ELIMINATION ROUND

COMPLIED BY: RAFAEL BARBIN

EASY ROUND

QUESTION #1: MAS – 10 seconds

Cost behavior analysis is a study of how a firm’s costs
a. Relate to competitor’s costs
b. Relate to general price level changes
c. Respond to changes in activity level within the company
d. Respond to changes in the grow national product

Answer: C

QUESTION #2: AUDITING – 10 seconds

Which of the following can be controlled by the auditor?
a. Inherent risk
b. Detection risk
c. Control risk
d. Both detection and control risk

Answer: B
Because the Inherent risk and Control cannot be controlled by the Auditor

QUESTION # 3: TAXATION – 10 seconds

Statement I: All individual taxpayers, except for NRA-NETBs, are subject 20% final tax on interests
from Philippine currency bank deposit and yield or any other monetary benefit from deposit
substitutes and from trust funds and similar arrangements
Statement II: All individual taxpayers, except for NRA-NETBs, are subject to 10% final on royalties,
in general and 20% final tax on books, literary works and musical composition
Statement III: All individual taxpayers, except for NRA-NETBs, are subject to 10% final tax on
prizes and winnings, in general

Answer: True, False, False

Statement II – 20% final on royalties in general (other than books, literary works and musical
composition), 10% final tax on books, literary works and musical composition.
Statement III – 20% final tax on prizes and winnings, in general.

QUESTION #4: RFBT – 10 seconds

Statement 1: Solutio indebiti is the voluntary administration of property of another without his or
her consent
Statement 2: Negotiorum gestio is the return of what has been paid by mistake
Statement 3: Obligation with an ex die period is the one obligation is not immediately demandable
Statement 4: A person alternatively bound by different prestation's shall completely perform all of
them

Answer: False, False, True, False

Statement 1 – It should be Negotiorum gestio
Statement 2 - It should be Solutio indebit
Statement 4 – Different prestation’s is due, but the performance of one is sufficient to extinguished the
debt.

QUESTIONS #5: FAR – 20 seconds

On December 31, 2022, the Cash and Cash Equivalent items of Misuzu Company show the following
composition:
Petty Cash Fund* P 5,000
Cash in Bank – BDO** 90,000
Savings Account – BPI*** 200,000
Traveler’s check 10,000
Manager’s check 23,000
Postage stamps 1,000
Checking account in UBP per book (outstanding checks as of year-end totaled
P10,000) 90,000
Postal money order 20,000
Treasury bill, due 3/30/23 (purchased 12/31/22) 70,000
Treasury bill, due 1/31/23 (purchased 5/1/22) 40,000
Demand deposit – MBTC (overdraft) (20,000)
Cash set aside for the acquisition of equipment to be disbursed 4 months after BS
date 30,000
Bond sinking fund 45,000
*Including expense receipts of P1,000, IOUs of P500, employee’s PDC of P200 and bills and coins of
P2,800
**Net of undelivered check payable to creditors of P30,000
***Cash in Savings account includes P100,000 of compensating balances. It was noted that 40% of
that amount is legally restricted as to withdrawal.

What amount of cash equivalent should Misuzu Company report on December 31, 2022?

Answer: 70,000
Treasury bill, due 3/30/23 (purchased 12/31/22) - Cash Equivalents
Treasury bill, due 1/31/23 (purchased 5/1/22) - Short-term Investment

QUESTION #6: AFAR – 10 seconds

The five-step model in IFRS 15 applies to revenue earned from a contract with a customer with
limited exceptions, regardless of the type of revenue transaction or the industry. Which of the steps
below is not a valid step in IFRS 15?
a. Step three requires the entity to determine the transaction price
b. Step two requires the identification of the separate performance obligations in the contract
c. Step five requires revenue to be recognized when the risks and rewards of ownership passes to
the customer
d. Step four requires the allocation of the transaction price to the separate performance obligations

Answer: C
Step 5 of the IFRS 15 model allows an entity to recognize revenue when (or as) each performance
obligation is satisfied. Revenue is recognized in line with the pattern of transfer. If an entity does not
satisfy its performance obligation over time, it satisfies it at a point in time and revenue will be
recognized when control is passed at that point in time.

