ReSA - THE REVIEW SCHOOL OF ACCOUNTANCY

CPA Review Batch 43  May 2022 CPALE  9 Feb 2022  6:00 PM – 9:00 PM

TAXATION FIRST PRE-BOARD EXAMINATION

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

1. Which of the following is not a nonresident citizen?

D a. A citizen of the Philippines who establishes to the satisfaction of
the Commissioner the fact of his physical presence abroad with a
definite intention to reside therein.
b. A citizen of the Philippines who leaves the Philippines during the
taxable year to reside abroad, either as an immigrant or for
employment on a permanent basis.
c. A citizen of the Philippines who works and derives income from sources
abroad and whose employment thereat requires him to be physically
present abroad most of the time during the taxable year.
d. A citizen of the Philippines who goes on a business trip abroad and
stays therein most of the time during the year.

2. First statement: The husband and wife shall compute their individual income tax
separately based on their respective total taxable income.
Second statement: If any income cannot be definitely attributed to or identified
as income exclusively earned or realized by either of the spouses, the same shall
be divided equally between the spouses for the purpose of determining their
respective taxable income.
A a. Both statements are correct
b. Both statements are incorrect
c. Both statements are incorrect
d. Only the second statement is correct

3. Which of the following is not subject to tax as a corporation?

D a. Business partnerships
b. Joint stock companies
c. Insurance companies
d. General professional partnership

4. First statement: All corporations, whether domestic or foreign, shall be taxed

at 20% effectively July, 2020 if their net tax taxable income does not exceed
P5,000,000 and their total assets do not exceed P100,000,000.
Second statement: Effective January 1, 2021, non-resident foreign corporations
shall be taxed at 25% on their net income from sources within the Philippines.
B a. Both statements are correct
b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct

5. One of the following is not a requisite of a taxable income.

D a. There must be gain.
b. The gain must be realized or received.
c. The gain must not be excluded by law from taxation.
d. The gain must be that of resident or nonresident citizen.

6. A property was received as donation from Charlwin when its fair market value was
P300,000. Charlwin in turn received this property as donation from Jose when
its fair market value was P350,000. This property was purchased by Marceliano
for P200,000 and was donated to Jose. The property was sold for P500,000.

How much gain (loss) shall be recognized from the sale?

A a. P300,000
b. P200,000
c. P150,000
d. None of the choices

7. If an individual performs services for a creditor who in consideration thereof

cancels the debt, the cancellation of indebtedness may amount to a:
D a. gift.
b. capital contribution.
c. donation inter vivos.
d. payment of income.

Page 1 of 14 0915-2303213  [email protected]

 TAXATION
ReSA Batch 43 - May 2022 CPALE Batch
09 Feb 2022  6:00 PM to 9:00 PM TAX First Pre-Board Exam
8. It is important to know the source of income for tax purposes (i.e., from within
and without the Philippines) because:
A a. some individuals and corporate taxpayers are taxed on their
worldwide income while others are taxable only upon income from
sources within the Philippines.
b. the Philippines imposes income tax only on income from sources
within.
c. some individual taxpayers are citizens while others are aliens.
d. export sales are not subject to income tax.

9. Gains, profits and income from the sale of real property are from sources
within the Philippines if:
A a. the real property sold is located in the Philippines.
b. the real property is sold in the Philippines.
c. the real property sold is located outside the Philippines.
d. the real property sold is owned by a resident citizen.

10. The term “capital asset” includes:

B a. stock in trade or other property included in the taxpayer’s inventory.
b. real property not used in the trade or business of taxpayer.
c. property primarily for sale to customers in the ordinary course of
his trade or business.
d. property used in the trade or business of the taxpayer and subject
to depreciation.

