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<a href=N ATIONAL C OLLEGE O F B USINESS A ND A RTS Cubao-Fairview-Taytay FIRST SEMESTER SY 2015-2016 FINAL DEPARTMENTAL EXAMINATIONS TAXATION 2 2 HRS TRANSFER & BUSINESS TAX INSTRUCTIONS: Select the correct answer for each of the following questions. Mark only one answer for each item by shading the corresponding letter of your choice on the answer sheet provided. STRICTLY NO ERASURES ALLOWED. Use Pencil No. 2 only. 1. Properties owned before marriage and brought into the marriage are generally classified as: I. Exclusive properties under conjugal partnership of gains. II. Common properties under absolute community of properties. A. Only I is correct C. Both I and II are correct B. Only II is correct D. Both I and II are incorrect 2. A resident alien donor donated to a Philippine domestic corporation a property located abroad valued at P500,000. The foreign donor's tax on the donation was P100,000. A donation earlier within the same calendar year was made to a legitimate daughter, property valued at P300,000. The donor's tax due on the last donation after credit for foreign donor's tax paid is: A. P50,000 P52,500 B. P56,000 C. D. P58,500 3. The excess of allowable deductions over gross income of the business in a taxable year is known as A. Net operating loss. B. C. Net deductible loss. Ordinary loss. D. NOLCO 4. The following data pertain to the estate of a married decedent: Conjugal real properties P5,000,000 Conjugal family home 2,000,000 Exclusive properties Conjugal ordinary deductions: 2,500,000 Funeral expenses 250,000 Other deductions 1,300,000 1,550,000 Medical expenses The taxable net estate is: 500,000 A. P3,750,000 B. P3,350,000 C. P2,750,000 D. P2,200,000 5. Which of the following excess input tax cannot be refunded or converted into tax credit certificate? A. Input tax associated with sale of goods to Asian Development Bank. B. Input tax associated with sale of goods to International Rice Research Institute. C. Input tax associated with export sales of VAT-registered taxpayers. D. Input tax associated with exports of non-VAT exporter. 6. The following data pertain to the estate of an unmarried but head of the family decedent: Real and personal properties P5,000,000 Family home Ordinary deductions: 800,000 Funeral expenses 200,000 Other deductions 1,300,000 1,500,000 Medical expenses The taxable net estate is: 300,000 A. P3,000,000 B. P2,200,000 C. P3,200,000 D. P1,500,000 7. The proceeds received under a life insurance endowment contract is NOT considered part of gross income: A. If it is so stated in the life insurance endowment policy. B. If the price for the endowment policy was not fully paid. C. Where payment is made as a result of the death of the insured . D. Where the beneficiary was not the one who took out the endowment contract. " id="pdf-obj-0-2" src="pdf-obj-0-2.jpg">

Cubao-Fairview-Taytay FIRST SEMESTER SY 2015-2016

FINAL DEPARTMENTAL EXAMINATIONS TAXATION 2

2 HRS TRANSFER & BUSINESS TAX

INSTRUCTIONS: Select the correct answer for each of the following questions. Mark only one answer for each item by shading the corresponding letter of your choice on the answer sheet provided. STRICTLY NO ERASURES ALLOWED. Use Pencil No. 2 only.

  • 1. Properties owned before marriage and brought into the marriage are generally classified as:

 

I.

Exclusive properties under conjugal partnership of gains.

 

II. Common properties under absolute community of properties.

 

A.

Only I is correct

 
  • C. Both I and II are correct

 

B.

Only II is correct

D. Both I and II are incorrect

  • 2. A resident alien donor donated to a Philippine domestic corporation a property located abroad valued at

 

P500,000. The foreign donor's tax on the donation was P100,000. A donation earlier within the same calendar year was made to a legitimate daughter, property valued at P300,000. The donor's tax due on the last donation after credit for foreign donor's tax paid is:

A.

P50,000

 

P52,500

  • B. P56,000

    • C. D. P58,500

  • 3. The excess of allowable deductions over gross income of the business in a taxable year is known as

 

A.

Net operating loss.

 
  • B. C. Net deductible loss.

Ordinary loss.

D. NOLCO

  • 4. The following data pertain to the estate of a married decedent:

 
   

Conjugal real properties

 

P5,000,000

Conjugal family home

2,000,000

 

Exclusive properties Conjugal ordinary deductions:

 

2,500,000

 

Funeral expenses

 

250,000

Other deductions

1,300,000

1,550,000

Medical expenses The taxable net estate is:

 

500,000

A.

