Name: Date:

Yr. and Block

Encircle the correct answer. Use permanent ink.

1. Dong Company, a non-vat restaurant business, uses accrual basis of accounting in its financial statements. Its operation for the year ended shows the following: B
Gross Revenue on account to customers 3,500,000.00 Gross Revenue on account to customers
Gross Receipts from senior citizens, net of 20% discount 400,000.00 Gross Receipts from senior citizens, net of 20% discount 3,500,000.00
Purchases, directly attributable to customers other than senior citizens, net of VAT 300,000.00 Direct COS 500,000.00
Purchases, cannot be attributed, net of VAT 200,000.00 - 2,000,000.00
Direct Cost of Sales 2,000,000.00 2,000,000.00
Purchase of Equipment, used for all services rendered 600,000.00
Increase in Accounts Receivable (VAT inclusive) 224,000.00
Operating Expenses 1,000,000.00
Determine the amount of Gross Income?
a 900,000.00 c 3,500,000.00
b 2,000,000.00 d 4,000,000.00

2. A cash dividend of P100,000 received by a taxpayer in 2020 from a foreign corporation whose income from Philippine sources is 40% of its total income is B
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 c Only Statement 1 is true
b Both statements are false d Only Statement 2 is true
D
3. 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 c Taxable in full if he is a non- resident citizen
b Partly taxable if he is a resident alien d Exempt from income tax if he is a non- resident alien

4 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 b
Statement 1- Considered as passive income
Statement 2- Subject to creditable withholding tax
a Both statements are true c Only Statement 1 is true
b Both statements are false d Only Statement 2 is true

Statement 1- The premiums on health and/or hospitalization insurance paid by an individual taxpayer is deductible from gross income for maximum amount of P200.00 provided the family
5. gross income does not exceed P250,000 per month. b
Statement 2- The premium on health and/or hospitalization insurance is not deductible by the spouse who claimed the additional exemption in case of married taxpayers.
a True, true c False, true
b True. false d False, false

A bought a condominium unit under installment basis, to be used as his office in the practice of his profession and paying P10,000 monthly. For income tax purposes, the P10,000 monthly
6. payment shall be c
a Treated as business rental, hence deductible c Treated as capital expenditure, hence not deductible
b Treated as depreciation expense, hence deductible d Treated as ordinary business expense

7. A marketing incurred the following expenses in relation to its business during the taxable year: d 300,000.00
Provision for bad debis 15,000.00 - 5,000.00
Research and development cost, treated as deferred expense 500,000.00 - 100,000.00
Contributions during the year: - 40,000.00
The government for priority 50,000.00 155,000.00
The government for public purposes 10,000.00 10%
To the Catholic church for charitable purposes 25,000.00 15,500.00
50,000.00
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 at book value 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 deductions for contributions are:

a 80,000.00 c 57,000.00
b 85,000.00 d 65,500.00

8. Total allowable deductions: A 65,500.00

a 210,500.00 c 202,750.00 5,000.00
b 220,500.00 d 225,000.00 100,000.00

Buenas Corporation, a real estate dealer and lessor, on its first year of operation, has received a Letter of Authority from the BIR. As a revenue officer, you were assigned to audit the
9. Corporation's income tax for taxable year 2018. The audited financial statements show the Corporation's income statement as follow:
Revenues:
Rental income 2,800,000.00
Interest from bank 24,000.00
 Gain on sale of land 500,000.00
Expenses:
Depreciation 800,000.00
Salaries and wages 200,000.00
Taxes and licenses 180,000.00
Entertainment and representation 40,000.00
Interest expense 60,000.00
Office supplies 20,000.00
Income tax due for the year is computed as follows:

Net income before income tax 2,024,000.00

Less: Interest from bank 24,000.00
Gain on sale of land 500,000.00 524,000.00
Net taxable income 1,500,000.00
Multiply by: corporate income tax 0.30
Income tax expense 450,000.00

After a detailed examination of the Corporation's books, you have noted the following:
Balance sheet as of December 31, 2018 showed an outstanding balance of deferred rent income amounting to P200,000, representing advance rent payments by tenants.
Interest from bank is net of 20% final withholding tax
Gain on sale of land, represents gain on sale of residential lot with selling price, amounting to P2,000,000
Taxes and licenses in the Notes to Financial Statements
Withholding tax on sale of land, P120,000
Documentary stamp tax on sale of land, P30,000
Surcharge and penalties on late payment of tax, P10,000
Permits and licenses, P20.000
Interest expense includes interest on late payment of tax, amounting to P5,000.

