C P A R CPA Review School of the Philippines

FINAL PRE-BOARD EXAMINATION Sunday, April 19, 2015 Business Law and
Taxation 04:00PM to 06:00PM
Choose the BEST answer for each of the following items. Mark only one answer
for each item on the Special
Answer Sheet provided, Strictly no erasure allowed.
1. Dividends on shares of stocks can only be declared out of unrestricted
retained earnings of the corporation.
Answer 1 - True, dividends whether cash or stock can be validly declared only
out of unrestricted retained earnings. Answer 2 - False, during the receivership,
the assets and properties of the corporation are being gathered for conversion
into cash in preparation for distribution to creditors
a. Both answers are correct c. Only answer 1 is correct b. Both answers are not
correct d. Only answer 2 is correct
For Nos. 2 - 11. A, through insidious words and machinations made B to sign a
promissory note which reads "I promise to pay A or order P10,000. Sgd B. Then
A negotiated the note to C by qualified indorsement and C to D by blank
indorsement then D to E by delivery, then E to Falso by delivery then F to G by
special indorsement, then G to H by qualified indorsement, then H to I by
facultative indorsement where H waived the notice of dishonor, then I to J by
conditional indorsement, then J to k by restrictive indorsement.
... If the promissory note is in the hands of A, which of the following is correct?
The promissory note is not valid, but A can collect from B because it is
negotiable The promissory note is negotiable and valid hence A can collect from
B The promissory note is negotiable but not valid hence A cannot collect from B
The promissory note is valid and negotiable but A cannot collect from B
2

3. If the promissory note is in the hands of C, which of the following is correct?

a C can collect from B, if C is a holder in due course b. C can collect from B whether or
not C is a holder in due course c. C can collect from A provided C is a holder in due
course d. C can collect from B but not from Abecause A is a qualified indorser
4. If the promissory note is in the hands of D, which is not correct?
D can collect from B if C is a holder in due course even if D is a holder for value D can collect
from either A or C if B will not pay D can collect from C but not from A if B will not pay D can
collect from A even if D is a holder for value if B will not pay
5.

If the promissory note is in the hands of E, which is correct?

a E can collect from A or C but not from D if B will not pay b. E is a holder even if D did
not indorse the note, hence E can collect from B c. E can collect from D but not from C if
B will not pay d. B is liable to E even if E is only a holder for value, if D is a holder in due
course
6. If the promissory note is in the hands of F, which is not correct?
F can collect from C or E but not from A or D if B will not pay F may further negotiate the
note either by indorsement or by mere delivery A, C and E but not D are liable to F if B
will not pay B is liable to F if F is a holder in due course even if E is only a holder for
value
7. If the promissory note is in the hands of G, which of the following is
correct?
a G may further negotiate the note only by indorsement and not by
mere delivery b. G may strike out the indorsement of A but all
indorsers subsequent to A are also discharged c. G can collect from A
or C or D or E or F if B will not pay d. G can collect from C or F but not
from A or D or E if B will not pay
As
8.
9.
O.
13.
14,
15.

which of the following is correct? . . .

If the promissory note is in the hands of H, which of the following is not correct?
a. A and G as qualified indorsers are not liable to H b. D and E are not liable to H c. C
and F are liable to Heven if H is only a holder for value d. B is liable to H if H is a holder
in due course
If the promissory note is in the hands of I, which of the following is correct?
a. If I is a holder for value, but His a holder in due course, B is liable to I b. All indorsers
are liable to I except the qualified indorsers c. The qualified indorsers and the persons
who negotiated by mere delivery are not liable to I d. I can strike out the indorsement of
G because G is not liable to I
If the promissory note is in the hands of J, which of the following is correct?
a. The instrument is no longer negotiable b. B is liable to Jif J fulfills the condition
if J is a holder in due course c. If the condition is not yet fulfilled, B cannot pay J
d. B is not liable to J even if J fulfills the condition
If the promissory note is in the hands of K, which of the following is correct?
a. The instrument is no longer negotiable b. The subsequent indorsement and
delivery of the instrument will be considered as assignment c. G is not liable to K,
even if K is a holder in due course d. A, D and E are not liable to K

. A promissory note reads “I promise O pay B or order P100,000. Sgd.

