Illustrative Tax Computations

MULTIPLE CHOICE

1. XYZ Corporation manufactures glass panels and is almost at the point of insolvency. It has no
more cash and all it has are unsold glass panels. It received an assessment from the BIR for
deficiency income taxes. It wants to pay but due to lack of cash, it seeks permission to pay in kind
with glass panels.

Should the BIR grant the requested permission?

a. It should grant permission to make payment convenient to taxpayers.
b. It should not grant permission because a tax is generally a pecuniary burden.
c. It should grant permission, otherwise, XYZ Corporation would not be able to pay.
d. It should not grant permission because the government does not have the storage facilities
for glass panels.
ANS: B REF: iCPA TOP: Tax Remedies

2. Deltoid Motors hit on the idea of setting up a wholly owned subsidiary, Gonmad Moters, and of
selling its assembled cars to Gonmad at a low price so it would pay a lower tax on the first sale.
Gonmad would then sell the cars to the pubic at a higher price without paying any sales tax on this
subsequent sale.

Characterize the arrangement

a. The plan is a legitimate exercise of tax planning and merely takes advantage of a loophole
in the law.
b. The plan is legal because the government collects taxes anyway.
c. The plan is improper; the veil of corporate fiction can be pierced so that the second sale
will be considered the taxable sale.
d. The government must respect Gonmad’s separate juridical personality and Deltoid’s
taxable sale to it
ANS: C REF: iCPA TOP: Tax Remedies

3. PRT Corporation purchased a residential house and lot with a swimming pool in an upscale
subdivision and required the company president to stay there without paying rent; it reasoned out
that the company president must maintain a certain image and be able to entertain guests at the
house to promote the company’s business. The company president declared that because they are
childless, he and his wife could very well live in a smaller house.

Was there a taxable fringe benefit?

a. There was no taxable fringe benefit since it for the convenience of the employer and was
necessary for its business.
b. There was a taxable fringe benefit since the stay at the house was for free.
c. There was a taxable fringe benefit because the house was very luxurious.
d. There was no taxable fringe benefit because the company president was only required to
stay there and did not demand free housing.
ANS: A
SOL:
NIRC Section 33; RR No. 3-98

REF: iCPA TOP: Tax Remedies

4. Ms. Allyza is employed in JBC Corporation. She receives the following for the current year:

Statutory minimum wage, inclusive of the 13th month pay P175,000

Overtime pay 40,000
Night-shift differential 25,000
Commission from the same employer 20,000
Total P260,000

How much is the exempt amount?

a. 260,000
b. 240,000
c. 20,000
d. None of the choices
ANS: B
SOL:
Basic statutory minimum wage P175,000
Overtime pay 40,000
Night-shift differential 25,000
Total P240,000

REF: RESA First Preboard May 2019 TOP: Income Tax Individuals

5. Ginoo is the CEO of Mahusay Corporation and received as compensation income (net of all
exclusions) the amount of P5,000,000 in 2018. He did not give up though his modest business
venture being an MBA graduate. In 2018, his total sales from his fast growing business amounted
to P3,000,000 for the first three quarters and P3,500,000 in the 4th quarter. Details of his business
operations in 2018 follow:

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Total sales P500,000 P500,000 P2,000,000 P3,500,000
Cost of sales (300,000) (300,000) (1,200,000) (1,500,000)
Operating expenses (120,000) (120,000) (480,000) (520,000)
Taxable income P80,000 P80,000 P320,000 P1,480,000

The total income tax for 2018 is:

a. 478,000
b. 1,450,000
c. 1,928,000
d. 2,077,200
ANS: D
SOL:
What if Ginoo signified his intention to be taxed at 8% income tax rate on gross sales in his 1st
quarter income tax return he filed? The total income tax due and payable (after tax credit) for
2018 is: P387,200

REF: CRC Final Preboard October 2018 TOP: Income Tax Individuals
6. Dyango is a professional with gross receipts of P2,000,000 and deductible expenses of P1,200,000,
for the calendar taxable year 2018. How much will be the income tax to be paid for 2018 by taking
into account your best recommendation as tax adviser on the most economical option to avail of in
taxing his self-employment income?
a. 110,000
b. 130,000
c. 140,000
d. 160,000
ANS: B
SOL:
The most economical option you recommended to Dyango in order for him to save on income tax
payment for his 2018 self-employment income is: Graduated income tax rates of from 0% to 35%

REF: CRC Final Preboard October 2018 TOP: Income Tax Individuals

7. A closely-held domestic corporation had the following data in 2018:

Gross income from business P3,000,000

Dividend from domestic corporation 100,000
Capital gain on sale of idle land on a selling price of
P3,600,000, but with a zonal valuation of P4,000,000 1,000,000
Capital gain on direct sale to buyer of shares of stock of
domestic corporation 200,000
Interest on Philippine currency bank deposit 100,000
Business expenses 2,000,000
Net operating loss in 2017 250,000
Income taxes paid for the first three quarters of the year 150,000
Dividend declared and paid within the year 500,000
Appropriation of retained earnings for additional working
capital purposes 800,000
Retained earnings at the start of the year 900,000
Paid-in capital 1,000,000

The income tax still due and payable in 2018 is

a. 60,000
b. 75,000
c. 150,000
d. 225,000
ANS: B
SOL:
Improperly accumulated earnings tax: P51,000

REF: CRC Final Preboard October 2018 TOP: Income Tax Corporation
 8. A domestic corporation’s 2018 computed NCIT and MCIT and creditable income taxes withheld at
source and excess MCIT and excess withholding tax from prior year follow: :

NCIT P520,000
MCIT 550,000
Taxes withheld at source 125,000
Excess MCITR over NCIR (2 years ago) 30,000
Excess withholding income tax prior year 10,000
Quarterly income taxes paid 250,000

The income tax still due and payable at the end of the year is
a. 165,000
b. 135,000
c. 115,000
d. 105,000
ANS: A REF: CRC Final Preboard October 2018 TOP: Income Tax Corporation

9. Taxpayer is a domestic corporation:

Taxable income before income tax

Philippines P3,000,000
Foreign country 2,000,000
Quarterly income taxes paid, Philippines 400,000
Income tax paid, foreign country 800,000

How much is the income tax still due if the taxpayer is claiming a deduction for the foreign income
tax paid?
a. 500,000
b. 860,000
c. 1,260,000
d. 1,500,000
ANS: B
SOL:
How much is the income tax still due if the foreign income tax paid is claimed, instead, as tax
credit against the Philippine income tax due? P500,000

REF: CRC Final Preboard October 2018 TOP: Income Tax Corporation

10. Ruth Leslie is employed in Lab Corporation and is also a part-time real estate agent for a real
estate broker. In addition to the SMW of P180,000 she received from her employer, she likewise
received P75,000 as commission from her real estate dealings for the year 2018.