How much should be the deductible taxes and licenses? d 30000

a 20,000.00 c 30,000.00 20000
b 180,000.00 d 50,000.00
d
10 How is the deductible entertainment and representation expense? 2/5 40,000.00 16,000.00 10,000.00 10,000.00
a 40,000.00 c 38,000.00 3/5 40,000.00 24,000.00 30,000.00 24,000.00
b 33,333.00 d 34,000.00

11. How much is the basic tax still tax due? C 3,500,000.00
a 250,770.00 c 253,770.00 - 1,154,100.00
b 252,200.00 d 250,800.00 703,770.00

Rey and Josepha inherited a commercial lot and building from their parents 2 years ago. In 2018 (current year), the inherited property realized rental income of P300,000 per month, in which
both shared the revenues equally, The co-ownership remained unregistered with the Securities and Exchange Commission. In addition, Jose and Maria reported their following personal
12 income and expenses.
Rey, gross compensation income (inclusive of 13th month and other benefits amounting to P100,000), P1,300.000 1,800,000.00
Josepha, net income from her laundry service business (net of cost and expenses of P600,000), P200,000. 1,080,000.00
1,210,000.00
How much is the income tax due of Rey in his annual income tax return, assuming optional standard deduction is used in determining his expenses? a 582,800.00
a 582,500.00 c 253,000.00
b 431,800.00 d 611,600.00 1,800,000.00
800,000.00
13 How much is the income tax due of Josepha in his annual income tax return, assuming optional standard deduction is used in determining his expenses. c 2,600,000.00
a 22,000.00 c 358,000.00 1,560,000.00
b 322,000.00 d 250,000.00 358,000.00

ATTY. PAPA, is a practicing lawyer, is also a licensed real estate broker. Both businesses were registered with the BIR and had the following data made available for year 2018 (amounts
14 are gross of withholding tax):
Revenues from his profession 3,000,000.00
Commission received 600,000.00
Cost of services 700,000.00
Business related expenses 400,000.00
Gain on sale of real property held for investment 500,000.00
Selling price of real property 2,000,000.00
Wagering gain 150,000.00
Wagering losses 100,000.00
Royalties from books published 150,000.00
Interest Income from banks 30,000.00
c 2,950,000.00
Compute Tax due, assuming ATTY. opted to use itemized deduction in computing his income tax - 400,000.00
a 810,000.00 c 666,000.00 2,550,000.00
b 698,000.00 d 826,000.00 666,000.00

15 Compute OSD. Optional Standard Deductions d 3,600,000.00

a 2,240,000.00 c 1,460,000.00 1,400,000.00
 b 2,300,000.00 d 1,440,000.00

16 How much is the total final withholding income tax of ATTY, assuming 2/3 of interest income from banks were realized from time deposits with maturity of 5 years? d
a 47,000.00 c 32,000.00 cgt 120,000.00
b 17,000.00 d 137,000.00 ft royalty 15,000.00

17 Notwithstanding any contrary provision of R.A. No. 1405 and other general or special laws, the Commissioner of Internal Revenue is authorized to inquire into bank deposits: a
Case 1: of a decedent to determine its gross estate
Case 2: of any taxpayer who has filed an application for compromise of his tax liability by reason of financial incapacity
a True in both cases c True only in the first case
b False in both cases d True only in the second case

In 2018, Ms. Glai Espenilla Bangug, financial comptroller of EB Company, earns annual compensation of P1, 500, 000, inclusive of 13th month and other benefits in the amount of P80, 000
and mandatory SSS contribution of P3,500 and Philhealth contribution of P2, 000. Aside from her employment income she owns a convenience store, VAT-registered, with gross sales of
P3, 000,000. Sales discount amounts to P300, 000; sales returns and allowances amount to P150, 000. Her cost of sales and operating expenses are P1, 000, 000 and P600, 000
18 respectively and with non-operating income of P100,000. Payments for the first three (3) quarters amount to P230,000. B
Can she avail of the 8 income tax rate?
a Yes, because her gross sales do not exceed the VAT threshold. c Yes, because she is a mixed income eatner.
b No, because she is VAT-registered. d No, because her total income including compensation income
exceed the VAT threshold.

