SEMESTER ,SY 2012-2013 MIDTERM EXAMS NAME_______________________ANSWER KEY_________________ I.D. NO.________________ GENERAL INSTRUCTIONS: MATCHING TYPE-WRITE THE LETTER (OF THE DEFINITION) OPPOSITE THE TERM MULTIPLE CHOICE-ENCIRCLE THE LETTER CORRESPONDING TO YOUR ANSWER _______________________________________________________________________________ PART I-OBJECTIVE TYPE CHAPTER 5-EXCLUSION FROM GROSS INCOME H______1. COMPENSATION OR DAMAGES A______2.EXCLUSION FROM GROSS INCOME G______3.DEVISE B______4. NONTAXABLE COMPENSATION INCOME F______5 BEQUEST C______6. NONTAXABLE OTHER RECEIPTS E______. GIFT D ______! TAX EXEMPT CONTRIBUTIONS A______ITEMS OR RECEIPTS NOT INCLUDED IN THE DETERMINATION OF THE TAXABLE INCOME BECAUSE THE LAW OR TREATY PROVIDES THAT THEY ARE EXEMPT FROM INCOME TAX B______EARNINGS THAT ARE COMPENSATION IN NATURE BUT W/C THE LAW SPECIFICALLY EXCLUDES AS PART OF THE GROSS INCOME FOR TAXATION PURPOSES C_____-AMOUNTS OR VALUES RECEIVED OTHER THAN COMPENSATION THAT ARE NOT TAXABLE ACCORDING TO LAW D_____GSIS, SSS, MEDICARE, PAG-IBIG AND UNION DUES ARE TAX-EXEMPT CONTRIBUTIONS E_____ANY PROPERTY LEGALLY AND VALIDLY TRANSFERRED FROM ONE PERSON TO ANOTHER FOR FREE F____PERSONAL PROPERTY TRANSFERRED FROM ONE PERSON TO ANOTHER BY WILL G_____REAL PROPERTY TRANSFERRED FROM ONE PERSON TO ANOTHER BY WILL H_____AMOUNTS RECEIVED, THROUGH ACCIDENT OR HEALTH INSURANCE OR UNDER WORKMENS COMPENSATION ACTS, AS COMPENSATION FOR PERSONAL INJURIES OR SICKNESS, PLUS THE AMOUNTS OF ANY DAMAGES RECEIVED WHETHER BY SUIT OR AGREEMENT ON ACCOUNT OF SUCH INJURIES OR SICKNESS CHAPTER 12"DEDUCTIONS FROM GROSS INCOME I. MULTIPLE CHOICE #ENCIRCLE $OUR ANS%ER& 1. THIS REFERS TO INCOME RECEIVED OR EARNED BUT IS NOT TAXABLE AS INCOME BECAUSE EXEMPTED BY LAW OR BY TREATY A DEDUCTION FROM GROSS INCOME B LIMITATION OF GROSS INCOME C& EXCLUSION FROM GROSS INCOME D NONE OF THE ABOVE !. THESE ARE SUBTRACTED FROM GROSS INCOME TO DERIVE TAXABLE NET INCOME A& DEDUCTION FROM GROSS INCOME B LIMITATION OF GROSS INCOME C EXCLUSION FROM GROSS INCOME D NONE OF THE ABOVE ". FOR BAD DEBTS TO BE DEDUCTED FROM GROSS INCOME, THE FOLLOWING SHOULD BE SATISFIED# A DEBT ACTUALLY ASCERTAINED TO BE WORTHLESS B CHARGED OFF WITHIN THE TAXABLE YEAR C& BOTH CONDITIONS A& AND B& ABOVE SHOULD BE SATISFIED $. THE % LIMIT ON INDIVIDUALS TAXABLE INCOME &BEFORE DEDUCTING CHARITABLE