POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

Taguig Branch
General Santos Avenue, Lower Bicutan, Taguig City

INCOME TAXATION MODULE 4 AND CHAPTER 1 & 2

Written Report

In Partial Fulfilment of the Requirements for the Degree of Business Administration

Major in Marketing Management

Presented to the Faculty of

College of Business

Presented by:
NAME

BSBA-MM 3-1

Presented to:

Sir Benjamin A. Abarquez Jr.

Subject Professor

January 2021
Narvaez, Daphne Joy D.

Exercise Mod 4-1

Benjie San Diego is the owner of Benjie’s Trading Company. Compute his tax due based on the
following:
a. The taxpayer had signified his intention to use the itemized deduction method.

Net Sales P4,950,000.00

Less: Cost of Goods Sold 1,926,300.00
Gross Income 3,023,700.00
Less: Operating Expenses 967,865.00
Net Income 2,055,835.00

Computation of tax due:

Tax Equivalent
First P2,000,000 490,000.00
Next Excess (P2,055,835 - P2,000,000) x 32% 17,867.20
Total tax due P507,867.20

b. The taxpayer had signified his intention to use the optional standard deduction (OSD) method.

Computation of taxable income:

Net Sales from business P4,950,000.00
Less: Optional Standard Deduction
Net Sales P4,950,000.00
Multiplied by: OSD Rate 40%
Allowed deduction 1,980,000.00 1,980,000.00

Taxable income 2,970,000.00

Computation of tax due:

First P2,000,000 490,000.00
Next Excess (P2,970,000 - P2,000,000) x 32% 310,400.00
Total tax due P800,400.00

In good form, compute the income tax due of Mr. San Diego as a sole proprietor.

Exercise Mod 4-2

Mr. Darryl Recososa is a proprietor of a manpower services business. Compute his tax due on the
following method:
a. Itemized Deduction

Net Revenue P1,905,000.00

Add: Service income 2,500.00

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Narvaez, Daphne Joy D.

Gain on Sale Assets 3,500.00

Gross Revenue 1,911,000.00
Less: Expenses 872,650.00
Net Income 1,038,350.00

Computation of tax due:

Tax Equivalent
First P800,000 130,000.00
Next Excess (P1,038,350 - P800,000) x 30% 71,505.00
Total tax due P201,505.00

b. Optional Standard Deduction (OSD)

Computation of taxable income:

Net revenue from business P1,905,000.00
Less: Optional Standard Deduction (OSD)
Net Revenue 1,905,000.00
Multiplied by: OSD Rate 40%
Allowed deduction 762,000.00 762,000.00

Taxable income 1,143,000.00

Computation of tax due:

First P800,000 130,000.00
Next Excess (P1,143,000 - P800,000) x 30% 102,900.00
Total tax due P232,900.00

Further, use the following assumptions:

1. The taxpayer signified his intention to be taxed at 8%.

Total Revenues P1,911,000

Less: Allowable deduction 250,000

NET TAXABLE INCOME 1,661,000

Tax Due:
8% x P1,661,000 P132,880

2. The taxpayer did not signify his intention to be taxed at 8%.

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Narvaez, Daphne Joy D.

Total Revenues P1,911,000

Less: Expenses 872,650

NET TAXABLE INCOME 1,038,350

Tax Due:
First P800,000 130,000
Excess (P1,038,350 - P800,000) x 30% 71,505
Total Tax Payable P201,505

In good form, compute the income tax due of Mr. Recososa as a sole proprietor.

CPABLES Multiple Choice Questions in Chapter 01

Q01. a. The power to compromise or abate any tax liability (p.11)

Q02. b (p.6&7)
Q03. b (p.13 and scire.licet.blogspot.com)
Q04. d (p.14)
Q05. a (Google)
Q06. d (p.3&11)
Q07. b (p.12&11)
Q08. c (Wiki: Taxation in the PH and p.6)
Q09. a (p.5 and p.14&15)
Q10. a (p.10)
Q11. (See Section 229, Pre-assessment Notice)
Q12. d (coursehero.com)
Q13. b (p.12 and Google)
Q14. c (Both on p.15)
Q15. d (p.10)
Q16. c (Theoretical Justice on p. 5 is a principle of sound tax system)

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Narvaez, Daphne Joy D.

Q17. d (Google and Graduated Tax on p.7)

Q18. c (p.2)
Q19. b (p.6)
Q20. c (p.5)
Q21. c (Both on p.11)
Q22. c (Both on p.11)
Q23. h (p.5)
Q24. d (Both on p.9)
Q25. d (p.9)
Q26. c (p.2)
Q27. a (p.6)
Q28. d (p.7)
Q29. b (p.6)
Q30. d (academia.edu)
Q31. d (p.5)
Q32. d (p.13)
Q33. d (Both on p.12)
Q34. c (p.16&15)
Q35. d (p.15&11)
Q36. c (p.7)
Q37. d (p.6)
Q38. b (academia.edu)
Q39. b (p.2)
Q40. c (Google exact words)
Q41. c (Both on p.11)
Q42. a (Both on p.12)
Q43. a (Both on p.12)
Q44. d (p.14)
Q45. a (PAN on p.14)
Q46. b (p.6)
Q47.
The last day for filing a protest with the BIR is on? _______
The last day for filing a protest with the Court of Tax Appeal is on? Within 30 days (p.15)
Q48.
When will be the last days for assessments and collections by the BIR from the taxpayers? _______
Q49. c (Only term not mentioned on p.16)
Q50. a (p.16)
Q52. d (p.17)

FORMAT IN TWO COLUMNS AND DELETE QUESTIONS!! “What is important for me are the answers.”

CPABLESS Multiple Choice Questions in Chapter 02

Q01. b (p.32)
Q02. d (p.40)
Q03. b (p.39)
Q04. b (p.36)
Q05. b (p.36)
Q06. b (p.33 and G.R. No. 221590)
Q07. c (See Schedular & Globalized on p.36)
Q08. c (See Schedular & Globalized on p.36)
Q09. a (p.38)
Q10. d (p.39)
Q11. c (p.39)
Q12. d (Divorced on www23.statcan.gc.ca)
Q13. c (p.39)
Q14. c (p.10 on Chap 1)
Q15. b (p.29)
Q16. c (p.30)
Q17. b (p.30&33)
Q18. d (imf.org or Ewan ko)
Q19. d (p.9 on Chap 1)

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Narvaez, Daphne Joy D.

Q20. c (p.7 on Chap 1)

Q21. b (p.31 and only one not mentioned as SAFE on p.39)
Q22. c (p.32)