How much is the income tax due if she is under the 8% income tax regime?
a. 20,400
b. 6,000
c. 0
d. some other amount
 ANS: B
SOL:
Total income received P255,000
Less: Statutory minimum wage 180,000
Taxable income, commission 75,000
Tax due (P75,000 x 8%) P6,000

How much is the income tax due if she is under the graduated income tax regime?
Total income received P255,000
Less: Statutory minimum wage 180,000
Taxable income, commission 75,000
Tax due (first P250,000) Exempt

Taxpayer’s income as minimum wage earner does not exceed P250,000; hence, not subject to
income tax and the withholding tax.

Since taxpayer is a mixed income earner and has received income from other sources in addition to
her compensation income, the commission received during the taxable year is subject to income
tax and consequently, to withholding tax.

In his instance, if the taxpayer selected the graduated income tax regime, her commission income
is subject to income tax at 0% since it did not exceed P250,000 and she is also subject to business
tax. However, if she selected the 8% income tax regime, she is liable for income tax amounting to
P6,000, but this is in lieu of the graduated income tax and the percentage tax under Section 116 of
the Tax Code.

Likewise, minimum wage earners receiving other income from other sources in addition to
compensation income, such as income from other concurrent employers, from the conduct of trade,
business, or practice of profession, except income subject to final tax, are subject to income tax
only to the extent of income other than Statutory Minimum Wage, holiday pay, overtime pay, night
shift differential pay, and hazard pay earned during the taxable year.

REF: RESA Final Preboard October 2018 TOP: Income Tax Individuals

11. Mr. Cris Yabut owns a nightclub and videoke bar, with gross sales/receipts of P2,500,000 for the
period under consideration. His cost of sales and operating expenses are P1,000,000 and P600,000,
respectively and with non-operating income of P100,000.

How much is the business tax due from [Link]?

a. 750,000
b. 450,000
c. 375,000
d. 250,000
ANS: B
SOL:
Gross sales/receipts P2,500,000
Tax rate 18%
Amusement tax 450,000

REF: RESA First Preboard May 2019 TOP: Income Tax Individuals
12. A married resident citizen has 5 qualified dependent children. The following information pertains
to his income and expenses in the year 2018:

Salary, net of P20,000 withholding tax P380,000

Interest income, bank deposit BPI Manila 50,000
Yield from money market placement, State Investment House, Manila 30,000
Rent expense, apartment house 36,000
Health insurance premium paid 5,000

How much is the taxable compensation income?

a. 430,000
b. 400,000
c. None, exempt from tax
d. None of the choices
ANS: B
SOL:
Taxable income: P400,000

How much is the gross compensation income?

Gross compensation income (P380,000 +P20,000) = P400,000

REF: RESA Final Preboard October 2018 TOP: Income Tax Individuals

13. Mr Juan Jose, married, resident citizen with two qualified dependent children, has the following
data for the year 2018:

Salaries, net of P50,000 withholding tax P200,000

Tuition of children 10,000
Rent of apartment 24,000
Household expenses 60,000
Health and hospitalization insurance premium paid 3,400

How much is the taxable compensation income?

a. 250,000
b. 200,000
c. 147,600
d. 47,600
ANS: A
SOL:
Gross compensation income (P200,000 + P50,000) = P250,000
Under the TRAIN, personal exemptions and deduction for health and or hospitalization insurance
premium are no longer allowed.

How much is the optional standard deduction?

None. Pure compensation income earners are not allowed optional standard deduction.

REF: RESA Final Preboard October 2018 TOP: Income Tax Individuals
14. Mr. Cris Yabut owns a nightclub and videoke bar, with gross sales/receipts of P2,500,000 for the
period under consideration. His cost of sales and operating expenses are P1,000,000 and P600,000,
respectively and with non-operating income of P100,000.

How much is his taxable compensation income for 2018?

a. 3,100,000
b. 1,200,000
c. 1,110,000
d. 1,230,000
ANS: D
SOL:
Gross compensation income P1,200,000
Add: Taxable 13th month pay and other benefits (P120,000 - 30,000
P90,000)
Taxable compensation income P1,230,000

REF: RESA First Preboard May 2019 TOP: Income Tax Individuals

15. The gross estate of the decedent is P10,000,000. The total amount of funeral expenses incurred is
P230,000, where P20,000 is still unpaid. The funeral expenses incurred is in addition to the
memorial plan of the decedent amounted to P50,000.

How much is the deductible funeral expenses if the decedent dies on December 31, 2017?
a. 500,000
b. 280,000
c. 250,000
d. None of the choices
ANS: C
SOL:
Actual funeral expenses (P230,000 + P50,000) P280,000
Limit (5% x P10,000,000) 500,000
Allowed (lower) (maximum) P250,000

REF: RESA First Preboard May 2019 TOP: Estate Tax

16. The decedent is a non-resident citizen, unmarried head of family, with the following data (dies
May 14, 2017):

Real and personal properties (consisting of piece of land valued P1,000,000;

car valued at P300,000; pieces of jewelry valued at P500,000; claims of
P50,000 against insolvent debtors and bank deposit valued at P900,000 of
which P100,000 was transferred mortis causa to the government P2,700,000
Funeral expenses 200,000
Other deductions (includes claims against the estate amounting to P50,000) 1,000,000

The taxable net estate is:

a. 1,565,000
b. 1,415,000
c. 1,140,000
d. None of the choices
 ANS: C
Funeral expenses
Actual P200,000
Limit (P2,700,000 x 5%) 135,000 P135,000
Claims against insolvent person 50,000
Transfer to National Government 100,000
Other deductions 1,000,000
Total P1,285,000

Gross estate (real and personal property) P2,700,000

Less; Deductions (1,285,000)
Net estate before special deductions 1,415,000
Less: Standard deduction 1,000,000
Taxable net estate P415,000

REF: RESA First Preboard May 2019 TOP: Estate Tax

17. The gross estate of the decedent is P5,000,000. The total amount of funeral expenses incurred is
P130,000, where P20,000 is still unpaid. The funeral expenses incurred is in addition to the
memorial plan of the decedent amounted to P50,000.

Suppose the decedent dies on January 1, 2018, how much is the deductible funeral expenses?
a. 200,000
b. 180,000
c. 150,000
d. None of the choices
ANS: D
Funeral expenses are no longer deductible per TRAIN Law.