19 How much is her total taxable income? C

a 2,913,500.00 c 2,464,500.00
b 2,550,000.00 d None of the choices.

Ms. Queenie signified her intention to be taxed at 8% income tax rate on gross sales in her first quarter return. However, her gross sales during the taxable year has exceeded the VAT
20 threshold
First Quarter Second Quarter Third Quarter Fourth Quarter
Total Sales 500,000.00 1,000,000.00 1,500,000.00 4,000,000.00
Cost of Sales 300,000.00 500,000.00 700,000.00 1,500,000.00
Operating Expenses 100,000.00 200,000.00 250,000.00 500,000.00

How much is the income tax due for the second quarter? b
a 100,000.00 c 20,000.00
b 80,000.00 d None of the Choices

21 How much is the income tax payable for the final quarter? a
a 574,000.00 c 340,000.00
b 560,000.00 d None of the Choices

ABC Corporation, VAT-registered real estate dealer, sold a residential lot on July 2, 2018 for P1,500, 000. The down payment was P200, 000. The zonal vale of the subject property at the time of sale
amounted P2, 000, 000. Would the sale qualify under installment plan?
22 A
a Yes, because the initial payment did not exceed 25% of the selling price
b No, because the amount of initial payments were not known
c Yes, because the sale had initial payments amd, therefore qualified under installment plan
d No, because as a rule, sale of real property would always be considered under cash basis.

23 Daily meal allowance for overtime work is a de minimis benefit if not exceeding what percent of the basic minimum wage? D
a 10% c 20%
b 15% d 25%

In 2018, Ms. Ai M. Strong, an MWE, received from her employer an annual minimum wage salary of P99,702. Aside from this, she also received P8,00 for holiday pay, overtime pay, and night shift
differential
24 pay. Furthermore, she received P8,303 as her 13t* month pay. What amounts shall she be taxable on? D
a P 8,000. c P 8,303
b P 107,702. d None

Ms. Ai in the immediately preceding number was promoted in July 2018, and starting the same month was given a raise in salary which was more than the statutory minimum age. Will her
25 entire compensation during 2018 be taxable and subject to withholding tax? C
Only her earnings from July 2018 to December 2018 shall be taxable and subject to
a Yes. Her entire earnings shall be taxable. c
withholding tax
b No. her entire earnings shall not be taxable. d None of the above.

26 This is not deductible from gross income B

a Transportation expenses from the main office to the branch. c Travel expenses on business trips.
Travel expenses while away from home in the
b Transportation expenses from home to the office and from the office back to home. d
pursuit of trade, business or profession.

27 Interest expense incurred to acquire property used in trade or business or exercise of a profession is C
a Not allowed as a deduction against gross income
 b Required to be treated as a capital expenditure to form part of the cost of the asset
c Allowed as a deduction or treated as a capital expenditure at the option of the taxpayer.
d Allowed as a deduction or treated as a capital expenditure at the option of the government

28 I. Documentary Stamp Tax is Deductible expense.

II. A capital expenditure usually benefits more than one accounting period and is deductible from gross income in the year it is paid or incurred. C
a True, True c True, False
b False, False d False, True

29 The records of a domestic corporation, on the calendar year basis, organized in 2010, show financial data for the following years: C
2018 2019 2020 2021
Net Sales 3,925,000.00 4,810,000.00 5,939,000.00 6,945,000.00
Cost of sales 1,950,000.00 2,710,000.00 3,465,000.00 4,180,000.00
Business expenses including bad
debts written off 1,900,000.00 2,000,000.00 2,520,000.00 2,400,000.00
Other taxable income 25,000.00 100,000.00 26,000.00 35,000.00
Total assets 40,000,000.00 50,000,000.00 51,000,000.00 49,000,000.00