A. B negotiated the note to C, then C
to D, D to E, E to F, F to G, G to H, then H to E all by special indorsements.
Which of the following is correct? If A dishonors the instrument
Eshould notify B, C, D, F, G and H to make them liable to him If E notifies G and
G notifies D, both D and G are liable to E F, G and Hare discharged because
they are intervening parties If E notifies C and C notifies B and D, the notice
given by C inures to the benefit of E making B and D liable to E
Using the preceding number, if E negotiates the note to I by special indorsement, which
of the following is
correct? -

- F, G and Hare not liable to I if I knows that the note was previously dishonored
If I is a holder in due course, all indorsers are liable to him I can collect from E
and E can collect from H If I presents the note for payment and A again
dishonors, I should notify all the indorsers to make them liable to him
Using the preceding number, but I negotiates the note to G by special indorsement,
which of the following is
not correct? - -
, a. The negotiation to G is not allowed because G is an intervening party
b. G can collect from E but not from H if A will not pay c. G can collect from F but not from I if A
will not pay d. G can collect from A even if G is not a holder in due course

A promissory note reads “I promise to pay B or bearer P100,000. Sgd. A. B

negotiated the note to C by special indorsement, then C to D by blank
indorsement, then D to E by delivery, then E to F by delivery,
If F is a holder in due course, he can collect from either B,
C, D or E if A will not pay iF can collect only from E if A will
not pay
F can collect either from B, C or E but not from D if A will not pay F cannot strike out the
indorsement of the payee B but can strike out the indorsement of C
lu. Using the preceding number, but the note is payable to B or order,
which of the following is correct?
a. If F is a holder in due course, he can collect from either B, C, D or E if A will not pay
b. F can only collect from E if A will not pay c. F can collect either from B, C or E but not
from D if A will not pay d. F cannot strike out the indorsement of the payee B but can
strike out the indorsement of C
7. Continuing the preceding number, and F makes a special indorsement to G
and G makes a qualified
indorsement to Hand H makes a conditional indorsement to I, which of the
following is correct?
a. Before fulfillment of the condition, I may demand payment from A and if
A pays, A's obligation
is extinguished
b. Before fulfillment of the condition, I may demand payment from A and if A
refuse to pay, the
note is considered as having been dishonored
c. Upon fulfillment of the condition, I can demand payment from any of the indorsers if A
dishonors the instrument -

d. Upon fulfillment of the condition, I becomes a holder and I can demand payment from
A if I is a
holder in due course

18. Which of the following instruments is negotiable?

a. "Pay to the order of A or B the sum of P100,000.” Sgd. Cand D b. I promise to pay to
the order of A or B the sum of P100,000”. Sgd, C and D c. "Pay to B or order the sum of
P100,000 30 days after sight. Sgd. A d. “We promise to pay A and B the sum of
P100,000”. Sgd. C and D
19. S sold his car to B on installment and a chattel mortgage was constituted on
the car. B defaulted in two installment payments. S foreclosed the chattel
mortgage and sold the car at a public auction. If there is deficiency, can S
recover the deficiency?
a. Yes, even without stipulation c. No, even if there is stipulation b. Yes, if there is
stipulation d. No, unless there is stipulation
20, B borrowed P100,000 from S secured by a chattel mortgage on B's car. The
debt is payable in installment. When B defaulted in 2 installment payments, S
foreclosed the chattel mortgage and sold the car at a public auction. If there is
excess, who is entitled to the excess?
a. S, even without stipulation c. S, unless there is stipulation b. B, only if there is
stipulation d B, even without stipulation
21. B pledged his ring to S, B failed to pay his obligation. S sold the ring at a
public auction. If there is
deficiency, can S recover the deficiency?
a. Yes, if there is stipulation c. Yes, even without stipulation b. No, even if there is
stipulation d. No, unless there is stipulation
22. Inadvertently, the SEC approved the Articles of Incorporation and issued a
Certificate of Incorporation to Wholesome Corporation. Thereafter it was discovered that
the incorporators have not completed the required period of residency in the Philippines.
As a result, which of the following is not correct?
a. The corporation shall be considered as a de-facto corporation b. The right to
exercise corporate powers can be inquired into collaterally in any private Suit to
which the corporation maybe a party c. The corporation has no legal
personality and the incorporators maybe held personally liable for
damages d. The Solicitor General has the right to question or contest the validity of
its corporate existence
through a quo-warranto proceedings
23. In case a managing partner collects a demandable debt from his debtor
who also owes the partnership a demandable debt, which of the following
is not correct if payment is not enough to cover the two debts?
sa. The sum collected shall be applied to the partnership credit
b. It shall be applied to the two credits in proportion to their amounts c. The
debtor has the right to have the payment applied to his debt to the partner if it
should be
onerous to him d. The partner cannot apply the payment to his own credit
24.
25.
26.
27.
28,
29.
30.

