Pasig Catholic College

Accounting Quiz Taxation

Multiple Choice Problems
1. Data: A mother gifted a lot in Bicutan City to her 19 year old daughter, on occasion of the
latters opening of her Beauty Spa business on April 1, of the current year. Said property
is earning yearly rental income of P150,000 since the year 2011. They have net business
income before allowed personal exemption and rental income of P350,000 and P175,000
respectively.
If the donors tax was not yet paid, what are their reportable gross Income respectively?
a. M P500,000
D P175,000

b. M- P450,000
D- P125,000

c. M P300,000
P 275,000

d. no answer

2. Data: An individual resident taxpayer had the following financial data in the current year
2015. An illegitimate child, and a cousin who are both underage, single, unemployed,
living with and dependent upon the taxpayer for chief support. He earned compensation
income of P129,000 from employment as well as from business and other income of
P250,000. The actual hospitalization health insurance premium payments were P5,000.
Business expenses incurred were P170,000.
The allowances and exemption is?
a. P50,000

b. P75,000

c.P100,000

d. no answer

3. Data: A widower Filipino citizen residing in Quezon City had the following data in the
current year
Sources of Income
1. In Philippines
2. In Russia
3. In Poland

Net Income

Foreign Income Tax

P500,000
200,000
400,000

P0
60,000
100,000

The allowed personal exemption has not been deducted yet.

Assuming that tax credit shall be claimed for the foreign income taxes paid, the
income tax due before tax credit is?
a. P157,000

b. P349,000

c. P333,000

d. no answer

4. In the current year X Company, a sole proprietorship business owned by Mr. X

granted fringe benefits to its employees as follows:
1. To employees who are managers and / supervisors. P540,000
2. To rank and file employees. P500,000
The fringe benefit tax is:
a. P254,118

b. P235,294

c. P172,800

d. no answer

5. Mrs. Evangelista owns a parcel of land worth P500,000 which was inherited from her
deceased father in 2009 when it was worth P300,000. Her father purchased it in 2008
for P100,000. If Mrs. Evangelista, in 2013, transfers this parcel of land to her wholly
owned corporation in exchanged for shares of stocks of said corporation worth
P450,000, the taxable gain is:
a. P50,000

b. P150,000

c. P350,000

d. no answer

6. Data: A domestic corporation showed us its data for the three years period as follows

Gross income
Deduction

2013

2014

2015

P580,000
650,000

P1,450,000
1,150,000

P1,400,000
900,000

c. P138,400

d. no answer

The income tax payable in year 2014 is?

a. P150,000

b. P175,000

7. Data: A domestic proprietary school had the following business data in the taxable
year 2013:
a.
b.
c.
d.

Tuition and matriculation fees

Dividend income from resident corporations
Rental income, net of 5% EWTAS
Business expenses

P5,000,000
350,000
5,700,000
6,000,000

The percent of the income from unrelated business activity is?

b. A 53%

b. P55%

c. 56%

d. no answer

8. Data: A domestic corporation had the following financial information in the taxable
year 2013:
1.
2.
3.
4.
5.

Gross profit from sales of merchandise, P1,600,000

Other income, P400,000
Royalty income in Philippines., P75,000
Business expenses, P1,350,000
The ratio of cost of sales to the total sales is 60%
a. P217,500

b. P195,000

c. P75,000

d. no answer

9. Data: Z Company has the following data in the current taxable year 2015
1.
2.
3.
4.
5.

Business income in the Philippines, P2,000,000

Business expenses in the Philippines, P1,200,000
Business income abroad, P700,000
Business expense abroad, P500,000
National income tax paid abroad, P68,000

If a domestic corporation, the income tax payable after claiming the foreign
income tax as deduction from gross income is:
a. P211,600

b. P240,000

c. P279,600

d. no answer

10. Data: AB is a general professional partnership. Partner A is married and partner B is

single, participating equally in the profit and losses. The following financial
information, for the partnership and its members, during the taxable calendar year
2013 are given as follows:
AB
P600,000
350,000

Gross Income
Business Expenses

A
P150,000
70,000

B
P200,000
120,000

The Gross Income of A from the partnership is:

a. P300,000

b. P125,000

c. None

d. P600,000