QUESTION #7: AFAR – 20 seconds

The Charl, Win, and Lee Partnership is being liquidated. All liabilities have been paid. The balance of
assets on hand is being realized gradually. The following are details of partners’ accounts:
Capital Account Drawing Account Loans to P/L
Balance Balance Partnership Ratio
Charl P 200,000 P 15,000 Cr. P 150,000 50%
Win 250,000 20,000 Dr. - 20%
Lee 100,000 30,000 Cr. 50,000 30%

If you are to rank the partners from the most vulnerable to the least vulnerable, the ranking will be

Answer: Lee, Charl, and Win respectively.

Charl Win Lee
Capital balance (Inc. Drawing account) 215,000 230,000 130,000
Add: Loans to Partnership 150,000 - 50,000
Total Interest 365,000 230,000 180,000
Divided by: P/L ratio 50% 20% 30%
Maximum Loss 730,000 1,150,000 600,000
Ranking (from Most to Least vulnerable) 2nd 3rd 1st
QUESTION #8: TAXATION – 20 seconds
An agricultural land is located in the province. Its fair market value is P5,000,000. How much is the
total real property tax including special education fund?

Answer: 40,000

Real Property taxes:

1. Determine the property fair market value
2. Determined the assessment level

3. Determine the Assess value = Fair market value x Assessment level

4. Determined the real property taxes
Basic Real Property =
Assessed value * RPT rate (2% if Cities/Municipalities; 1% if Province)
(5,000,000*40%)*1% = 20,000
Add: Special levies on Real property tax
Special Education Fund (SEF) =
Assessed value *1%
(5,000,000*40%)*1% = 20,000
Total RPT 40,000

QUESTION #9: MAS – 20 seconds

Mona Co. expects an 80% learning curve on hours spent on producing its new product called
“Astrolabe”. The first batch of the product required a total of 100 hours. The second batch should
require:

Answer: 60 hours

Batch Cumulative Ave. Time per batch

1st 100 hrs.
2nd (100*2*80%) 160 hrs. = 160 hrs. – 100 hrs. = 60 hrs.
4th (100*4*80%) 320 hrs.

QUESTION #10: AUDITING – 20 seconds

The condensed income statement of XYZ Company for the year ended December 31, 2020 is
presented below:

XYZ Company
Income Statement
For the year ended December 31, 2020
Sales P1,000,000
Cost of goods sold (600,000)
Gross profit 400,000
Operating expenses (150,000)
Operating income 250,000
Other income (expense) 50,000
Income before tax 300,000
Income tax expense (30%) (90,000)
Net income 210,000

The December 31, 2020 audit of the company’s financial statements disclosed the following errors:
1. January 1, 2020 inventory is understated by P17,000.
2. December 31, 2020 inventory is understated by P31,000.
3. Accrued interest income of P5,000 and Advances from customers of P11,000 in 2019 were
not recognized in the company’s books.
4. Accrued salaries expense of P4,000 and prepaid rent of P6,000 in 2020 were not recognized
in the company’s books.
5. Sales of P5,000 were not recorded until January 2021, although the goods were shipped in
December 2020, and were excluded from the December 31 physical inventory.
 6. Purchases of P30,000 made in December 2020 were not recorded, although the goods were
received and properly included in the December 31 physical inventory.
7. A machine was sold for P10,000 on July 1, 2020 and the proceeds were credited to the Sales
account. The machine was acquired on January 1, 2017 for P60,000. At that time, it had an
estimated life of 6 years with no residual value. Also, no depreciation was recorded on the
machine in 2020.
8. A patent was acquired at the beginning of 2020 for P350,000. No amortization expense has
been recorded for it since its acquisition. The patent had a 10-year useful life with no
residual value on the date of acquisition.
9. A 3-year fire insurance policy purchased on April 1, 2018 for P75,000 was expensed
outright on the year of purchase.
10. The beginning retained earnings before any audit adjustments is P248,525. Dividends
declared during the year amounted to P50,000.