Recovery of bad debts written off:

In 2018 60,000.00
In 2019 10,000.00

The income tax payable for 2018?

a 30,000.00 c 40,000.00
b 35,000.00 d None of the above

30 The income tax payable 2019? C

 a 78,000.00 c 68,000.00
b 45,200.00 d None of the above

31 The income tax payable for 2020? A

a 37,500.00 c 20,000.00
b 27,500.00 d None of the above

32 The income tax payable for 2021? D

a 100,000.00 c 78,000.00
b 97,500.00 d 40,500.00

33 Christina, single, Filipino with | dependent child, received in taxable year 2020 the following professional fees as an independent consultant: A
Monthly Fees Less 5% CWT Net Monthly Fees
240,000.00 12,000.00 228,000.00

The monthly cost of her professional services amounted to P20,000, gross of the Creditable Withholding Tax.
The office rental expenses related to her consultancy business amounted to
Monthly rental expense Less 5% Creditable Withholding Tax. Monthly rental expense paid
30,000.00 1,500.00 28,500.00

She is not VAT-registered and instcad pays 3% Percentage Tax on her gross receipts under Section 116 of the Tax Code.
Aside from her consultancy business, she is a faculty member of CPAR University from which she received the following employment income for the same year:
Gross pay Less CWT Less SSS premiums and union dues Net Pay
850,000.00 60,000.00 6,000.00 784,000.00

The amount she received from CPAR University is inclusive of 13th Month Pay and other benefits of P165,000.
Her car fuel expenses amounted to P10,000 per month. She used the car for her consultancy business 40% of the time.

She also wrote a book entitled "SINGLE LIFE IS HEAVEN" which became a bestseller in the Philippines. In 2020, she earned royalties from the book in the amount of P2,500,000, net of the 10% final tax.
Using this amount, she opened a time deposit with BDO which earned interest income of P75,000, net of the 20% final tax.

She has excess tax credits from the prior ycar of P15,500.

Calculate her tax payable in the 1st Quarter of 2020?

a 12,600.00 c 64,100.00
b 48,600.00 d None of the above

34 Calculate her tax payable in the annual ITR for 2020? B

a 777,872.00 c 369,112.00
b 309,112.00 d None of the above

35 Calculate her tax payable in the 2nd quarter if she avails of the 8% income tax option D
a 115,200.00 c 21,000.00
b 27,700.00 d None of the above

36 Calculate her tax payable in the annual ITR if she avails of the 8% income tax option C
a 348,900.00 c. 80,100.00
b 176,100.00 d None of the above

37 A feature of ordinary gains as distinguished from capital gains: D

a. Gains from sales of assets not stock in trade. c. Sources are capital assets.
b. May or may not be taxable in full. d. No holding period.

38 On capital gain tax on real property, which of the following statements is not true? B
a. The tax should be paid, if in one lump sum, within 30 days from the date of sale.
b. The term “initial payment” is synonymous to “down payment”.
c. Tax on the Sale of residential house and lot could be refunded from Escrow in certain circumstances.
d. The tax may be paid in installment if the initial payments do not exceed 25% of the selling price.

Mr. Juan dela Cruz transferred his commercial land with a cost of P500,000 but with a fair market value of P 750,000 to JDC Corporation in exchange of the stocks of the corporations with par value of
39 P1,000,000. As a result of the transfer he became the major stockholder of the corporation. As a result of the transfer, C
a. The recognized gain is the difference between the fair market value of the shares of stocks and the cost of the land
b. The recognized gain is the difference between the par value of the stock and the fair market value of the land.
c. No recognized gain because the land was in exchange or purely stocks and Mr. dela Cruz became the majority stockholders.
d. No recognized gain because the land was in exchange of stocks of the corporation.
40 Gross income is reported partially in each taxable year in proportion to collections made in such period as it bears to the total contract price refers to: D
a. Crop year basis method. c. Accrual method.
b. Percentage of completion basis method. d. Installment sales method.

41 Lots being rented when subsequently sold are classified as: C

a. Capital assets c. Ordinary assets.
 b. Liquid assets. d. Fixed assets.