May not require stockholders approval

a. Declaration of cash dividend c, increase of bonded indebtedness b.
Management contract d. Removal of a director
Assume that the unpaid subscription of S for 10 shares with a par value of P100 each is
P400 and the expenses, interest and cost of sales amount to P50. Who is the highest
bidder if the bids are as follows?
a. P400 for 5 shares c. P450 for 7 shares b. P450 for 6 shares d. P400 for 4 shares

The following are the effects of unlawful partnership, except -

a. The contract is voidab initio and the partnership never existed in the eyes of the law
b. The profits shall be confiscated in favor of the government c. The instruments, or
tools and proceeds of the crime shall be forfeited in favor of the government d. The
contributions of the partners shall be confiscated in favor of the government
A person cannot be admitted into the partnership without the consent of
a. All the partners c. 2/3 of the partners b. Majority of the partners d. Partners
representing the controlling interest
On April 1, 2014, A and B entered into a contract of partnership for the purpose of
buying and Selling textbooks, with the former as capitalist partner and the latter as
industrial partner. It was agreed that A shall contribute P100,000 to the common fund on
May 2, 2014. Upon the arrival of the designated date, A failed to deliver the contribution
he promised. As a result
a. B should make a demand upon A for the delivery of his contribution to render A in
default b. The contract of partnership becomes void because A failed to give his
contribution to the
common fund c. B can compel A to deliver his contribution with interest
and damages without the necessity of
demand . . d. The contract of partnership was never perfected because
there was no delivery of contributions
by the partners
A, B and C formed a limited partnership with A as general partner, B as limited partner
and C as industrial partner. A and B contributed P50,000 each. The partnership failed
and after disposing all its assets to pay partnership debts, there still remains a note
payable in the sum of P15,000. Against whom can the creditor demand payment of the
note of P15,000
a. Only A is liable to pay the P15,000 indebtedness
b. A and B are liable to pay P7,500 each
c. A and Care liable to pay P7,500 each d. A, B and C are liable to pay P5,000 each
Statement 1- A director is removed from office by a vote of the
stockholders holding or representing at least 2/3 of outstanding capital
stock. The vacancy occasioned by such removal can be filled by the vote of
at least a majority of the remaining directors if still constituting a quorum
Statement 2-Treasury shares sold for less than par or issued value are
considered “watered stock” and as such are prohibited by law. ་“ལྟ་ ལྟ་
a. True, true b. True, false c. False, true d. False, false
... One of the following is a ground for the suspension or revocation of the certificate of
incorporation by the
SEC

a. If the corporation has commenced its business transactions and

afterwards ceased operations
continuously for a period of at least 5 years
b. If the corporation fails to commence and start to operate and the failure to operate is
due to
causes beyond its control
c. If the corporation does not formally commence its business operation or transactions
within two
years from date of issuance of certificate of incorporation
d. If the corporation has commenced its operations and subsequently become
continuously
inoperative for two years
32. The following are ways of enforcing payment of unpaid subscription. Which is
the exception?
a Sale at public auction of delinquent stock b. Denying delinquent stock cash dividend
c. Filing a court action to recover unpaid subscription d. Denying delinquent stock the
right to vote and be voted upon
. After ten years, five out of the nine incorporators who organized the
corporation and signed the articles of
incorporation died. The corporation is
a. Dissolved as there will only be four left which is below the minimum of five
incorporators
required by law b. Dissolved as the Corporation Code requires that the
incorporators be alive during the operation
of the business c. Not dissolved as it still has forty years left in its term d. Not
dissolved as it enjoys the right of succession
3
3