CONTRIBUTION FOR DEDUCTIBILITY OF ORDINARY CHARITABLE CONTRIBUTIONS A 'ERO B (% C 1(% D& 1'( E NONE OF THE ABOVE (. THE % LIMIT ON CORPORATIONS TAXABLE INCOME &BEFORE DEDUCTING CHARITABLE CONTRIBUTION FOR DEDUCTIBILITY OF ORDINARY CHARITABLE CONTRIBUTIONS A 'ERO B& 5( C 1(% D 1)% E NONE OF THE ABOVE *. THE AMOUNT OF PREMIUM ALLOWED PER FAMILY DURING THE TAXABLE YEAR FOR HEALTH AND/OR HOSPITALI'ATION INSURANCE FOR DEDUCTION FROM GROSS INCOME A P$,+)) B& P2)4'' C 'ERO D NONE OF THE ABOVE ,. IN RELATION TO NO. * ABOVE, THE ADDITIONAL PROVISION SAYS THAT THE GROSS FAMILY INCOME SHALL BE A NOT MORE THAN P!)),))) FOR THE TAXABLE YEAR B& NOT MORE THAN P25')''' FOR THE TAXABLE $EAR C NOT MORE THAN P")),))) FOR THE TAXABLE YEAR D NONE OF THE ABOVE +. AS A GENERAL RULE, SALARY EXPENSES ARE ALLOWED AS DEDUCTIONS FROM GROSS BUSINESS INCOME ONLY IF A SALARY HAS BEEN PAID/ACCRUED B SALARY IS IN ACCORDANCE WITH MINIMUM WAGE LAW C& CORRESPONDING %HT HAS BEEN DEDUCTED AND REMITTED TO THE BIR -. THE SECRETARY OF FINANCE PROVIDES THE FOLLOWING CEILINGS FOR REPRESENTATION EXPENSES A& * ( FOR TAXPA$ERS ENGAGED IN SALE OF GOODS+PROPERTIES, 1( OF NER REVENUE FOR TAXPA$ERS ENGAGED IN SALE OF SERVICES B 1% FOR TAXPAYERS ENGAGED IN SALE OF GOODS/PROPERTIES. / % OF NET REVENUE FOR TAXPAYERS ENGAGED IN SALE OF SERVICES 1).THE OPTIONAL STANDARD DEDUCTION ON INDIVIDUAL IS- A $)% OF TAXABLE INCOME B $)% OF BUSINESS AND/OR PROFESSIONAL INCLUDING COMPENSATION INCOME C& 4'( OF BUSINESS AND+OR PROFESSIONAL INCOME D 1)% OF BUSINESS AND/OR PROFESSIONAL EXCLUDING COMPENSATION INCOME 11.OPTIONAL STANDARD DEDUCTION IS ALLOWED TO A& RESIDENT ALIEN B NON-RESIDENT ALIEN ENGAGED IN TRADE OR BUSINESS C NON-RESIDENT ALIEN NOT ENGAGED IN TRADE OR BUSINESS D NON-RESIDENT FOREIGN CORPORATION MULTIPLE CHOICE I. TRUE OR FALSE #ENCIRCLE $OUR ANS%ER& 1. OPTIONAL STANDARD DEDUCTION IS THE SAME AS ITEMI'ED DEDUCTION A TRUE B& FALSE !. ORDINARY CHARITABLE CONTRIBUTIONS ARE SUBJECT TO LIMITATION AS TO THE AMOUNT DEDUCTIBLE FROM GROSS INCOME A& TRUE B FALSE ". SPECIAL CHARITABLE CONTRIBUTIONS ARE DEDUCTIBLE IN FULL FROM GROSS INCOME A& TRUE B FALSE $. ABC CORP. BOUGHT 1)) SHARES OF XY' CORP. AT P1)) PER SHARE. SIX MONTHS LATER, DUE TO AN UNFAVORABLE MARKET CLIMATE, THE SHARES WERE SELLING AT P!