P3,750,000

 

B. P3,350,000

 
  • C. P2,750,000

 

D. P2,200,000

  • 5. Which of the following excess input tax cannot be refunded or converted into tax credit certificate?

 

A.

Input tax associated with sale of goods to Asian Development Bank.

 

B.

Input tax associated with sale of goods to International Rice Research Institute.

C.

Input tax associated with export sales of VAT-registered taxpayers.

D.

Input tax associated with exports of non-VAT exporter.

 
  • 6. The following data pertain to the estate of an unmarried but head of the family decedent:

 

Real and personal properties

 

P5,000,000

Family home Ordinary deductions:

 

800,000

 

Funeral expenses

 

200,000

Other deductions

1,300,000

1,500,000

Medical expenses The taxable net estate is:

 

300,000

A.

P3,000,000

 
  • B. P2,200,000

 
  • C. P3,200,000

 

D. P1,500,000

  • 7. The proceeds received under a life insurance endowment contract is NOT considered part of gross income:

 

A.

If it is so stated in the life insurance endowment policy.

 

B.

If the price for the endowment policy was not fully paid.

C.

Where payment is made as a result of the death of the insured

.

D.

Where the beneficiary was not the one who took out the endowment contract.

 

TAXATION 2

TRANSFER & BUSINESS TAX

  • 8. What is the effect on the tax liability of a taxpayer who does not protest an assessment for deficiency taxes?

A. The taxpayer may appeal his liability to the CTA since the assessment is a final
A.
The taxpayer may appeal his liability to the CTA since the assessment is a final decision of the
Commissioner on the matter.
B.
The BIR could already enforce the collection of the taxpayer’s liability if it could secure authority
from the CTA.
C.
The taxpayer's liability becomes fixed and subject to collection as the assessment becomes final and
collectible .
D.
The taxpayer's liability remains suspended for 180 days from the expiration of the period to protest.
9.
As a general rule, within what period must a taxpayer elevate to the Court of Tax Appeals a denial of
his application for refund of income tax overpayment?
A.
Within 30 days from receipt of the Commissioner's denial of his application for refund.
B.
Within 30 days from receipt of the denial which must not exceed 2 years frompayment of income
tax.
C.
Within 2 years from payment of the income taxes sought to be refunded.
D.
Within 30 days from receipt of the denial or within two years from payment.
10.
Conrad died on July 31, 2014. His estate tax return should be filed within:
A.
Six months from filing of the notice of death.
B.
Sixty days from the appointment of an administrator.
C.
Six months from the time he died on July 31, 2014.
D.
Sixty days from the time he died on July 31, 2014.
11.
On March 30, 2010 Miguel Foods, Inc., received a notice of assessment and a letter of demand on its
April 15, 2007 final adjustment return from the BIR. Miguel Foods then filed a request for
reinvestigation together with the requisite supporting documents on April 25, 2010. On June 2, 2010,
the BIR issued a final assessment reducing the amount of the tax demanded. Since Miguel Foods was
satisfied with the reduction, it did not do anything anymore. On April 15, 2015 the BIR garnished the
corporation's bank deposits to answer for the tax liability. Was the BIR action proper?
A.
Yes. The BIR has 5 years from the filing of the protest within which to collect.
B.
Yes. The BIR has 5 years from the issuance of the final assessment within which to collect.
C.
No. The taxpayer did not apply for a compromise.
D.
No. Without the taxpayer's prior authority, the BIR action violated the Bank Deposit Secrecy Law.
12.
Income is considered realized for tax purposes when:
A.
It is recognized as revenue under accounting standards even if the law does not do so.
B.
The taxpayer retires from the business without approval from the BIR.
C.
The taxpayer has been paid and has received in cash or near cash the taxable income.
D.
The earning process is complete or virtually complete and an exchange has takenplace.
13.
Alain Descartes, a French citizen permanently residing in the Philippines, received several items during
the taxable year. Which among the following is NOT subject to Philippine income taxation?
A.
Consultancy fees received for designing a computer program and installing the same in the
Shanghai facility of a Chinese firm.
B.
Interests from his deposits in a local bank of foreign currency earned abroad converted to Philippine
pesos.
C.
Dividends received from an American corporation which derived 60% of its annual gross receipts
from Philippine sources for the past 7 years.
D.
Gains derived from the sale of his condominium unit located in The Fort, Taguig City, to another
resident alien.
14.
Gian Carlo, a sole proprietor, buys and sells "kumot at kulambo" both of which are subject to value-
added tax. Since he is using the calendar year as his taxable year, his taxable quarters end on the last
day of March, June, September, and December. When should Gian Carlo file the VAT quarterly return
for his gross sales or receipts for the period of July 1 to September 30?
A.
Within 25 days from September 30
B.
Within 45 days from September 30
C.
Within 15 days from September 30
D.
Within 30 days from September 30

