Problem 1 - 3

The following data are taken from the records of X Corporation, a VAT-registered business, for the
year 2004 the first year of operation:

Income tax expense P 570,000

Input VAT on purchases of goods sold 120,000
Sales returns 60,000
Sales discount due to prompt payments 150,000
Gain on sale of capital assets-subject to normal tax 50,000
Operating expense before taxes 990,000
Community tax 10,000

Required: Compute the following:

1. Amount subject to VAT
2. Output Vat
3. Amount of VAT payable

Problem 4
C, a VAT-registered business, reported total cash sales of P1,000,000,000 during the month.
Additional information is as follows:

Sales on account P 300,000

Installment sales (20% collected)- not included
In total cash sales 500,000
Cost of regular sales 600,000
Purchases of goods during the month, Including VAT 448,000
Input VAT credit from previous month 36,000

During the month, the owner had a drawing of goods for sale for personal use amounting to
P50,000, had consigned goods to outlet amounting to P100,000 were already more than 60 days.

Also, C imported machines as follows:

Machines: Purchase price Purposes

1 P100,000 Personal use
2 200,000 Business use

The importation was subject to a 50% excise tax.

Required: Compute the net VAT payable.

Problem 5
The income statement of X Corporation, a VAT-registed business, prepared under the GAAP rules is
as follows:
Sales P10,000,000
Less: Sales returns and allowances P300,000
Sales discounts (prompt payment) 200,000 500,000
Net sales P9,500,000
Less: Cost of sales 5,500,000
Gross profit P4,000,000
Less: Operating expenses:
Salaries P1,000,000
Depreciation 300,000
Supplies 200,000
Bad debts (% of accts rec'ble) 100,000
Interest expense 50,000 1,650,000
Operating income P2,350,000
Add: Other revenues:
Interest income, net of tax P32,000
Cash dividend(domestic) 68,000 100,000
Income before other expenses P2,450,000
Less: Losses on investment in securities 250,000
Net income before tax P2,200,000

In addition, the records of X Corporation show the following:

Total purchases during the year (inclusive of VAT) P4,480,000

Consigned goods for more than 60 days 560,000
Inventory used to pay 400,000

Required: Determine the correct amount of the following: Output VAT