POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

STA. MESA, MANILA

ACCO
2ND EVALUATION EXAMINATION
AUGUST 18, 2015

INSTRUCTION: On the scannable form, shade the letter of the best answer. If the answer is not
among the choices, shade “E”.

1. Which is not part of de minimis benefits?

a. Clothing allowance. c. Monetized unused vacation leave credits.
b. 13th month pay. d. Actual medical benefits.

2. The de minimis benefits not exceeding their thresholds are

a. subject to fringe benefit tax. c. exempt from income tax.
b. subject to regular tax. d. deductions from gross income.

3. On July 1, 2015, PLDT designated the use of its residential unit for its managerial employee. The residential
unit was acquired for ₱4.5M and has a zonal value of ₱4M and assessed value of ₱3M. Compute the fringe
benefit tax for the third and fourth quarter of 2015.
a. ₱100,000; ₱100,000. c. ₱47,059; ₱47,059.
b. ₱52,941; 52,941. d. ₱11,764; ₱11,764.

4. An employer pays the ₱10,000 monthly rental of its managerial employee. Compute the quarterly
monetary value.
a. ₱10,000. b. ₱15,000. c. ₱30,000. d. ₱40,000.

5. As a rule, hybrid expenses are presumed

a. 50% fringe benefit. c. 50% de minimis benefit.
b. 100% fringe benefit. d. 100% legitimate business expense.

6. The free usage of which of the following item is exempt from fringe benefit tax?
a. Yacht. b. Car. c. Residential unit. d. Helicopter.

7. SPI Global reimbursed the following expense liquidation of its managerial employee:
Purchase of office supplies ₱20,000
Personal meals and groceries 15,000
Gasoline for transportation (½ for business) 8,000
Office electricity, water and telephone bills 12,000
Compute the monetary value of fringe benefits.
a. ₱55,000. b. ₱35,000. c. ₱23,000. d. ₱19,000.

8. In the immediately preceding problem, how much is the fringe benefit tax if the managerial employee is a
resident citizen?
a. ₱25,882. b. ₱16,471. c. ₱10,824. d. ₱8,941.

9. Globe Telecommunications acquired the following for the use of its executive officers:
Bell 206 helicopter ₱23M
Elling E3 Executive (Seagoing motor yacht) 16.4M
Compute the monetary value.
a. ₱39.4M. b. ₱16.4M. c. ₱1.64M. d. ₱0.41M.

10. Which is not an exempt housing benefit,

a. Housing within 50 feet from the perimeter of the employer’s business.
b. Housing benefits for 3 months.
c. Military sleeping quarters.
d. Temporary housing.
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11. During the last calendar quarter of 2015, Sun Cellular granted a Filipino supervisory employee the following
benefits:
Salaries ₱120,000
Performance bonus 20,000
13th month pay 40,000
Excess de minimis 12,000
Cash price of car given to supervisory employee 300,000
Compute the fringe benefit tax.
a. ₱160,941. b. ₱151,529. c. 146,824. d. ₱141,176.

12. Red Mobile grants its managerial employees the privilege to select a car of their choice with value not
exceeding ₱1,000,000 a unit or be given ₱1,000,000 cash benefit to acquire their own cars. It also grants
supervisory employees car benefits if they actually purchase their cars
Car benefits given to managers, net of withholding tax on compensation ₱ 900,000
Value of cars purchased for two managers 2,000,000
Cash payments to various car suppliers for supervisory employees 1,600,000
Compute the monetary value.
a. ₱4.5M. b. ₱3.6M. c. ₱2M. d. ₱1.6M.

13. In the immediately preceding problem, compute the fringe benefit tax if the employees are all qualified as
special alien.
a. ₱794,118. b. ₱666,667. c. ₱635,294. d. ₱352,941.

14. Touch Mobile acquired a ₱1M motor vehicle for the use of its field engineer, a plant supervisor, assigned to
a very remote facility from town. Compute the monetary value.
a. ₱1M. b. ₱200,000. c. ₱100,000. d. ₱0.

15. The fringe benefit tax by nature is a

a. tax on passive income of managerial or supervisory employee.
b. final tax.
c. tax to the employer of managerial or supervisory employee.
d. tax to all employee on their fringe benefits.

16. Ms. Ozawa, a resident citizen, won $1,000,000 from the US lottery. The lottery winning is
a. exempt from tax. c. subject to 10% final tax.
b. subject to 20% final tax. d. subject to regular tax.

17. A concerned government employee furnished the BIR a statement detailing the improper tax practices of a
corporate taxpayer. The information was instrumental to the collection of ₱500,000 tax. How much
informer’s tax reward after tax shall be provided to the informant?
a. ₱50,000. b. ₱45,000. c. ₱40,000. d. ₱0

18. Maricar is a venturer sharing 50% in the profits of Sogo Ventures, an unincorporated joint venture, engaged
in the trading of home appliances. Sogo Ventures reported ₱200,000 profits in 2015. How much final tax
will be withheld on Jerome’s profit sharing?
a. ₱0. b. ₱10,000. c. ₱20,000. d. ₱40,000.

19. Which interest income is not subject to any income tax?

a. Interest income from discount notes. c. Imputed interest.
b Interest income from bonds issued by a bank. d. Interest income from deposit substitutes.

20. A 2015 dividend declaration is subject to a final tax of

a. 6%. b. 8%. c. 10%. d. 20%.

21. The final tax rates on pre-termination of long-term deposit is not relevant to
a. any corporations. c. resident aliens.
b. resident citizens. d. nonresident citizens.

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22. The interest income from long-term Peso deposits made with foreign banks is
a. subject to 20% final tax. c. subject to regular tax.
b. exempt from any tax. d. none of the above apply.