11. The widow of your best friend has just been paid P1,000,000 on account of the
life insurance policy of the deceased husband. She asks you whether she shall
declare the amount for income tax purposes or for estate tax purposes.
First advice: The proceeds of the life insurance paid to the beneficiary upon
the death of the insured are exempt from income tax and need not be declared for
income tax purposes.
Second advice: The proceeds of life insurance will have to be declared for estate
tax purposes if the designation of the beneficiary is revocable, otherwise, they
need not be declared.
A a. Both advices are right
b. First advice right; second advice wrong
c. Both advices are wrong
d. First advice wrong; second advice right

12. Ms. Elisya Montenegro entered her short story in a literary contest. She won in
the Short Story category, and received P500,000 for her prize. What was the tax
consequence of the literary prize?
B a. Exempt from income tax
b. Subject to final withholding tax
c. Subject to Section 24 (A)
d. Not subject to any internal revenue tax

13. Under this system, the amount of income tax withheld by the withholding agent is
constituted as a full and final payment of the income tax due from the payee on
the said income.
B a. Creditable withholding tax
b. Final withholding tax
c. Global tax system
d. Schedular tax system

14. Which of the following passive income is not subject to 20% final withholding
tax. As a general rule, which of the following passive income of resident citizen?
D a. Interest from any peso bank deposit
b. Yield or any other monetary benefit from deposit substitutes and
from trust funds and similar arrangements
c. Prizes (except prizes amounting to P10,000 or less)
d. Royalties on books, as well as other literary works and musical
compositions

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 TAXATION
ReSA Batch 43 - May 2022 CPALE Batch
09 Feb 2022  6:00 PM to 9:00 PM TAX First Pre-Board Exam
15. Which of the following fringe benefits shall be subject to the fringe benefit
tax?
D a. Benefits given to the rank-and-file employees, whether granted under
a collective bargaining agreement or not
b. Fringe benefits required by the nature of, or necessary to the trade,
business or profession of the employer
c. Fringe benefit given for the convenience or advantage of the employer
d. Membership fees, dues and other expenses borne by the employer for
the managerial and supervisory employee in social and athletic clubs
and similar organizations

16. First statement: The fringe benefit tax is imposed only when the employer is a
corporation.

Second statement: The fringe benefit tax shall be withheld and paid by the
employer in accordance with the provision of Section 57 (A).
D a. Both statements are correct
b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct

17. De minimis benefit pertaining to monetized value of vacation and sick leave
credits paid to government officials and employees is limited to:
D a. 10 days
b. 15 days
c. 20 days
d. None of choices

18. The gross estate of this decedent shall only be comprised of properties
situated in the Philippines.
D a. Filipino residing in the Philippines
b. American residing in the Philippines
c. Filipino residing in the USA
d. American residing in the USA

19. Mr. Julian Cruz procured a life insurance upon his own life. He designated his
estate’s executor as an irrevocable beneficiary. For estate tax purposes, the
proceeds of life insurance is:
A a. included in the gross estate of Mr. Julian Cruz because when the
executor of the estate is a beneficiary the proceeds are included in
the gross estate regardless of the designation.
b. not included in the gross estate of Mr. Julian Cruz because the
designation of the beneficiary is irrevocable.
c. included in the gross estate of Mr. Julian Cruz because proceeds of
life insurance are always subject to estate tax.
d. not included in the gross estate because, as a rule, proceeds of life
insurance are generally not subject to estate tax.

20. Mr. Rigoberto Collado, a citizen and resident of Puerto Rico, dies during the
year. Puerto Rico does not impose transfer taxes on properties of decedent not
residing therein. He left the following properties among others:
Shares of stock, San Miguel Corporation, Manila
House and lot, Puerto Rico
Leasehold on a condominium unit, Philippines
Contract for public works, Philippines

The executor of his estate in Philippines asked you what properties are to be
included in his Philippine gross estate. What answer will you give him?
B a. Include all the properties.
b. Include contract for public works and leasehold on condominium unit
only.
c. Include all properties except shares of stock and house and lot
d. Include all properties except house and lot in Puerto Rico.

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 TAXATION
ReSA Batch 43 - May 2022 CPALE Batch
09 Feb 2022  6:00 PM to 9:00 PM TAX First Pre-Board Exam
21. A property was transferred mortis causa. The following data were gathered from
the transaction:
Fair market value, time of transfer – P500,000
Fair market value, time of death – P300,000
Consideration received when transferred – P350,000

How much shall be included in the gross estate?

