Excel Professional Services Inc.

Management Firm of Professional Review and Training Center (PRTC)

Online • Manila • Cavite • Laguna • Cebu • Cagayan De Oro • Davao
Since 1977

Taxation (TAX) CPA Review Gudani/Naranjo/Siapian/Wong

FINAL PRE-BOARD EXAMINATION April 29 & 30, 2023

Multiple Choice. Select the letter that corresponds to the best answer. This examination consists of 70 items and the
exam is good for three (3) hours. Good luck!

Use the tax tables if necessary:

SCHEDULE OF EXPANDED WITHHOLDING TAX (EWT)
Income Payment EWT Income Payment EWT
Professional/Management/Consultancy fees Gross receipts 3M or Purchase of goods or properties 1% - goods
(Individual) below - 5% by Top Withholding Agents (TWA) 2% - service
Gross receipts over -
3M or VAT-reg – 10%
Professional/Management/Consultancy fees Gross receipts Partners in general professional 720,000 or less
(Non-Individual) 720,000 or below - partnerships (drawings, advances, -10%
10% sharings, allowances, etc.) Above 720,000
Gross receipts over – 15%
720,000 – 15%
Contractors/subcontractors (security, 2% Commission (if not employee) 10%
janitorial, etc.)
Director’s fees (if not employee) 10% or 15% (720,000 Income distributed to 15%
threshold) beneficiaries of estates/trusts
Rental 5%

GRADUATED TAX TABLE UNDER TRAIN LAW (January 1, 2018 to December 31, 2022)
Over But not over The tax shall be Plus Of excess over
250,000 0 0 -
250,000 400,000 0 20% 250,000
400,000 800,000 30,000 25% 400,000
800,000 2,000,000 130,000 30% 800,000
2,000,000 8,000,000 490,000 32% 2,000,000
8,000,000 2,410,000 35% 8,000,000

GRADUATED TAX TABLE UNDER TRAIN LAW (January 1, 2023 and onwards)
Over But not over The tax shall be Plus Of excess over
0 250,000 0 0 -
250,000 400,000 0 15% 250,000
400,000 800,000 22,500 20% 400,000
800,000 2,000,000 102,500 25% 800,000
2,000,000 8,000,000 402,500 30% 2,000,000
8,000,000 - 2,202,500 35% 8,000,000