The audited cost of goods sold of XYZ Company for 2020 is:

Answer: 616,000

Unadjusted COGS P 600,000

(1) Beginning Inventory - Understated 17,000
(2) Ending Inventory - Understated (31,000)
(3) Unrecorded Purchases 30,000
Adjusted COGS 616,000

AVERAGE ROUND

QUESTION #1: MAS – 40 SECONDS

Gi-Ar-Ci company has a degree of operating leverage equal to 4. If the breakeven point in sales is
equal to 1,500,000, how much is the margin of safety?

Answer: 500,000
Total amount Ratio
Actual/Budgeted Sales 2,000,000 100%
Less: Breakeven Sales 1,500,000
Margin of Safety 500,000 *25%

*Margin of safety ratio:

1st priority – (Margin of safety/Actual or Budgeted sales) - Not applicable
2nd priority - (Contribution Margin / Profit Margin) - Not applicable
3rd priority – (1 / Degree of operating leverage) - Applicable
= (1 / 4)
= 25%

QUESTION #2: TAXATION – 10 SECONDS

Which of the following statement is/are not true?
Statement I: The final withholding tax on PCSO Winnings for NRA-ETB still Exempt under CREATE
Law
Statement II: A 10% IAET is imposed on corporations with improperly accumulated taxable
income is repealed under CREATE Law. Hence, no more IAET.
Statement III: Sale or importation of Capital equipment, its spare parts and raw materials,
necessary for the production of personal protective equipment components such as coveralls, gown,
surgical cap, surgical mask, N-95 mask, scrub suits, goggles and face shield, double or surgical
gloves, dedicated shoes, and shoe covers, for COVID-19 prevention is exempt from VAT under
TRAIN Law.
Statement IV: Any person whose sales or receipts does not exceed P3,000,000 for the taxable year
and who is not a VAT-registered person shall pay a tax equivalent to 1% permanently reduced
under CREATE Law.
Statement V: The Capital Gains Tax rate from sale of unlisted stock by Resident Corporation is 15%
under CREATE Law.

Answer: I, IV only
Statement I – Under CREATE Law the final withholding tax on PCSO Winnings for NRA-ETB is 20% for
corrected the mistakes and inconsistency of the TRAIN Law.
Statement III - is exempt from VAT under CREATE Law not under TRAIN Law.
Statement IV – Under CREATE Law Temporarily reduced the tax rate to 1% Beginning July 1, 2020
until June 30, 2023.
QUESTION #3 – RFBT – 10 SECONDS
RA No. 11232: The Code shall be known as the

Answer: Revised Corporation Code of the Philippines

- Under RCC Sec. 1

QUESTION #4: - FAR – 40 SECONDS

The information relates to Ariana Company’s Pension Liability for the current year:
Current service cost ₱500,000
Interest in PBO 600,000
Interest income on plan assets 350,000
Loss on plan settlement 250,000
Present value of benefit obligation settled in advance 950,000
Past service cost during the year 300,000
Actual return on plan assets 850,000
Actuarial loss on PBO during the year 200,000
Contribution to the plan 1,500,000
Discount or settlement rate 10%

What is the projected benefit obligation at year-end?

Answer: P6,650,000

QUESTION #5: AUDITING – 40 SECONDS

You have been assigned to audit the accounts receivable of XYZ Company for the financial year
ending December 31, 2019. You received the following confirmation replies from the company’s
customers on January 24, 2020.
Customer X: The inventory was received on Based on your examination of documents, the
January 7, 2020. We have agreed that the terms sale amounted to ₱400,000. Freight is paid by
of the delivery will be FOB destination. XYZ Company amounting to ₱3,500.
Customer Y: We have already paid the Based on your testing of the journal entries,
outstanding balance on December 23, 2017. you have noted that the accountant failed to
record the collections amounting to ₱345,000.
Customer Z: We have not bought any products Based on your testing, you have noted that the
during the year. accountant erroneously recorded the sale to
Customer Z instead to Customer A amounting
to ₱908,000.