( PER SHARE. ABC CORP. DID NOT SELL THE SHARES. THE SHRINKAGE IN VALUE OF P,,()) IS DEDUCTIBLE. A TRUE B& FALSE (. INDEMNITY IS COMPENSATION FOR DAMAGES OR LOSS SUSTAINED. LIFE INSURANCE CONTRACT IS A CONTRACT OF INDEMNITY. A& TRUE B FALSE *. ONE OF THE RE0UISITES FOR THE DEDUCTIBILITY OF INTEREST EXPENSE IS THAT THE INTEREST MUST HAVE BEEN STIPULATED IN WRITING A& TRUE B FALSE ,. ANNA BORROWED P!),))) FROM HER SISTER KAREN WITH INTEREST. AT THE END OF THE YEAR, ANNA PAID THE PRINCIPAL PLUS INTEREST OF P",))). THE INTEREST OF P",))) IS ALLOWABLE DEDUCTION. A TRUE B& FALSE +. MR. X, WHO IS MAJORITY STOCKHOLDER AND PRESIDENT OF MAGULANG CORP., RECEIVES AN ANNUAL SALARY OF P1,))),))). PRESIDENTS OF CORPORATIONS SIMILAR CORPORATIONS OF SAME SI'E, SAME VOLUME AND SAME AREA RECEIVE AN AVERAGE OF P()),))). THE DIFFERENCE OF P()),))) MAYBE DISALLOWED AS A DEDUCTION. A& TRUE B FALSE -. SALARIES PAID BY EMPLOYERS TO EMPLOYEES WHO ARE ABSENT IN THE MILITARY, NAVAL OR OTHER SERVICE OF THE GOVERNMENT, BUT INTEND TO RETURN AFTER THE TOUR OF DUTY, ARE ALLOWABLE DEDUCTIONS A& TRUE B FALSE 1). EXPENSES INCURRED FOR THE REPAIR OF AN OFFICE BUILDING TO PREVENT LEAKING ARE ALLOWABLE DEDUCTIONS A& TRUE B FALSE 11. REPAIRS IN THE NATURE OF REPLACEMENT TO THE EXTENT THAT THEY ARREST DETERIORATION AND PROLONG THE LIFE OF THE PROPERTY ARE CAPITAL EXPENDITURES, AS DIFFERENTIATED FROM MAINTENANCE AND INCIDENTAL REPAIRS A& TRUE B FALSE 1!. NON-RESIDENT ALIENS NOT ENGAGED IN TRADE OR BUSINESS WITHIN THE PHIL. AND NON-RESIDENT FOREIGN CORPORATION ARE TAXED ON THE BASIS OF THEIR GROSS INCOME, AND NOT NET INCOME A& TRUE B FALSE 1". A BUSINESS EXPENSE IS CONSIDERED ORDINARY WHEN IT IS COMMONLY INCURRED IN THE TRADE OR BUSINESS OF THE TAXPAYER A& TRUE B FALSE 1$. AN EXPENSE IS CONSIDERED NECESSARY IF IT IS APPROPRIATE AND HELPFUL TO THE TAXPAYERS BUSINESS A& TRUE B FALSE 1(. A BRIBE GIVEN TO OBTAIN PROTECTION FROM ARREST AND PROSECUTION IS AN ALLOWABLE DEDUCTION A TRUE B& FALSE 1*. PAYMENTS TO SECURE POLITICAL INFLUENCE TO OBTAIN FAVORABLE PUBLIC CONTRACTS IS ALLOWABLE DEDUCTION A TRUE B& FALSE 1,.SALARIES OF STAFF IN THE OPERATION OF ILLEGAL HORSE-BETTING BUSINESS ARE ALLOWABLE DEDUCTIONS A& TRUE B FALSE 1+. FOR INCOME TAX PURPOSES, A TAXPAYER MAY DEDUCT FROM HIS GROSS INCOME A LOWER AMOUNT OR NOT CLAIM ANY DEDUCTION AT ALL A& TRUE B FALSE 1-. FOR INDIVIDUAL TAXPAYERS EARNING PURELY COMPENSATION INCOME, ONLY PERSONAL AND ADDITIONAL EXEMPTIONS AND MANDATORY CONTRIBUTIONS &SSS/GSIS, PHILHEALTH, PAG-IBIG AND UNION DUES ARE ALLOWED TO BE DEDUCTED AND IF APPLICABLE, PREMIUM PAYMENTS ON HEALTH AND/OR HOSPITALI'ATION INSURANCE A& TRUE B FALSE !). PAYMENTS FOR NON-PHYSICAL INJURIES PROHIBIT THAT IT SHALL INCLUDE A PROFIT AS A MATTER OF SANCTION A& TRUE B FALSE !1. ALL GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS , EXCEPT THOSE EXPRESSLY EXEMPTED, ARE RE0UIRED BY TAX CODE TO PAY INCOME TAXES A& TRUE B FALSE !!. RETIREMENT BENEFITS RECEIVED BY GOVERNMENT EMPLOYEES FROM GSIS AND BY PRIVATE EMPLOYEES FROM SSS ARE ARE EXEMPT FROM TAXATION A& TRUE B FALSE !". WHILE THE INCOME OF FOREIGN GOVERNMENTS FROM OPERATION OF VESSELS IN THE PHILIPPINES IS TAXABLE, ITS INCOME FROM INTEREST ON DEPOSITS IN PHIL. BANKS IS NOT TAXABLE. A& TRUE B FALSE !$. THE VALUE OF THE CORPUS OR PROPERY RECEIVED AS A GIFT, OR UNDER A WILL, OR TESTAMENT OR THROUGH LEGAL SUCCESSION IS EXEMPT FROM INCOME TAX A& TRUE B FALSE !(. UNDER THE HUSBANDS GENERAL OBLIGATION OF SUPPORT, NEITHER ALIMONY NOR ALLOWANCE BASED ON SEPARATION AGREEMENT IS TAXABLE INCOME A& TRUE B FALSE !,.UNLESS EXEMPTED BY LAW, INTERESTS RECEIVED BY A TAXPAYER, WHETHER OR NOT USURIOUS, ARE TAXABLE A& TRUE B FALSE !+. THE MAIN CRITERION FOR COMPENSATION FOR SERVICES TO BE CONSIDERED INCOME IS THAT SERVICES MUST BE RENDERED AND THAT PAYMENT MUST BE MADE FOR SUCH SERVICES A& TRUE B FALSE !-. REVENUE IS TO THE GOVERNMENT AS INCOME IS TO A PERSON OR CORPORATION A& TRUE B FALSE "). INCOME IS ALWAYS IN THE FORM OF MONEY AND CAN NOT TAKE ANY OTHER FORM A TRUE B& FALSE "1. THE OPTIONAL STANDARD DEDUCTION IS AN OPTION AVAILABLE ONLY TO INDIVIDUAL &NOT CORPORATE TAXPAYERS A TRUE B& FALSE "!.THERE IS NO DETERMINATION OF INCOME UNTIL THE SERVICE IS RENDERED A& TRUE B FALSE "". THE RULE ON COMPENSATION INCOME APPLIES TO ALL TAXPAYERS INCLUDING NON- RESIDENT ALIENS NOT ENGAGED IN BUSINESS IN THE PHILIPPINES A TRUE B& FALSE "". ANY AMOUNT RECEIVEDFOR ANY CAUSE BETOND THE CONTROL OF OFFICIAL OR EMPLOYEE ARE TAX-EXEMPT A& TRUE B FALSE "$. CONTRIBUTIONS TO SSS/GSIS, PHILHEALTH, PAG-IBIG AND UNIONS ARE EXCLUDED FROM GROSS INCOME A& TRUE B FALSE "(. NOT CONSIDERING THE PREMIUMS PAID, PROCEEDS OF LIFE INSURANCE POLICIES PAID TO THE HEIRS OF THE HEIRS OR BENEFICIARIES ARE TAX-EXEMPT A& TRUE B FALSE "-. WHILE THE BIR ALLOWS OPTIONAL STANDARD DEDUCTION, SUPPORTING DOCUMENTS ARE STILL