REF: RESA First Preboard October 2018 TOP: Estate Tax

18. The decedent, resident alien, is a married man with a surviving spouse with the following data dies
on June 1, 2018:

Conjugal real properties (including a piece of land valued at

P500,000 transferred inter vivos) P15,500,000
Family home 10,000,000
Exclusive properties 2,000,000
Exclusive deductions 1,000,000
Conjugal ordinary deductions
Funeral expenses P200,000
Judicial expenses 500,000
Other deductions 1,500,000 2,200,000
Medical expenses 700,000

The family home is exclusive property. The estate tax due is:
a. 570,000
b. 195,000
c. 165,000
d. None of the choices
 ANS: C
Exclusive Conjugal Total
Gross estate P12,000,000 P15,000,000 P27,000,000
Less: Deductions (1,000,000) (1,500,000) 2,500,000
Net estate before special deductions P11,000,000 P13,500,000 P24,500,000
Less: Special deductions
Family home deduction (10,000,000)
Standard deduction (5,000,000)
Net estate before share of surviving spouse 9,500,000
Less: Share of surviving spouse (1/2 x
P13,500,000) 6,750,000
Taxable net estate P2,750,000
Estate tax due (6%) P165,000

REF: RESA First Preboard October 2018 TOP: Estate Tax

19. The decedent is a married man with a surviving spouse, died on February 4, 2018. The estate
presented the following data:

Conjugal real and personal properties P14,000,000

Exclusive family home 30,000,000
Conjugal ordinary deductions 2,000,000

The taxable net estate is:

a. 42,000,000
b. 32,000,000
c. 27,000,000
d. 21,000,000
ANS: D
Exclusive Conjugal Total
Gross estate P30,000,000 P14,000,000 P27,000,000
Less: Deductions - (2,000,000) 2,500,000
Net estate before special deductions P30,000,000 P12,000,000 P24,500,000
Less: Special deductions
Family home deduction 30,000,000 (10,000,000)
Maximum 10,000,000 (10,000,000)
Standard deduction (5,000,000)
Net estate before share of surviving spouse 27,000,000
Less: Share of surviving spouse (1/2 x
P12,000,000) (6,000,000)
Taxable net estate P21,000,000

REF: RESA Final Preboard October 2018 TOP: Estate Tax

20. Art Angeles, single resident citizen, died in the city of Makati on March 16, 2018, leaving the
following:

Net estate, Philippines P300,000

Net estate, Country A 150,000
Estate tax paid, Country A 8,200
Net estate, Country B 100,000
Estate tax paid, Country B 4,600
Net estate, Country C 250,000
Estate tax paid, Country C 16,250

How much is the estate tax payable?

a. 39,000
b. 24,101
c. 20,200
d. None of the choices
ANS: C
Net estate, Philippines P300,000
Net estate, Country A 150,000
Net estate, Country B 100,000
Net estate, Country C 250,000
Taxable net estate P800,000
Tax due (P800,000 x 6%) P48,000
Less: Tax credit for foreign estate taxes (27,800)
Tax payable P20,200

Limit Actual Allowed

Limit A: By country
A: 150,000/800,000 x P48,000 P9,000 P8,200 P8,200
B: 100,000/800,000 x 48,000 6,000 4,600 4,600
C: 250,000/800,000 x 48,000 15,000 16,250 15,000
P27,800
Limit B: By total
500,000/800,000 x 48,000 30,000 29,050 29,050

Allowed (lower) P27,800

How much is the estate tax payable assuming the decedent a non-resident alien?
Net estate, Philippines P300,000
Tax rate 6%
Estate tax payable 18,000

REF: RESA First Preboard October 2018 TOP: Estate Tax

21. Don Pepe, single, but head of the family, Filipino and resident of Manila died intestate on
November 1, 2018. He left the following properties and interests:

House and lot (family home) in Manila P800,000

Vacation house in New York City 5,500,000
Commercial land in Manila donated by his father in 2012 2,000,000
Toyota car in Manila being used by his fiancee 500,000
Proceeds of life insurance where the beneficiary is his fiancee
(revocable) 1,000,000
Furniture and appliances in Manila house 1,000,000
Claims against an insolvency person (Filipino resident) whose
assets total P10,000 and whose liabilities total P100,000 100,000
Shares of stock in XYZ Corporation (domestic) with fair market 100,000
value of
Funeral expenses 250,000
Unpaid real property taxes 600,000
Medical expenses of last illness 800,000
Claims against the estate 310,000

What is the taxable net estate and the estate tax due?
a. P2,000,000 and P120,000
b. P3,890,000 and P233,400
c. P4,200,000 and P252,000
d. P4,790, 0000 and P272,400
ANS: C REF: CRC First Preboard May 2019 TOP: Estate Tax

22.
Revocable transfer FMV, Date of Death FMV, Date Consideration
of Transfer received
Land P5,200,000 P4,000,000 P3,000,000
Automobile - 1,000,000 1,500,000
Shares of stock 200,000 500,000 400,000
Bond certificates 400,000 300,000 350,000
Transfer under power of appointment
Farm land, limited power 1,300,000 1,500,000 -
Land and building, general power 1,800,000 2,000,000 1,000,000

Additional gross estate (if still any) is:

a. 0
b. 3,000,000
c. 3,500,000
d. 4,300,000
ANS: B REF: CRC First Preboard May 2019 TOP: Estate Tax
23. The records pertinent to same properties of a resident citizen, who died on February 14, 2018,
reveal the following information:

Date acquired Fair market value on Fair market value

date acquired 2/14/2018
Land (inherited) 2/1/2017 P500,000 P700,000
Car (donated) 12/25/2014 300,000 200,000
Jewelry (inherited) 1/1/2013 100,000 150,000

The car donated to the decedent was mortgaged by the donor for P60,000 which was paid by the
decedent before he died. The gross estate of the decedent amounted to P10 million while total of
deductible losses, indebtedness, taxes, and donation to the Government for public purposes
amounted to P2 million.