Page 2 of 9

TAXATION 2

TRANSFER & BUSINESS TAX

  • 15. What is the rule on the taxability of income that a government educational institution derives from its school operations? Such income is:

    • A. Subject to 10% tax on its net taxable income as if it is a proprietary educational institution.

  • B. Exempt from income taxation if it is actually, directly, and exclusively used for educational

 

purposes.

 
  • C. Subject to the ordinary income tax rates with respect to incomes derived from educational activities.

  • D. Exempt from income taxation in the same manner as government-owned and controlled corporations.

  • 16. Exempted from donor's taxation are gifts made:

  • A. For the use of the barangay.

  • B. In consideration of marriage.

  • C. To a school which is a stock corporation.

D. To a for-profit government corporation.

  • 17. In 2014, Juliet Vasquez earned P500,000 as income from her beauty parlor and received P250,000 as Christmas gift from her spinster aunt. She had no other receipts for the year. She spent P150,000 for the operation of her beauty parlor. For tax purposes, her gross income for 2014 is:

A.

P750,000

B. P500,000
B. P500,000

C. P350,000

D. P600,000

  • 18. Passive income includes income derived from an activity in which the earner does not have any substantial participation. This type of income is:

  • A. Usually subject to afinaltax.

  • B. Exempt from income taxation.

  • C. Taxable only if earned by a citizen.

D. Included in the income tax return.

  • 19. On July 31, 2014, Esmeralda received a preliminary assessment notice from the BIR demanding that she pays P180,000 deficiency income taxes on her 2012 income. How many days from July 31, 2014 should Esmeralda respond to the notice?

    • A. 180 days

B. 30 days

C. 60 days

D

. 15 days
. 15 days
  • 20. Although the power of taxation is basically legislative in character, it is NOT the function of Congress to:

    • A. Fix with certainty the amount of taxes.

  • B. Collect the tax levied under the law.

C. Identify who should collect the tax.

  • D. Determine who should be subject to the tax.

  • 21. The actual effort exerted by the government to effect the exaction of what is due from the taxpayer is known as: A. Assessment

B. Levy

C. Payment

D. Collection
D. Collection
  • 22. Double taxation in its general sense means taxing the same subject twice during the same taxing period. In this sense, double taxation:

    • A. Violates substantive due process.

    • B. Does not violate substantive due process.

C

. Violates the right to equal protection.

  • D. Does not violate the right to equal protection.

  • 23. In 2013, Marilou Inc.'s net profit before tax was P35 million while its operating expenses was P31 million. In 2014, its net profit before tax was P40 million and its operating expenses was P38 million. It did not declare dividends for 2013 and 2014. And it has no proposed capital expenditures for 2015 and the immediate future. May Marilou be subject to the improperly accumulated tax on its retained profits for 2013 and 2014?

    • A. Yes, since the accumulated amounts are reasonable for operations in relation to what it usually needed annually.

TAXATION 2 TRANSFER & BUSINESS TAX 15. What is the rule on the taxability of income
  • B. Yes, since the accumulation is not reasonably necessary for the immediate needs of the business.

  • C. No, because there is no showing that the taxpayer's 2013 and 2014 net profit before tax exceeded its paid- up capital.

  • D. No, because the taxpayer is not shown to be a publicly-listed corporation, a bank, or an insurance company.

Page 3 of 9

TAXATION 2

TRANSFER & BUSINESS TAX

  • 24. Max Corporation is registered under the laws of the Virgin Islands. It has extensive operations in Southeast Asia. In the Philippines, its products are imported and sold at a mark-up by its exclusive distributor, Kim's Trading, Inc. The BIR compiled a record of all the imports of Kim from Max and imposed a tax on Max net income derived from its exports to Kim. Is the BIR correct?

 

A.

Yes. Max is a non-resident foreign corporation engaged in trade or business in the Philippines.