DOCUMENTARY STAMP TAX TABLE

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1. The BIR issued information materials to guide taxpayers S3 - Order Slip; Purchase Order
on how to file their 2022 Annual Income Tax Returns. S4 - Sales Invoice (Cash or Charge)
This is in consonance with: S5 - Statement of Account
a. Equity in Taxation a. S2 only c. S4 only
b. Administrative Feasibility b. S2 or S4 only d. Any of the above
c. Principles of Sound Tax System
d. Uniformity in Taxation 9. Which is most accurate about retention of books of
accounts?
2. Which is FALSE? Under the CREATE law, S1 - Hard Copies may be kept within the first five
I. Registered Export Enterprises, if opted (5) years reckoned from the day following the
enhanced deductions, can claim up to ten (10) deadline in filing a return, or if filed after the
years. deadline, from the date of the filing of the return,
II. Domestic Market Enterprises, if opted enhanced for the taxable year when the last entry was made
deductions, can claim up to five (5) years. in the books of accounts.
a. Only S1 is true c. Both are true S2 - After five (5) years, electronic copy of the
b. Only S2 is true d. Both are false hardcopy (paper) of the books of accounts,
subsidiary books and other accounting records in an
3. S1 – Purchases made by solo parents are subject to electronic storage system may be kept.
10% discount. S3 - For Independent CPA, the responsibility to
S2 – Purchases made by solo parents are VAT-exempt. maintain and preserve electronic copies of the
a. Only S1 is true c. Both are true audited and certified financial statements including
b. Only S2 is true d. Both are false the audit working papers for a period of ten (10)
years from the due date of filing the annual income
4. Which is FALSE? tax return or the actual date of filing thereof,
S1 – The Commissioner of Internal Revenue has four whichever comes later.
Deputy Commissioners. a. S1 only
S2 – The Commissioner of Customs has six Deputy b. S1 and S2 only
Commissioners c. All of the above are true
S3 – The PEZA Board has twelve members. d. All of the statements are false
S4 – The Bases Conversion and Development Authority
has eight members. 10. Which is FALSE? The audit by independent CPA of
a. S1 c. S3 INDIVIDUAL taxpayer’s books of accounts is
b. S2 d. S4 a. Not required if his gross sales, earnings, receipts or
output do not exceed Php 3,000,000.
5. Which is FALSE in BIR registration? b. Not required if he opted 8% preferential taxation
S1 – Employees are required to be registered before c. Not required if he opted for Optional Standard
employment. Deduction
S2 – Sole proprietors are required to be registered d. Required if gross sales, earnings, receipts or output
before commencement of business. is Php 3,000,000 or more.
S3 – Corporations are required to be registered
before payment of tax. 11. The best proof of successful e-FPS return filing is the
S4 – Partnerships are required to be registered a. Duly filed return
before or upon filing of applicable tax return, b. Filing Reference Number
statement or declaration. c. Screenshot of successful filing
a. S1 c. S3 d. Tax Return Confirmation Receipt
b. S2 d. S4
12. The best proof of successful e-BIR Form online return
6. The deadline of January 31 applies to the following, filing is the
except: a. Duly filed return
a. 4th Quarter Remittance Return of Creditable Income b. Filing Reference Number
Tax Withheld (Expanded) c. Screenshot of successful filing
b. Annual Registration Fee d. Tax Return Confirmation Receipt
c. Monthly Remittance Return on Creditable Income
Tax Withheld (Compensation) for the month of 13. Which is TRUE?
December S1 – A taxpayer exempt from paying tax is also
d. Local Professional Tax exempt from filing the applicable return.
S2 – If deadline of filing of return falls on weekdays,
7. Printing of official receipts and/or sales invoices must be the deadline of filing is the next working day.
preceded by: a. Only S1 is true c. Both are true
a. Application of Permit to Use and Print Receipts and b. Only S2 is true d. Both are false
Invoices
b. Approval of Authority to Print Receipts 14. Which is FALSE in BMBE? To be considered barangay-
c. Approval of books of accounts based,
d. Registration of Computerized loose-leaf S1 - its business operations are confined within the
territorial jurisdiction of the municipality or LGU in
8. It is the principal evidence of sale of goods. which its principal place of business is located.
S1 - Delivery receipt and/or Collection Receipt
S2 - Official Receipt