The vanishing deduction is

a. 360,000
b. 364,800
c. 380,800
d. 524,800
ANS: B REF: CRC First Preboard May 2019 TOP: Estate Tax

24. Pepe and daughter Mocha died in an accident. Judith, the wife and mother died one day after the
death of Pepe and daughter Mocha. The following were their properties in the Philippines:

1. Judith, exclusive properties of P5,000,000.

2. Pepe and Judith, community properties of P19,300,000.
3. Mocha, exclusive properties of P1,200,000.

The taxable net estate of Mocha was

a. 4,650,000
b. 1,025,000
c. 4,325,000
d. 700,000
ANS: B REF: CRC Final Preboard October 2018 TOP: Estate Tax

25. Decedent was a citizen of the Philippines:

Property no. 1, inherited from father 1.5 years ago

Fair market value when inherited P500,000
Fair market value of death 350,000
Mortgage on the property when inherited 80,000
Mortgage on the property paid by decedent 30,000

Property no. 2, received as gift from mother 3.5 years ago:

Fair market value when received 400,000
Fair market value at death 450,000

Gross estate which includes the properties above 6,000,000

Ordinary deductions 450,000

The vanishing deduction is:

 a. 370,000
b. 384,800
c. 499,500
d. 573,500
ANS: B REF: CRC Final Preboard October 2018 TOP: Estate Tax

26. Decedent was a citizen of the Philippines:

Exclusive properties P4,000,000

Conjugal properties including P200,000 GSIS retirement 6,200,000
benefit
Funeral expenses 350,000
Judicial expenses within one year from death 300,000
Claims against the estate 400,000
Judicial expenses beyond one year from death 250,000

The estate tax due and payable is:

a. 108,000
b. 114,000
c. 276,000
d. 408,000
ANS: A REF: CRC Final Preboard October 2018 TOP: Estate Tax

27. The decedent was married at the time of death.

Cash owned before the marriage P10,000,000

Real property inherited during the marriage 12,000,000
Personal property by the wife received as gift before the marriage 800,000
Property acquired with cash owned before the marriage 1,200,000
Clothes of the decedent purchased with the exclusive money of the wife 1,000,000
Jewelry purchased with exclusive cash 2,000,000
Property unidentified when and by whom acquired 2,400,000
Cash income during the marriage 4,000,000

The gross estate under the system of conjugal partnership of gains is:
a. 33,400,000
b. 32,600,000
c. 31,600,000
d. 33,400,000
ANS: C
The gross estate under the system of absolute community of property is: P33,400,000

TOP: Estate Tax

28. Dina Cabangon, a citizen of the Philippines and US resident, and under the system of conjugal
partnership of gains, died in the US and was shipped to and buried in the Philippines. She had the
following data:

Real property in the Philippines (inherited 3.5 years with a fair market
value of P9,000,000 when inherited) P11,000,000
Real property in the US, used as family home 13,000,000
Tangible personal properties in the Philippines 200,000
Tangible personal properties in the US 700,000
Funeral expenses in the US 110,000
Funeral expenses in the Philippines 110,000
Unpaid obligations 600,000
Claim against an insolvent person in the Philippines 100,000

The taxable net estate is:

a. 0
b. 2,650,000
c. 4,150,800
d. 9,150,800
ANS: A TOP: Estate Tax

29. A non resident alien, married, died October 7, 2018. He left the following:

Conjugal properties:
Philippines P3,000,000
Foreign country 4,000,000
Exclusive properties:
Philippines 2,000,000
Foreign country 1,000,000
Deductions:
Actual funeral expenses 100,000
Judicial expenses 300,000
Claims against the conjugal estate 500,000
Claims against the exclusive estate 150,000
Transfer for public use 200,000
Medical expenses 600,000
Losses (part of exclusive properties in the Philippines) 100,000

Included in the Philippines conjugal gross estate above were the following:
Domestic shares P600,000
Share in a partnership 300,000
Other tangible personal properties 2,100,000

The Philippines exclusive properties were all tangible personal properties. These included a car
which was inherited 3.5 years before the present decedent’s death and had a fair market value of
P400,000. The foreign country where the decedent was a citizen and a resident at the time of his
death did not impose transfer taxes of any character on the intangible personal properties of
Filipinos not residing.
 The Philippines estate tax due and payable is:
a. 177,138
b. 150,288
c. 145,752
d. 120,288
ANS: A TOP: Estate Tax

30. SK Litton, Filipino, has one year more to reach the compulsory retirement age of 65 years old as
an employee of a private firm. Unfortunately, he met a fatal vehicular accident that caused his
instantaneous death. He is survived by his wife and received P1,000,000 from SK Litton’s
employer as benefit under RA 4917.

The amount that must be included in the gross estate:

a. Non, exempt
b. 250,000
c. 500,000
d. 1,000,000
ANS: C TOP: Estate Tax

31. On March 1, 2018, Ms. Samira Aquino donated a piece of land to her best friend, Mar Roxas. She
also donated to a non-profit religious organization. The donation to her friend was a piece of land
which had an assessed value of P1,000,000 and zonal value of P800,000 at the time of donation.
The donations to a non-profit religious organization were cash amounting to P200,000 and an
automobile with a purchase of P700,000. The piece of land was encumbered with an unpaid
mortgage of P300,000 which was not assumed by the donee. In addition, the donee agreed to pay
the applicable donor’s tax of P210,000.

How much was the donor’s tax due?

a. 114,000
b. 60,000
c. 45,000
d. None of the choices
ANS: C

Gross gifts P1,900,000

Less: Deductions 900,000
Taxable net gifts 1,000,000
Donor’s tax due 250,000 Exempt
750,000 x 6% 45,000 P45,000

How much is the value of the gross gifts?

Piece of land, assessed value (higher) P1,000,000
Automobile (purchase price) 700,000
Cash 200,000
Total gross gifts P1,900,000

While the transfer to a non-profit religious organization is an exempt transfer, there is a need to
declare it as part of the gross gifts for verification by the BIR that not more than 30% of the
donation shall be used by the donee for administrative purpose.
 How much was the total deductions?
Gifts to a non-profit religious organization (P200,000 + P700,000) = P900,000

How much were the taxable net gifts?

Taxable net gifts P1,000,000
Tax rate 30%
Donor’s tax P300,000

REF: RESA First Preboard May 2019 TOP: Donors Tax

32. On March 1, 2018, Mr. Pantaleon donated a piece of land to his best friend, German. He also
donated to a non-profit religious organization. The donation to his friend was a piece of land which
had an assessed value of P1,000,000 and zonal value of P800,000 at the time of donation. The
donations to a non-profit religious organization were cash amounting to P200,000 and an
automobile with a purchase price of P700,000. The piece of land was encumbered with an unpaid
mortgage of P300,000 which was assumed by the donee. In addition, the donee agreed to pay the
applicable donor’s tax of P210,000.

How much is the donor’s tax due?

a. 210,000
b. 42,000
c. 27,000
d. None of the choices
ANS: C

Gross gifts P1,900,000

Less: Deductions 1,200,000
Taxable net gifts 700,000
Donor’s tax due 250,000 Exempt
450,000 27,000 P27,000

REF: RESA First Preboard October 2018 TOP: Donors Tax

33. LA Corporation donated P1,000,000 to a government agency which was created to generate profit
to the government. The agency’s total expenses amounted to P15,000,000, 30% of which were for
administrative purposes? How much was the exempt gift?
a. 4,500,000
b. 3,000,000
c. 1,000,000
d. none of the choices
ANS: D
Gifts made to or for the use of the National Government or any entity created by any of its
agencies which is not conducted for profit, or to any political subdivision of the said Government
shall be exempt gifts.

