NAME: _Kojima, Yuji________________________________

ID NO.: __11381590_______________________________
DATE: ___Dec 12 2018______________________________

PLEASE TYPE IN YOUR ANSWERS IN THE BLANKS PROVIDED AND SUBMIT

YOUR FILE SAVED IN PDF.

I. DETERMINE THE TAXABLE GROSS INCOME OF THE FOLLOWING

INDIVIDUAL TAXPAYERS (all of them are Filipino citizens residing in the
Philippines) FOR THE TAXABLE YEAR 2018:

1. GRINGO (5 points) ANSWER: ___________129500______________

HE RECEIVED THE FOLLOWING AMOUNTS:

- P500,000 value of found treasure
- P20,000 monthly salary from employer X
- P2,000 monthly commissions from the same employer
- P34,000 total year-end bonuses
- P500,000 Mega Lotto winnings

2. RANDY (5 points) ANSWER: ___________27000______________

HE RECEIVED THE FOLLOWING AMOUNTS:

- P25,000 monthly salary
- P25,000 13th Month pay
- P5,000 monthly commissions

3. SATUR (5 points) ANSWER: ____________5800_____________

HE RECEIVED THE FOLLOWING AMOUNTS:

- P10,000 monthly salary
- P15,000 jueteng winnings
- P10,000 additional monthly income for singing in a bar on
weekends
- P2,000 monthly share from regular tips in the bar

4. QUERUBIN (5 points) ANSWER: ___________3000______________

HE RECEIVED THE FOLLOWING AMOUNTS:

- P10,000 monthly rent income
- P5,000 jueteng winnings
- P20,000 monthly salary
- P20,000 13th Month Pay

5. GARCI (5 points) ANSWER: ___________30000______________

HE RECEIVED THE FOLLOWING AMOUNTS:

- P300,000 annual salary
- P100,000 bribe from a client
II. DETERMINE THE TOTAL GROSS INCOME AND TOTAL ALLOWABLE
EXCLUSIONS & EXEMPTIONS OF THE FOLLOWING INDIVIDUAL TAXPAYERS
FOR THE TAXABLE YEAR 2018:

1. The Civil Engineer

- single
- won in a civil case for gross negligence filed against him and
received P1,000,000 for moral damages
- total year–end bonuses amounting to P330,000
- P100,000 health and hospitalization benefits
- P25,000 monthly salary from DPWH
- P100,000 total bribe money from contractors who want to
undertake construction projects for the government
- paid P20,000 tax under protest; was notified that it will be
refunded next year

TOTAL GROSS INCOME: 5 points P_________1640000______________

TOTAL ALLOWABLE EXCLUSIONS: 5 points P__________382000_____________

2. The Doctor
- P30,000 monthly salary from PGH
- received P1,000,000 in damages from a malicious case filed
against him for medical malpractice
- as gift from his dad, he received a clinic space valued at
P5,000,000
- P100,000 monthly income for laboratory research rendered to A
Pharmaceuticals
- P200,000 monthly business income

TOTAL GROSS INCOME: 5 points P_________4960000________________

TOTAL ALLOWABLE EXCLUSIONS: 5 points P__________1437200_______________

3. The Computer Geek

- was given a tax refund of P50,000
- got business earnings amounting to P2,000,000
- found treasure valued at P100,000
- P1,000,000 total cash dividends given at the end of the year
- P1,000,000 winnings in illegal drag racing
- P100,000 royalties for a computer game patented in his name

TOTAL GROSS INCOME: 5 points P__________3100000_______________

TOTAL ALLOWABLE EXCLUSIONS: 5 points P___________842000______________

4. The Passive Income Earner

- inherited a 10-door apartment with a fair market value of
P15,000,000
- P1,000,000 total rentals from the inherited apartment
- won P100,000 in jueteng
- as beneficiary, he received P1,000,000 as proceeds from his wife’s
life insurance policy
- P500,000 worth of condoned debt from his creditor-friend
- P500,000 worth of cash gift from the same creditor-friend
- P1,000,000 cash inheritance from his father

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TOTAL GROSS INCOME: 5 points P________17600000__________
TOTAL ALLOWABLE EXCLUSIONS: 5 points P_________5770000__________

III. FROM THE FOLLOWING AMOUNTS, HOW MUCH WILL BE SUBJECTED TO

INCOME TAX FOR THE TAXABLE YEAR 2018?
PLACE A BOX ON YOUR ANSWERS.

1. 1,000,000 moral damages arising from a suit due to an actionable breach of

promise to marry
P500,000 bribe from a client (5 points)
P100,000 disability benefits
MY ANSWER IS A
A. P 600,000 b. P 100,000
c. P 500,000 d. none of the above

2. P5,000,000 PCSO Mega Lotto winnings (5 points)

P1,000,000 jueteng winnings
P150,000 jueteng tong
P100,000 permanent disability benefits
MY ANSWER IS A

A. P1, 250,000 b. P1,000,000

c. P6,150,000 d. none of the above

3. P20,000 13th Month Pay from DEF

P1,000,000 separation pay from employer mining corporation due to a
permanent physical disability sustained from a mining accident
(5 points)
MY ANSWER IS B
a. P60,000 B. P20,000
c. P0 d. none of the above

4. bought a P10M condominium unit in the year 2000; this unit is currently
appraised at P12M
inherited P1M in cash
P200,000 monthly payments for the use of trademarks registered under his
name
MY ANSWER IS D

a. P2.1M b. P12.1M (5 points)

c. P10.1M D. none of the above

5. P15,000 Mid-Yr Bonus from KLM Enterprises

P15,000 Year-End Bonus from the same firm
P20,000 representing other X’mas benefits
MY ANSWER IS A