RE0UIRED A TRUE B& FALSE III-MATCHING T$PE X______1. ORDINAR$ CONTRIBUTIONS A______2.DEDUCTIONS OR ALLO%ABLE DEDUCTIONS B______3. REVENUE EXPENDITURES %______4. SPECIAL CONTRIBUTIONS C______5. CAPITAL EXPENDITURES D111111*. ITEMI-ED DEDUCTIONS V______. DEFINED CONTRIBUTION PLAN E______!. GENERAL BUSINESS EXPENSES F______.. ORDINAR$ EXPENSE U______1'. DEFINED BENEFIT PLAN G______11.NECESSAR$ EXPENSE H______12. BUSINESS T______13. PENSION PLAN I______14. TRAVELLING EXPENSES /______15. RENT EXPENSES S_____16. DEVELOPMENT STAGE 0_____1. REPRESENTATION EXPENSES L_____1!. INTEREST EXPENSE R_____1.. DEVELOPMENT EXPENDITURES M_____2'.BAD DEBTS EXPENSE N_____21. CLAIM ASCERTAINED TO BE %ORTHLESS Q_____22. EXPLORATION AND DEVELOPMENT EXPENDITURES O_____23. DEPRECIATION EXPENSE P_____24. DEPLETION EXPENSE A_____-BUSINESS EXPENSES AND LOSSES INCURRED W/C THE LAW ALLOWS TO REDUCE GROSS BUSINESS INCOME TO ARRIVE AT NET TAXABLE INCOME B_____-ORDINAR$ RECURRING EXPENDITURES THAT PROVIDE BENEFITS TO THE CURRENT ACCOUNTING PERIOD. AKA 1PERIOD COSTS2 BECAUSE THEY ARE RELATED TO A PARTICULAR PERIOD OF TIME OF BUSINESS OPERATION C_____-NON RECURRING EXPENDITURES RELATED TO THE AC0UISITION OF DEPRECIABLE ASSETS TO BE USED IN THE BUSINESS BUT NOT FOR SALE, HAVING A USEFUL LIFE OF SEVERAL YEARS. THEY PROVIDE CURRENT AND FUTURE BENEFITS IN BUSINESS OPERATIONS D_____SPECIFIC BUSINESS OPERATING EXPENSES ALLOWED BY THE TAX CODE TO BE DEDUCTED FROM THE GROSS INCOME E____ALL ORDINAR$ AND NECESSAR$ EXPENSES PAID OR INCURRED DURING THE TAXABLE YEAR IN CARRYING ON OR W/C ARE DIRECTLY ATTRIBUTABLE TO THE DEVELOPMENT) MANAGEMENT) OPERATION AND/OR CONDUCT OF THE TRADE, BUSINESS OR EXERCISE OF A PROFESSION F____IT IS REASONABLE AND COMMON TO THE PARTICULAR BUSINESS OF THE TAXPAYER G_____IT IS USEFUL OR HELPFUL TO THE BUSINESS H_____ACTIVITY INTENDED TO MA0E A PROFIT. .CONNOTES REGULARIT$ IN TRANSACTION THAT MIGHT RESULT IN PROFIT I_____EXPENSES INCURRED %+IN AND OUTSIDE THE COUNTR$ WHILE A%A$ FROM HOME IN THE PURSUIT OF TRADE, BUSINESS, OR PROFESSION. INCLUDE TRANSPORTATION EXPENSES AND MEALS AND LODGING /_____EXPENSES INCURRED FOR THE CONTINUED USE OR POSSESSION OF PROPERTY TO W/C THE TAXPAYER HAS NOT TAKEN OR IS NOT TAKING TITLE TO OR IN W/C HE HAS NO E0UITY OTHER THAN THAT OF A LESSEE, USER OR POSSESSOR 0____ENTERTAINMENT) AMUSEMENT AND RECREATION EXPENSES INCURRED