34. May a stock certificate be issued before full payment? Statement 1- No, in
case of stock with par value Statement 2-Yes, in case of stock without par value
a. True, true b. True, false c. False, true d. False, false
35. Which of the following corporate acts will not require the approval of the
stockholders or of the members
of the private corporation?
a. To amend the by-laws b. To increase the capital stock c. To invest corporate funds in
another corporation or business d. To elect the officers of the corporation
36. Delectus personae is an element of a partnership which means
a. Right to choose his partners c. Obligation to remain loyal to his partners b. Confidence
and trust in his partners d. Distribution of profits among the partners
37. When a real property is contributed to the partnership
a. A real contract is perfected b. A written instrument is required c. A public instrument
complete with inventory is required d. A partner can make important alteration if
beneficial to the partnership
38. A, B, C and D are general partners contributing P20,000, P30,000,
P50,000 and industry respectively. At
the time of liquidation, the partnership is indebted to Y for P50,000, to partner A
for P30,000 and to partner
B for P20,000. If the assets of the partnership amount only to P20,000, which of
the following is correct?
a. Y can collect P20,000 from the partnership and from partners A, B and C at
P10,000 each b. After exhausting the assets of the partnership amounting to
P20,000, Y can collect from partners A, B, : C and D at P7,500 each c. Y can
collect P20,000 from the partnership and P30,000 from either partners A or B or
C or D d. If Y succeeds in collecting the P30,000 from the separate properties of
the partners concerned,
partners A, B and C will be required to make additional contribution
39. A is the listed owner of 10,000 shares with par value of P100/share in ABC
Corporation. ABC sued A for
the payment of A's indebtedness of P1M. A contends that such debt must be compensated by his
shares of stocks with the plaintiff corporation. The contention of A is
a. Valid due to legal compensation b. Valid by virtue of judicial compensation c.
Untéñá5te since he is not a creditor of the corporation d. Automatically extinguished if
the fair market value of the shares is P1M
40. In the partnership of A, B, C and D, D was designated as the managing
partner. D's able management
41.
42.
43.

prevented the firm to suffer from the economic turbulence caused by the
instability of the Philippine peso.
Partners A, B and C became jealous of D's good name. As a result, D was
capriciously and whimsically
removed as manager without a valid cause. Is the removal valid?
a. Yes, D's removal is valid even without his consent b. Yes, provided it is approved by
all the other partners c. No, D's appointment is irrevocable without a just or lawful cause
d. No, D can only be removed for a valid cause with vote of the partners owning the
controlling interest
The importation of the following is exempt from VAT, except
a grapes, apples and oranges c. race horse, fighting cocks and Zoo
animals b. poultry and livestock drice, corn and coffee beans
The importation of the following is subject to WAT, except
a vegetables, cows and shrimps c. . shells, corals and tobacco b. logs, woods
and abaca d. cotton, orchids and bamboos
ABC Transport Corporation has land, sea and air transport operations. To
improve its services, which of the following importation is subject to vat?
a. 20 units of airconditioned buses - b. 12 units of life-saving, safety and
rescue equipment for shipping transport operation c. 10 airplanes d. 5
ships
A, a vat taxpayer made a Php 100,000 sales to the government invoiced at Php
112,000 inclusive of output
vat. A purchased the same for Php 90,000, net of Php 10,800 input vat. The
government effected payment, net of the 5% final vat. The entry to record the sale to the
government is
a. Cash Php 107,000 Standard Input Tax 5,000
Sales Php 100,000 Output Tax 12,000
b. Cash Php 100,000 Standard Input Tax 5,000 Output Tax 7,000
Sales Php 100,000 Output Tax 12,000
c. Cash Php 100,000 Standard Input Tax 5,000
Sales Php 100,000 Output Tax 5,000
d. Cash Php 106400 Standard Input Tax 5,600
Sales Php 100,000 Output Tax 12,000

