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TAXATION

1. During a particular year, the following gross sales/receipts subject to VAT are recorded by a tax
payer who is not VAT-registered:

Gross receipts, transport of goods and P1,000,000


cargoes
Gross receipts, practice of profession 700,000
Gross sales, grocery store 800,000
Gross sales, agricultural food products 300,000
in their original state

Based on the above data, will he be subject to VAT?

a) No, he is not subject to VAT because his sales/receipts in each business do not exceed the
VAT threshold amount.
b) Yes, he is subject to VAT because aside from the practice of his profession, he also derives
revenue from other lines of business which are subject to VAT and applying the
aggregation rules his combined gross sales/ receipts subject to VAT exceed the threshold
amount.
c) No, he is not subject to VAT because he is not VAT-registered.
d) Answer not given.

BUSINESS LAW
2. 1st Statement – The voluntary acceptance by the creditor of a certified cashier’s check produces
payment of the debtor’s obligation.
2nd Statement – Unless the application of payment is expressly stated, the payment shall be
applied to the obligation most onerous to the creditor.

A. False, false
B. True, False
C. True, True
D. False, True

TAXATION

3. The following data (VAT inclusive) are available for the year 2017:
Third quarter:
Sales P 1,680,000
Purchases 896,000
Purchase of machinery (6-year useful 2,240,000
life)
Unutilized input VAT as of end of 97,000
second quarter

Fourth quarter:
Sales 2,240,000
Purchases 1,120,000

How much is the VAT payable or (excess input tax for the third quarter?

a. P72,000
b. (P25,000)
c. P80,640
d. (P23,000)

Solution:

OT (IT)

P1,680,000 x 12/112 P180,000

896,000 x 12/112 (96,000)

2,240,000 x 12/112 x 3/60 (12,000)

Excess Income Tax, 2nd quarter (97,000)

Excess Income Tax (25,000)