LEARNING TASK WEEK 3

&4
ACCOUNTING
WEEK 3 PERFORMANCE TASKS
Test/Talab
Activity 1.
1. False
2. True
3. True
4. False
5. False
6. True
7. False
8. True
9. True
10. True

REINFORCE/RUBDOB
Activity 2
1. A
2. C
3. E
4. D
5. B
Integrate/Iral
Activity 3: Comprehensive Problem: JECAF MARKETING

1. Maria Dela Vega is paid a monthly compensation of ₱20,000 (net of mandatory

contributions). Maria is a single parent of a 10 year old girl.
Solution:
Her monthly compensation is at Column 6 B1 is for monthly compensation of ₱17,917 to
₱27,083. Clearly, ₱ 20,000 is within this range. The formula for Maria De Vega’s withholding
tax is ₱1,875 + 25% of over ₱17,917. To compute, its ₱1,875 + 25% (₱20,000 - ₱17,917) =
₱2,395.75 monthly.

Year End Tax Due

Compensation(Jan. - Dec.) (php 20, 000 x 12) Php 240, 000
Less: Personal Deductions 75,000
Taxable Income 165, 000
Tax Due(php 22, 500 + 25% in excess of 140, 000) 28, 750
Less: Tax withheld (php 2, 395. 74 x 12) 28, 749
Tax Payable/(Refundable) Php 1.00
 2. Lawrence Sison’s salary is ₱18,000 (net of mandatory contributions) paid semi-monthly.
Lawrence is a single with no qualified dependents.
Solution:
His semi- monthly compensation is at Column 7 A2 is for semi-monthly compensation of ₱12,
500 to ₱ 22,917. Clearly, ₱ 18,000 is within this range. The formula for Lawrence Sison's
withholding tax is ₱ 2,083.33 + 30% of over ₱ 12,500. To compute, its ₱ 2, 083.33 + 30% (₱
18,000 - ₱ 12, 500) = ₱ 3, 733.33 semi-monthly. Therefore his monthly withholding tax is Php
3,733.33 x 2= 7, 466.66.

Year End Tax Due

Compensation(Jan. - Dec.) (php 36, 000 x 12) Php 432, 000
Less: Personal Deduction 50, 000
Taxable Income 382, 000
Tax Due(php 50, 000 + 30% in excess of 250, 000) 89, 600
Less: Tax withheld (Php 7, 466.66 x 12) 89,599.92
Tax Payable/(Refundable) Php 0.08

3. Luz Martinez is paid weekly salary of ₱2,500 (net of mandatory contributions of SSS,
Philhealth and Pag-ibig fund). Luz is a widow with five children ages 4 to 15 years old.
Solution:
Her weekly compensation is at Column 1 B4 is for weekly compensation of ₱ 1. 00 to ₱ 2, 885.
Clearly, ₱ 2, 500 is within this range. The formula for Luz Martinez withholding tax is ₱ 0.00 +
0% of over ₱ 1.00. To compute, its ₱ 0.00 + 0% (₱ 2, 500 – 1)) = ₱ 0.00 weekly. Therefore his
monthly withholding tax is Php 0.00. Her yearly compensation will be Php 2, 500 x 52 weeks =
Php 130, 000, her personal basic exemption is Php 50, 000 and her additional tax exemption is
Php 100, 000, total tax exemption is Php 150, 000, therefore, she earns no tax for the whole
taxable year.
Year End Tax Due
Compensation(Jan. - Dec.) (php 2, 500 x 52) Php 130,000
Less: Personal Deductions 150, 000
Taxable Income 0
Tax Due 0
Less: Tax withheld 0
Tax Payable/(Refundable) Php 0
Assess/Antas
Activity 4: Discussion questions

1. What is Taxation?
Taxation is the process by which the government collects revenue in order to finance its
expenses. As addition it is literally referred to as tax, it is a compulsory financial charge
imposed on a taxpayer by a governmental organization, basically the Bureau of Internal
Revenue in order to fund government spending and various public expenditures.

2. What is income tax?

It is defined as the tax on the net income or the entire income realized in one taxable year. Tax
on income is a tax imposed on individuals or entities that vary in proportion to their income or
profits. Taxation rates may vary depending on the type or characteristics of the taxpayer. The
rate of tax may increase as taxable income increases.

3. Who are required to pay income tax in the Philippines?

1. A citizen of the Philippines residing therein is taxable on all income derived from sources
within and without the Philippines. (2) A non-resident is taxable only on income derived from
sources within the Philippines. (3) An individual citizen who is working and deriving income
abroad as an Overseas Filipino Workers (OFW) is taxable only on income from sources within
the Philippines. Provided, that the OFW, who is a citizen of the Philippines and who receives
compensation for services rendered abroad as a member of the complement of a vessel
engaged exclusively in international trade shall be treated as an OFW. (4) An alien individual,
whether a resident or not of the Philippines, is taxable only on income derived from sources
within the Philippines. (5) A domestic corporation is taxable on all income derived from sources
within and without the Philippines; and (6) A foreign corporation whether engaged or not in trade
or business in the Philippines is taxable only on the income derived from sources within the
Philippines.