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S2 - its principal activity consists in the c. The Competent Authority in the Philippines is the
application/use of a particular skill peculiar to the Commissioner of Internal Revenue
locality. d. Venue of application is at the Office of the
S3 - the majority of its employees must be residents Commissioner
of the barangay where the BMBE is located.
S4 - the raw materials must be predominantly 21. Which is FALSE in real property tax (RPT) under Local
sourced from the area where the BMBE is located. Government Code?
a. S1 c. S3 S1 – The maximum tax discount for advanced prompt
b. S2 d. S4 payment of real property tax is 20%.
S2 – The interest rate is 2% per month and is imposable
15. S1 - Export enterprises under CREATE Law are entitled until delinquent tax is fully paid
ITH of 4 to 7 years depending on location and industry S3 – The RPT accrues on the first day of January and
priorities and followed by SCIT or enhanced deductions from that date it shall constitute a lien on the property
for ten (10) years. which shall be superior to any other lien, mortgage, or
S2 - Domestic market enterprises under CREATE Law encumbrance of any kind whatsoever, and shall be
are entitled to ITH of 4 to 7 years followed by enhanced extinguished only upon the payment of the delinquent
deductions for five (5) years. tax.
a. Only S1 is true c. Both are true S4 – Collection of RPT is the responsibility of the city or
b. Only S2 is true d. Both are false municipal treasurer.
a. S1 c. S3
16. S1 - Business establishments are required to give the b. S2 d. S4
statutory discount regardless of who is the source of
payment or mode of payment, provided that the goods 22. Which is TRUE under the National Internal Revenue
and services are for the exclusive use of the Senior Code of 1997, as amended regarding prescription?
Citizen or Person with Disability.
S2 - lf the purchaser is children with disability, the Assessment Collection
parents have the full authority to purchase the product General In case of General In case
for their child and must only present the PWD lD as Rule Fraud or Rule of Fraud
required. Falsity or
a. Only S1 is true c. Both are true Falsity
b. Only S2 is true d. Both are false a 3 years 10 years 5 years 5 years
b. 3 years 10 years 3 years 5 years
17. S1 - The senior citizen or Person with Disability can
authorize any person of his/her choosing through an c. 10 years 3 years 5 years 10 years
authorization letter duly signed by the senior d. 3 years 10 years 3 years 3 years
citizen/person with disability to purchase qualified
goods.
23. The penalty for attempt to evade or defeat tax is:
S2 - In case of failure to present Senior Citizen or PWD
ID at the time of the purchase of the goods and services,
Fine Imprisonment
the business establishment or the third-party service
provider has the right to refuse to release the goods to Minimum Maximum Minimum Maximum
the authorized representative. a 100,000 5,000,000 2 years 5 years
a. Only S1 is true c. Both are true b. 500,000 10,000,000 6 years 10 years
b. Only S2 is true d. Both are false
c. 1,000,000 20,000,000 8 years 15 years
18. S1 - Donations made by husbands and wife out of their d. 5,000,000 50,000,000 10 years 20 years
common property is deemed made by each; hence, both
shall prepare separate Donor’s Tax Return and claim 24. Which is TRUE in taxation of individual taxpayers?
separate deductions. S1 – 8% preferential tax does not apply to
S2 - If what was donated is a conjugal or community compensation income earners.
property, only the person who signed the Deed is S2 – Non-VAT individuals engaged in trade and at the
subject to donor’s tax without prejudice to the right of same time who practices their profession can opt to be
the other spouse to question the validity of the donation taxed at 8%.
without her consent. S3 – Mixed income earners have the option to be taxed
a. Only S1 is true c. Both are true either at 8% or graduated tax rates
b. Only S2 is true d. Both are false a. S1 c. S1 and S2
b. S2 d. All are true
19. S1 – Goods on hand of taxpayers who will transition
from non-VAT to VAT is subject to 12% VAT due to 25. Which is FALSE? In crimes and offenses under the Tax
deemed sale transaction. Code, as amended:
S2 - Taxpayers who will change registration from VAT a. If the offender is not a citizen of the Philippines, he
to non-VAT is entitled to transitional input tax. shall be deported immediately after serving the
a. Only S1 is true c. Both are true sentence without further proceedings for
b. Only S2 is true d. Both are false deportation
b. If he is a public officer or employee, the maximum
20. ABC Corp., a domestic corporation, applied for a Tax penalty prescribed for the offense shall be imposed
Treaty Relief on its transactions with XYZ Corp., a non- and, in addition, he shall be dismissed from the
resident foreign corporation. Which is TRUE? public service and perpetually disqualified from
a. In applying for treaty relief, the BIR cannot holding any public office, to vote and to participate
determine whether the subject transaction is in any election
subject to other internal revenue taxes c. If the offender is a Certified Public Accountant, his
b. In case of denial, the remedy is appeal to the Court certificate as a Certified Public Accountant shall be
of Tax Appeals automatically revoked or cancelled