 

B.

No. The tax should have been computed on the basis of gross revenues and not net income.

C.

No. Max is a non-resident foreign corporation not engaged in trade or business in the Philippines.

 

D.

Yes. Max is doing business in the Philippines through its exclusive distributor, Kim’s Trading. Inc.

  • 25. Hannah, a compensation income earner, filed her income tax return for the taxable year 2010 on March 30, 2011. On May 20, 2014, Hannah received an assessment notice and letter of demand covering the taxable year 2010 but the postmark on the envelope shows April 10, 2014. Her return is not a false and fraudulent return. Can Hannah raise the defense of prescription?

 

A.

No. The 3 year prescriptive period started to run on April 15, 2011, hence, it has not yet expired on

 

April 10,2014.

 
 

B.

Yes. The 3 year prescriptive period started to run on April 15, 2011, hence, it had already expired by May 20, 2014.

C.

No. The prescriptive period started to run on March 30, 2011, hence, the 3 year period expired on April 10, 2014.

D.

Yes. Since the 3-year prescriptive period started to run on March 30, 2011, it already expired by May 20, 2014.

  • 26. Spouses Helena and Federico wanted to donate a parcel of land to their son Dondon who is getting married in December, 2014. The parcel of land has a zonal valuation of P420,000. What is the most efficient mode of donating the property?

 

A.

The spouses should first donate in 2014 a portion of the property valued at P20,000 then spread the P400,000 equally for 2015, 2016, 2017 and 2018.

B.

Spread the donation over a period of 5 years by the spouses donating P100,000 each year from 2014 to 2018.

C.

The spouses should each donate a P110,000 portion of the value of the property in 2014 then each

 

should donate P100,000 in 2015.

 
 

D.

The spouses should each donate a P100,000 portion of the value of the property in 2014, and another P100,000 each in 2015. Then, in 2016, Helena should donate the remaining P20,000.

  • 27. Which theory in taxation states that without taxes, a government would be paralyzed for lack of power to activate and operate it, resulting in its destruction?

 

A.

Power to destroy theory

 

B.

Lifeblood theory

 

C.

Sumptuary theory

D.

Symbiotic doctrine

  • 28. There is no taxable income until such income is recognized. Taxable income is recognized when the:

 
 

A.

Taxpayer fails to include the income in his income tax return.

 

B.

Income has been actually received in money or its equivalent.

C.

Income has been received, either actually or constructively.

D.

Transaction that is the source of the income is consummated.

  • 29. As regards a revenue bill, which of the following is not correct?

 

A.

The Senate may propose amendments if the bill originates from the House of Representatives.

 

B.

The House of Representatives may propose amendments if the bill originates from the Senate.

C.

The President may recommend a revenue bill to Congress.

 

D.

A House of Representative version and a Senate version approved separately and then consolidated with both houses approving the consolidated version.

  • 30. The payor of passive income subject to final tax is required to withhold the tax from the payment due the recipient. The withholding of the tax has the effect of:

 

A.

A final settlement of the tax liability on the income.

 

B.

A credit from the recipient's income tax liability.

C.

Consummating the transaction resulting in an income.

 

D.

A deduction in the recipient's income tax return.

 

Page 4 of 9

TAXATION 2

TRANSFER & BUSINESS TAX

  • 31. Statement 1 - The levying, imposition and collection of tax are legislative in character. Statement 2 - The aspects of taxation are shared by the legislative and executive branches of the government.