45. Using the above information, the actual input vat that will be charged to
cost or expense is
46.

a Php 3,800 b. Php 5,000 c. Php 7,000 d. Php 2,000

On April 19, 2015, Mr. A donated 1,000 shares of stock of ABC Corporation. ABC
Corporation shares are listed in the stock exchange. The following are the trading
prices of each share on April 19, 2015:
Opening price Php 800 Highest trading price - 880 Lowest trading price 760 Average
trading price 820 Last trading price . . 840
The gross gift is
47. The DOC Restaurant, a vat registered taxpayer sold to spouses H, a
senior citizen and W a person with
disability, as follows (based on menu prices):
W 2-pieces spicy chicken Php 150 Php 150
Siomai special 64 Sago — gulaman 64 Mushroom chicken soup 100 OO Tofu 64
Steamed kangkong 64 Buko pandan 70 70 Totalis Php 448. Php 448
The output tax due is
a Php 38.40 b. Php 48 c. Php 43.01 d. P0
48. Mrs. A died leaving 2,000 shares of stocks of ABC Corporation, a closely held
corporation, as part of her estate. The balance sheet of ABC Corporation is
shown below together with the fair values of its assets and
liabilities:
Book Values Cash Equipment 1,000,000 Land A 4,000,000 Land B 4,000,000
Building A 2,000,000 Building B 1,000,000 Investment 3,000,000
Total Assets Php 17,000,000
Liabilities Equity
FA
Php 2,000,000 Php 2,000,000
1,200,000
2,600,000
Php 7,000,000
10,000,000

Total Liabilities & Equity Php 17,000,000

R V Assessed Values Zonal Values

5,000,000 4,400,000 4,800,000 4,000,000

ALUES

Independent Appraisal
Php 10,000,000 Php 12,000,000 8,000,000 7,000,000 6,000,000
3,900,000

Each share of stock of ABC Corporation has a par value of Php 1,000. Mrs. A
purchased the shares at Php 1,200/share. ABC Corporation has 20,000 shares
outstanding. The shares of stock shall be included in Mrs.
As gross estate at

a Php 2,920,000. b. Php 2,880,000 c. Php 2,000,000 d.

Php 2400,000
49. An inventory of Mr. A's properties was taken two years after his death. He
had the following properties
during the inventory taking:
Cash (20% from income of A's properties after death)
Car (bought for Php 2M one day before A's death)
House and Lot (FMV - Php 8M on As death)
Business interest (worth Php6M on A's death) The following expenses and losses
were incurred by the estate:
Funeral expenses Judicial expenses
Loss of pieces of jewelry (8 months after A's death) Obligations of A paid using his estate
The gross estate of A is

a Php 23.200,000 b. Php 23,400,000

50. Which of the following is not subject to VAT
a Non-life insurance premiums
b. Non-life reinsurance premiums
c. Php 22,200,000
Php 4,000,000
1,200,000 10,000,000 7,000,000
Php 800,000 400,000 1,000,000 2,000,000
d. Php 20,400,000
c. Non-life insurance commissions d. Non-life reinsurance commissions
si. For the months of August and September 2014, ABC Bank has the following
income floss.
Interest income with maturity August September
- of less than 5 years P800,000 P1M - of more than 5 years 800,000 M
Rentals 400,000 800,000
Net trading gain (loss) (100,000) 200,000
The gross receipts tax of ABC Bank for August is a. P76,000 b. P68,000 c. P69,000
d. P63,000
52. The gross receipts tax of ABC Bank for September is →
a. P125,000 b. P130,000 c. P116,000 d. P123,000

53. A filed his ITR for 2014 on April 15, 2015 and will pay his tax liability in
installment. The return shows an income tax due of P100,000 and income
tax withheld of P60,000. If A pays the 2" installment only on October 15,
2015, the amount to be paid (excluding compromise penalty) is a. P26,000
b. P35,000 c. P55,000 d P37.500
54. A, a VAT registered person had the following data for Apríl 2015 (vat not
included):
a. Export sale offeeds for animals
i. For human consumption P 1,500,000 ii. For race horses and fighting cocks
500,000 b. Domestic sale offeeds for animals
í. For human consumption 750,000 ii. For race horses and fighting cocks 250,000
c. input tax which cannot be directly attributed to
any of the above sales 100,000 The output tax for April is
a P30,000 b, P90,000 c. P60,000 di. P120,000
55. Using the above data, the vat still due (excess input tax) is
a, (P45,000) b. (P20,000) c (Ꮲ70,000) d. P5,000
56. A, a VAT registered taxpayer made the following acquisition of capital
goods from VAT registered
suppliers (net of vat) during the quarter;
Date Cost Estimated Life July 2 P1,500,000 8 years O 500,000 2 years
August 5 400,000 3 years 20 500,000 4 years September 10 500,000 4 years
 15 600,000 6 years The July 2 acquisition was retired in September. The
input tax for July is
a. P4,275 b. Р5,500 c. P63,000 d. P240,000