42 Who among the following is a non-resident alien? A

a. An alien who comes to the Philippines for a definite purpose which in its nature may be promptly accomplished.
b. An alien who comes to the Philippines for a definite purpose which in its nature would require an extended stay.
c. An alien who has acquired residence in the Philippines
d. An alien who lives in the Philippines with no definite intention as to his stay

43 If an individual performs services for a creditor who in consideration thereof cancels the debt, the cancellation of indebtedness may amount: D
a. To a gift. c. To a donation
b. To a capital contribution. d. To a payment of income.

44 The following are the general principles of income taxation: A

i. A citizen of the Philippines residing therein is taxable on all income derived from sources within and without the Philippines.
ii. A nonresident citizen is taxable on income derived from sources within the Philippines.
iii. An individual citizen of the Philippines who is working and deriving income from abroad as an overseas contract worker is taxable only on income from sources within the Philippines.
iv. An alien individual, whether a resident or not of the Philippines, is taxable only on income derived from sources within the Philippines.
v. A domestic corporation is taxable on all income derived from sources within and outside the Philippines
vi. A foreign corporation, whether engaged or not in business in the Philippines, is taxable only on income derived from sources within the Philippines.

a. All the statements are true c. One of the statements is false.

b. All the statements are false. d. Some of the statements are false

45 Which of the following statements is wrong? A

a. A general partnership in trade is not taxable as a corporation. d. A GPP is not taxable as a corporation.
b. A joint venture for undertaking construction projects is not taxable as a corporation.
c. A consortium for energy operations pursuant to an operating consortium agreement under a service contract with the government is not taxable as a corporation.

46 One of the following is not correct for deductibility of losses from gross income: D
c. A declaration of loss by casualty should be filed with the Bureau of
a. It must arise from fire, storm, or other casualty, robbery, theft, or embezzlement. Internal Revenue.

d. It is of property owned by the taxpayer, whether used in business or

b. It must not be compensated by insurance or any form of indemnity. not.

A citizen of the Philippines sold his principal residence in the Philippines at a selling price equal to its fair market value of P4,000,000. The basis or cost of the property was P2,500,000. If the entire proceeds
47 of the sale is immediately invested in acquiring a net principal residence, how much is the basis of the new principal residence? C
a 3,500,000.00 c 2,500,000.00
b 3,000,000.00 d 4,000,000.00

48 In question 58, if only P3,000,000 out of P4,000,000 was utilized in acquiring a new principal residence, the capital gain tax is: A
a. P60,000 c. P180,000.
b. P240,000. d. Some other amount.

49 M CO., a domestic corporation, had the following data for 2021: C

Taxable income, Philippines P1,000,000
Taxable income, X Foreign Country 600,000
Taxable income, Y Foreign Country 400,000
Income tax paid to X Foreign Country 250,000
Income tax paid to Y Foreign Country 120,000
Philippine income tax paid, three quarters of the year 110,000
Total Asset is P 85,000,000 (including Land held for sale worth 3,000,000)

Tax credit for foreign income taxes paid?

a. P540,000. c. P312,000.
b. P370,000. d. P340,000.

50 In Question 60, the Philippine income tax still due, after credit for foreign income taxes paid is: B
a. 78,000.00 c. 500,000
b. 0.00 d. 188,000

51 Statement 1: A business expense will be disallowed as a deduction if the corresponding CWT has not been withheld and remitted to the BIR. a
Statement 2: OSD cannot be disallowed due to non-withholding of the expanded or creditable withholding tax pursuant to Section 34(K) of the Tax Code.
a. All are true. c.False, True
b. All are false d. True, False