A. True, true B. True, false C. False, true D. False, false 32. This is an
A.
True, true
B. True, false
C. False, true
D. False, false
32.
This is an inherent limitation on the power of taxation:
A.
The rule on taxation shall be uniform and equitable.
B.
No law impairing the obligations of contracts shall be enacted.
C.
Charitable institutions, churches, personages or convents appurtenants thereto, mosque and non-
profits cemeteries and all kinds of lands, buildings and improvements actually, directly and
exclusively used for religious or charitable purposes shall be exempt from taxation.
D.
The tax laws cannot apply to the property of foreign governments.
33.
Which of the following transactions is exempt from value-added-tax?
A.
Sale of services subject to other percentage tax
B.
Sale of work of art.
C.
Sale of literary works.
D.
Sale of musical composition.
34.
An excise tax imposed on gratuitous transfers inter vivos:
A. Donor’s tax
B. Estate tax
C. Percentage tax
D. VAT
35.
Transfer tax is a tax imposed on the privilege to transfer property ownership
A.
Through a will
C.
Inter vivos
B.
Mortis causa
D.
Gratuitously
36.
First Statement: No deduction shall be allowed in the case of non-resident decedent who is not a citizen
of the Philippines, unless the executor, administrator, or anyone of the heirs, as the case may be,
includes in the return required to be filed under the Tax code, the value at the time of the decedent’s
death of that part of his gross estate not situated in the Philippines.
Second Statement: Special deductions such as family home, standard deduction and medical expenses
shall not be allowed as deduction from the gross estate of non-resident aliens decedents.
A.
Both statements are correct
C.
Only the first statement is correct
B.
Bothe statements are incorrect
D.
Only the second statement is correct
37.
Which statement is wrong? The donor’s tax:
A.
is computed on the basis of the net gifts of a calendar year.
B.
becomes proportionately bigger on later donations.
C.
is computed separately for each spouse in case of a joint donation.
D.
is computed and paid within thirty (30) days from the date of donation.
38.
Ms. Marilyn Fractor made the following gifts in the year 2011:
_
Date
June 6, 2011
__
___
Donations
______________
P50,000 to Jaimee, purely illegitimate daughter
celebrated on June 8, 2010.
__________
August 11, 2011
A piece of jewelry purchased by Ms. Fractor
for P100,000 (but with a fair market value of
P150,000 at the time of donation) given to
her husband.
_______________________
October 12, 2011
P50,000 to Maritz, her legitimate daughter,
on account of her marriage on
December 25, 2010.
_________________
December 25, 2011
P20,000 cash donation to a non-profit
philanthropic organization.
___________
The total taxable net gifts of Ms. Fractor as of December 25, 2011 were:
A.
P 200,000
C. P 90,000
B.
P 140,000
D. Zero.

Page 5 of 9

TAXATION 2

TRANSFER & BUSINESS TAX

  • 39. On January 5, 2011, Marie Baltazar, resident donor, made the following donations:

 

a.

To Dianne, recognized natural child, land in the Philippines valued at P310,000, on account of her forthcoming marriage;

b.

To Francisco, legitimate son, car in San Diego, California, USA valued at P500,000 (donor’s tax paid

 

in USA, P20,000).

 
 

For Philippine donor’s tax purposes, the donor’s tax due after tax credit shall be:

A.

P 32,000.

 
  • C. P 12,000

 

B.

P 20,000.

D. none.

 
  • 40. Who of the following shall file a separate return? I- Each spouse donating conjugal/community property II- Co-owners donating co-ownership property

 
 

a.

I only

 

c. Neither I nor II

b.

II only

  • d. Both I and II

 
  • 41. A resident citizen of the Philippines made the following donations on one date:

 

Donations on account of marriage:

 

To legitimate son

P 100,000

To legitimate daughter and her husband-to-be, on account of marriage

15,000

 

To a recognized natural son

 

30,000

To an adopted child

60,000

To an illegitimate daughter

40,000

To a sister

12,000

To a charitable institution The deductions from gross estate is:

20,000

A.

P67,500.

 

C.

P57,500 .
P57,500
.

B.

P60,000.

D.

P30,000.

  • 42. Since donation to a charitable institution has no ceiling as a deduction for donor’s tax purposes, 1 st statement: The net gift will be zero, so that in computing the donor’s tax, the donation may be omitted in deductions. 2 nd statement: The gross gifts shall be reported and the deduction shall be claimed.

 

A.

Both statements are true

 

B.

Both statements are false

C.

First statement is true while second statements is false

 

D.

First statement is false while second statement is true

  • 43. Karl sold his car to Liam for P200,000. Karl car cost P500,000, and had a fair value of P400,000 at the time of sale. What was the tax consequence of the sale?

 

A.

There was a taxable gift of P300,000

 

B.

There was a taxable gift of P200,000

C.

The transfer was for insufficient consideration, hence, not subject to donor’s tax

D.

The transfer involved a personal property, hence, not subject to donor’s tax

  • 44. Every donation or grant of gratuitous advantage, direct and indirect, between the spouses during the marriage, shall be void, except;

 

A.

moderate gifts which the spouses may give each other on the occasion of any family rejoicing.

B.

donation mortis causa.

 

C.

donation propter nuptias which are given before the marriage.

 

D.

all the choices are correct exceptions.

 
  • 45. Estate tax is:

 
 

A.