D a. P500,000
b. P300,000
c. P150,000
d. None

22. How much is the allowable standard deduction for non-resident alien decedent?
C a. Five Million Pesos (P5,000,000)
b. Three Million Pesos (P3,000,000)
c. Five Hundred Thousand Pesos (P500,000)
d. None, not allowed to deduct standard deduction

23. The following selected data were taken from the Estate of Ed Sados:
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 deducted from the gross estate?

B a. P880,000
b. P580,000
c. P100,000
d. P 80,000

24. 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 (650,000 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?

D a. P 500,000
b. P 225,000
c. P 200,000
d. P 100,000

25. For purposes of availing of a family home deduction to the extent allowable, a
person may constitute:
B a. as many family homes as possible.
b. only one family home.
c. one family home for each spouse.
d. one family for each child.

26. One of the following is not a distinction between donation inter vivos and
donation mortis causa.
C a. Donation inter vivos takes effect during the lifetime of the grantor
while donation mortis causa takes effect after the death of the
grantor.
b. Donation inter vivos is subject to donor’s tax while donation mortis
causa is subject to estate tax.
c. Donation inter vivos requires a public document while donation mortis
causa may not require a public document.
d. Donation inter vivos is valued at fair market value at the time the
property is given while donation mortis causa is valued at the fair
market value at the time of the death of the grantor.

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 TAXATION
ReSA Batch 43 - May 2022 CPALE Batch
09 Feb 2022  6:00 PM to 9:00 PM TAX First Pre-Board Exam
27. Mr. Primitivo Primero died and was survived by his wife and two (2) children,
Faye and Faith. After getting her share in the conjugal property, the surviving
spouse renounced her share in the hereditary estate in favor of Faith to the
exclusion of Faye. Was the renunciation subject to donor’s tax?
A a. Yes, because the renunciation was made categorically in favor of
identified heir to the exclusion or disadvantage of the other co-
heirs.
b. No. because the renunciation was considered a general renunciation.
c. Yes, because , as a rule, renunciation of share in the hereditary
estate is always subject to donor’s tax.
d. No, because, as a rule, the surviving spouse cannot renounce her
share in the hereditary estate.

28. Mr. J. Santos donated P500,000 to AST Foundation, a philanthropic organization.

The organizations total administrative expenses amounted to P5,000,000 out of
its expenses of P20,000,000. How much was the exempt gift to the philanthropic
organization?
C a. P6,000,000
b. P5,000,000
c. P500,000
d. None

29. First statement: For VAT purposes, a taxable person is any person liable to pay
the VAT, whether registered or registrable in accordance with the Tax Code.

Second statement: The status of a “VAT-registered person” as a VAT-registered

person shall continue until the cancellation of such registration.
A a. Both statements are correct
b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct

30. Which of the following sales of residential property, shall be subject to VAT
beginning January 1, 2021?
A a. Sale of residential lot the value of which does not exceed P1,500,000
b. Sale of residential house and lot and other residential dwellings
with selling price of not more than P2,000,000.
c. Sale of real properties not primarily held for sale to customers or lease
in the ordinary course of trade or business
d. Sale of real property utilized for socialized housing

31. Which of the following is not included in the term “gross selling price”?
B a. Total amount of money or its equivalent paid by the purchaser
b. Value-added tax passed on by the seller to the buyer
c. Excise tax
d. None of the choices

32. Which statement is incorrect? VAT on importation of goods:

D a. is imposed on an importation for sale or for use in business.
b. is imposed on an importation for personal use.
c. shall be paid prior to removal from customs custody.
d. may not be available as input tax.

33. For VAT purposes, capital goods or properties, also known as depreciable
assets, refer to:
I – goods or properties with estimated useful life greater than one (1)
year
II – treated as depreciable assets under Section 34 (F) of the Tax Code
III – used directly or indirectly in the production or sale of taxable
goods or services
A a. Yes to I, II and III
b. Yes to II and III only
c. Yes to I and II only
d. Yes to I only

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 TAXATION
ReSA Batch 43 - May 2022 CPALE Batch
09 Feb 2022  6:00 PM to 9:00 PM TAX First Pre-Board Exam

34. A VAT-registered person shall issue for every sale, barter or exchange of goods
or properties a:
A a. VAT invoice.
b. VAT official receipt.
c. VAT credit certificate.
d. VAT refund.