Upon retirement, Kaitlynn Gabriel planned to sell a parcel of idle land (capital asset) in Calamba, Laguna which she inherited from her father 20 years ago. Before selling, she discovered
that other parcels of land of the same size and in the same area sold for P2.8 M. She even hired a professional appraiser who estimated the value of her land at P3.0 M. She eventually sold
the parcel of idle land to her friend for P2.4 M. The zonal value at the time of sale was P2.6 M, and the assessor's value was P2.7 M.
52 D
What is the capital gains tax ("CGT) on the sale?
a 6% of P3.0 M c 6% of P2.4 M
b 6% of P2.8 M d None of the above.
53 CRISTAL corporation (domestic), which started operations in 2010, has the following data for FY ending April 30, 2021: A
Sales, net of sales discounts 20,000,000.00
Cost of sales 5,000,000.00
Salaries of employees, net of payroll deductions of P350,000 5,000,000.00
Fringe benefits given to:
Rank and file employees 1,040,000.00
Managerial employees 325,000.00
EAR expenses 550,000.00
Rent expenses 1,200,000.00
Depreciation expense 700,000.00
Bad debt expense (1/3 charged off during the year) 105,000.00
Interest expense on BPI loan 400,000.00
Interest expense on loan from majority shareholder 100,000.00

Other income:
Cash dividends received from:
1) Domestic corporations 550,000.00
3) Foreign corporations 30,000.00
Interest income from Philippine bank deposits, net of FT 100,000.00
Royalty income (Phils.), gross of FT 125,000.00
Gain from sale of property:
1) Makati real property not used in business (SP = P10M) 2,000,000.00
2) Domestic shares (not listed) held as capital assets 100,000.00
3) Domestic shares (listed) held as capital assets 23,000,000.00
Liquidating dividend from ABC Corp. 100,000.00
(cost of ABC shares = P96,000)

CWT withheld by customers 68,000.00

Tax paid in first 3 quarters 30,000.00

Compute final taxes on the CRISTAL's passive income.

(A) P50,000 (C) P40,000
(B) P45,000 (D) None of the above
54 Compute total CGT on CRISTAL's capital gains. C
(A) P 753,000 (C) P 615,000
(B) P4,065,000 (D) None of the above

55 How much is the corporation's MCIT? A

(a) P175,898 (c) P150,340
(b) P172,714 (d) None of the above

56 How much is the corporation's income tax payable? A

(a) P1,383,793 (c) P1,550,340
(b) P1.481.793 (d) None of the above

Valix School of Business, Inc. (domestic corporation) is a proprietary educational institution with an issued permit from the CHED. In FY ending February 28, 2021, it recorded a net taxable
57 income of P3.0 Million. Compute its income tax due for taxable year 2020 assuming that it passed the predominance test. C
(A) P300,000 (C) P120,000
(B) P 30,000 (D) None of the above

58 1st Statement: Gain on sale of all kinds of capital assets are subject to the final tax on capital gains. C
2nd statement: Gain from sale of real property classified as capital asset and located in Miami, Florida is subject to the final tax on capital gains.
a. true, true; c. false, false;
b. true, false; d. false, true;

59 Which of the following may be subject to corporate income tax: C

a. Non-stock and non-profit educational institution. c. A private educational institution.
b. A public educational institution. d. Local water district

60 The MIT shall not apply to the following Foreign Corporations, except: D
a. RFC engaged in business as international air carrier subject to 2 1/2% of Its gross Philippine billings.
b. Nonresident Foreign Corporation on gross income derived from lease
c. RFC engaged in business as a Regional Operating Headquarters (ROHQ) for the year ending December 31,2021
a. RFC engaged in importing cranes and heavy equipment into the Philippines

61 In 2020, Totoy, Inc. had the following items of income and expenses: C
Sales P500.000
Cost of services, salary of personnel directly engaged in business 250,000
business
Dividends received 25,000

The dividends were received from a domestic corporation. The general and administrative expenses include factory facilities expense and cost of manufacturing supplies of P25,000 and
P15,000, respectively. What amount should be reported as gross income for minimum corporate income tax?
a P210,000 c P250,000
b P235,000 d P275,000

Phoenix Corp, a calendar year corporation realized taxable income of P35,000 from its regular business operations for calendar year 2020. In addition, Phoenix had the following capital
62 gains and losses during 2020. b
Short-term capital gain P8,500
Short-term capital loss - 4,000.00
Long-term capital gain 1,500.00
Long-term capital loss - 3,500.00

What is Phoenix' total taxable income for 2020?

