PALAWAN STATE UNIVERSITY

COLLEGE OF BUSINESS AND ACCOUNTANCY

BSBA (HRDM) Fourth Year Block No. 2
Taxation Final Exams October 1, 2015
Prof.: Atty. Emilia Concepcion D. Severino

MULTIPLE CHOICE: Choose the best answer

1. Generally, the grossed up monetary value of the fringe benefit shall be determined by dividing
the monetary value of the fringe benefit by:
a. 67% c. 66%
b. 68% d. 69%

2. One who is vested with powers or prerogatives to lay down and execute management policies
and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees
a. rank and file employee
b. supervisory employee
c. managerial employee
d. officers

3. The grossed-up monetary value of fringe benefit subject to fringe benefit tax received by a non-
resident alien individual not engaged in trade or business in the Philippines is computed by
dividing the monetary value of the fringe benefit by:
a. 68% c. 70%
b. 32% d. 75%

4. Which of the following is subject to fringe benefit tax?

a. Compensation of rank and file employee
b. Compensation of the supervisory and managerial employees
c. Fringe benefit of the rank and file employee
d. Fringe benefit of the supervisory and managerial employees

5. The fringe benefits tax is not imposed on

a. rank and file employee c. managerial employee
b. supervisory employee d. all employees

6. The following statements about fringe benefits are false. Which is the exception?
a. The amount of de minimis benefits given to rank and file employees are not subject to the
fringe benefits tax
b. the amount of de minimis benefits given to managerial employees are subject to fringe
benefits tax
c. the equivalent of value of free meals and living quarters which are given to an employee
for the convenience-of-the-employer are considered as fringe benefits subject to fringe
benefits tax
d. the fringe benefit tax is not deductible from gross income is computing the taxable income
of the employer

Numbers 7, 8, and 9 shall be based on the following information:

Mayaman Co. owns a fleet of motor vehicles. In 2014, one of the cars which was acquired at a
cost of P400,000.00 was allowed as service vehicle by one of its officials. During the year, its
book value amounted to P375,000.

7. How much is the monetary value of the fringe benefit?

a. P375,000.00 c. P40,000.00
b. P400,000.00 d. P80,000.00

8. How much is the gross up monetary value?

a. P400,000.00 c. P80,000.00
b. P58,823.00 d. P18,823.00

9. How much is the fringe benefit tax?

a. P400,000.00 c. P80,000.00
b. P58,823.00 d. P18,823.00

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Numbers 10, 11, 12and 13 shall be based on the following information:
Plaza Corporation owns a condominium unit. During the year 2014, the said corporation
furnished and granted the said property for the residential use of its Senior Vice President. The
fair market value of the said property is P10,000,000 while its zonal value is P8,000,000.

10. What value of the property shall be used in determining the grossed-up monetary value of the
fringe benefit?
a. P10,000,000.00 c. P250,000.00
b. P 8,000,000.00 d. P200,000.00

11. How much is the annual monetary value of the fringe benefit?
a. P10,000,000.00 c. P250,000.00
b. P 8,000,000.00 d. P200,000.00

12. How much is the grossed-up monetary value of the fringe benefit?
a. P250,000.00 c. P117,647.00
b. P200,000.00 d. P367,647.00

13. How much is the fringe benefit tax?

a. P117,647.00 c. P250,000.00
b. P80,000.00 d. P200,000.00

14. Any good, service, or other benefit furnished or granted by an employer in cash or in kind in
addition to the basic salaries, to an individual employee (except rank and file employee)
a. De Minimis Benefit c. Fringe Benefit
b. Fringe Benefit Tax d. Grossed Up Monetary Value

15. Which statement is wrong? The amount on which the fringe benefit tax rate is applied is:
a. the monetary value of the fringe benefit
b. the grossed-up monetary value of the fringe benefit
c. the amount deductible by the employer from his/its gross income
d. reflected in the books in the two accounts of fringe benefits and tax

16. Those who, in the interest of the employer, effectively recommend such managerial actions if the
exercise of such authority is not merely routinary or clerical in nature but requires the use of
independent judgment
a. Officers c. Managerial Employees
b. Supervisory Employees d. Rank and File Employees

Numbers 17 to 20 are based on the following assumptions:

Mr. X, a bank manager, lives in a residential house owned by his employer. The market value of
the residential property is P7M while the zonal value is P8,040,000.

17. What value of the property shall be used in determining the grossed-up monetary value of the
fringe benefit?
a. P7,000,000.00 c. P250,000.00
b. P 8,040,000.00 d. P200,000.00

18. How much is the annual monetary value of the fringe benefit?
a. P150,000.00 c. P201,000.00
b. P450,000.00 d. P402,000.00

19. How much is the grossed-up monetary value of the fringe benefit?
a. P295,588.00 c. P117,647.00
b. P200,000.00 d. P367,647.00

20. How much is the fringe benefit tax?

a. P17,647.00 c. P50,000.00
b. P80,000.00 d. P94,588.00

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21. The following are de minimis benefits, except:
a. medical cash allowance to dependents of employees not exceeding P750 per semester or
P125 per month
b. laundry allowance not exceeding P300 per month
c. uniforms and clothing allowance not exceeding P5,000 per annum
d. none of the above

Numbers 22 to 24 shall be based on the following information:

During the year 2014, MJ Corporation paid for monthly rental of a residential house of its branch
manager, Mr. TJ, amounting to P67,000.

22. How much is the monthly monetary value of the fringe benefit?
a. P33,500.00 c. P67,000.00
b. P30,000.00 d. P45,000.00

23. How much is the monthly grossed-up monetary value of the fringe benefit?
a. P15,775.00 c. P95, 562.00
b. P49,265.00 d. P33,500.00

24. How much is the monthly fringe benefit tax?

a. P67,000.00 c. P15,765.00
b. P33,500.00 d. P49,265.00

25. The employer subject to the fringe benefit tax may be a/an
a. individual c. professional partnership
b. coporation d. all of the above

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