What is the correct accounts receivable as at December 31, 2019 if the record shows ₱14,520,000?

Answer: 13,775,000

AR, uncorrected ₱14,520,000

Customer X (400,000) No sale yet
Customer Y (345,000) No collections recorded
Customer Z (908,000) Reclassification
Customer A 908,000 Reclassification
AR, corrected ₱13,775,000
QUESTION #6: AFAR – 40 SECONDS
Enzo, Co., a technology equipment supply company, entered into a contract with a customer on
December 1, 2019 to supply, install and service a system of computers. The agreed price was
₱300,000, to include a two-year service contract starting on January 2020. Payment was made in
total following installation in January 2020. At December 31, 2019, Enzo, Co. had supplied all the
machines, but had not yet installed any. Installation happened in January 2020. The directors of
Enzo, Co. estimated that the computers would be sold for ₱200,000 on a stand-alone basis.
Installation would cost ₱30,000, and the two-year service contract would cost ₱100,000 if
purchased separately.

How much revenue should be recorded for the year ended December 31, 2020?

Answer: 72,728

Applying the 5-step approach:

1. The contract is clear.
2. The performance obligations are three. Enzo, Co. must deliver machines, install them and
service them for 2 years.
3. The transaction price is clear which is ₱300,000.
4. The transaction price is allocated to each performance obligation in the ratio of their
standalone fair values. The total of the individual deliverables would be ₱330,000. Hence,
the transaction price is divided as follows:

Machines = ₱300,000 * (200/330) = ₱181,818

Installation = ₱300,000 * (30/330) = ₱27,273
Servicing = ₱300,000 * (100/330) = ₱90,909.

5. Only the first performance obligation (deliver machines) is satisfied during 2019. Hence,
Enzo, Co. will recognize ₱181,818 in revenue (and trade receivables) on that date. The
installation is completed in January 2020. Hence, ₱27,273 is recognized on that date. The
servicing will happen over 2 years. Hence, half the revenue related to the servicing (₱45,455)
will be recognized in 2020. The balance will be carried forward as deferred revenue and
recognized in 2021.

QUESTION #7 – TAXATION – 40 SECONDS

You transferred a 50,000 unlisted stock of domestic corporation the fair market value of P
3,500,000 to your brother for a consideration of P 1,250,000. Assuming that the stock was bought 5
years ago with a par value P50 per share at a price of P3,000,000. How much is the donor’s tax AND
documentary stamp tax due respectively? (Provide two separate answers)

Answer: P 120,000 and P18,750

Donor’s Tax = (P3,500,000 – 1,250,000) - 250,000) * 6% = P120,000

And:
Documentary Stamp Tax = ((50,000*50)/200) * P1.50 = P 18,750

And Also Subject to CGT: 1,250,000 * 15% = P 187,500

QUESTION #8: RFBT – 40 SECONDS
Ana is a partner of ABC Partnership. She is also a stockholder of Ana Corporation Ana has the
following deposit accounts in a closed bank (BDO):
Ana’s Business (Sole Proprietorship) Checking Account – BDO-Pasig City branch P350,000
Ana Savings Deposit BDO-Taguig City branch 400,000
Ana and Bea and Carla and Dana Time Deposit BDO-Manila City branch 600,000
Ana and ABC Partnership Checking Account – BDO-Pasay City branch 500,000
Ana and Ana Corporation Checking Account – BDO-Makati City branch 200,000
Ana’s loan payable to BDO – Quezon City Branch (100,000)

What is the maximum deposit insurance coverage by PDIC in so far as Ana is concerned?