a P36,250 c P39,500
b P38,500 d P40,500

Jose and Berto, both unmarried, formed a general professional partnership. The partners agreed to share profits equally. During the year 2020, the partnership earned a net income of Php500,000. Berto,
also engaged in the business of buying and selling cars, reports net income from his business amounting to Php750,000.
The income tax due of the partnership is:
63 C
a. Php150,000 c. Php 0.00
b. Php160,000 d. Php125,000

64 Share in the net distributable income of a general professional partnership by a resident citizen is subject to: D
a. 10% final withholding tax c. 6% capital gains tax
b. 20% final withholding tax d. Regular income tax at 0% to 35%

65 The following taxpayers who received a dividend income from a domestic corporation will receive net of 10% final withholding tax, except D
a. Resident citizen c. Resident alien
b. Non-resident citizen d. Non-resident alien engaged in trade or business

66 Refund of the following taxes are not included in the gross income, except d
a. 6% capital gains tax on sale of real property. d. Fringe benefits tax paid by the employer.
b. Tax erroneously paid on donations to the Government.
 c. Special assessment on property specially benerited by infrastructure project project of the Government

67 Which statement below expresses the lifeblood theory? b

a. The assessed taxes must be enforced by the government.
b. The underlying basis of taxation is government necessity, for without taxation, a government can neither exist nor endure;
c. Taxation is an arbitrary method of exaction by those who are in the seat of power;
d. The power of taxation is an inherent power of the sovereign to impose burdens upon subjects and objects within its jurisdiction for the purpose of raising revenues.

68 Income from the performance of service is treated as income from within the Philippines, if: C
a. The payment of compensation for the service is made in the Philippines; c. The service is actually performed in the Philippines
b. The contract calling for the performance of service is signed in the Philippines; d. The recipient of service income is a resident of the Philippines.
 69 Income from dealings in property (real, personal, or mixed) is the gain or loss derived D
A. only from the cash sales of property. C. from sale and lease of property
B. from cash and gratuitous receipts of property, D. from the sale, barter or exchange of property,

MJ's income from leasing his property reaches the maximum rate of tax under the law. He donated one-half of his said property to a non-stock, non-profit educational institution whose
income and assets are actually, directly and exclusively used for educational purposes, and therefore qualified for tax exemption under Article XIV, Section 4 (3) of the Constitution and
Section 30 (h) of the Tax Code. Having thus transferred a portion of his said asset, MJ succeeded in paying a lesser tax on the rental income derived from his property. Is there tax
70 avoidance or tax evasion? A
a. There is tax avoidance. L] has exploited a fully permissible alternative method to reduce his income tax by transferring part of his rental income to a tax exempt entity through a donation
of one-half of the income producing property.
b. There is tax evasion. LJ has exploited a non-permissible alternative method to reduce his income tax by transferring part of his rental income to a tax exempt
c. There is tax dodging.
d. None of the choices

71 Juan is a MIXED INCOME EARNER. He is a self-employed resident citizen and currenlly the Finance manager of Omega Corporation. The following data were provided for 2021 taxable year. b
Compensation income 1,800,000.00
13th month pay and other benefits 150,000.00
Sales 2,800,000.00
Cost of sales 1,125,000.00
Business Expenses 650,000.00
Interest income from peso bank deposit 80,000.00
Interest income from bank deposit under FCDS 120,000.00
Gain on sale of land in the Philippines held as capital asset with cost of
P1,500,000 when the zonal value is P1,200,000 500,000.00
Gain on sale of land in the Philippines held as capital asset wilh cost of
P1,500,000 when the zonal value is P1,200,000 500,000.00
Creditable withholding tax on compensation income 448,000.00
Creditable withholding tax on sale of goods 28,000.00

How much is the income tax payable of Juan assuming he opted to be taxed at 8% for the year?
a. P28,000 c. P448,000
b. P196,000 d. P672,000

72 A domestic corporation has the following income and expenses for the year. b
PH Abroad
Gross Sales 100,000,000.00 50,000,000.00
Costof Sales 40,000,000.00 20,000,000.00
Operating Expenses 30,000,000.00 12,000,000.00