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d. In the case of associations, partnerships or 30. All of the following are true, except:
corporations, the penalty shall be imposed on the a. Preliminary Assessment Notice is only a proposed
partner, president, general manager, branch assessment
manager, treasurer, officer-in-charge, and the b. The discrepancy/discrepancies in Notice of
employees responsible for the violation Discrepancy is/are considered deficiency tax/taxes
c. The Formal Letter of Demand/Final Assessment
26. Which is FALSE in estate taxation of bank deposits? Notice is the notice of assessment
S1 – At the option of the executor, administrator or d. The issuance of collection letter is considered a final
heirs, bank deposits of decedents may be subjected to decision on disputed assessment
6% final tax at any time from decedent’s death.
S2 – If the bank deposits were subjected to final tax, 31. The antecedent facts of ABC Corp.’s TY2011 tax case
the deposits shall no longer form part of the gross estate are as follows:
of the decedent. November 12, 2012 Service of Letter of Authority dated
S3 – In case of joint deposits, only that share or interest October 30, 2012
of decedent is subject to either final tax or estate tax. November 9, 2013 Issuance of Notice of Discrepancy /
S4 - In all cases, the final tax withheld shall not be Notice of Informal Conference
refunded but may be credited from the tax due in November 28, 2014 Issuance of Preliminary Assessment
instances where the bank deposit account subjected to Notice (PAN)
final tax has been actually included in the gross estate December 15, 2014 Reply to the PAN
declared in the estate tax return of the decedent. December 16, 2014 Issuance of Formal Letter of Demand
a. S1 c. S3 (FLD)
b. S2 d. S4 Note: ABC Corp. failed to file a valid
protest to the FLD
27. The authority granted to internal revenue officers to March 3, 2015 Issuance of Final Decision on Disputed
distraint personal property of whatever character and to Assessment (FDDA)
levy upon the real property and interest in or rights to March 30, 2015 ABC Corp, filed its request for
reconsideration
real property of a delinquent taxpayer:
February 4, 2020 Denial of request for reconsideration by
a. e-Letter of Authority
Commissioner
b. Mission Order
March 22, 2020 Issuance of Warrant of Distraint and/or
c. Notice of Levy or Encumbrance
Levy (WDL)
d. Warrant of Distraint and/or Levy (WDL)
June 30, 2020 Filing of petition for review with the
Court of Tax Appeals
28. Nicanor, as the Accountant of ABC Corp., prepared and
Which is TRUE?
filed the Company’s 2020 Annual Income Tax Return
a. The assessment has prescribed
(AITR) on April 17, 2023. After filing, he realized the b. The collection has prescribed
following:
c. The assessment and collection have prescribed
• In #1 (see return below) – Indicated fiscal instead
d. The assessment and collection are valid
of calendar.
• In #2 (see return below) – Indicated 12/2021
32. Which is FALSE? The taxpayer:
instead of 12/2022
a. Must reply to the Preliminary Assessment Notice
within fifteen days from receipt of the PAN
b. Must protest the Formal Letter of Demand/Final
Assessment Notice within thirty days from receipt of
the FLD/FAN
c. Must appeal the Final Decision on Disputed
What is Nicanor’s remedy? Assessment within thirty days from receipt of the
a. Amend the return by filing a new one and indicate FDDA
the correct information and mark YES to the d. None of the statements is false
question in item #3 of the return
b. Amend the return by filing a new one and indicate 33. Which is FALSE?
the correct information and mark NO to the question a. The Final Decision on Disputed Assessment must
in item #3 of the return contain that it is a final decision
c. Revise the data upon retrieval of the BIR of the b. The Final Decision on Disputed Assessment must
return state the details of the assessment and must
d. Submit proof and request the BIR to correct the contain factual and/or legal basis otherwise the
return assessment is void
c. The Formal Letter of Demand/Final Assessment
29. It means the national territory of the Philippines outside Notice state the details of the assessment and must
of the proclaimed boundaries of the ECOZONES except contain factual and/or legal basis otherwise the
those areas specifically declared by other laws and/or assessment is void
presidential proclamations to have the status of special d. The Preliminary Assessment Notice must state the
economic zones and / or free ports. details of the assessment and must contain factual
a. Customs territory and/or legal basis otherwise the PAN is void
b. Domestic jurisdiction
c. Philippine area of responsibility 34. Which is FALSE? For ordinary prescription to not set in,
d. Philippine territory the BIR must issue the assessment on:
a. For the 2020 1st Quarter Expanded Withholding Tax
return - on or before April 30, 2023
b. For the 2020 1st Quarter Final Withholding Tax
return - on or before April 30, 2023
c. For the 2020 1st Quarter Income Tax Return – for
individuals on or before May 15, 2023