REF: RESA Final Preboard October 2018 TOP: Donors Tax

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

Donations on account of marriage:

To legitimate son P100,000
To a legitimate daughter and her husband-to-be, on account of 15,000
marriage
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 20,000

The deductions from gross gift is:

a. 67,500
b. 60,000
c. 57,500
d. 20,000
ANS: D
Donation to charitable institution: P20,000

REF: RESA Final Preboard October 2018 TOP: Donors Tax

35. On January 15, 2018, Daisy gave a piece of land to her brother-in-law who is getting married on
February 14, 2018. The assessed value and zonal value of the land were P750,000 and P1,000,000,
respectively. The land had an unpaid mortgage of P200,000, which was not assumed by the donee
and an unpaid realty tax of P10,000 which was assumed by the donee.

How much was the donor’s tax due?

a. 297,000
b. 237,000
c. 44,400
d. 31,400
ANS: C
Gross gift P1,000,000
Less: Unpaid realty tax assumed by donee 10,000
Taxable net gifts P990,000
Tax due 250,000 Exempt
740,000 x 6% P44,400

What value shall be reflected in the gross gift?

Zonal value is P1,000,000.

How much shall be the total deductions?

Unpaid realty tax assumed by the donee is P10,000

REF: RESA Final Preboard October 2018 TOP: Donors Tax

36. Sir Bigay made the following donations for the year 2018 as follows:

January To his son amounting to P250,000

February To an officemate P30,000
March To his daughter who got married in the month P60,000; and to his daughter in
law P40,000.

How much is the donor’s tax for the month of March?

a. 6,000
b. 7,800
c. 9,000
d. 14,000
ANS: A
How much is the donor’s tax for the month of January? Exempt

How much is the donor’s tax for the month of February? P1,800

REF: CRC First Preboard May 2019 TOP: Donors Tax

37. Mr. Regalo made donations for calendar year 2018 as follow:

Feb To a legitimate daughter who got married on valentine’s day amounting to

P350,000.
July To legitimate son’s birthday celebration amounting to P450,000
To the National Government cash of P100,000

The donor’s tax due for the month of August 2019 is?
a. 19,500
b. 13,500
c. 12,900
d. Exempt
ANS: D
How much is the donor’s tax for the month of February? P6,000

How much is the donor’s tax for the month of July? P27,000

Compute the donor’s tax due for the month of July if the gift given to the son was split into two:
P225,000 in July and P225,000 in August 2019? P13,500

REF: CRC First Preboard May 2019 TOP: Donors Tax

38. Donations by a citizen and resident of the Philippines in 2018, as follows:

To Pipoy, of property in the Philippines P200,000

To Pipay, of property outside the Philippines 300,000

There was a foreign donor’s tax payment on the donation of property located outside the
Philippines of P10,000.

The donor’s tax due in the Philippines after credit for the foreign donor’s tax paid is:
a. 5,000
b. 6,000
c. 9,000
d. 12,000
ANS: B REF: CRC Final Preboard October 2018 TOP: Donors Tax

39. A resident donor gave the following donations in 2018:

January 24 Land located in the Philippines valued at P2,000,000 to her uncle subject to
the condition that the latter will pay the donor’s tax due and unpaid
mortgage amounting to P500,000.
November 30 Building in the USA valued at P4,500,000 to her sister. Donor’s tax paid in
the USA was P260,000.

The donor’s tax due on the January 24 donation is

a. 75,000
b. 90,000
c. 105,000
d. 120,000
ANS: D
The donor’s tax due on the November 30 donation after tax credit on foreign donor’s tax paid is:
P10,000

TOP: Donors Tax

40. Donation of properties with fair market values as follows:

Land in Hongkong P1,000,000

Land and building in the Philippines 1,500,000
Shares of stock of a domestic corporation 500,000
Shares of stock of a foreign corporation 400,000
Transfer inter vivos of property in the country of the
transferor: consideration received, P90,000; fair market
value of property at the time of transfer 200,000
Cancellation of indebtedness of a resident of the country
where the transferor resides, as an act of liberality 20,000
Receivable from a friend (residing in the same country 50,000
as that of the donor)
 The gross gifts if the donor’s is a citizen or resident of the Philippines
a. 2,080,000
b. 2,580,000
c. 3,580,000
d. 3,670,000
ANS: D
The gross gifts if the donor is a non-resident, not citizen of the Philippines: P2,900,000

The gross gifts if the donor is a non-resident, not citizen of the Philippines, and the reciprocity
clause of the estate tax law applies: P2,000,000

TOP: Donors Tax

41. A stockholder of a closely held corporation owns 100,000 shares before the IPO. The cost of the
share is P1,000,000. During the IPO, the shares are selling at P12 per share. His broker friend
advises him not to sell his shares during the IPO but instead wait until after the IPO. After the IPO,
the outstanding shares of the closely held corporation are 1,000,000 shares and are now selling at
P14 per share at the local stock exchange.

The stockholder of the closely held corporation approaches you to seek your advice because he is
also planning to sell the shares directly to his friend and, therefore, not traded through the local
stock exchange at P15 per share.

How much is the percentage tax if he sells his shares during the IPO on January 2, 2018?
a. 48,000
b. 36,000
c. 12,000
d. none of the choices
ANS: A
Gross selling price (100,000 shares x P12) P1,200,000
Tax rate 4%
Stock transaction tax 48,000
Ratio = (100,000 shares/1,000,000 shares) 10%

How much is the percentage tax if he sells the shares after the IPO on January 2, 2018?
Gross selling price (100,000 shares x P14) P1,400,000
Tax rate .006%
Stock transaction tax P8,400

REF: RESA First Preboard May 2019 TOP: Other taxes

42. A proprietor of bowling alleys has the following gross receipts during the month of July 2018

Gross receipts from bowling operation P2,000,000

Gross receipts from sale of food and drinks inside the bowling alley 1,000,000
Gross receipts from rental of stalls inside the bowling alley 500,000
 How much is the amusement tax?
a. 1,050,000
b. 630,000
c. 525,000
d. None of the choices
ANS: D
Operators of bowling alleys are not subject to amusement taxes.