35. Which of the following shall not be considered livestock for VAT-exempt
transactions purposes?
D a. Cows
b. Bulls and calves
c. Sheep
d. Race horses

36. All of the following cooperatives enjoy VAT exemption on their sales or
receipts except:
D a. agricultural cooperatives.
b. credit and multi-purpose cooperatives.
c. non-agricultural, non-electric and non-credit cooperatives.
d. electric cooperatives.

37. Effective July 1, 2020 to June 30, 2023, the percentage tax rate on persons
exempt from VAT shall be:
A a. 1%.
b. 2%.
c. 3%.
d. 5%.

38. Mr. Jaime Rodriguez is the owner of a small variety store. His gross sales in
any one year do not exceed the VAT threshold amount. He is not VAT-registered.
The following data are taken from the books of the variety store for the quarter
ending March 31, 2020:
Merchandise inventory, December 31, 2019 P 100,000
Gross sales 450,00
Purchases from VAT-registered suppliers 350,000

How much is the percentage tax due and payable?

B a. P22,500
b. P13,500
c. P 9,000
d. P 4,500

39. The following data were provided by an air carrier:

Freight and cargo fees (cargo originating from the
Philippines in a continuous and uninterrupted flight to
Japan, passage documents sold in Japan) P5,000,000
Mail fees (mail originating from Japan in a continuous and
uninterrupted flight to the Philippines, passage documents
sold in the Philippines) 4,000,000
Advance payments for cargo originating from the Philippines
in a continuous and uninterrupted flight to Singapore
(passage documents sold in Singapore) 3,000,000
Receipts from sales of tickets to passengers originating from
the Philippines in a continuous and uninterrupted flight to
Hongkong (tickets sold in the Philippines) 2,000,000
Expenses, Philippines 1,500,000

How much is the common carrier’s tax due from the air carrier assuming it is an
international carrier doing business in the Philippines?
C a. P420,000
b. P300,000
c. P240,000
d. P210,000

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 TAXATION
ReSA Batch 43 - May 2022 CPALE Batch
09 Feb 2022  6:00 PM to 9:00 PM TAX First Pre-Board Exam
40. Ms. N is a caterer and a videoke bar operator. In a taxable period, she had the
following data, tax not included:
Sales:
From operations of the Truluv Catering Service:
Cash sales P400,000
Accounts receivable (catering) 250,000
Credit card sales 243,000
From operations of the Dude Videoke Bar:
Cash sales 1,360,000
Credit card sales 624,200
Payments for catering service, based on gross
receipts (80% of which are to VAT taxpayers) 60%

How much is the amusement tax payable?

A a. P357,156
b. P297,630
c. P198,420
d. None of the choices

SITUATIONAL

Ms. Leni operates a convenience store while she offers bookkeeping services to her
clients. In 2018, her gross sales amounted to P800,000.00, in addition to her receipts
from bookkeeping services of P300,000.00. She already signified her intention to be
taxed at 8% income tax rate in her 1st quarter return. How much is the income tax
liability for the yea?

41. Will she qualify to be taxed at 8%?

A a. Yes, because her total gross sales and/or gross receipts and other
non-operating income do not exceed the VAT threshold and she
signifies her intention to be taxed at 8% income tax rate in her
first quarter return.
b. No, because while her total gross sales and/or gross receipts and other
non-operating income do not exceed the VAT threshold and she
signifies her intention to be taxed at 8% income tax rate in her
first quarter return, her income comes from different sources.
c. Yes, because individual taxpayers are always given the option to be
taxed at 8% income tax rate regardless of their total gross sales
and/or gross receipts and other non-operating income.
d. No, because individual taxpayers whose total gross sales and/or
gross receipts and other non-operating income are always subject
to tax under Section 24 (A).