Answer: 525,000

Account Name: Type of Deposit Balance Insured Uninsured

Ana’s Business (Sole Checking Account 350,000 350,000 -
Proprietorship)
Ana Savings Deposit 400,000 150,000 250,000
Ana and Bea and Carla Time Deposit 600,000 125,000 100,000
and Dana
Ana and ABC Checking Account 500,000 - -
Partnership
Ana and Ana Checking Account 200,000 - -
Corporation
Total 625,000 350,000
Less: Ana’s loan payable to BDO – QC Branch (100,000)
Maximum deposit insurance coverage by PDIC 525,000

QUESTION #9: AUDITING – 10 SECONDS

PSA 315 requires that the auditor document the understanding of the entity’s internal control.
When there are numerous property and equipment transactions during the year, an auditor who
plans to assess control risk at a low level usually performs
a. Tests of controls and extensive tests of property and equipment balances at the end of the
year.
b. Analytical procedures for current year property and equipment transactions.
c. Tests of controls and limited tests of current year property and equipment transactions.
d. Analytical procedures for property and equipment balances at the end of the year.

Answer: C

QUESTION #10: AFAR – 10 SECONDS

Under PFRS 3, contrary to PAS 37, what is the recognition principle of contingent liability assumed
in a business combination?
a. The acquirer shall recognize as of the acquisition date a contingent liability assumed in a
business combination if it is a present obligation that arises from past events and its fair
value can be measured reliably even only reasonably possible
b. The acquirer shall recognize a contingent liability assumed in a business combination at the
acquisition date only if it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation
c. The acquirer shall recognize a contingent liability assumed in a business combination at the
acquisition date only if it is virtually certain that an outflow of resources embodying
economic benefits will be required to settle the obligation
d. The acquirer shall recognize a contingent liability assumed in a business combination at the
acquisition date only if it is remote that an outflow of resources embodying economic
benefits will be required to settle the obligation

Answer: A
DIFFICULT ROUND

QUESTION #1: TAXATION – 60 SECONDS

ABC Corp, a domestic corporation, has the following data in 2021:
Gross Income 1,500,000
Operating and Administrative Expenses 600,000
Interest income on Bank deposit (net) 5,000
Gain on sale of unlisted domestic shares 35,000
Dividend from a domestic corporation 35,000
Dividend paid during the year 120,000
Reserved for building acquisition 250,000
Additional information:
 In 2020, the corporations suffered an operating loss of P130,000.
 Retained earnings on January 1, 2021, P200,000
 Ordinary shares, P 350,000
 Additional paid-in capital, P 50,000
 Total Taxes Paid (RCIT, FWT, & CGT) is P 237,500

Under CREATE Law, compute for IAET

Answer: Zero
- A 10% IAET is imposed on corporations with improperly accumulated taxable income was
repealed under CREATE Law. Hence, no more IAET.

QUESTION #2: RFBT – 60 SECONDS

The following data are provided by Dracula Agricultural Cooperative, a cooperative already existing
for at least five years:

Sales Revenue P 1,450,000

Membership fee revenue 50,000
Operating Expenses 500,000

What is the amount that is available for interest on share capital and patronage funds?

Answer: P 700,000

1. The net surplus is computed in the same manner as net income, as follows:

Net surplus = Sales revenue P 1,450,000 + Membership fee Revenue P50,000

- Operating Expenses P500,000
= P 1,000,000
2. Since nothing in the problem suggest a different rate of distribution, the statutory rates
shall apply in our computation, as follows:
Reserve Fund 10%
Education & Training Fund 10%
Community & Development Fund 3%
Optional Fund 7%
Total 30%
*The rate is 10% since the Cooperative has already been existing for at least 5 years.
3. The P700,000 balance shall be the excess from which the interest on share capital and
patronage refund may be paid out of.

QUESTION #3 – FAR – 60 SECONDS

On January 1, 20x2, Lessee Company leased a building from a lessor with the following pertinent
information:
Annual rental payable at the end of each year P1,000,000
Initial direct cost paid 400,000
Lease incentive received 100,000
Security deposit 300,000
Leasehold improvement 200,000
Purchase option that is reasonably certain to be exercised 500,000
Lease term 5 years
Useful life of building 8 years
Implicit interest rate 10%
PV of an ordinary annuity of 1 for 5 periods at 10% 3.79
PV of 1 for 5 periods at 10% .62
What is the cost of the right of use asset?