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d. For the 2020 1st Quarter VAT return - on or before Deductions 500,000 200,000 1,100,000 500,000
April 25, 2023
Taxable 500,000 800,000 (100,000) 1,500,000
income
35. Which is FALSE?
(loss)
a. Beginning 2023, the filing of VAT return is quarterly
only
The duly filed Quarterly VAT returns disclosed the following:
b. Input tax on purchase of capital goods (depreciable)
Quarters 1st 2nd 3rd 4th
exceeding Php 1,000,000.00 is creditable against
output tax VATable 2,000,000 3,000,000 3,000,000 5,000,000
c. Input tax on purchase of capital goods (depreciable) sales
exceeding Php 1,000,000.00 is deferred over the Output tax 120,000 360,000 360,000 600,000
useful life of the asset or maximum of sixty months
d. The remedy in case of denial of VAT refunds is to
appeal to the Court of Tax Appeals Purchases
with VAT:
Use the following information to answer next three (3)
questions: Goods 4,000,000 3,000,000 2,000,000 4,000,000
Service 200,000 100,000 200,000 200,000
ABC Corp. a regional operating headquarter of ABC World
Group based in Australia shared the following financial Input tax 504,000 372,000 264,000 504,000
information:
2022 2023
VAT paid 0 0 96,000 96,000
Gross receipts 100,000,000.00 120,000,000.00
Cost of Services 80,000,000.00 90,000,000.00
In addition to the above, a review of the Balance Sheet
Gross Income 20,000,000.00 30,000,000.00 Accounts (Statement of Financial Position) showed the
Allowable Deductions 19,500,000.00 25,000,000.00 balances of Asset and Liability in the amounts of Php
Net Taxable Income 500,000.00 5,000,000.00 10,000,000 and Php 6,000,000, respectively.

39. How much is the income tax payable for the 1st Quarter
Other information: Income Tax Return?
2022 2023 a. Php 10,000.00 c. Php 100,000.00
Assets 80,000,000.00 95,000,000.00 b. Php 20,000.00 d. Php 125,000.00
Liabilities 30,000,000.00 40,000,000.00
40. How much is the income tax payable for the 2nd Quarter
Stockholders’ Equity 50,000,000.00 55,000,000.00
Income Tax Return?
a. Php 20,000.00 c. Php 200,000.00
36. How much is the income tax payable in its 2022 AITR? b. Php 160,000.00 d. Php 260,000.00
a. Php 0 (ROHQ is exempt from taxation)
b. Php 50,000.00 41. How much is the income tax payable (overpayment)
c. Php 125,000.00 for the 3rd Quarter Income Tax Return?
d. Php 200,000.00 a. (Php 20,000.00) c. Php 10,000.00
b. Php 0 d. Php 30,000.00
37. How much is the income tax payable in the 2023 AITR?
a. Php 0 (ROHQ is exempt from taxation) 42. How much is the income tax payable for the 4th Quarter
b. Php 1,000,000.00 Income Tax Return?
c. Php 1,175,000.00 a. Php 0 c. Php 150,000.00
d. Php 1,250,000.00 b. Php 20,000.00 d. Php 300,000.00

38. How much is the output tax in 2022? 43. How much is the income tax payable (overpayment) in
a. Php 0 as ROHQ’s transactions are subject to zero- its Annual ITR?
rate a. Php 280,000.00 c. Php 540,000.00
b. Php 0 as the ROHQ’s transactions are exempt from b. Php 330,000.00 d. Php 675,000.00
VAT
c. Php 1,000,000.00 as ROHQ’s transactions are 44. How much is the VAT payable for the 1st Quarter VAT
subject to 1% percentage tax Return?
d. Php 12,000,000.00 a. Php 46,000 c. Php 360,000.00
b. Php 96,000.00 d. Php 600,000.00
Use the following information to answer next seven (7)
questions: 45. How much is the VAT payable for the 2nd Quarter VAT
The following can be found in ABC Corp.’s (domestic Return?
corporation) 2022 financial records: a. Php 68,000.00 c. Php 328,000.00
Quarterly Income Statement: b. Php 108,000.00 d. Php 480,000.00
Quarters 1st 2nd 3rd 4th
Gross 5,000,000 4,000,000 3,000,000 6,000,000 46. How much is the VAT payable (overpayment) for the 3rd
sales Quarter VAT Return?
Cost of 4,000,000 3,000,000 2,000,000 4,000,000 a. (Php 204,000.00) c. Php 96,000.00
sales b. Php 0 d. Php 360,000.00
(purchase
of goods) 47. How much is the VAT payable for the 4th Quarter VAT
Return?
Gross 1,000,000 1,000,000 1,000,000 2,000,000 a. Php 120,000.00 c. Php 480,000.00
income
b. Php 216,000.00 d. Php 720,000.00