OR PAID DURING THE YEAR THAT ARE DIRECTLY RELATED TO THE DEVELOPMENT, MANAGEMENT AND OPERATION OF THE THE TRADE, BUSINBESS OR PROFESSION OF THE TAXPAYER L_____COST OF MONE$ INCURRED W/IN A TAXABLE YEAR ON INDEBTEDNESS IN CONNECTION WITH THE TAXPAYERS PPROFESSION,TRADE OR BUSINESS M____CLAIM THAT BECOMES %ORTHLESS OR UNCOLLECTIBLE ARISING FROM MONEY LENT OR FROM GOODS SOLD AND SERVICES RENDERED N_____WHEN THE CREDITOR DETERMINED WITH REASONABLE DEGREE OF CERTAINTY THAT THE CLAIM COULD NOT BE COLLECTED DESPITE THAT FACT THAT THE CREDITOR TOOK REASONBLE STEPS TO COLLECT O_____ALLOWANCE TO REDUCE THE USEFUL VALUE OF THE TANGIBLE FIXED ASSETS RESULTING FROM WEAR AND TEAR AND NORMAL OBSOLESCENCE P_____THE EXHAUSTION OF NATURAL RESOURCES LIKE MINES, OIL AND GAS WELLS DUE TO PRODUCTION Q_____EXPENSES PAID/INCURRED BEFORE THE DEVELOPMENT STAGE OF OF THE MINE INTENDED TO ASCERTAIN THE EXISTENCE) LOCATION) EXTENT) OR QUALIT$ OF ANY DEPOSIT OF ORE OR OTHER MINERAL R_____EXPENDITURES PAID/INCURRED DURING THE DEVELOPMENT STAGE OF THE MINE OR OTHER NATURAL DEPOSITS S_____-BEGINS AT THE TIME DEPOSITS OR MINERAL ORES ARE SHOWN TO EXIST IN SUFFICIENT COMMERCIAL 0UANTITY AND 0UALITY AND SHALL END UPON COMMENCEMENT OF ACTUAL COMMERCIAL EXTRACTION T_____FUND INTENDED TO PROVIDE RETIREMENT BENEFITS TO EMPLOYEES U_____UNDER THIS PLAN, THE EMPLO$ER HANDLES AND MANAGES THE FUND, BENEFITS THAT THE RETIREE WOULD RECEIVE ARE DEFINED AND BASED ON CERTAIN PERCENTAGE OF THE SALARY OF THE EMPLOYEES ELIGIBLE TO THE BENEFIT PLAN V_____UNDER THIS PLAN, TRUST FUND IS HANDLED B$ A THIRD PART$ CALLED THE ADMINISTRATOR. THE LIABILITY OF THE EMPLO$ER IS TO CONTRIBUTE THE DEFINED OR CONTRACTED PERIODIC CONTRIBUTION AS PER AGREEMENT WITH THE ADMINISTRATOR %_____CONTRIBUTIONS DEDUCTIBLE IN FULL X_____CONTRIBUTIONS THAT ARE NOT DEDUCTIBLE IN FULL, SUB/ECT TO LIMITATIONS PART II-PROBLEM SOLVING PROBLEM 31-OSD#INDIVIDUAL VS. CORPORATION& X REPORTED THE FOLLOWING FOR THE PERIOD# SALES P!,))),))) COST OF SALES *)),))) OPERATING EXPENSES !)),))) REQUIRED4 COMPUTE FOR THE OPTIONAL STANDARD DEDUCTION ASSUMING X IS A& SOLE PROPRIETOR B& CORPORATION SOLUTION4 SOLE PROPRIETOR CORPORATION SALES P!,))),))) P!,))),))) LESS# COST OF SALES ) *)),))) BASIS OF OSD !,))),))) 1,$)),))) X OSD RATE $)% $)% OSD P+)),))) P(*),))) PROBLEM 32-ITEMI-ED DEDUCTIONS MAHIRAP CORPORATION &ENGAGED IN SALE OF