REF: RESA First Preboard May 2019 TOP: Other taxes

43. Tamayo Telephone Co. has the following data for the first quarter of 2018:

Payments for overseas calls originating from the Philippines made by

the Philippine government P500,000
Payments fro personal overseas calls originating from the Philippines
(individual callers) 800,000
Payments fro business overseas calls originating from the Philippines
(individual callers) 600,000

The overseas communications tax shall be:

a. 190,000
b. 140,000
c. 60,000
d. None of the choices
ANS: B
Payments for personal overseas calls originating from the Philippines
(individual callers) P800,000
Payments for business overseas calls originating from the Philippines
(individual callers) 600,000
Total 1,400,000
Rate 10%
Overseas communications tax P140,000

Assuming the calls are all domestic or local, how much is the output tax if any?
Payments for calls by the Philippine government P500,000
Payments for personal domestic calls by individual callers 800,000
Payments for business domestic calls by individual callers 600,000
Gross receipts 1,900,000
Tax rate 12%
Output VAT P228,000

REF: RESA First Preboard October 2018 TOP: Other taxes

44. A franchise grantee of water utilities has the following gross receipts for the first quarter of the
current year:

Gross receipts, sale of water P3,500,000

Gross receipts, rent of office spaces 3,500,000
Expenses, sale of water 1,000,000
Expenses, rent of office spaces 500,000

How much is the business tax of the same of water?

a. 105,000
b. 70,000
c. 50,000
d. None of the choices
ANS: B
Gross receipts, sale of water P3,500,000
Tax rate 2%
Franchise tax P70,000

How much is the business tax on the rent of office spaces, assuming the taxpayer is not
VAT-registered?
Gross receipts, rent of office spaces P3,500,000
Tax rate 12%
Franchise tax P420,000

If the taxpayer is a concessionaire of a franchise grantee of water utilities, not VAT-registered,

how much is the business tax, if any?
Gross receipts, sale of water P3,500,000
Gross receipts, rent of office spaces 3,500,000
Total gross receipts P7,000,000
Tax rate 12%
VAT P840,000

REF: RESA First Preboard May 2019 TOP: Other taxes

45. A domestic common carrier has the following data on gross receipts and expenses for the first
quarter of 2018::

Gross receipts, sale of water P3,500,000

Gross receipts, rent of office spaces 3,500,000
Expenses, sale of water 1,000,000
Expenses, rent of office spaces 500,000

How much is the business tax if it is a domestic common carrier by land?

a. 90,000
b. 45,000
c. 37,350
d. None of the choices
ANS: B
Gross receipts, sale of water P3,500,000
Tax rate 2%
Franchise tax P70,000
 How much is the business tax if it is a domestic common carrier by water, VAT-registered?
Gross receipts, rent of office spaces P3,500,000
Tax rate 12%
Franchise tax P420,000

How much is the business tax if it is a domestic common carrier by air, not VAT-registered.?
Gross receipts, sale of water P3,500,000
Gross receipts, rent of office spaces 3,500,000
Total gross receipts P7,000,000
Tax rate 12%
VAT P840,000

REF: RESA First Preboard May 2019 TOP: Other taxes

46. A domestic common carrier has the following data on gross receipts and expenses for the first
quarter of 2018::

Gross receipts, sale of water P3,500,000

Gross receipts, rent of office spaces 3,500,000
Expenses, sale of water 1,000,000
Expenses, rent of office spaces 500,000

How much is the business tax if it is a domestic common carrier by land?

a. 90,000
b. 45,000
c. 37,350
d. None of the choices
ANS: B
Gross receipts, sale of water P3,500,000
Tax rate 2%
Franchise tax P70,000

How much is the business tax if it is a domestic common carrier by water, VAT-registered?
Gross receipts, rent of office spaces P3,500,000
Tax rate 12%
Franchise tax P420,000

How much is the business tax if it is a domestic common carrier by air, not VAT-registered.?
Gross receipts, sale of water P3,500,000
Gross receipts, rent of office spaces 3,500,000
Total gross receipts P7,000,000
Tax rate 12%
VAT P840,000

REF: RESA First Preboard May 2019 TOP: Other taxes

47. A domestic common carrier has the following data on gross receipts and expenses for the first
quarter of 2018::

Transport of passengers P1,500,000

Transport of goods and cargoes 1,500,000
Expenses, transport of passengers 300,000
Expenses, transport of goods and cargoes 500,000

How much is the business tax if it is a domestic common carrier by water, VAT-registered?
a. 90,000
b. 45,000
c. 37,350
d. None of the choices
ANS: D
Transport of passengers, goods and cargo P3,000,000
Tax rate 12%
Percentage tax on VAT-exempt person (Section 116) P360,000

How much is the business tax if it is a domestic common carrier by land?

Transport of passengers P1,500,000
Tax rate 3%
Common carrier’s tax P45,000

How much is the business tax if it is a domestic common carrier by air, not VAT-registered?
Transport of passengers, goods and cargo P3,500,000
Tax rate 3%
Percentage tax on VAT exempt person (Section 116) P90,000

REF: RESA First Preboard May 2019 TOP: Other taxes

48. A taxpayer is engaged in VAT-subject transactions but his annual gross sales do not exceed the
VAT threshold. Hence, he did not register under VAT system. However, during the current year,
his quarterly gross sales follow:

First quarter P1,000,000

Second quarter 1,000,000
Third quarter 1,000,000
Fourth quarter 1,000,000

How much is the percentage tax due?

a. 480,000
b. 120,000
c. 90,000
d. None of the choices
ANS: C
First quarter P1,000,000
Second quarter 1,000,000
Third quarter 1,000,000
Total gross sales 3,000,000
Tax rate 3%
Percentage tax P90,000
 REF: RESA First Preboard October 2018 TOP: Other taxes

49. The Anong Pizza, VAT-registered issued the following official receipt to a customer who was with
a senior citizen:

Ordered by a senior citizen:

Parma pizza P880
Mango basi 80 P1,060

Ordered by the non-senior citizen:

House salad 420
Beef rendang 590
Avocado smoothie 190 1,200

Total sales (VAT inclusive) P2,260

How much is the total amount due:

a. 2,260
b. 2,140
c. 2,017.85
d. None of the choices
ANS: B
Total sales (VAT inclusive) P2,260
Less:
Sales discount P189.28
VAT included on VAT exempt sale 113.57 302.85
Net sales P1,957.15
182.85
P2,140

Total sales (VAT inclusive) P2,260

Less: VAT (P2,260 x 12/12) 242.14
Total sales before VAT 2,017.86
Less: Sales discount to senior citizen 189.29
Net sales P1,828.57
Service charge rate 10%
Service charge P182.85

How much is the VAT exempt sale?