A. P50,000 b. P1,020,000 (5 points)

c. P20,000 d. none of the above

IV. FOR PURPOSES OF FILLING OUT BIR FORM NO. 1700 or 1701 (as
applicable), DETERMINE THE TOTAL NET TAXABLE INCOME AND
THE INCOME TAX DUE OF THE FOLLOWING INDIVIDUAL
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 TAXPAYERS (all of them are Filipino citizens residing in the
Philippines) FOR THE TAXABLE YEAR 2018:

1. The Lawyer
TOTAL NET TAXABLE INCOME (5 points): _______7920000______
INCOME TAX DUE (5 points): ________2384400________________
a. received P3,600,000 gross annual salary from employer
b. won in a civil case and received P1,000,000 for moral damages
c. received property dividends valued at P200,000
d. won P500,000 cash prize in a raffle draw sponsored by a television
program; the taxes on this prize were tax paid by the TV network
e. received P600,000 representing other bonuses from employer
f. received P300,000 13th month pay
g. received P100,000 health and hospitalization benefits
h. won P1,500,000 in jueteng
i. received P1,000,000 bribe from a client
j. earned P50,000 interest income from his time deposits at PSBank

2. The Doctor
TOTAL NET TAXABLE INCOME (5 points): _____18580000________
INCOME TAX DUE (5 points): ____________6113000___________________

a. was given a second-hand car, valued at P2,000,000, from a patient

over and above his agreed professional fee under a contract of
services; the doctor-taxpayer owns and manages his own clinic
b. found treasure valued at P5,000,000
c. received royalties for the copyright for his book “Scientific Healing”
at P1,500,000
d. received P500,000 as moral damages from a malicious case filed
against him for medical malpractice
e. as gift from his aunt, he received a clinic space worth P6,000,000
f. received P40,000 monthly pension from GSIS
g. earned P5,000,000 annual net business income
h. received P50,000 monthly salary from employer university
i. received P100,000 monthly cash dividend income
j. won P5,000,000 in Mega Lotto

V. 1701 PROBLEM

WHITEFLOUR is a bakeshop solely owned by taxpayer Josa Cruz, a resident

Filipino. It realized total gross business earnings of P10M for 2013. The
taxpayer started operating the business on 1 January 2013. In January 2013,
she paid the following amounts to the government: P50,000.00 for license fees
and P55,000.00 for other business taxes.

For the taxable year, she paid monthly rentals at P30,000.00 for the
business site. She spent P2,000,000.00 for baking supplies and other shop
utilities. For salaries and wages and other ordinary and necessary business
4
expenses, she spent another P3,000,000.00. The business sustained minimal
ordinary business losses amounting to P50,000.00. She bought one delivery
van valued at P800,000.00. After a period of five (5) years as useful life, the
van will only have a scrap value of P300,000.00. In one of the bakeshop’s
contracts, a client paid only 50% of the total contract price of P500,000.00.
Despite diligent efforts, Whiteflour was not able to recover the unpaid contract
price from the client.

For six months within the taxable year, she was also employed by a
culinary school to deliver weekly lectures. She was paid a monthly salary of
P100,000.00. To reward herself for the initial success of the business, she
bought a slightly used car from a friend, for the fair price of P900,000.00.

Compute for the following amounts: 5 POINTS EACH

1. Net Taxable Business Income ___________4135000_______

2. Total Allowable Deductions from Business Income ___5865000____

3. Total Allowable Deductions from Compensation Income

________________0_________________
4. Total Net Taxable Income ___________4735000______________

5. Tax Due ________________1365200______________________________

VI. COMPUTE THE NORMAL INCOME TAX DUE FOR THE FOLLOWING
CORPORATIONS.
ALL ITEMS LISTED UNDER SECTIONS 32 AND 34 APPLY TO TAXABLE
YEAR 2017.

1. MANG DONALD, as a MANUFACTURING ENTITY:

Section 32, NIRC Section 34, NIRC
Sales, PH – P8M ONBE, PH – P3M
Sales, Malaysia – P2M ONBE, Malaysia – P1M
Sales, Japan – P3M ONBE, Japan – P2M
Interest Income, PH – P1M Annual Depreciation Expense, PH – P500K
Rent Income, PH – P5M Business Taxes, PH – P600K
Dividend Income, PH – P500K Bad Debts, PH – P700K
Payment for Service Contracts(PH)– P2M Ordinary Loss, PH – P800K
Payment for Service Contracts(Japan)– P1M Casualty Loss, Japan – P900K
Litigation Expenses, Malaysia – P700K

1. As a Domestic Corporation (5 Points):

______________1740000__________________________________

2. As a Resident Foreign Corporation (5 Points):

_________________1320000_______________________________

3. As a Non- Resident Foreign Corporation (5 Points):

________________3000000________________________________

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 2. MANG DONALD, as a REAL ESTATE COMPANY (BUY, SELL AND LEASE):

1. As a Domestic Corporation (5 Points):

___________3240000_____________________________________

2. As a Resident Foreign Corporation (5 Points):

_____________2820000___________________________________

3. As a Non- Resident Foreign Corporation (5 Points):

______________4500000___________________________________

3. MANG DONALD, as a RESTAURANT BUSINESS:

1. As a Domestic Corporation (5 Points):

_________________1740000_______________________________

2. As a Resident Foreign Corporation (5 Points):

__________________1320000______________________________

3. As a Non- Resident Foreign Corporation (5 Points):

________________3000000________________________________