A property tax.

B.

A local tax.

C.

An excise tax.

D.

An indirect tax.

Page 6 of 9

TAXATION 2

TRANSFER & BUSINESS TAX

  • 46. Bea”, at the time of retirement, had 1,000 pieces of merchandise which was deemed sold at a value of P20,000.00 with an output tax of P2,400,00. After retirement, “Bea” sold to “Carol” 500 pieces of these for P12,000.00. In the contract of sale or invoice, “Bea” stated the sales invoice number wherein the output tax on “deemed sale” was imposed and the corresponding tax paid on the 500 pieces. He prepared the following invoice:

Gross selling price

P

10,800

VAT previously paid on “deemed sale”:

1,200

Total How much is the input tax of “Carol”?

P

12,000

 

A.

P 2,400

 

C. P

1,000

 

B.

P

1,200

D. None of the choices

 
  • 47. For VAT purposes, the term “taxable quarter” shall mean:

 
  • A. calendar quarter whether the taxpayer uses fiscal or calendar quarter for income tax purposes.

  • B. fiscal quarter whether the taxpayer uses fiscal or calendar quarter for income tax purposes.

  • C. the quarter that is synchronized to the income tax quarter of the taxpayer.

 
  • D. none of the choices.

 
  • 48. A VAT-registered trader made the following sales of goods during the second calendar quarter of the current year:

 

Cash sales

P 200,000

Open account sales

100,000

Installment sales (receipts, P40,000) Consignment sales (not yet sold as of end of the quarter):

100,000

 

June 15

 

100,000

May 15

100,000

April 15 How much is the output tax for the quarter using 12% VAT rate?

100,000

 

A.

P60, 000
P60, 000
 

C.

P40, 800

B.

P48, 000

D.

P24, 000

  • 49. Hitachi Corporation is a Value-Added Tax registered dealer of appliances. The following data are for the last quarter of the current year:

 

Sales, total invoice value

 

P 6,921,600

Purchases, net of input taxes

5,500,000

Sales returns (based on total invoice value)

224,000

Purchases returns, net of input taxes

300,000

Deferred input taxes (carried over from the third quarter of the current year)

9,500

 

How much is the value-added tax due for the last quarter of the current year using 12% VAT rate?

A.

P 170,212.00

 

B.

P 150,956.94

C.

P 84,100.00

D.

P72,100.00

  • 50. The deductible funeral expenses shall be actual funeral expenses (whether paid or unpaid) up to the time of interment, or an amount equal to 5% of the gross estate, whichever is lower, but in no case to exceed:

 

A.

P 100,000.

 

C. P

500,000.

 

B

.

P 200,000

.

D. P 1,000,000.

  • 51. The following are the requisites in order for claims against the decedent’s estate to be deductible, except which one?

 

A.

They must be existing against the estate.

 

B.

They must be reasonably certain as to amount.

 

C.

They must have been prescribed

.

D.

They must be enforced by the claimant.

 

Page 7 of 9

TAXATION 2

TRANSFER & BUSINESS TAX

  • 52. A VAT registered public works contractor has the following data for the second quarter of 2014 (VAT exclusive):

Contract price (private sector clients)

P5,000,000

Contract price (Government)

3,000,000

Collections from Government contracts subjected to 5% final withholding VAT

950,000

Collections from private sector clients

2,000,000

Purchases during the quarter (used on private sector clients contracts)

800,000

Payments for services of a VAT-registered sub-contractor (used in Government

400,000

contracts) Purchases during the quarter (used in both private sector clients and Government

300,000

contracts) The value-added taxes payable for the quarter on sales to the Government and sales to the private

sector clients are, respectively:

Government

TAXATION 2 TRANSFER & BUSINESS TAX 52. A VAT registered public works contractor has the following
  • A. P50,000

Private sector

P120,000
P120,000
  • B. P121,500

P50,000

Government

C. P60,000

D. P50,400

Private sector

P120,000

P121,500

  • 53. A VAT-registered taxpayer engaged in the supply of services has the following data taken from its books for the month of January 2011:

Accounts receivable, January 1, 2011

P

560,000

Sales on account for the month of January

1,000,000

Cash sales for the month of January

300,000

Accounts receivable, January 31, 2011

784,000

How much is the output tax for the month of January, 2011 using 12% VAT rate?

 

A.

P 156,000

C.

P 129,120

B.

P 132,000

 

D.

