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Bicol College Bicol College

Problem Solving Problem Solving

1. Mr. CSO, a minimum wage earner, works for G.O.D.. Inc. He is not engaged business nor has any other 1. Mr. CSO, a minimum wage earner, works for G.O.D.. Inc. He is not engaged business nor has any other source
source of income other than his employment. For 2017, Mr. CSO earned a total compensation income of of income other than his employment. For 2017, Mr. CSO earned a total compensation income of 135,000.
135,000.
c. The taxpayer contributed to the SSS, PhilHealth, and HDMF amounting to 5,000 and has
a. The taxpayer contributed to the SSS, PhilHealth, and HDMF amounting to 5,000 and has received a 13th month pay of 11,000. His income tax liability will be?
received a 13th month pay of 11,000. His income tax liability will be?
d. The following year, Mr. CSO earned, aside from his basis wage additional pay of 140,000
b. The following year, Mr. CSO earned, aside from his basis wage additional pay of 140,000 which consist of the overtime pay 80,000, night differential 30,000 hazard pay 15,000 and
which consist of the overtime pay 80,000, night differential 30,000 hazard pay 15,000 and holiday pay 15,000. He has same benefits and contributions. His tax liability will be?
holiday pay 15,000. He has same benefits and contributions. His tax liability will be?
2. Ms. EBQ operates a convenience store while she offers bookkeeping services to her clients. In 2018, her gross
2. Ms. EBQ operates a convenience store while she offers bookkeeping services to her clients. In 2018, her sales amounted to 800,000 in addition to her receipts from bookkeeping services of 300,000. She already
gross sales amounted to 800,000 in addition to her receipts from bookkeeping services of 300,000. She signified her intention to be taxed at 8% income tax rate in her 1st quarter return.
already signified her intention to be taxed at 8% income tax rate in her 1st quarter return.
c. Her tax liability for the year will be?
a. Her tax liability for the year will be? d. Ms. EBQ above, failed to signify her intention to be taxed at 8% income tax rate on gross
b. Ms. EBQ above, failed to signify her intention to be taxed at 8% income tax rate on gross sales in her initial quarterly income tax return, and she incurred cost of sales and operating
sales in her initial quarterly income tax return, and she incurred cost of sales and operating expenses amounting to 600,000 and 200,000, respectively, or a total of 800,000, the
expenses amounting to 600,000 and 200,000, respectively, or a total of 800,000, the income tax shall be?
income tax shall be?
3. Mr. JMLH signified his intention to be taxed at 8% income tax rate on gross sales in his 1 st quarter income tax
st
3. Mr. JMLH signified his intention to be taxed at 8% income tax rate on gross sales in his 1 quarter income return. He has no other source of income. His total sales for the first 3 quarters amounted to 3,000,000 with 4 th
tax return. He has no other source of income. His total sales for the first 3 quarters amounted to 3,000,000 quarter sales 3,500,000.
with 4th quarter sales 3,500,000.
1st qtr (8%) 2nd qtr (8%) 3rd qtr (8%) 4th qtr
1st qtr (8%) 2nd qtr (8%) 3rd qtr (8%) 4th qtr Total sales 500,000.00 500,000.00 2,000,000.00 3,500,000.00
Total sales 500,000.00 500,000.00 2,000,000.00 3,500,000.00 COS 300,000.00 300,000.00 1,200,000.00 1,200,000.00
COS 300,000.00 300,000.00 1,200,000.00 1,200,000.00 Gross Income 200,000.00 200,000.00 800,000.00 2,300,000.00
Gross Income 200,000.00 200,000.00 800,000.00 2,300,000.00 Operating Expenses 120,000.00 120,000.00 480,000.00 720,000.00
Operating Expenses 120,000.00 120,000.00 480,000.00 720,000.00 Taxable Income 80,000.00 80,000.00 320,000.00 1,580,000.00
Taxable Income 80,000.00 80,000.00 320,000.00 1,580,000.00

4. Ms. RPSV is a prominent independent contractor who offers architectural and engineering services. Since her
4. Ms. RPSV is a prominent independent contractor who offers architectural and engineering services. Since career flourished, her total gross receipts amounted to 4,250,000.00 for taxable 2018. Her recorded cost of
her career flourished, her total gross receipts amounted to 4,250,000.00 for taxable 2018. Her recorded service and operating expenses were 2,150,000.00 and 1,000,000.00 respectively. Her income tax liability will
cost of service and operating expenses were 2,150,000.00 and 1,000,000.00 respectively. Her income tax be?
liability will be?
5. In 2018, Mr. GCC owns a nightclub and video bar, with gross sales/receipts of 2,500,000.00. His cost of sales
5. In 2018, Mr. GCC owns a nightclub and video bar, with gross sales/receipts of 2,500,000.00. His cost of and operating expenses are 1,000,000.00 and 600,000.00, respectively, and with non-operating income of
sales and operating expenses are 1,000,000.00 and 600,000.00, respectively, and with non-operating 100,000.00. His income tax liability will be?
income of 100,000.00. His income tax liability will be?