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A storm resulted in the loss of livestock worth $136,000. The deductible loss for taxation purposes is $120,000. Mr. Jun, a professional practitioner, incurred $70,000 in deductible expenses which included salaries for office staff, office utilities, supplies, and depreciation of office equipment. A taxpayer owns a building with a fair market value of $6,000,000, purchase price of $5,000,000, and carrying amount of $4,500,000. With a remaining useful life of 9 years using the straight line depreciation method, the deductible depreciation expense is $500,000.

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Sophia Keratin
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141 views

Intx

A storm resulted in the loss of livestock worth $136,000. The deductible loss for taxation purposes is $120,000. Mr. Jun, a professional practitioner, incurred $70,000 in deductible expenses which included salaries for office staff, office utilities, supplies, and depreciation of office equipment. A taxpayer owns a building with a fair market value of $6,000,000, purchase price of $5,000,000, and carrying amount of $4,500,000. With a remaining useful life of 9 years using the straight line depreciation method, the deductible depreciation expense is $500,000.

Uploaded by

Sophia Keratin
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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7.

A storm resulted in the loss of the following livestock:

Value of two heifers (purchased at 15,000 each) 40,000

Value of a bull (purchased for 18,000) 24,000

Value of 12 calves worth 6,000 each 72,000

Total value of lost livestock 136,000

Determine the deductible loss for taxation purposes.

120,000

48,000 (15k x 2=30k+18k)

64,000

8. Mr. Jun, a professional practitioner, incurred the following expenses during the period:

Salaries of household maids 50,000

Salaries of office staff 30,000

Office utilities 12,000

Office supplies 8,000

Depreciation of personal car 15,000

Depreciation of office equipment 20,000

Compute the total deductible expenses

135,000

70,000 (30K+12K+8K+20K)

50,000

100,000
9. The following relate to the building of a taxpayer

Fair market value 6,000,000

Purchase price 5,000,000

Carrying amount 4,500,000

Remaining useful life 9 years

Depreciation method Straight line

What is the deductible amount of depreciation expense?

555,555

500,000 (4.5M/9)

666,667

10. The personal car of the taxpayer had the following data

Fair market value 6,000,000

Purchase price 5,000,000

Estimated useful life 10 years

500,000

250,000

600,000

11. The following relate to the inventory of tools held by the taxpayer

Inventory of tools, January 1, 2019 120,000

Purchases of tools 300,000

Inventory of tools, December 31, 2019 140,000


What is the amount of deductible tools expense?

280,000 (120K+300K-140K)

300,000

120,000

12. A taxpayer pay the following disbursements and expenses for the current year:

Tuition fees of children 50,000

Donation to friends 20,000

Purchase of office equipment at start of the year (equipment expected to last for 5 years)
100,000

Office rent (for three years including the current year) 90,000

Office supplies (1/2 used) 20,000

Compute the total deductible expense from the above items

50,000

60,000 (100K/5yrs=20k, 90k/3=30k,20kx1/2=10k. 20k+30K+10K=60k)

20,000

13. Bermuda Inc. Insured to of its key employees paying the following premiums annually:

Mr. Crocker, the president 40,000

Mr. Janiero, the vice president for operations 34,000


In Mr. Crocker's policy, Bermuda Inc. is the beneficiary. In Mr. Janiero's policy, his wife is the beneficiary
of the policy.

Compute the total deductible expense

50,000

34,000

74,000

40,000

14. Dragon city corporation is a resident foreign corporation established in china but is operating in the
Philippines. During the year it paid for 300,000 for salaries of Philippine employees and 1,200,000 for
Chinese employees.

Compute the deductible compensation expense.

300,000

1,500,000

1,200,000

15. Sapphire City Corporation is a domestic corporation established in china but is operating in the
Philippines. During the year it paid for 300,000 for salaries of Philippine employees and 1,200,000 for
Chinese employees.

Compute the deductible compensation expense.

1,200,000

300,000

1,500,000
16. Gold City Corporation is a non-resident foreign corporation established in china but is operating in
the Philippines. During the year it paid for 300,000 for salaries of Philippine employees and 1,200,000
for Chinese employees.

Compute the deductible compensation expense.

1,200,000

1,500,000

300,000

17. Barney company had the following summaries of expenses:

Expenses without supporting documentation 200,000

Expenses with supporting documentation

Income payments subject to creditable withholding tax:

With withheld CWT 600,000

Without withheld CWT 400,000

Payments not subject to creditable withholding tax 200,000

Determine the amount of deductions

800,000 (600k+200K)

1,200,000

1,400,000

1,000,000

18, Catalan Corporation bought equipment costing 500,000. The equipment was expected to have
50,000 residual value at the end of its 5-year expected life, but they failed to withhold the creditable
withholding tax on the equipment.
Compute the depreciation expense in the first year

45,000

180,000

90,000

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