P 110,000

  • 54. Which of the following transactions in the course of trade or business requires actual payment of VAT before an input tax is allowed as tax credit from the output tax?

 

A.

Purchase of services

 

B.

Transactions deemed sale

 

C.

Domestic purchase of goods for use as raw materials supplied in the sale of services

 

D.

Domestic purchase of goods for use in trade or business for which deduction for depreciation or amortization is allowed under the Tax Code

  • 55. Which of the following input taxes shall not be credited against output taxes arising from sales to non- government entities?

 

A.

Input tax on purchase of real properties for which VAT has actually been paid

 

B.

Input tax on purchase of service in which VAT has actually been paid

C.

Transitional and presumptive input taxes

 

D.

Input taxes that can be directly attributable to VAT taxable sales of goods and services to the government or any of its political subdivisions, instrumentalities or agencies, including GOCCs

 
  • 56. Presumptive input tax is equivalent to:

 
 

A.

ten percent (10%) of the gross value in money of the purchases of primary agricultural products used as inputs to the production.

B.

five percent (5%) of the gross value in money of the purchases of primary agricultural products used as inputs to the production.

C.

four percent (4%) of the gross value in money of the purchases of primary agricultural products

 

used as inputs to the production.

 
 

D.

two percent (2%) of the gross value in money of the purchases of primary agricultural products used as input to the production.

  • 57. When is the time for filling of the estate tax return?

 
 

A.

Thirty (30) days from the decedent’s death

B.

Two (2) months from the decedent’s death

C.

Six (6) months from the decedent’s death

D.

Two (2) years from the decedent’s death

Page 8 of 9

TAXATION 2

TRANSFER & BUSINESS TAX

  • 58. The following selected data were taken from the Estate of Eduard Santos:

Claim against an insolvent person (fully uncollectible)

P 500,000

Claim against a person who absconded (fully uncollectible)

300,000

Claim against an insolvent person (20% collectible)

100,000

How much should be included in and deducted from the gross estate?

Amount to be included

Amount to be deducted

 
  • A. P580,000

P900, 000

 
  • B. P880,000

P900, 000

  • C. P100,000

P400, 000

  • D. P 80,000

P100, 000

  • 59. An unmarried decedent died leaving properties he inherited 4 ½ years ago which had fair market value of P800,000 at the time of his death (P650,000 at the time of inheritance, and unpaid mortgage of P50,000 paid by the present decedent). Other properties in his gross estate had fair market value of P1,000,000. The total expenses, losses, indebtedness, taxes and transfer for public purpose amounted to P300,000. How much was the vanishing deduction?

  • A. P 500, 000

C. P 200,000

B.
B.

P 225, 000

D. P 100,000

  • 60. The decedent is a married man with a surviving spouse with the following data:

Conjugal real properties

P 5,000,000

Conjugal family home

1,500,000

Exclusive properties Conjugal ordinary deductions

2,500,000

Funeral expenses

P

200,000

Other deductions

1,000,000

1,200,000

Medical expenses

500,000

Additional information:

  • a. 20% of the funeral expenses were borne by the estate.

  • b. Other deductions includes P200,000 judicial expenses incurred to settle the conflicting claims of the heirs

The taxable net estate is:

  • A. P 3,400,000.

C.

P 3,080,000.

  • B. P 3,200,000.

D.

P 2,750,000.

Estate Tax Table

Over

But not over

The tax shall be

Plus over

Of the excess

 

-0-

200,000

 

Exempt

 

-0-

-0-

200,000

500,000

 

-0-

 

5%

200,000

500,000

2,000,000

 

15,000

 

8%

500,000

2,000,000

5,000,000

 

135,000

 

11%

2,000,000

5,000,000

10,000,000

 

465,000

 

15%

5,000,000

10,000,000

And over

1,215,000

 

20%

10,000,000

 

Donor’s Tax Table

 

Over

But not over

The tax shall be

 

Plus

Of the Excess Over

-

P100,000

Exempt

P100,000

200,000

0

2%

P 100,000

200,000

500,000

2,000

4%

200,000

500,000

1,000,000

14,000

6%

500,000

1,000,000

3,000,000

44,000

8%

1,000,000

3,000,000

5,000,000

204,000

10%

3,000,000

5,000,000

10,000,000

404,000

12%

5,000,000

10,000,000

1,004,000

15%

10,000,000

 

-

END

-

 

God Bless!

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