GOODS REPORTED THE FOLLOWING INFORMATION# SALES P$),))),))) COST OF SALES "!,))),))) OOERATING EXPENSE, INCLUSIVE OF REPRESENTATION EXPENSE AMOUNTING TO P*)),))) WITH PROPER DOCUMENTATION $,))),))) REQUIRED4 COMPUTE FOR THE AMOUNT OF REGULAR ITEMI-ED DEDUCTION SOLUTION4 OPERATING EXPENSE BEFORE REPRESENTATION EXPENSE P",$)),))) &P$,))),)))-*)),))) REPRESENTATION EXPENSE-ACTUAL P*)),))) -LIMIT&P$),))),))) X .))( !)),)))&LOWER !)),))) ALLOWABLE ITEMI'ED DEDUCTION P",*)),))) PROBLEM 33-COMPENSATION FOR IN/URIES AND PENSIONS WHILE WORKING, NITOY. ONE OF RGF CONSTRUCTON COMAPANYS WORKERS, DIED BYT FALLING FROM THE 1) TH FLOOR OF THE BUILDING. THE COMPANY HELPED THE WORKERS FAMILY WITH THE FOLLOWING# MONTHLY SALARY P1),))) DEATH BENEFITS 1)),))) TERMINAL PAY (),))) FUNERAL EXPENSE !),))) CONTINOUS COMPENSATION AFTER BURIAL FOR " MONTHS "),))) REQUIRED4 COMPUTE FOR THE TOTAL DEDUCTIBLE EXPENSE SOLUTION4 MONTHLY SALARY P1),))) DEATH BENEFITS 1)),))) TERMINAL PAY (),))) COMPENSATION-CONTINOUS FOR " MOS. "),))) TOTAL DEDUCTIBLE EXPENSE P1-),))) PROBLEM 34-RENT EXPENSE ON JULY "1, !)1!, KATRINA A CONTRACT OF LEASE WITH ABC BUILDERS REGARDING A SPACE WITH THE STIPULATIONS THAT KATRINA SHOULD BE RESPONSIBLE IN PAYING THE FOLLOWING# MONTHLY RENT P$),))) SHARE IN ANNUAL PROPERTY INSURANCE PREMIUM *,))) SHARE IN ANNUAL REAL PROPERTY TAX ",))) SHARE IN ANNUAL CITY SERVICES $+,))) IF KATRINA USES ,)% OF THE SPACE FOR BUSINESS AND THE REMAINING ")% FOR RESIDENCE, REQUIRED4 HO% MUCH IS THE DEDUCTIBLE RENT EXPENSE TO BE REPORTED FOR THE $EAR ENDING DECEMBER 31) 2'125 SOLUTION4 MONTHLY RENT &P$),))) X ,)% X (-FROM AUGUST TO DECEMBER !)1! P1$),))) INSURANCE PREMIUM &P*,))) X ,)% X (/1!2 1,,() REAL PROPERTY TAX &P",))) X ,)% X (/1!2 +,( DEDUCTIBLE RENT EXPENSE P1$!,*!( PROBLEM 35-LEASEHOLD IMPROVEMENT LETTY SIGNED A 1)-YEAR LEASE CONTRACT TO OCCUPY A VACANT LOT FOR P$,))) A MONTH. AS A PART OF THE LEASE AGREEMENT, LETTY CONSTRUCTED A RESTAURANT BUILDING COSTING P1,!)),))) COMPLETED AT THE START OF THE LEASE CONTRACT. THE BUILDING HAS AN ESTIMATED USEFUL LIFE OF 1! YEARS. AT THE END OF THE LEASE CONTRACT, THE LANDLORD WILL OWN THE BUILDING. REQUIRED4 COMPUTE FOR THE MONTHL$ DEDUCTIBLE EXPENSE SOLUTION4 MONTHLY RENTAL EXPENSE P$,))) MONTHLY DEPRECIATION&P1,!)),)))/1)/1! 