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48. Assuming the Company filed its 4th Quarter VAT return Use the following information to answer next four (4)
on January 20, 2023 and filed an amendment on questions:
January 31, 2023, the imposable surcharge is?
a. None Nicanor disclosed the following 2022 transactions for
b. 25% since the under-declaration is less than 30% your review:
c. 25% based on the deficiency basic VAT Customers Amount of Sale Amount
d. 50% due to falsity or fraud collected
Senior citizens 100,000.00 100,000.00
Use the following information to answer next six (6) Persons with 50,000.00 50,000.00
questions: disability
Solo parents 50,000.00 50,000.00
Nicanor is employed by ABC Corp. and has no other source National Athletes 50,000.00 50,000.00
of income. He received the following from his employer in Athletes 50,000.00 50,000.00
2022: Regular customers 400,000.00 300,000.00
Monthly Basic Salary 102,526.46 Government 1,000,000.00 500,000.00
Total 1,700,000.00 1,100,000.00
13th month pay and other benefits 142,649.82 He asked you to compute the following:
De minimis benefits 26,000.00
55. Assuming Nicanor is VAT-registered seller of goods, how
SSS, PHIC and PAGIBIG Contributions 32,633.29
much is the total output tax required to be reported in
Other exempt benefits 45,177.93 the VAT return?
49. How much is the total non-taxable or exempt a. Php 102,000.00 c. Php 174,000.00
compensation? b. Php 108,000.00 d. Php 180,000.00
a. Php 161,177.93 c. Php 193,811.22
b. Php 167,811.22 d. Php 246,461.04 56. Assuming Nicanor is VAT-registered seller of goods, how
much is the VAT-exempt transaction required to be
50. Assuming during annualization, it was determined that reported in the VAT return?
the tax withheld on compensation from January to a. Php 150,000.00 c. Php 250,000.00
November is Php 200,000.00, how much is the tax b. Php 200,000.00 d. Php 300,000.00
required to be withheld on compensation in Nicanor’s
December compensation? 57. Assuming Nicanor is VAT-registered seller of service,
a. Php 74,890.20 c. Php 46,715.20 how much is the total output tax required to be reported
b. Php 0 d. Php 96,145.80 in the VAT return?
a. Php 102,000.00 c. Php 174,000.00
51. Assuming during annualization, it was determined that b. Php 108,000.00 d. Php 180,000.00
there was over withholding, until when is the employer
required to refund employee? 58. Assuming Nicanor is Non-VAT-registered seller of
a. Not later than December 24 service, how much is the percentage tax PAYABLE
b. Not later than December 31 assuming further that the required withholding was
c. Not later than January 25 of the following year made by the government?
d. Not later than January 31 of the following year a. Php 6,000.00 c. Php 11,000.00
b. Php 7,000.00 d. Php 17,000.00
52. Assuming , further, that Nicanor was employed on
November 1, how much is the 13th month pay to be paid Use the following information to answer next two (2)
by his employer? questions:
a. Php 17,087.74 c. Php 102,526.46
b. Php 17,088.00 d. Php 106,913.95 A taxpayer has the following financial information:
Gross sales 5,000,000
53. Which is FALSE in 13th month pay? Cost of sales 4,000,000
a. It is equivalent to the mandatory one month of total Gross income 1,000,000
salary received by official and employees of the Deductions 500,000
government, GOCC or private offices Taxable income (loss) 500,000
b. It can be higher than the threshold for exemption Other information:
c. To be eligible, employee must have worked for at • The taxpayer has non-operating income (rent
least one (1) month during the calendar year income) of Php 200,000.00.
d. Payment cannot be deferred and is payable on or • The taxpayer has opted Optional Standard
before December 24 of each year Deduction as method of deduction.