42. How much is her taxable income for the year?

B a. P1,100,000
b. P 850,000
c. P 800,000
d. P 300,000

43. How much is the income tax due?

B a. P88,000
b. P68,000
c. P64,000
d. P10,000

44. Assuming Ms. Leni above, failed to signify her intention to be taxed at 8% income
tax rate on gross sales in her 1st Quarter Income Tax Return, and she incurred
cost of sales and operating expenses amounting to P600,000.00 and P200,000.00,
respectively, or a total of P800,000.00. How much is the income tax?
D a. P88,000
b. P68,000
c. P64,000
d. P10,000

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 TAXATION
ReSA Batch 43 - May 2022 CPALE Batch
09 Feb 2022  6:00 PM to 9:00 PM TAX First Pre-Board Exam
45. Using the same information in the immediately preceding number, to what
business tax will she be liable if Ms. Leni failed to signify her intention to
be taxed at 8% income tax rate on gross sales in her 1st Quarter Income Tax
Return?
B a. Value-Added Tax
b. Percentage Tax on Person Exempt From VAT
c. Amusement Tax
d. Excise Tax

SITUATIONAL

A proprietary educational institution has the following data for the calendar year
2021:
Gross receipts, related activities P 15,000,000.00
Cost of services, related activities 6,000,000.00
Allowable deductions from related activities 3,250,000.00
Gross receipts, unrelated activities 18,000,000.00
Cost of services, unrelated activities 5,000,000.00
Allowable deductions from unrelated activities 2,000,000.00
Payments, first three (3) quarters 2,000,000.00

46. How much is net taxable income from related activities?

D a. P16,750,000.00
b. P15,750,000.00
c. P11,000,000.00
d. P 5,750,000.00

47. How much is the net taxable income from unrelated activities?
C a. P16,750,000.00
b. P15,750,000.00
c. P11,000,000.00
d. P 5,750,000.00

48. What corporate tax rate will it be subject to?

A a. 25%
b. 20%
c. 10%
d. 1%

49. How much is the income tax payable?

B a. P4,187,500.00
b. P2,187,500.00
c. P1,675,000.00
d. P1,350,000,00

50. How much is the output VAT, if any?

D a. P3,960,000.00
b. P2,160,000.00
c. P2,160,000.00
d. None, VAT-Exempt

SITUATIONAL

The decedent is a married man with a surviving spouse with the following raw data:
Conjugal real and personal properties (including an automobile
purchased during the marriage using common fund for the
exclusive use of the surviving spouse) P 14,000,000
Conjugal family house 9,000,000
Exclusive family lot 1,000,000
Exclusive properties (including the P3,000,000 exclusive
properties of the surviving spouse) 8,000,000
Conjugal ordinary deductions (including funeral expenses of
P100,000 and judicial expenses of P200,000) 2,300,000
Exclusive ordinary deductions (excluding the P500,000 unpaid
mortgage on the exclusive property of the surviving spouse) 1,000,000
Medical expenses 200,000

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 TAXATION
ReSA Batch 43 - May 2022 CPALE Batch
09 Feb 2022  6:00 PM to 9:00 PM TAX First Pre-Board Exam
51. Using BIR Form No. 1801, what value shall be reflected in Schedule 1A (Details
of Family Home)?
A a. P10,000,000
b. P 5,500,000
c. P9,000,000
d. P1,000,000

52. Using BIR Form No. 1801, how much shall be reflected in Line 35 (ordinary
deductions)?
C a. P3,800,000
b. P3,300,000
c. P3,000,000
d. P2,300,000

53. Using BIR Form No. 1801, how much shall be reflected in Line 37D (total special
deductions)?
B a. P15,000,000
b. P10,500,000
c. P10,000,000
d. P 6,000,000

54. Using BIR Form No. 1801, how much shall be reflected in Line 40/16 (net taxable
estate)?
B a. P4,300,000
b. P5,000,000
c. P7,300,000
d. P8,500,000

55. Using BIR Form No. 1801, how much shall be reflected in Line 18 (estate tax due)?
B a. P256,000
b. P300,000
c. P440,000
d. P515,200

SITUATIONAL
Excellent Products, Inc. processes canned fruits and canned sardines. The following
VAT-exclusive selected data for the first quarter of the 2021 calendar year are taken
from its books:
Sale of canned fruits P2,000,000
Sale of canned sardines 3,000,000
Purchase of tomatoes and onions from farmers
(for canned sardines) 500,000
Purchase of corn oil from a supplier
(for canned sardines) 300,000
Purchase of fresh fish from fishermen
(for canned sardines) 400,000
Purchase of fresh fruits from farmers
(for canned fruits) 200,000
Purchase of refined sugar from an agricultural
cooperative that manufactures refined sugar
(for canned fruits) 100,000
Purchase of refined sugar from a refined sugar
refinery (for canned fruits) 50,000
Purchase of packaging materials for the both products 800,000
Purchase of labels (for both products) 150,000
Total bills for trucking services in bringing
canned products to warehouse only P50,000 was paid) 100,000
Monthly VAT payments, previous two months 300,000