How much is the income tax due assuming the taxable year was 2020?
a. P12.000.000 C. P14,400.000
b. P13,200,000 d. P18,000,000

73 Mananiah Corporation, a corporation engaged in business in the Philippines and abroad has the following data for 2021 taxable year: c
Gross:Income, Philippines 975,000.00
Expenses, Philippines 750,000.00
Gross Income, Malaysia 770,000.00
Expenses, Malaysia 630,000.00
Interest on bank deposit 25,000.00
Assets 15,000,000.00

Determine the income tax/final tax (as applicable) due assuming the corporation is:
DOMESTIC RFC NRFC DOMESTIC RFC NRFC
a 116,800.00 72,000.00 320,000.00 c 73,000.00 56,250.00 250,000.00
b 73,000.00 67,500.00 300,000.00 d 91,250.00 56,250.00 250,000.00

74 A domestic corporation was registered with the BIR in 2018. What year would the first MCIT will be Imposed on such corporation? b
a 2020 c 2021
b 2022 d 2023

Use the following data for the next two (2) questions;
75 ABC Inc., a domestic corporation registered with BIR since 2015, has the following data for 2021 taxable year. c
Gross receipts 11,500,000.00
Discounts and allowances 2,500,000.00
Salaries of personnel directly involved in rendering service 3,000,000.00
Salaries of administrative personnel 1,000,000.00
Fees of consultants direcly involved in rendering service 500,000.00
Rental of equipment used in rendering service 700,000.00
Rental of office space for use of administrative personnel 500,000.00
Other operating expenses 4,200,000.00
Assets 35,000,000.00
 How much was the income tax due and payable in 2021?
a - c 48,000.00
b 66,000.00 d 96,000.00

76 Continuing the preceding number, the Company provided he following data in 2022 b
Gross receipts 120,000,000.00
Salaries of personnel directly involved in rendering service 38,000,000.00
Salaries of administrative personnel 12,000,000.00
Fees of consullants direclly involved in rendering service 16,000,000.00
Rental of equipment used in rendering service 15,000,000.00
Rental of office space for use of administrative personnel 5,000,000.00
Other operating expenses 23,000,000.00
How much was the income tax due and payable in 2022?
 a 48,000.00 c 2,525,000.00
b 2,477,000.00 d 2,750,000.00

77 Royalty income from books received by a corporation upon the effectivity of CREATE law (in percentages) C
DC RFC NRFC DC RFC NRFC
a 10.00 10.00 30 c 20.00 20 25
b 20.00 20 30 d 15.00 7.5 Exempt

78 Mega Construction Corporation, a domestic corporation, has the following dala for 2021 taxable year; A
Gross income, Phil. 100,000,000.00
Gross income, USA 50,000,000.00
Gross income, Japan 50,000,000.00
Expenses, Phil, 30,000,000.00
Expenses, USA 20,000,000.00
Expenses, Japan 10,000,000.00

Other income:
Dividend from San Miguel Corp, a domestic Corp 7,000,000.00
Dividend from Ford Motors, (RFC, income within) 12,000,000.00
Gain on sale of shares of a domestic corporation sold directly to buyers 15,000,000.00
Royalty income, Philippines 5,000,000.00
Royalty income, USA 10,000,000.00
Interest income on peso bank deposit 8,000,000.00
Interest income on FCDS deposit 3,000,000.00
Interest from receivables in the Philippines 6,000,000.00
Rent Income, land in USA 25,000,000.00
Rent income, Building in the Philippines 10,000,000.00

The Company also sold a condominium classified as capital asset for P200,000,000. The cost of the Condominium is P100,000,000 while its Zonal Value is P300,000,000.
The Company's total assets excluding the condominium sold and the land on which the business office building is situated amounted to P680,000,000.

How much is the income tax due in 2021?

a 47,750,000.00 c 52,500,600.00
b 50,750,000.00 d 60,900,000.00

79 How much is the total capital gains tax in 2021? D

a 2,250,000.00 c 19,875,000.00
b 18,250,000.00 d 20,250,000.00

80. How much is the FWT on passive income in 2021? c

a 1,600,000.00 c 3,050,000.00
b 2,850,000.00 d 60,900,000.00