23. Mr. Sule published his book abroad for the international market. During the first quarter, he earned a gross
royalty of ₱1,000,000. How much final tax will be withheld by the foreign publisher?
a. ₱250,000. b. ₱200,000. c. ₱100,000. d. ₱0.

24. Bayantel, a domestic corporation, was credited $46,250 interest income in its depositary account in an
FCDU Bank. How much final tax was withheld?
a. $0. b. $3,468.75. c. $3,750. d. $11,562.50.

25. Assume that Bayantel is a nonresident foreign corporation, how much final tax was withheld?
a. $0 b $3,468.75. c. $3,750. d. $11,562.50.

26. Mr. Kanor earned the following prizes from two different competitions:
Date Event Gross Prize
Jan. 4, 2015 Singing ₱12,000
Feb. 14, 2015 Dancing 10,000
Compute the total final tax that should have been withheld from the above prizes.
a. ₱5,500. b. ₱4,400. c. ₱3,000. d. ₱2,400.

27. Hayden invested ₱1M in tax-free corporate bonds of RCBC. The bond pays 8.4% interest annually net of any
taxes. How much final tax must RCBC withheld from the annual interest payment to Hayden?
a. ₱36,000. b. ₱16,800. c. ₱8,400. d. ₱0.

28. SM Department Store conducted a sales promotion where customers purchases exceeding ₱1,000 in one
transaction shall be entitled to a ticket for a chance to win ₱500,000. Ms. Yosh won the prize. How much
shall SM Department Store withheld from the grand prize winning?
a. ₱200,000. b. ₱100,000. c. ₱50,000. d. ₱0.

29. Royalty income of a domestic corporation from abroad is

a. subject to final tax. c. subject to regular tax.
b. subject to either final tax or regular tax. d. not subject to Philippine income tax.

30. Wally received ₱45,000 interest from short-term deposits. Compute the final tax on interest.
a. ₱4,500. b. ₱5,000. c. ₱9,000. d. ₱11,250.

31. The sale of which of the following is subject to capital gains tax?
a. Boarding house. c. House and lot.
b. Warehouse. d. Personal cellular phone.

32. Which is not a capital asset for a security dealer?

a. Domestic stocks c. Investment Property
b. Domestic bonds d. Office Equipments

33. Who shall pay the two-tiered capital gains tax?

a. Real property developer. c. Dealer in stocks.
b. Merchandiser or trader of goods. d. A or B

34. Mr. Bediones, a nonresident citizen, sold domestic stock rights directly to buyer at a gain of ₱300,000.
Compute the capital gains tax.
a. ₱30,000. b. ₱25,000. c. ₱20,000. d. ₱15,000.

35. Ms. Jill Rose disposed her principal residence for ₱2M and immediately acquired a new one at Bliss
Muntinlupa for ₱1,800,000. The old residence cost Ms. Jill Rose ₱1M and have a fair market value of ₱2.5M
at the date of sale. Compute the capital gains tax to be deposited in escrow.
a. ₱0. b. ₱60,000. c. ₱120,000. d. ₱150,000.

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36. In the immediately preceding problem, what would be the tax basis of Ms. Jill Rose’s new residence?
a. ₱1.8M. b. ₱1M c. ₱0.9M. d. ₱0.8M.

37. Referring to #35 above, how much capital gains tax will be released to Ms. Jill Rose?
a. ₱150,000. b. ₱135,000. c. ₱120,000. d. ₱15,000

38. A wash sale of domestic shares wherein 20,000 shares was disposed at a loss of ₱40,000 were
subsequently covered-up within the 30 day period by a purchase of 15,000 shares for ₱10/share. The
deductible capital loss against capital gain on the wash sale is
a. ₱0. b. ₱10,000 c. ₱13,333 d. ₱20,000

39. What is the cost of the 15,000 shares acquired in the preceding problem?
a. ₱150,000. B. ₱160,000 c. ₱180,000 d. ₱190,000

40. Talk n Text, a domestic service company, has the following transactions on the sale of another domestic
corporation:
Transaction Quantity Price
Purchase 20,000 ₱40,000
Purchase 30,000 63,000
Sale 40,000 92,000
Assuming the FIFO method is used, compute the capital gains tax on the sale.
a. ₱500. b. ₱480. c. ₱400. d. ₱0.
41. Assuming the FIFO method is used, compute the capital gains tax on the sale.
a. ₱500. b. ₱480. c. ₱400. d. ₱0.

42. Exemption based upon which of the following is repealable?

a. Contract. b. Constitution. c. Law. d. None of these.

43. Tax as to incidence is classified as

a. Fiscal or regulatory. c. National or local.
b. Direct or indirect. d. Specific or ad valorem.

44. Income is recognized when received rather than when earned

a. Accrual basis. c. Cash basis.
b. Installment basis. d. Deferred payment basis.

45. A short accounting period may not arise under which of the following circumstance?
a. Change of accounting period by a corporate taxpayer.
b. Change of accounting period by an individual taxpayer.
c. Death of a taxpayer.
d. Dissolution and liquidation of a business.

46. Percentage of the fair value of the yacht is considered in measuring depreciation value.
a. 5% b. 10% c. 20% d. 50%

47. Transfers for insufficient consideration are subject to

a. Income tax. b. Transfer tax. c. Either A or B. d. Both A and B.

48. Which is not an income tax scheme

a. Final Income Taxation c. Capital Gains Taxation
b. Ordinary Gains Taxation d. Regular Income Taxation

49. The reporting classification of gross income into operating and non-operating is unnecessary for
a. Individual b. Corporate c. A and B d. Neither A nor B

50. Active income is subject to

a. Regular tax b. Capital Gains Tax c. Final Tax d. Any of these

"The greatest mistake you can make in life is to be continually fearing you will make one."
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 -- Elbert Hubbard –

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