56. Using BIR Form No. 2550Q, what shall be reflected in Line 19A (Total
Sales/Receipts)?
A a. P5,000,000
b. P3,000,000
c. P2,000,000
d. None of the choices

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 TAXATION
ReSA Batch 43 - May 2022 CPALE Batch
09 Feb 2022  6:00 PM to 9:00 PM TAX First Pre-Board Exam
57. Using BIR Form No. 2550Q, what shall be reflected in Line 19B (output tax due)
using 12% rate?
A a. P600,000
b. P500,000
c. P360,000
d. P240,000

58. Using BIR Form No. 2550Q, what shall be reflected in Line 20D (presumptive
input tax), if any?
C a. P56,000
b. P32,000
c. P20,000
d. None. Not allowed

59. Using BIR Form No. 2550Q, what shall be reflected in Line 24 (total allowable
input tax)?
A a. P182,000
b. P176,000
c. P162,000
d. P156,000

60. Using BIR Form No. 2550Q, what shall be reflected in Line 27 (Tax Still
Payable) using 12% rate?
D a. P418,000
b. P370,000
c. P346,000
d. P118,000

SITUATIONAL

Mr. Nguyen Gandaipen, a non-resident Thai, during the current year donates on January
15, 2022 a brand-new car in the Philippines valued at P1,200,000 and house and lot in
Thailand valued at P2,500,000 to his legitimate son who is getting married in the
Philippines. The son agrees to pay the unpaid tax of P120,000 on the car and the
unpaid mortgage of P500,000 on the house and lot.

61. Using BIR Form No. 1800, what shall be reflected in line 27 (Total Gifts In This
Return)?
C a. P3,700,000
b. P2,500,000
c. P1,200,000
d. None of the choices

62. Using BIR Form No. 1800, what shall be reflected in line 33 (total deductions
allowed)?
B a. P130,000.
b. P120,000.
c. P10,000.
d. none.

63. Using BIR Form No. 1800, what shall be reflected in line 38/14 (total net gift
subject to tax)?
D a. P2,830,000
b. P1,200,000
c. P1,080,000
d. P 830,000

64. Using BIR Form No. 1800, what shall be reflected in line 18 (tax payable)?
D a. P214,200
b. P142,800
c. P64,800
d. P49,800

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 TAXATION
ReSA Batch 43 - May 2022 CPALE Batch
09 Feb 2022  6:00 PM to 9:00 PM TAX First Pre-Board Exam
65. Where shall the donor file the donor’s tax return?
C a. Revenue District Office having jurisdiction over the place in the
Philippines where the son is getting married
b. Revenue District Office having the jurisdiction over the place in the
Philippines where the son’s wife resides
c. Philippine Embassy or Philippine Consulate in Thailand
d. None of the choices

SITUATIONAL

The following items (66 – 70) are considered BONUS ITEMS for purposes of determining the score of the
TAX First Pre-Board Exam. The given information for these items were uploaded only around 7:35 PM of
February 9. Some examinees have already submitted the Google Quiz form before 7:35 PM of February 9
while some examinees were able to learn about the uploaded information only AFTER submitting the form.
Ube Paspas Bus is a common carrier by land. It is VAT-registered. During quarter
ending March 31, 2021, it has the following gross receipts:
Transport of passengers P1,000,000
Transport of goods 1,500,000
Transport of cargoes 500,000

66. How much is the common carrier’s tax payable?

D a. P 120,000
b. P 90,000
c. P 60,000
d. P 30,000

67. When shall the Percentage Tax Return be filed?

A a. April 25, 2021
b. April 24, 2021
c. April 21, 2021
d. April 15, 2021

68. How much is the Value-Added Tax?

B a. P 360,000
b. P 240,000
c. P 120,000
d. None. VAT threshold not exceeded

69. When shall the Quarterly VAT be filed?

A a. April 25, 2021
b. April 24, 2021
c. April 21, 2021
d. April 15, 2021

70. Assuming it is not VAT-registered, how much shall be the total percentage
taxes?
C a. P90,000
b. P60,000
c. P50,000
d. P30,000