1),))) MONTHLY DEDUCTIBLE EXPENSE P1$,))) PROBLEM 36-LEASEHOLD IMPROVEMENT ON DECEMBER 1, !)11, MASARAP FOODS CO. SIGNED A 1)-YEAR LEASE CONTRACT TO OCCUPY A VACANT LOT FOR P1),))) A MONTH. AS PART OF THE LEASE AGREEMENT THE LESSEE CONSTRUCTED A RESTAURANT BUILDING COSTING P1,-(),))). THE BUILDING WAS COMPLETED AND IMMMEDIATELY USED ON FEBRUARY !+, !)1!. THE BUILDING HAS AN ESTIMATED USEFUL LIFE OF 1! YEARS WITH A SALVAGE VALUE OF P1)),))). AT THE END OF THE LEASE CONTRACT, THE LANDLORD WILL OWN THE BUILDING. REQUIRED4 COMPUTE FOR THE RELATED DEDUCTIBLE EXPENSE OF MASARAP FOODS CO. IN 2'12. SOLUTION4 RENT EXPENSE&P1),))) X 1! P1!),))) ADD# DEPRECIATION EXPENSE&P1,-(),)))/-.,( X 1)/1! 1**,**, DEDUCTIBLE EXPENSE IN !)1! P!+*,**, PROBLEM 3-REPRESENTATION EXPENSE A BUSINESS REPORTED A TOTAL NET REVENUE OF P1),))),))). THE ACTUAL ENTERTAINMENT AND REPRESENTATION EXPENSES INCURRED IN CONNECTION WITH THE CONDUCT OF BUSINESS AMOUNTED TO P*),))). REQUIRED4 COMPUTE FOR THE DEDUCTIBLE AMOUNT OF ENTERTAINMENT AND REPRESENTATION EXPENSE ASSUMING THAT THE BUSINESS IS A& TRADING BUSINESS B& SERVICE BUSINESS SOLUTION4 A TRADING P1),))),))) X .))(2 P5')'''#LIMIT&-LOWER THAN P*),)))&ACTUAL B SERVICE BUSINESS P1),))),))) X .)12 P1)),)))& LIMIT-HIGHER THAN P6')'''#CTUAL&- LO%ER PROBLEM 3!-DEDUCTIBLE CONTRIBUTION EXPENSE THE NET INCOME BEFORE CONTRIBUTION OF GCF COMPANY, A DOMESTIC CORPORATION IS P$)),))). IT DONATED P"),))) TO A RELIGIOUS ORGANI'ATION. REQUIRED4 COMPUTE FOR THE ALLO%ABLE CHARITABLE CONTRIBUTION SOLUTION4 P$)),))) X (%2P2')''' LIMIT #LO%ER& THAN ACTUAL P"),))) PROBLEM 3.-DEDUCTIBLE CONTRIBUTION EXPENSE THE NET INCOME AFTER P1(,))) CONRIBUTION &TO AN ACCREDITED SOCIAL WELFARE ORGANI'ATION OF A RESIDENT CITI'EN IS P1(),))). REQUIRED4 COMPUTE FOR THE ALLO%ABLE CHARITABLE CONTRIBUTION SOLUTION4 &P1(),))) 3 1(,))) X 1)%2P1*,())&LIMIT HIGHER THAN ACTUAL CC OF P15)'''. PROBLEM 31'-INTEREST EXPENSE A CORPORATION EARNED INCOME, INCLUSIVE OF P1)),))) INTEREST INCOME AND NET OF INTEREST EXPENSE OF P+),))), AMOUNTING TO P",))),))). REQUIRED4 COMPUTE FOR THE DEDUCTIBLE INTEREST EXPENSE SOLUTION4 P+),)))-&""% X P1)),)))2P$,,))) 666666666END OF MT EXAMS6666666666 THE GREATEST CRIME THAT $OU CAN COMMIT AGAINST $OURSELF AND $OUR LOVED ONES IS NOT DOING $OUR BEST.
Unabridged Articles of the Ike Jackson Report :the Future of Hip Hop Business 2020-2050: Unabridged articles of the Ike Jackson Report :The Future of Hip Hop Business 2020-2050, #2