Parma pizza P980
Mango basil 180
Total VAT exempt sales P1,050
Less: VAT included in the VAT exempt sale (P1,060 x 113.57
12/112)
VAT exempt sales P946.43

How much is the sales discount for senior citizen?

VAT-exempt sale P946.43
Mango basil 20%
VAT exempt sales P189.29

REF: RESA First Preboard May 2019 TOP: VAT

50. In 2018, Romy Tana has the following transactions:

Gross receipts, trucking business P3,800,000

Gross receipts, lease of residential units (monthly rental is
P15,000 per unit) 3,500,000
Gross receipts, practice of accountancy 1,000,000
Sale of 4 residential lots at P1,500,000 each to 4 individual buyers 6,000,000
Sale of 3 parking spaces at P500,000 each 1,500,000

How much is the total VAT subject amount, assuming the taxpayer is VAT registered?
a. 14,300,000
b. 13,300,000
c. 6,500,000
d. None of the choices
ANS: C
Gross receipts, trucking business P3,800,000
Gross receipts, practice of accountancy 1,000,000
Sale of 3 parking spaces at P500,000 each 1,500,000
VATable gross amount P6,500,000

How much is the VAT exempt gross receipts, assuming the taxpayer is VAT registered?
Gross receipts, lease of residential units (monthly rental is
P15,000 per unit) P3,500,000
Sale of 4 residential lots at P1,500,000 each to 4 individual 6,000,000
buyers
VAT exempt gross amount P9,500,000

REF: RESA First Preboard May 2019 TOP: VAT

51. Hotel California, VAT-registered, offers different services to its guests. The following data taken
from the books of the taxpayer are for the first quarter of 2018:

Revenues Collections
Hotel rooms (local guests) P800,000 P700,000
Dining hall:
Sale of food and refreshments 1,000,000 850,000
Sale of wine, beer and liquor 700,000 600,000
Disco:
Sale of food and refreshments 600,000 550,000
Sale of wine, beer and liquor 500,000 450,000

How much is the output tax for the first quarter of 2018 using 12% VAT rate?
a. 432,000
b. 378,000
c. 258,000
d. None of the choices
 ANS: C
Collections, hotel rooms P700,000
Collections:
Sale of food and refreshments, dining hall 850,000
Sale of wine, beer and liquor, dining hall 600,000
Gross receipts P2,150,000
Tax rate 12%
VAT P258,000

How much is the tax base for VAT purposes?

Collections, hotel rooms P700,000
Collections:
Sale of food and refreshments, dining hall 850,000
Sale of wine, beer and liquor, dining hall 600,000
Gross receipts P2,150,000

REF: RESA First Preboard May 2019 TOP: VAT

52. Sweet Tooth Inc manufactures refined sugar. The following selected data are taken from its books:

Sale of refined sugar, net of VAT P2,000,000

Purchase of sugar cane from farmers 500,000
Purchases of packaging materials, gross of VAT 784,000
Purchase of labels, gross of VAT 112,000
Advance payment of VAT before release from refinery 60,000

How much is the VAT payable using 12% VAT rate?

a. 124,000
b. 84,000
c. 64,000
d. 20,000
ANS: C
Output tax (P2,000,000 x 12%) P240,000
Less: input taxes
Presumptive input tax on sugar cane P20,000 850,000
(P500,000 x 4%)
On packaging materials (P784,000 x 12/112) 84,000
On labels (P112,000 x 12/112) 12,000 (116,000)
VAT payable 124,000
Less: Tax payments/credits
Advance VAT paid (60,000)
Tax payable P64,000

How much is the presumptive input tax, if any?

Presumptive tax on sugar cane is P500,000 x 4% = P20,000

How much are the total input taxes?

Presumptive input tax on sugar cane P20,000
Passed-on VAT on packaging materials (784,000 x 12/112) 84,000
Passed-on VAT on labels (112,000 x 12/112) 12,000
Total input taxes P116,000
 REF: RESA Final Preboard October 2018 TOP: VAT

53. Ube Paspas Bus is a common carrier by land. It is VAT-registered. During month of February
2017, it has the following gross receipts:

Transport of passengers P1,000,000

Transport of goods 1,500,000
Transport of cargoes 500,000

How much is the VAT payable?

a. 360,000
b. 240,000
c. 120,000
d. 30,000
ANS: B
Gross receipts (transport of goods) P1,500,000
Gross receipts (transport of cargoes) 500,000
Total 2,000,000
Tax rate 12%
VAT P240,000

How much is the common carriers’ tax payable?

Gross receipts (transport of passengers) P1,000,000
Tax rate 3%
Common carrier’s tax P30,000

REF: RESA Final Preboard October 2018 TOP: VAT

54. A VAT registered taxpayer

Accounts receivable, beginning P100,000

Accounts receivable, ending 140,000
Inventory, beginning 50,000
Inventory, ending 65,000
Purchases 90,000
Sales 250,000
Purchase discount 5,000
Sales return 10,000
Collections 200,000
Cost of sales 70,000

How much is the input tax?

a. 0
b. 10,200
c. 10,800
d. 8,400
ANS: B
How much is VATable sales? P240,000

How much is output tax? P28,800

REF: CRC First Preboard May 2019 TOP: VAT

55. The following events happened in a VAT enterprise:

June Performance of service

July Received invoice in the amount of P112,000
August Paid the services

When and how much input VAT can be claimed?

a. July, P12,000
b. July, P13,400
c. August, P12,000
d. August, P13,440
ANS: C REF: CRC First Preboard May 2019 TOP: VAT

56. Viva Corporation has the following sales (total invoice) during a month:

Sales to private entities P224,000

Sales to export-oriented enterprise 100,000
Sale of exempt goods 100,000

The following input taxes were passed - on by its VAT-registered suppliers during the month:
Input tax on taxable goods P5,000
Input tax on zero-rated sales 3,000
Input tax on sale of exempt goods 2,000
Input tax on depreciable capital goods not attributable to any
particular activity 20,000

The VAT payable for the month is:

a. 1,000
b. 7,200
c. 9,000
d. 16,000
ANS: A REF: CRC First Preboard May 2019 TOP: VAT

57. The following data taken from a VAT-registered entity, inclusive of VAT:

Sales to government P112,000

Regular sales 350,000
Zero-rated sales 250,000
Exempt sales 87,500
Purchases 532,000

How much VAT is charged to expenses:

a. 6,650
b. 7,250
c. 14,250
d. 33,250
ANS: B
How much is the output VAT? P49,500

How much is the actual input VAT? P57,000

 How much of the actual input VAT can actually be claimed as input tax credit against the output
VAT? P49,750

How much is the final withholding VAT? P5,000

REF: CRC First Preboard May 2019 TOP: VAT

58. A VAT registered construction materials supplier is the winning bidder to exclusively supply
construction materials for the construction of a common terminal in Baguio City. For the month, it
has the following data, VAT exclusive:

Sales, net P112,000

Purchase of merchandise 350,000
Purchase of delivery equipment, 5 year life 250,000
PLDT bill 30,000

What if the buyer of the construction materials is non-government entity. How much will be the
VAT payable for the month?
a. 0
b. 32,400
c. 36,000
d. 38,400
ANS: C
How much can the local government of Baguio City withhold as VAT from its payment to the
VAT-registered construction materials supplier? P20,000

REF: CRC First Preboard May 2019 TOP: VAT

59. Lola Bertol, 65 years old, grandmother, was treated by her grandchildren Luz, Vi and Minda to
max’s restaurant during grandparents day and their total bill is P2,240.