- END –

Page 11 of 14 0915-2303213  [email protected]

 TAXATION
ReSA Batch 43 - May 2022 CPALE Batch
09 Feb 2022  6:00 PM to 9:00 PM TAX First Pre-Board Exam

ANSWERS & SOLUTIONS/CLARIFICATIONS

6. Selling price P500,000

Less: Basis (basis to the last owner who did not acquire the 200,000*
property by donation)
Gain from sale P300,000

23. Claim against an insolvent person (fully uncollectible P500,000

Claim against an insolvent person (80% x 100,000) 80,000
Total P580,000

24. Value to take P 650,000

Less: Mortgage paid 50,000
Initial basis 600,000
Less: Proportional deduction (P600,000/P1,800,000 X P300,000) 100,000
Final basis 500,000
Rate 20%
Vanishing deduction P 100,000

28. The gift was exempted because the administrative expenses of the donee-institution did not
exceed 30% of the total expenses (5,000,000/P20,000,000 = 25%).

38. Gross sales P450,000

Tax rate 3%
Percentage tax 13,500
Effective July 1, 2020 until June 30, 2023, the rate shall be 1%.

39. Freight and cargo fees (cargo originating from the Philippines in a continuous
and uninterrupted flight to Japan, passage documents sold in Japan) P5,000,000
Advance payments for cargo originating from the Philippines in a continuous
and uninterrupted flight to Singapore (passage documents sold in Singapore) 3,000,000
Gross receipts 8,000,000
Tax rate 3%
Common carrier’s tax P 240,000

40. Cash sales P1,360,000

Credit card sales 624,200
Gross receipts (Dude Videoke Bar) P1,984,200
Tax rate 18%
Amusement tax P 357,156

42. Gross sales – Convenience store P800,000.00

Gross receipts - Bookkeeping 300,000.00
Total gross sales/receipts 1,100,000.00
Less: Amount allowed as deduction 250,000.00
Taxable income P850,000.00

43. Taxable income P850,000.00

Tax rate 8%
Tax due P 68,000.00

44. Gross sales – Convenience store P 800,000.00

Gross receipts - Bookkeeping 300,000.00
Total gross sales/receipts 1,100,000.00
Less: Cost of sales 600,000.00
Gross income 500,000.00
Less: Operating expenses 200,000.00
Taxable income P 300,000.00
Tax due 250,000.00 Exempt
50,000.00 x 20% 10,000.00 P 10,000.00

Aside from income tax, Ms. Leni is likewise liable to pay business tax.

Page 12 of 14 0915-2303213  [email protected]

 TAXATION
ReSA Batch 43 - May 2022 CPALE Batch
09 Feb 2022  6:00 PM to 9:00 PM TAX First Pre-Board Exam

45. Effective January 1, 2018 to December 31, 2022

If the taxable income is:
Over But not over The tax shall be Plus Of excess over
P 250,000 0%
P 250,000 400,000 20% P 250,000
400,000 800,000 P 30,000 25% 400,000
800,000 2,000,000 130,000 30% 800,000
2,000,000 8,000,000 490,000 32% 2,000,000
8,000,000 2,419,000 35% 8,000,000

Related activities Unrelated activities Total

Gross receipts P15,000,000.00 P18,000,000.00 P33,000,000.00
Less: Cost of services 6,000,000.00 5,000,000.00 11,000,000.00
Gross income 9,000,000.00 13,000,000.00 22,000,000.00
Less: Allowable deductions 3,250,000.00 2,000,000.00 5,250,000.00
Net taxable income (46)P 5,750,000.00 (47) P11,000,000.00 16,750,000.00
Tax rate* (48) 25%
Income tax due 4,187,500.00
Less: Payments, first 3 quarters 2,000,000.00
Income tax payable (49)P2,187,500.00

