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Activity 2

The Central Plain University had total income of $3,381,400 and total expenses of $2,307,350 in fiscal year 2018. It built a new six-room building costing $750,000 that was being depreciated over 10 years. The income tax due was the higher of the normal income tax of $153,550 or the minimum corporate income tax (MCIT) of $60,000.

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672 views3 pages

Activity 2

The Central Plain University had total income of $3,381,400 and total expenses of $2,307,350 in fiscal year 2018. It built a new six-room building costing $750,000 that was being depreciated over 10 years. The income tax due was the higher of the normal income tax of $153,550 or the minimum corporate income tax (MCIT) of $60,000.

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LFGS Finals
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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1. The following information were from the records of the Central Plain University, Inc.

, a
private educational institution, for the fiscal year ended May 31, 2018:
Income: Miscellaneous Fees P 362,600
Tuition 2,843,100
Income from rents 60,000
Net income, school canteen 36,200
Net income, book store 24,800
Dividends 15,000
Interest on time deposit 45,000

Expenses: Payroll and administrative salary 1,425,420


Other operating expenses 844,430
Depreciation, new six-room building 37,500

In the first month of the fiscal year, the school built a new six-room building costing
P750,000. The new building would be depreciated for 10 years.

How much was the income tax due from the Central Plain University, Inc. for the fiscal
year ended May 31, 2018?

2. The following data are presented to you:


Year Normal Income Tax MCIT
2016 P 50,000 P 75,000
2017 60,000 100,000
2018 100,000 60,000

How much is the tax payable for the years 2016, 2017 and 2018?

3. A domestic corporation has the following data:


Minimum Corporate Normal Corporate
Income Tax (MCIT) Income Tax (NCIT)
2016 P40,000 P28,000
2017 8,000 10,000
2018 30,000 40,000

How much is the tax due and payable in 2016, 2017 and 2018?

4. The following data pertain to a domestic corporation which registered with BIR in 2012:
Minimum Corporate Normal Corporate
Income Tax (MCIT) Income Tax (NCIT)
2016 P 75,000 P 50,000
2017 100,000 60,000
2018 60,000 100,000

How much is the tax payable for 2016, 2017 and 2018?

5. Aliw Service Corporation, registered with BIR in 2010, has the following data for the year
2018:
Gross receipts P1,000,000
Discounts given 100,000
Returns and allowances 150,000
Salaries of personnel directly involved in the supply of services 300,000
Fees of consultants directly involved in the supply of services 50,000
Rental of equipment directly used in the supply of services 70,000
Operating expenses 420,000

How much is the income tax due and payable?

6. The following data were provided by Air America, international carrier doing business in the
Philippines:
Gross receipts, sales of tickets in the Philippines (Manila to Taipei flight) P8,000,000
Gross receipts, sales of tickets in Japan (Manila to Tokyo flight) 5,000,000
Gross receipts, sales of tickets in Japan (Tokyo to Manila flight) 3,000,000
Gross receipts, sales of tickets in the Philippines (Manila to Hongkong flight),
passengers were endorsed to another international airline which
airlifted them from Manila 1,000,000
Gross receipts, sales of tickets in the Philippines (Manila to Los Angeles flight),
passengers were transhipped in Tokyo to Los Angeles by another airline (flight
from Manila to Tokyo - 5 hours; flight from Tokyo to Los Angeles – 10 hours) 4,500,000
Expenses, Philippines 4,000,000

How much was the Philippine income tax due and payable?

7. The record of a closely held corporation, registered with BIR in 2009, reveals the following.
It had a paid-up capital stock of P5,000,000 as of December 31, 2017.
2017: Gross income P 3,000,000
Less: Expenses 3,800,000
Net operating loss ( 800,000)
Accumulated retained earnings, end of year P 6,000,000

2018: Gross income P 5,000,000


Expenses 3,000,000
Rent income, net of 5% withholding tax 475,000
Interest on money market placement,
net of 20% withholding tax 80,000
Inter-corporate dividends received 500,000
Dividends paid by the corporation 1,500,000

Upon examination of the 2018 return, the BIR concludes that there is improper
accumulation of profit. The corporation fails to show proof to prove the contrary.

Question 1: How much is the tax payable of the corporation per return in the year 2018?

Question 2: How much is the tax on the improperly accumulated income in 2018?

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