000 90,000
Exempt sales 30,000 50,000 80,000
Sales to the government 0
Export sales 30,000 30,000
Total 70,000 30,000 100,000 200,000

Quarterly
October November December Totals
Purchase of services
from VAT suppliers related to:
VATable sales to private entities 20,000 20,000
Exempt sales 30,000 30,000
Sales to the government 200,000 100,000 300,000
Export sales 20,000 20,000
Total 220,000 50,000 100,000 370,000

Quarterly
October November December Totals
Purchase of depreciable capital
goods from VAT supplier 3,000,000 2,000,000 5,000,000
Life in years 3 6

The corporation had excess input tax credit from the previous quarter in the amount of ₱3,900.
In November, it chose to file an application for VAT refund/TCC in the amount of ₱2,000.
The purchase of the depreciable capital goods is for the benefit of all its businesses.

(65) What is the VAT payable for November 2020?

(A) ₱143,900
(B) ₱223,273
(C) ₱223,000
(D) None of the above
 16

(66) What is the amount to be reflected on line 17B in Form 2550M for November 2020?

(A) ₱240,000
(B) ₱350,000
(C) ₱590,000
(D) None of the above

(67) What is the amount to be reflected on line 20A in Form 2550M for November 2020?

(A) ₱599,600
(B) ₱576,000
(C) ₱592,000
(D) None of the above

(68-70) Domestic Inc., VAT-registered, had the following data (net of business taxes) for the last
quarter of 2022 in Philippine peso:

Quarterly
October November December Totals
Sales:
VATable sales to private entities 5,000,000 2,000,000 3,000,000 10,000,000
Exempt sales 400,000 200,000 600,000
Sales to the government 300,000 100,000 400,000
Export sales 200,000 50,000 250,000
Total 5,900,000 2,200,000 3,150,000 11,250,000

Quarterly
October November December Totals
Purchase of goods
from VAT suppliers related to:
VATable sales to private entities 40,000 50,000 90,000
Exempt sales 30,000 50,000 80,000
Sales to the government 0
Export sales 30,000 30,000
Total 70,000 30,000 100,000 200,000

Quarterly
October November December Totals
Purchase of services
from VAT suppliers related to:
VATable sales to private entities 20,000 20,000
Exempt sales 30,000 30,000
Sales to the government 200,000 100,000 300,000
Export sales 20,000 20,000
Total 220,000 50,000 100,000 370,000

Quarterly
October November December Totals
Purchase of depreciable capital
goods from VAT supplier 3,000,000 2,000,000 5,000,000
Life in years 3 6
 17

The corporation had excess input tax credit from the previous quarter in the amount of ₱3,900.
In November, it chose to file an application for VAT refund/TCC in the amount of ₱2,000.
The purchase of the depreciable capital goods is for the benefit of all its businesses.
68) Compute the VAT payable for November 2022.

(A) ₱17,818
(B) ₱17,757
(C) ₱13,676
(D) None of the above
(69) What is the amount to be reflected on line 17B in Form 2550M for November 2022?

(A) ₱240,000
(B) ₱350,000
(C) ₱590,000
(D) None or 0
(70) What is the amount to be reflected on line 20A in Form 2550M for November 2022?

(A) ₱599,600
(B) ₱576,000
(C) ₱592,000
(D) None or 0
END