57. Using the above data, the input tax for August is
a. P2,583 b. P8,083 c. P108,000 d. P113,500
58. Using the data in number 57, the input tax for September is -
a, P2,450 b. P132,000 c. P178,950 d. P231450
59. Which of the following is subject to wat?
Sale of passenger or cargo vessels and aircraft for domestic or
international transport operations Sale of agricultural and marine food
products in their original state Sales by agricultural cooperatives duly
registered with the Cooperative Development Authority
Sale of fuel, goods and supplies by persons engaged in international
shipping or air transport operations
60. The following are exempt from vat, except
a. Services subject to percentage tax b. Lease of residential units with a monthly rental not
exceeding P12,800 c. Export sales d. Services of banks and other non-banks financial
intermediaries
6. As income tax liability for 2014 was P75,000. She filed the return and paid the
total amount due but not with the proper internal revenue district office on July
15, 2015. The amount payable (ignoring compromise
penalty) is
a. P97,500 b. P112,500 c. P 16,250 d. P135,000

62. DODC Airlines, an international air carriershowed the following gross

receipts:
Point of Origin Destination Gross Receipts
Philippines China P2000,000 Philippines Singapore 1,600,000 Singapore Japan 3,000,000

Twenty-five percent of the shipment from the Philippines to Singapore were

later shipped from Singapore to Japan. The percentage tax due is
a P198,000 b. P186,000 c. P108,000 d. P96,000

63. DODC Broadcasting Company, a non-vat holder of a franchise to

operate a radio and television network
reported the following gross receipts (net of any tax):
Year 2014 P 9,000,000 2015 12,000,000 The business tax liability
2014 2015
a.P 270,000 P 360,000 b. 1080,000 1,440,000 c. 270,0000 1,440,000 d. 1080,000 360,000

64. Tax credit for foreign tax paid is allowed on

a. Encome tax paid by a non-resident citizen c. Income tax paid by a non-resident
alien b. Estate tax paid by a resident alien d. Donor's tax paid by a non-resident
alien
Questions No. 65 to 67:

65. ABC Corporation did not file its annual income tax return for the
calendar year 2014 on its due date, that is April 15, 2015. On May 15,
2015, the corporation advised the BIR that its income tax due for the
said year amounts to Pt,000,000 but, however, due to its adverse
financial condition at the moment, it will be unable to pay the entire
amount, inclusive of the delinquency penalties. Hence, on May 15,
2015, it made a partial payment of P400,000. The total amount due as
of May 15, 2015 is (ignoring compromise penalty)
a. Pł,266667 b. P1,160,000 c. P760,000 d. P1516,667

66. Using the above statement, assuming that the BR demanded

payment of the unpaid balance of its tax obligation payable by June
15, 2015, the amount due on June 15, 2015 is (ignoring compromise
penalty)
a. P881,111 b. P1,027,778 c. P772,667 d. P926,667

67. Using the receding number, if the corporation fails to pay the tax due by
June 15, 2015, how much will the
corporation pay on July 15, 2015
а. Р895,796 b. P1,044,908 c. P785,548 d. P978,711
68. Which of the following is subject to VAT
a. Sale of residential lot valued at P2,000,000 b. Saie of residential house
and lot valued at P2,500,000 c. Lease of residential units with a monthly
rental per unit of P12,000 where the aggregate rentals
received during the year was P2,500,000 d. Lease of residential units
with a monthly rental per unit of P15,000 where the aggregate rentals
received during the year is P1,800,000
69. Which of the following is not considered as transaction deemed sale?
a. Transfer, use or consumption not in the ordinary course of business of
goods or properties originally
intended for sale of for use in the course of business b. Distribution or
transfer to shareholders or investors as share in the profits of the vat-registered
person or to creditors in payment of debt c. Consignment of goods if
actual sale is not made within 60 days following the date such goods were
- consigned d. Retirement from or cessation of business, with respect
to capital goods existing as of such retirement
or cessation