4. Philippine individual income tax is progressive. In this context, what does progressive
means?
The tax rate increases with the tax base. To sum it up, a taxpayer who earns a higher income
also earns a higher rate of tax, therefore the income tax is progressive means that the rate of
tax has a direct relationship with the taxpayer’s income realized.

5. How much personal and additional exemptions are allowed by the Philippine Tax Law?
All individual taxpayers are granted a personal exemption of ₱50,000. Additional exemptions of
₱25,000 are given for each qualified dependent but only up to four dependents. Qualified
dependent shall be legitimate, illegitimate or legally adopted child who is below twenty-one
years old, unmarried, not employed, or mental/physical defect who's incapable of self-support,
regardless of age, is still considered to be qualified.
6. What is Compensation income?
Compensation income refers to the income derived by an employee.

7. How is monthly withholding income tax determined?

Employers are required by law to withhold income tax dues from their employees’ salary.
Taxpayers who derive their income solely from compensation are required to file BIR Form 1700
as their income tax returns. However, to give relief to these taxpayers, BIR implemented
Substituted filing.

8. What is substitute filing?

A substituted filing is an arrangement where your current employer will file your tax return on
your behalf. Under “substituted filing”, an individual taxpayer although required under the law to
file his income tax return, will no longer have to personally file his own income tax return but
instead the employer's annual information return filed will be considered as the “substitute”
income tax return of the employee

9. How is a sole proprietorship business taxed?

The tax payments of businesses organized as sole proprietorships are made in the name of the
owners. The owner is considered as individual taxpayer who derived income from business. He
is required to file BIR Form 1701. The business will not file a separate tax return. It has two
option for payment; (1), itemized deduction, using Statement of Comprehensive Income, (2),
Optional standard deduction scheme, can claim deduction up to maximum 40% of gross receipt.

10. What is optimized standard deduction?

The proprietor can claim deductions up to maximum of 40% of gross receipts. Gross receipts
are equal to net sales plus other taxable income. This means that the business taxable income
is equivalent to 60% of gross receipts.
WEEK 4: PERFORMANCE TASKS

SHARPEN/SANAY
Activity 5: COMPREHENSIVE PROBLEM

JECAF Marketing has two employees – Claire Althea Parale and John Emmanuel Ladringan.
Both Claire and John have a gross monthly compensation of ₱25,000 (net of mandatory
contributions). Both are paid on the 30th of the month. Claire is single without no qualified
dependents. John is married with one qualified dependent.

Claire Althea Parale John Emmanuel Ladringan

Her monthly compensation is at Column 6 A2 Her monthly compensation is at Column 6 B1

is for monthly compensation of ₱ 15, 833 to is for monthly compensation of ₱ 17, 917 to
₱ 25, 000. Clearly, ₱ 25, 000 is within this ₱ 27, 083. Clearly, ₱ 25, 000 is within this
range. The formula for Claire Althea Parale's range. The formula for John Emmanuel
withholding tax is ₱ 1, 875 + 25% of over ₱ Ladringan's withholding tax is ₱ 1, 875 +
15, 833. To compute, its ₱1,875 + 25% (₱25, 25% of over ₱ 17, 917. To compute, its
000 - ₱ 15, 833) = ₱ 4, 166.75 monthly. ₱1,875 + 25% (₱25, 000 - ₱ 17, 917) = ₱ 3,
645.75 monthly.

Year End Tax Due (Claire Althea Parale)

Compensation(Jan. - Dec.) (php 25, 000 x 12) Php 300, 000
Less: Personal Deductions 50, 000
Taxable Income 250, 000
Tax Due(php 22, 500 + 25% in excess of 140, 000) 50,000
Less: Tax withheld (php 4, 166.75 x 12) 50, 001
Tax Payable/(Refundable) Php (1.00)

Year End Tax Due (John Emmanuel Ladringan)

Compensation(Jan. - Dec.) (php 25, 000 x 12) Php 300, 000
Less: Personal Deductions 75, 000
Taxable Income 225, 000
Tax Due(php 22, 500 + 25% in excess of 140, 000) 43, 750
Less: Tax withheld (php 3, 645.75 x 12) 43, 749
Tax Payable(Refundable) Php 1.00
Activity 6: COMPREHENSIVE PROBLEM

A. Optional Standard Deduction

Emmanuel’s tax due on April 15, 20Y6.

Sales Php 1, 450,000
Less:
Optional standard deduction(40% x 1, 450,000) 580, 000
Taxable income from business 870, 000
Less: Personal deduction 50, 000
Additional deduction 50, 000
Net Taxable income 770, 000
Tax Rate Php 125, 000 + 32% of excess over Php 500, 000
Tax Due Php 211, 400

B. Itemized Deduction

Claire’s tax due on April 15, 20Y6

Sales Php 1, 450, 000
Cost of Goods sold 580, 000
Gross Profit 870, 000
Total Operating Expenses 408, 900
Taxable income from the business 461, 100
Less:
Personal deduction 50, 000
Additional deduction 25, 000
Net Taxable income 386, 100
Tax Rate Php 50, 000 + 30% over excess of Php 250, 000
Tax Due Php 90, 830
Less: Tax Credits and Payments
Total Quarterly Payments 65, 000
Total Tax Payable Php 25, 830