Answer: 4,400,000
PV of annual rental (1,000,000 x 3.79) 3,790,000
PV of purchase option (500,000 x .62) 310,000
Initial lease liability 4,100,000
Initial direct cost 400,000
Lease incentive received (100,000)
Cost of right of use asset 4,400,000

QUESTION #4: MAS – 60 SECONDS

Rain Company has a limited source of materials in producing its three products. It can only buy
10,000 units of material love every year. Information regarding these products are as follows:

Product Ivana Product Alawi Product Soriano

Selling price per unit P 800 P 600 P 400
Variable manufacturing costs per unit P 350 P 165 P 75
Variable selling costs per unit P 150 P 19 P 70
Allocated fixed costs P 50,000 P 150,000 P 75,000
Demand per year 300 units 900 units 600 units
Number of materials needed to produce 1 6 8 5

Assuming that Rain Company made the right decision, how many units of Product Ivana must it
produced?

Answer: Zero

Product Ivana Product Alawi Product Soriano

Selling price per unit P 800 P 600 P 400
Variable manufacturing costs per unit P 350 P 165 P 75
Variable selling costs per unit P 150 P 19 P 70
Contribution Margin P 300 P 416 P 255
Divided by Req. # of Materials 6 8 5
CM per Materials P 50 P 52 P 51

Materials
1st - Alawi (900*8) 7,200
2nd - Soriano (560*5) 2,800
3rd - Ivana -
Total 10,000

QUESTION #5: AFAR – 60 SECONDS

ABC Corporation is currently undergoing liquidation due to financial difficulties. The trustee of ABC
Corp. presented the following information: Assets amounting to P125,000 are available to
unsecured liabilities without priority. Assets amounting to P110,000 represents assets originally
not pledged to any liabilities. Unpaid liabilities are as follows: administrative expenses: P21,000;
taxes: P18,000 and wages: P32,000. Accounts payable and notes payable totaled P180,000. No
assets were pledged on the said liabilities. Payment to fully secured creditors and partially secured
creditors amounts to P139,000 and P144,000 respectively. The expected recovery percentage is 40
percent. Total payment to all creditors

Answer: 426,000

Payment to fully secured creditors 139,000

Payment to Unsecured Liab., w/ priority (21k + 18k + 31k) 70,000
Payment to partially secured creditors 144,000
Payment to Unsecured Liab., w/o priority (180,000*40%) 72,000
Total payment to all Creditors (Total Free assets) 426,000

QUESTION #6: AUDITING – 60 SECONDS

Bartolo Company has provided information on intangible assets as follows:
 A patent was purchased from Valenzuela Company for ₱4,000,000 on January 1, 2018.
Bartolo estimates the remaining useful life of the patent to be 10 years. The patent was
carried in Valenzuela’s accounting records at a net book value of ₱4,000,000 when
Valenzuela sold it to Bartolo.
  During 2019, a franchise was purchased from Delco Company for ₱960,000. The contract
which runs for 10 years provides that 5% of revenue from the franchise must be paid to
Delco. Revenue from the franchise for 2019 was ₱5,000,000. Bartolo takes a full year
amortization in the year of purchase.
 The following research and development costs were incurred by Bartolo in 2019:
Materials and equipment ₱284,000
Personnel 378,000
Indirect costs 204,000
₱866,000
Bartolo estimates that these costs will be recouped by December 31, 2022. The materials
and equipment purchased have no alternative uses.
 On January 1, 2019, because of recent events in the field, Bartolo estimates that the
remaining life of the patent purchased on January 1, 2018 is only 5 years from January 1,
2019.

What is the total carrying value of Bartolo’s intangible assets on December 31, 2019?