70. The gross receipts of A, a lessor, from his residential units for the year,
show.
Monthly rent/unit No. of units Totał
P12,800 10 Pl,536,000 P10,000 10 P1,200,000 P14,000 8 P1,344,000 PᎥ6,000 8 P1,536,000
The output vat is

a. P673,920 b. P345,600 c. PS29.920 d. Po

71. Which of the following is not a power vested in the Bureau of Internal
Revenue?
a. The assessment and collection of all national internal revenue taxes, fees and
charges b. The enforcement of all forfeitures, penalties and fines c. The granting
of tax exemptions and other tax incentives to taxpayer d. The execution of
judgments in all cases decided in its favor by the Court of Tax Appeals and the
ordinary courts
72.The seizure by the government of real property to enforce the payment
of taxes to be followed by its public
sale if the taxes are not voluntarily paid
a, Delinquency b. Deficiency с Levy d, EDistraint
73. DEF Corporation, due to financial incapacity requested that it be
allowed to pay its income tax liability per return for calendar year 2014,
amounting to P1 million in four(4) equal monthly installments starting April
15, 2015. Its request has been duly approved. The tax due for the second
installment on May 15, 2015
ES

a P250,000 b. P254.167 c.Ꮲ262.500 d. P300,000

74. A insured his life for P10M. in case A dies, the proceeds of the life
insurance shall be:
a. Excluded from gross estate if the beneficiary is the estate, executor or
administrator whether
revocable or irrevocable b. Part of gross income if the beneficiary is a
third person and the designation is revocable c. Part of the gross estate if
the beneficiary is a third person and the designation is irrevocable d.
Excluded from gross income whether beneficiary is revocable or
irrevocable
75. A sold his piano, a capital asset which he purchased in 2000 at a cost of
P50,000. The terms of sale show:
Downpayment January 15, 2014 ------జ జ==== P20,000 Installment payment r
February 15, 2014 ------------ 20,000 - February 15, 2015 ----------- 40,000

r February 15, 2016 ----------40,000 ‫ܡܒܒܼܕ‬. A

will report a taxable gain on above sales in 2014 of a P11,667 b.
P23,333 c. P35,000 d. P70,000
76. ABC Corporaation engage in freight and trucking business received the
following in 2014
Share in net income of the joint venture with XYZ Corp. P900,000 Dividend received from
KLM Corp., a Domestic Corp, 18,000 Dividend received from NOP Corp., a Non-resident
foreign Corp. 10,000
Own met income 2,200,000

The net taxable income of ABC Corp. is a. P1,210,000 b. P2,110,000 c. P2210,000 d.

P1,200,000
77. During 2014, the total net amount paid for the salaries and wages
amounted to P9,000,000 after effecting
the following deductions for employees:
SSS premiums contributions P 420,000 Philhealth premiums contributions
100,000 Pag-ibig premiums contributions 180,000 Creditable withholding tax
300,000
In addition, the corporation provided its vice-president for operations
P340,000 cash as fringe benefit. The allowable deduction for salaries
and benefits is
а. Р9,340,000 , b. P10,500,000 c. P10,340,000 d. P 10,000,000
For Nos 78 - 80. ABC, a domestic corporation usually bills its foreign
branch at cost. ABC and the BER entered into an advanced pricing
agreement which fixed ABC's cross border pricing to its foreign branch at
150% of cost. The following are provided for the year:
Philippines Branch Sales
through the branch: (intra-company sales)
Selling Price . Php 10,000,000 Php 8,000,000 Cost of Sales 10,000,000 ... 10,000,000
Gross Income Php Php 8,000,000
Sales to another domestic corporation:
Selling Price Php 8,000,000 Cost of Sales
3OOOOOO Gross income Php 5,000,000
78. The gross income from the Philippines is
a. Php 5,000,000 b. Php 10,000,000 c. Php 13,000,000 d. Php 15,000,000
79. The total gross income of ABC is
a. Php 13,000,000 b. Php 8,000,000 c. Php 5,000,000 d. Php 10,000,000
• 80. If the foreign operation is not a branch but a foreign subsidiary
incorporated abroad, ABC's gross income is
a Php 5,000,000 b. Php 10,000,000 c. Php 9,000,000 d. Php 13,000,000
The Ed