How much is the VAT?

a. 60
b. 100
c. 180
d. 240
ANS: C
How much is the discount of the senior citizen? P160

If the seller is non-VAT enterprise, how much is the discount of the senior citizen? P112

REF: CRC First Preboard May 2019 TOP: VAT

60. How much will a senior citizen pay for a meal he took from a VAT-registered restaurant?

Gross receipt (VAT included): P280,000

a. 200
b. 224
c. 250
d. 280
ANS: A REF: CRC Final Preboard October 2018 TOP: VAT
61. Ajinomoto, a Japanese residing in the Philippines, bought garments from a domestic corporation
and immediately exported them to Japan. Total value of export is P280,000. The VAT output tax
on the transaction is
a. 30,000
b. 33,600
c. None, because 0% VAT rate applies
d. None, because the transaction is exempt from VAT
ANS: D REF: CRC Final Preboard October 2018 TOP: VAT

62. The taxpayer is a VAT seller of goods. Data, VAT not included, for a month follow

Gross sales, less sales discounts and sales returns and allowances P900,000
Purchases of goods from:
VAT registered taxpayers 180,000
Non VAT taxpayers 40,000
Billing for purchase of service from
VAT registered taxpayer 20,000
Payment for purchases of supplies from
VAT registered taxpayer 48,000
Salaries of employees 80,000
Payment to Manila Waters Corporation 50,000
Other operating expenses 160,000

The VAT payable for the month is

a. 67,440
b. 72,240
c. 78,240
d. 80,640
ANS: D REF: CRC Final Preboard October 2018 TOP: VAT

63. A sales invoice prepared by a VAT-registered taxpayer showed the following details:

Selling price P200,000

VAT 18,400
Total P218,400

The output tax that should be in the books of accounts that goes into the computation of the VAT
payable is
a. 18,400
b. 23,400
c. 24,000
d. 26,208
ANS: B TOP: VAT
64. The taxpayer is a VAT registered owner of an eatery place. Data on a certain gross receipts
follows:

Foods P3,360
Beverages 420
Service charge 378
City tax 54.60

What shall the OR show?

a. 4,617.60
b. 4,658.10
c. 4,666.20
d. 4,711.56
ANS: C
How much is the output tax on the sale? P445.50

TOP: VAT

65. A VAT registered medical practitioner received P97,000 from a retainer medium-sized
establishment for professional services rendered. The physician’s expected annual gross income
has always been more than P720,000. The output tax included in the OR issued is
a. 10,714
b. 11,412
c. 11,640
d. 12,000
ANS: C TOP: VAT

66. A PEZA-registered enterprise under a special tax regime engaged as an export enterprise provided
you with the following information for the taxable year 2018:

Export sales P40,000,000

Direct costs 20,000,000
Administrative expenses 5,000,000
Marketing expenses 2,500,000
Other operating expenses 1,200,000
Incidental losses 400,000

How much is the tax due to the city or municipality where the enterprise is located.
a. 1,000,000
b. 600,000
c. 400,000
d. none of the choices
ANS: C
Export sales P40,000,000
Less: Direct costs 20,000,000
Gross income 20,000,000
Tax rate 5%
Tax due P1,000,000
Due to the National Government (3/5 x 1,000,000) P600,000
Due to the Local Government (2/5 x 1,000,000) P400,000
 REF: RESA Final Preboard October 2018 TOP: Other taxes

67. Bikes Are Us, an importer of bicycle from USA, imported 10 racing bikes. The importer agreed to
pay $10,000 for the shipment. The amount was exclusive of $400 freight cost and $200 insurance
packed ready for the Philippines. No selling commission, assist or royalty or limitation was
imposed on the Biked Are Us as buyer. Assuming a forex rate of P50:$1 and a 15% rate of
customs duty, how much is the customs duty on the importation?
a. 79,500
b. 78,000
c. 75,000
d. none of the choice
ANS: A
Agreed price $10,000
Add: Freight cost 400
Insurance 200
Total $10,600
Multiplied by 50
Total in Philippine pesos P530,000
Multiplied by rate of customs duty 15%
Customs duty P79,500

REF: RESA Final Preboard October 2018 TOP: Other taxes

68. Gross receipts of a common carrier: P280,000

What is the percentage tax or VAT to be paid if common carrier by land transporting people.
a. P8,400 OPT
b. P33,600 VAT
c. P0 VAT
d. Neither OPT nor VAT
ANS: A
If common carrier by land transporting goods and cargoes: P33,600 VAT

If common carrier by air or sea transporting from one point in the Philippines to another point in
the Philippines, whether goods, cargoes or people. P33,600 VAT

If common carrier by air or sea transporting from one point in the Philippines to a point outside
the Philippines: P0 VAT

REF: CRC Final Preboard October 2018 TOP: Other taxes

69. An importer wishes to withdraw its importation from the Bureau of Customs. The imported goods
are subject to a 10% ad valorem custom duty. Details of the importation follow:

Invoice cost of importation in pesos P1,000,000

Cost of containers and packing 100,000
Cost of freight and insurance up to Philippine port 250,000
Expenses incurred within the customs premises prior to actual
withdrawal 150,000
 The customs duty on the imported goods is
a. 150,000
b. 135,000
c. 110,000
d. 100,000
ANS: B
The dutiable value of the imported goods is: P1,350,000

VAT on importation: P196,200

REF: CRC Final Preboard October 2018 TOP: Other taxes

70. A residential house and lot located in Manila have the following fair market values:

Lot P5,000,000
House 10,000,000

The assessment levels are 20% for the lot and 50% on the house.

The real property taxes due and payable on the residential house and lot, where Manila is imposing
the maximum basic real property tax rate is:
a. 120,000
b. 135,000
c. 180,000
d. 300,000
ANS: C REF: CRC Final Preboard October 2018 TOP: Other taxes