Answer: 3,744,000
Cost of patent purchased on Jan. 1, 2018 ₱4,000,000
2018 amortization (P4,000,000/10) (400,000)
Carrying value, Dec. 31, 2018 3,600,000
2019 amortization (P3,600,000/5) (720,000)
2,880,000
Cost of franchise ₱960,000
2019 amortization (P960,000/10) (96,000)
864,000
Total carrying value of intangibles ₱3,744,000

QUESTION #7 – MAS – 60 SECONDS

Beidou Company is interested in calculating its weighted average cost of capital. Beidou has a
current financial structure that is composed of 50% debt, 40% common stock and 10% preferred
stock. Since the retained earnings of the company is already exhausted, all common stock will be
sourced externally. The beta of Beidou Company’s stock is 0.7 while the current risk-free rate of
return is 4% and market risk premium is 6%. The dividends on the company’s preferred stock is set
at P2.25, and the issuance price per share (net of P5 floatation costs) of preferred stock is P30. Debt
issued by Beidou Company yields the 11% stated interest rate to investors. The marginal tax rate
for the company is 40%. What is the weighted average cost of capital for Beidou Company? (Round
of 2 decimal point)

Answer: 7.33%

Common stock (using CAPM) = (4% + (6%*.70)) * 40% = 3.28%

Preferred stock = (P2.25/P30)*10% = 0.75%
Cost of Debt = (11%*(1-40%)) * 50% = 3.30%
WACC = 7.33%

QUESTION #8: AFAR – 60 SECONDS

Given the following units and cost data:
Month Units Total Cost
April 18 15,600.00
May 19 15,200.00
June 15 14,600.00
July 11 13,200.00
August 11 12,800.00
September 48 72,500.00
October 17 13,700.00

Calculate the annual fixed cost using the high-low method.

Answer: 114,000

= (15,200 - 12,800)/(19 – 11) = P300

= P 300 * 19 = 5,700
= P15,200 – 5,700 = 9,500
= P9,500 * 12 months = P114,000
QUESTION #9: RFBT – 10 SECONDS
Gerber was waiting in for his turn to deposit money inside ABC Bank. When it was his turn, he saw
a Raffy, a prominent social media influencer, had just finished his transaction and intentionally left
a crumpled a piece of paper on the bank teller’s countertop. After a few moments of being
starstruck, he proceeded with depositing Php5,000,000. Once he received his deposit slip, he took
the crumpled piece of paper and placed it in his pocket, without objection from the teller, so he
could later throw it away. As he was walking towards the door, he needed to answer a phone call
When he got home, he noticed that he had forgotten to throw away the crumpled paper in his
pocket. He opened it up and saw the amount of Php10,000,000 deposited by Raffy and his
corresponding bank account number. Gerber immediately took a photo and sent it to a Group Chat
composed of at least 10 people. As Raffy was scrolling on social media, he saw his bank account
details on a post by a group called “Yown!” with the hashtag #PaScholarNamanDiyan being shared
by a person called John Bo. Who is in violation of R.A. 1405 (Secrecy of Bank Deposits)?
a. The teller of the Bank, because he did not object to the taking of the crumpled paper
b. Gerber, because his act of taking a photo and subsequent sharing was the proximate case of
the disclosure
c. The people on the Group Chat, the group “Yown!,” and John Bo as they had actively revealed
the bank account details
d. None of the foregoing

Answer: D

QUESTION #10: TAXATION – 60 SECONDS

ABC Corporation has a soft spot for senior citizens and persons with disability (PWDs). As such, it
hires senior citizens and PWDs to work in the company for at least six (6) months. The following
data for the current year taken from the books of accounts are provided by the corporation:
Gross sales P30,000,000
Sales discount (excluding discounts to senior citizens and PWDs) 4,000,000
Cost of sales 10,000,000
Salaries of senior citizens 1,000,000
Salaries of PWDs 600,000
Physical facilities in order to provide reasonable accommodation
for PWDs (fully deductible) 400,000
Other operating expenses 6,000,000

During the same period the corporation also allows 20% discount to senior citizens and PWDs who
buy goods from the company. The sales are as follows (not part of the gross sales above):
Sales to senior citizens P1,600,000
Sales to PWDs 1,000,000

How much is the total itemized deductions including the special itemized deductions?

Answer: P 9,020,000

Regular Special
Salary Senior 1,000,000 15% 150,000
Salary PWD 600,000 25% 150,000
Physical Facilities 400,000 50% 200,000
OPEX 6,000,000
Discount *520,000
8,000,000 1,020,000 9,020,000

Senior 1,600,000
PWD 1,000,000
2,600,000 x 20% = *520,000