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2. The Calintaan Corporation had the following historical MCIT and RCIT data:
Basing solely on the information provided, what is the tax due and payable respectively in 2013 and 2014?
a. P120,000; P220,000 c. P120,000; P210,000
b. P120,000; P100,000 d. P110,000; P220,000
What is the income tax still due to be filed through BIR Form 1702-RT?
a. P 0 c. P 41,000
b. P 25,000 d. P112,000
4. A corporate taxpayer had the following data on its fifth year of operation:
Philippines Abroad Total
Sales P 2,000,000 P 3,000,000 P 5,000,000
Less: Cost of services 1,200,000 1,800,000 3,000,000
Gross income from operation P 800,000 P 1,200,000 P 2,000,000
Interest on deposits 50,000 250,000 300,000
Total Income P 850,000 P 1,450,000 P 2,300,000
Less: Business expenses 800,000 1,300,000 2,100,000
Net income P 50,000 P 150,000 P 200,000
5. In the immediately preceding problem, what is the tax due if the corporation is a resident foreign corporation?
a. P 0 c. P16,000
b. P15,000 d. P17,000
9. If an individual performs services for a creditor who in consideration thereof cancels the debt, the cancellation
of indebtedness may amount:
a. To a gift.
b. To a capital contribution.
c. To a donation inter vivos.
d. To a payment of income.
10. Dividends received by a domestic corporation or by a resident foreign corporation from a domestic corporation
shall:
a. Not be subject to tax
b. Be subject to fifteen percent (15%) final tax
c. Be subject to ten percent (10%) final tax
d. None of the choices
11. Which of the following government-owned or controlled corporations shall be subject to the corporate income
tax?
I - Philippine Amusement and Gaming Corporation (PAGCOR);
II - National Development Corporation (NDC);
III - Philippine Charity Sweepstakes Office (PCSO);
IV - Social Security System (SSS).
a. All of the above; c. I and II only
b. II only; d. None of the above.
The record of a closely held corporation, already in operation since 2010, reveals the
following:
2013: Gross income P 3,000,000
Less: Expenses 3,800,000
Net operating loss (P800,000)
Upon examination of the 2014 return, the BIR concludes that there is improper accumulation
of profit. The corporation fails to show proof to prove the contrary.
12. Using 30% tax rate, how much is the tax payable of the corporation in 2013 and 2014?
2013 2014
a. Zero P30,000;
b. Zero P47,500;
c. P60,000 P80,000;
d. P60,000 P30,000;
13. Using the data in the preceding number, how much is the tax on the improperly accumulated
income in 2014?
a. P55,000; c. P3,000;
b. P53,000; d. Zero.
14. A domestic corporation has the following data for the fiscal year starting June 1,2008 and
ending May 31,2009:
Gross income, Philippines P 5,000,000
Gross income, USA 10,000,000
Deductions, Philippines 2,000,000
Deductions, USA 4,000,000
How much is the income tax due for the fiscal year ending May 31,2009?
a. P3,150,000
b. 2,962,500
c. P2,880,000
d. P 2,700,000
Panday Corporation’s computed normal income tax and MCIT, and creditable income taxes withheld
from 1st to 4th quarters including excess MCIT and excess witholding taxes from prior year/s are as
follows:
15. How much is the income tax payable for the first quarter?
a. 100,000 c. 60,000
b. 80,000 d. 40,000
16. How much is the income tax payable for the second quarter?
a. 330,000 c. 100,000
b. 230,000 d. 80,000
19. A proprietary private educational institution has presented the following data for the year
2014:
21. Aliw Service Corporation, registered with BIR in 2007, has the following data for the year
2014:
For income tax purposes, the American management expert shall be classified as
a.RA b.NRAETB
c.NRANETB d.NRC
23. Mr. Santiago purchased a life annuity for P100,000 which will pay him P10,000 a year. The life expectancy of Mr.
Santiago is 12 years. Which of the following will Mr. Santiago be able to exclude from his gross income?
a. P100,000. c. P20,000
b. P10,000. d. Answer not given.
Theresita Guadalupe insured his life with an insurance company. Under the contract, she will pay a monthly premium of
P2,000 for 10 years. In case of death before the 10th year, his beneficiary will receive an indemnification in the amount of
P150,000. If he is still living on the 10th year, he will receive the face value of P500,000.
24. If Theresita Guadalupe dies on the 5th year, his beneficiary will report an income of:
a. P500,000 b. 150,000 c. 260,000 d. Exempt
25. Suppose Theresita Guadalupe, dies on the 5th year and his beneficiary was offered to receive the P150,000 in lump
sum or to receive it at P20,000 a month for ten (10) months and the beneficiary chose the 2nd option, she will report
an income of
a. 500,000 b. 150,000 c. 50,000 d. Exempt
26. Suppose Theresita Guadalupe survived the policy and was able to receive P500,000, she will report an income of
a. 500,000 b. 260,000 c. 150,000 d. None
27. Bea Binene won a gold medal and P50,000 cash prize for swimming competition in the Palarong Pambansa. How much
final tax should be withheld from the prize?
a. P 20,000 c. P5,000
b. P 10,000 d. P 0
28. Cleveland Champions Company insured the life of its president for P2,000,000. A total of P500,000 in premiums was
paid before the president died. The company collected the total proceeds.