54. Assuming finally that during the same year, Nicanor sold 59. Assuming the taxpayer is an individual taxpayer, how
his personal car for Php 601,000.00 which he bought in much is the taxable income?
2020 for Php 600,000.00. Which is TRUE? a. Php 700,000.00
a. Nicanor is not required to file an Annual Income Tax b. Php 720,000.00
Return since he has one employer during the year c. Php 3,200,000.00
and the tax was properly withheld d. Php 3,120,000.00
b. Nicanor is still qualified as a substituted filer
provided the tax due on his compensation equals 60. Assuming the taxpayer is a non-individual taxpayer,
the tax withheld by his employer how much is the taxable income?
c. The capital gain is subject to regular tax a. Php 720,000.00
d. The gain is not required to be reported since it is a b. Php 800,000.00
non-business/non-professional income c. Php 3,120,000.00
d. Php 3,200,000.00

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Use the following information to answer next three (3) 62. How much is the deficiency basic value-added tax?
questions: a. Php 340,000.00 c. Php 840,000.00
b. Php 700,000.00 d. Php 1,200,000.00
The following were culled from the records of ABC Corp., a
non-VAT trading company under BIR audit due to a 63. Assuming ABC Corp., is a top withholding agent, how
complaint for non-issuance of receipts: much is the deficiency basic expanded withholding tax?
a. Php 85,000.00 c. Php 105,000.00
Statement of Financial Position (Balance Sheet) per books: b. Php 95,000.00 d. Php 115,000.00
Assets 2021 2020
64. The following were lifted from the 2022 sales books and
Cash 2,000,000.00 1,000,000.00
the duly filed percentage tax returns of ABC Corp.:
Accounts Receivable 3,000,000.00 2,000,000.00 Head Branch 1 Branch 2 Branch 3
Office
Merchandise Inventory 4,000,000.00 2,000,000.00
Gross 700,000. 300,000. 200,000. 100,000.
PPE 5,000,000.00 3,000,000.00 Sales 00 00 00 00
Total Assets 14,000,000.00 8,000,000.00
Percenta
Liabilities
ge tax
Accounts Payable 500,000.00 200,000.00 returns:
1st 200,000. 150,000. No return 100,000.
Other Payables 300,000.00 150,000.00
Quarter 00 00 filed 00
Total Liabilities 800,000.00 350,000.00 2nd 100,000. No return 50,000.0 No return
Quarter 00 filed 0 filed
3rd 150,000. 50,000.0 No return No return
Statement of Comprehensive Income (Income Statement) Quarter 00 0 filed filed
per return (AITR): 4th No return 50,000.0 No return No return
2021 Quarter filed 0 filed filed
Gross sales 6,000,000.00 The Head Office’s and the Branches’ Certificate of
Registration showed Percentage Tax Return as one of the
Sales returns and 0.00 tax types. You were engaged to handle tax compliance of
discounts the Company. The total deficiency basic percentage tax you
Net Sales 6,000,000.00
will recommend for payment in the amendment of the
Less: Cost of sales: returns is:
a. Php0.00
Beginning Inventory 2,000,000.00
b. Php 2,000.00
Add: Purchases 5,000,000.00 c. Php 4,500.00
d. Php 45,000.00
Total available for sale 7,000,000.00
Less: Ending inventory 4,000,000.00 3,000,000.00 65. The records of ABC Corp., a VAT-registered taxpayer,
for the TY 2022 are disclosed below:
Gross income 3,000,000.00
Month Description Amount Input Tax
Less: Expenses: of
purchase
Salaries and wages 500,000.00
January Inventory 1,000,000.00 120,000.00
Depreciation 500,000.00 Machinery 2,000,000.00 240,000.00
February Inventory 500,000.00 60,000.00
Rent 500,000.00 Equipment 1,500,000.00 90,000.00
Transportation and 500,000.00 March Inventory 2,000,000.00 240,000.00
travel Delivery 3,000,000.00 360,000.00
Contractor’s expense 500,000.00 2,500,000.00 truck
Total 10,000,000.00 1,200,000.00
Net income 500,000.00 Note: Life of machinery, equipment and delivery truck
is five (5) years How much is the total input tax
The Company intentionally did not file any corresponding creditable against the output tax?
tax returns except the annual income tax return where it a. Php 420,000.00 c. Php 1,179,000.00
paid Php 100,000.00. b. Php 441,000.00 d. Php 1, 200,000.00