51. Conjugal family house P9,000,000

Exclusive family lot 1,000,000
Total P10,000,000

52. Conjugal ordinary deductions (2,300,000 – 300,000) P2,000,000

Exclusive deductions 1,000,000
Total P3,000,000

53. Standard deduction P5,000,000

family home
Family house (1/2 x 9,000,000) 4,500,000
Family lot (full) 1,000,000
Total 5,500,000
Maximum 10,000,000
Lower 5,500,000
Total P10,500,000

Exclusive Common Total

34 Gross estate P6,000,000 P23,000,000 P29,000,000
35 Less: Ordinary deductions 1,000,000 2,000,000 3,000,000
36 Estate after ordinary deductions 5,000,000 21,000,000 26,000,000
37 Less: Special deductions
37A Standard deduction 5,000,000
37B Family home 5,500,000
37C Others (specify) -
37D Total special deductions 10,500,000
38 Net estate 15,500,000
39 Less: Share of surviving spouse (1/2 x
21,000,000*) 10,500,000
40/16 Net taxable estate 5,000,000 (54)
17 Applicable tax rate 6%
18 Estate tax due P 300,000 (55)

56. Sale of canned fruits P2,000,000

Sale of canned sardines 3,000,000
Total P5,000,000

57. Gross sales P5,000,000

Tax rate 12%
Output tax P600,000

58. Presumptive input tax on purchase of tomatoes and onions (500,000 x 4% = P20,000))

Page 13 of 14 0915-2303213  [email protected]

 TAXATION
ReSA Batch 43 - May 2022 CPALE Batch
09 Feb 2022  6:00 PM to 9:00 PM TAX First Pre-Board Exam

59. Presumptive input tax on purchase of tomatoes and onions (500,000 x 4%) P20,000
Passed-on VAT on purchase of corn oil (300,000 x 12%) 36,000
Passed-on VAT on purchase of refined sugar from sugar refinery (50,000 x 12%) 6,000
Passed-on VAT on purchase of packaging materials (800,000 x 12%) 96,000
Passed-on VAT on purchase of labels (150,000 x 12%) 18,000
Passed-on VAT on trucking services (50,000 x 12%) 6,000
Total P182,000

60. 19B Output tax P600,000

24 Total allowable input tax 182,000
25 Net VAT payable 418,000
Less: 26A Monthly VAT payments, previous two months 300,000
27 Tax Still Payable P118,000

61. Car, Philippines P1,200,000

62. Unpaid tax on car assumed by the donee P120,000

63. 27 Total Gifts In This Return P1,200,000

Less: Deductions
Unpaid tax on car assumed by the donee
33 Total Deductions Allowed 120,000
34 Total net gifts in this return 1,080,000
Add: 35 Total prior net gifts during the calendar year -
36 Total net gifts 1,080,000
37 Less: Exempt gift 250,000
38/14 Total net gift subject to tax P 830,000

64. 38/14 Total net gift subject to tax 830,000

15 Applicable donor’s tax rate 6%
16 Total donor’s tax due 49,800
Less: 17Tax credit/payments -
18 Tax payable P49,800
Add:19 Penalties -
20 Total amount payable P49,800

65. 27 Total Gifts In This Return P1,200,000

Less: Deductions
Unpaid tax on car assumed by the donee
33 Total Deductions Allowed 120,000
34 Total net gifts in this return 1,080,000
Add: 35 Total prior net gifts during the calendar year -
36 Total net gifts 1,080,000
37 Less: Exempt gift 250,000
38/14 Total net gift subject to tax 830,000
15 Applicable donor’s tax rate 6%
16 Total donor’s tax due 49,800
Less: 17Tax credit/payments -
18 Tax payable P49,800
Add:19 Penalties -
20 Total amount payable P49,800

66. Gross receipts (transport of passengers) P1,000,000

Tax rate 3%
Common carrier’s tax P 30,000

68. Gross receipts (transport of goods) P1,500,000

Gross receipts (transport of cargoes 500,000
Total 2,000,000
Tax rate 12%
Value-added tax P 240,000

70. Common carrier’s tax (transport of passengers)

(1,000,000 x 3%) P30,000
Percentage on Persons Exempt from VAT (transport of goods and cargoes)
(2,000,000 x 1%) 20,000
Total P50,000

Page 14 of 14 0915-2303213  [email protected]