Compute the return on capital.
a. P2,000,000 c. P500,000
b. P1,500,000 d. P 0
30. Withholding taxes through value added tax is filed using BIR FORM ____
a. 2551 b. 2301 c. 1601-V d. 2550
31. Refer to the previous number, the deadline of the form stated in number 63 is on or before
a. 10th day of the following month
b. 15th day of the following month
c. 20th day of the following month
d. 25th day of the following month
32. Mr. A, a resident citizen of the Philippines, had the following data for 2015 and 2016:
2018: Gross income from business 600,000
a. 55,000
b. 5,000
c. 95,000
d. 40,000
33. A citizen of the Philippines, with a two-year-old legitimate child, had the following data in a calendar year:
Gross income from business 1,000,000
The taxable income for the year before the exemption of P250,000:
a. 130,000
b. 55,000
c. 140,000
d. 100,000
34. Nikki Corporation has the following transactions during the year:
Gross income, Philippines business P1,600,000
Gross income, Hongkong business 400,000
Business expense, Philippines 900,000
Business expense, Hongkong 100,000
Interest connected with Philippine business 60,000
Interest connected with Hongkong business 40,000
Interest connected with business in the Phil. and Hongkong 100,000
Business expense which cannot be allocated 120,000
If taxpayer is a resident foreign corporation, its net income subject to tax in the Philippines is:
35. A resident, single with qualified dependent illegitimate children had the following during the calendar year.
Gross compensation income P250, 000
Expenses related to his employment 120, 000
SSS premium contributions 3, 600
Philhealth contribution 2, 400
Pag-ibig contributions 2, 000
Union dues 1, 000
Premiums on health insurance 4, 000
The taxable income before exemption is
43. Using the preceding problem except that the normal income tax for the fourth quarter is
P50, 000 (instead of P200, 000), the income tax due for the year is
The A corporation provided the following data for calendar year ending December 31, 2019 ($ 1= P50).
Philippines Abroad
47. Under No. 31, but it opts to claim the tax paid abroad as deduction from gross income, its income tax is
A. P780,000 B.P832, 000 C.P275,000 D.P150,000
48. If it is private educational institution, its income tax due after tax credit
A. P730, 000 B.P832, 000 C.P275,000 D.P150,000
53. If it is a non-resident lessor of aircrafts, machineries and equipments, its income tax is
A. P100,000 B.P180,000 C.P300,000 D.P128,000
54. If it is a resident corporation but its expenses within and outside the Philippines is P3M,
Unallocated (disregard original data on expenses), its income tax is A.P640,000 B.P700,000
C.P480,000 D.P128,000
55. If it is a resident corporation and remitted 60% of its net profit to its head office abroad, its total tax liability is
(Original data).
a. P480,000 B.P571,800 C. P196,000 D.P612,750
56. If it is a private educational institution but P3.5M of its total gross income is from lease and restaurant business,
its income tax is
A.P730,000 B.P275,000 C.P150,000 D.P812,500
57. If it is a domestic corporation, but its total expenses is P5,800,000 (disregard original data on expenses), its income
tax is
A.P730,000 B.P64,000 C.P120,000 D.P85,000
58. Under No.44, but the domestic corporation is non-profit hospital (disregard tax paid abroad ), Its income tax is
A.P20,000 B.P64,000 C.P10,909 D.P120,000
59. If the corporation is a non-stock educational; institution, which uses all its revenues or
income for educational and charitable purposes , its income is
Asset 1 Asset 2
Book value of the asset at the time of loss P200,000 P200,000
Cost to restore the property back to its normal operating condition 120,000 300,000
Insurance recovery 50,000 None
Salvage None 40,000
A. P300,000 C. P160,000
B. P200,000 D. P240,000
65. X acquired a machine at a cost of P250,000. Scrap value is P20,000 and the estimated useful life was 25 years. After
depreciating the asset for 20 years using the straight-line method, it was determined that the remaining life is not five
years. The annual depreciation
from the 21st year assuming a remaining life of 10 years without scrap is
a. P10,000 C. P9,200
b. P11,500 D. P6,600
66. One of the following is not correct for deductibility of losses from gross income
a. Must arise from fire, storm or other casualty, robbery, theft or embezzlement
b. Must not be compensated by insurance or other form of indemnity
c. A declaration of loss by casualty should be filed with the Bureau of Internal Revenue
d. Must have been claimed as deduction in the estate return of the taxpayer
a. The optional standard deduction is an amount equal to forty percent (40%) of the Gross income
from business or practice of profession of the taxpayer.
b. The optional standard deduction is not available against compensation income arising Out of an employer-
employee relationship
c. The election of Optional Standard Deduction is irrevocable for the taxable year for Which the choice is
made.
d. Unless the taxpayer signifies in his return his intention he shall be considered as having availed of the
itemized deduction.
68. The following may be allowed to claim optional standard deduction, except
69. The following may elect optional standard deduction or itemized deduction, except
70. Z took a life insurance policy of P2M naming his wife as beneficiary. The policy provides that the insurance
company will pay Z the amount of P2 M after the 25th year of the policy and his beneficiary, should he die
before this date. The premiums paid on the policy is P1.5M. If Z outlived the policy and received the
proceeds of P2M, such proceeds will be:
A. Taxable in full
B. Exempt from income tax
C. C. Partly taxable, partly exempt
D. Subject to final tax.