Audit findings: 66. ABC Corp., a domestic manufacturing company, shared

• Under-declared sales of Php 4,000,000.00. the following information:
• Cost of sales is correct. Direct materials – Php 5,000,000.00
• Salaries and wages amounting to Php 200,000.00 were Direct labor – Php 3,000,000.00
given to ghost employees. Factory overhead – Php 3,000,000.00
• No withholding was made on rent and contractor’s Assuming actual training expenses for skills
expenses. development of employees paid to private
• No proof of transportation and travel expense in the enterprises (with apprenticeship agreement) is Php
amount of Php 100,000.00. 1,000,000.00, how much is the additional deduction
• Total actual input tax paid is Php 500,000.00. that can be claimed by the Company?
a. Php 0.00
61. In preparing the necessary assessment, how much is b. Php 300,000.00
the total deficiency income tax including increments? c. Php 500,000.00
(Compute the interest until May 15, 2023) d. Php 1,000,000.00
a. Php 1,525,500.00 c. Php 1,863,000.00
b. Php 1,727,800.00 d. Php 2,200,500.00

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TEAM PRTC

67. The General Information Sheet duly filed by ABC Corp.,

a domestic corporation whose shares are not listed, with 70. ABC Corp. has made the following transactions:
the Securities and Exchange Commission showed the Transactions Amount
following: Subscribed shares of stock at XYZ 1,000,000.00
Corp. (DC) with par value Php100
Stockholder Number of Par Value Loan - private entities 1,000,000.00
Shares (acquisition cost)
DEF Corp. (DC) 10,000 1,000,000.00 Loan – PRTC Bank 1,000,000.00

GHI Corp. (RFC) 10,000 1,000,000.00 Rent 1,000,000.00

Donation of real property (zonal is 1,000,000.00
JKL Corp. (NRFC) 10,000 1,000,000.00
higher)
MNO Corp. (DC) 10,000 1,000,000.00 Cash donation 1,000,000.00
Nicanor 10,000 1,000,000.00 How much is the total documentary stamp tax
JKL Corp. sold its shares to XYZ Corp., a non-resident required to be paid?
foreign corporation for Php 2,000,000.00. How much is the a. Php 27,002.00
capital gains tax to be paid before transfer? b. Php 34,500.00
a. Php 0 c. Php 34,502.00
b. Php 150,000.00 d. Php 42,002.00
c. Php 250,000.00
d. Php 300,000.00
Thank you for participating in Team PRTC
68. Nicanor donated the following properties in 2022: Nationwide Open Final Pre-Board Examination.
Land to Department of Acquisition cost – Php
Education for construction of 5,000,000.00
elementary school Zonal value – Php
4,000,000.00
Assessor’s fair value – Php
3,000,000.00
Prevailing market rate – Php
10,000,000.00
Land to Saint Nichols Acquisition cost – Php
Academia, his alma mater in 1,000,000.00
high school, a private non- Zonal value – Php
stock, non-profit institution 3,000,000.00
Assessor’s fair value – Php
2,000,000.00
Cash to Mahal Kita Php 1,000,000.00
Foundation, accredited by
Philippine Council for NGO
Certification
Cash to a priest Php 1,000,000.00
How much is the donor’s tax?
a. Php 45,000.00
b. Php 225,000.00
c. Php 285,000.00
d. Php 525,000.00

69. Inday provided you the list of the estate of Nicanor who
died intestate on February 14, 2023. The following are
the details:

Properties:
• Family home – Php 15,000,000.00
• Inherited land – Php 5,000,000.00
• 1000 Shares in ABC Corp. an unlisted company –
5,000,000.00
• Bank deposits – Php 5,000,000.00
• Motor vehicles – Php 5,000,000.00
Other information:
• Funeral Expenses – Php 1,000,000.00
• Loss incurred on February 13, 2023 – Php
1,000,000.00

How much is the estate tax due?

a. Php 150,000.00
b. Php 300,000.00
c. Php 450,000.00
d. Php 750,000.00

Page 8 of 8 www.teamprtc.com.ph TAX.FinPB5.23