Answers / Solutions to Problems on Percentage Taxes and VAT, edition 2013 -2014

Vgl files, vgl files, sols to pt n vat 2013 - 2014

Problems in Chapter 13. percentage taxes sec.116 to 121.
Problem 1. Rainbow Corporation
a. Seller of Goods
Gross Sales Price
Less: Sales Returns, allowance
Net Sales Price
Pt rate
Percentage Tax Due

375,000
(16,500)
358,500
X 3%
10,755

Problem 2. Filipinas Company

a. Seller of Goods
Sales Price
Delivery Fees
Packaging, Handling Fees
Pt billed to customer
Gross Sales Price
Pt rate
Percentage Tax Due

78,650
1,350
950
2,428
83,378
X 3%
2,501.34

b. Seller of Services
Net Sales Price

358,500

Net Sales Receipts

Pt rate
Percentage Tax Due

293,000
X 3%
8,790

b. Seller of Services
Gross Sales Price
Rate of collection
Sales Receipts
Pt rate
Percentage Tax Due

83,378
65%
54,195
X 3%
1,625.87

Problem 3. Orlando Company

A, Seller of Goods
1st QTR
Gross sales Price
Less: Sales Ret., Allow. Disc.
Net Sales Price
Pt rate
Percentage Tax Due

2nd QTR
95,000
16,500
78,500
X 3%
2,355

85,000
0.00
85,000
X 3%
2,550

3rd QTR
113,000
9,000
104,000
X 3%
3,120

4th QTR

3rd QTR

4th QTR

100,000
12,000
88,000
X 3%
2,640

A, Seller of Services
1st QTR

2nd QTR

Cash Sales
Collections on credit Sales
Gross Sales Receipts
Less: Sales Ret. Allow. Disc.
Net Sales Receipts
Pt rate
Percentage Tax Due

?
?
95,000
(16,500)
78,500
X 3%
2,355

Problem 4. Matindi Corporation

a. Seller of Goods
Cash Sales
Credit Sales

35,000
62,500

Gross Sales
Less: Sales Ret. Allow. Disc.
Net Sales
Pt rate
Percentage Tax Due

97,500
(3,500)
94,000
X 3%
2,820

22

?
?
85,000
0.00
85,000
X 3%
2,550

54,000
26,000
80.000
(9,000)
71,000
X 3%
2,130

63,000
23,000
86,000
(12,000)
74,000
X 3%
2,220

b. Seller of Services
Cash Sales
Collections on credit Sales, Feb
Collections on credit sales, Mar
Gross Sales Receipts
Less: Sales Ret. Allow. Disc.
Net Sales Receipts
Pt rate
Percentage Tax Due

35,000
24,000
18,000
77,000
3,500
73,500
X 3%
2,205

Problem 5. Aguila Bus Company

A, Seller of Services
Min.QGR
98,600
164,200
197,100
197,100

1st QTR

P. Jeepney
32,300
17,690
6,780
56,770
X 3%
1,971
65,700

P. Taxi

Receipts net of expenses

Comm. compensation
Oil and gas expenses
QTRly Gross Receipts
Pt rate
Percentage Tax due
Min.QGR

Passenger fees
Cargofees
QTRly Gross Receipts
Pt rate
Percentage Tax due

Co. A. IAC
11,875,000
6,290,000
18,165,000
X 3%
544,950

Co. C. ISC
720,000
7,560,000
8,280,000
X 3%
248,400

Bus no. 010

Bus no 143
Bus no 211
Bus no 212
QTRly Gross Receipts
Pt rate
Percentage Tax due

98,600
164,200
197,100
197,100
657,000
X 3%
19,710

Problem 6. Three Enterprises

76,500
24,380
12,760
113,640
X 3%
3,409.20
98,600

Problem 7-Mr. Mahusay-Operator of School Buses

Gross Receipts - Bus No. 1
Gross Receipts - Bus No. 2
Total Gross Receipts
Multiplied by % Tax Rate
Percentage Tax Due
Problem 8.Mr. Mcanico - Operator of Garage , (NVR)
Caring and Maintenance Fees
Tune Ups
Minor Repairs
Major Repairs
Sales of Fuels, Greases, spare parts

2nd Q
P158,500.00
67,800.00
P226,300.00
X 0.03
P6,789.00

P14,600
12,500
23,700
34,900
9,800

Collections of Prior Month-Service Sales

Total
Less: AR on SS - June 2009
Taxable Gross Receipts
PT rate
PTdue

7,350
P102,850
(8,400)
P94,450
X 3%
P2,833.50

23

2nd QTR
175,800
164,200
197,100
197,100
734,200
X 3%
22,026

Vgl files, vgl files, sols to pt n vat 2013 - 2014

Problem 9. Hongkong Corp. Franchise grantee
NVRP
Gross Billings on income as franchise grantee
Collections on billings on income not
covered by franchise
Accts.Rec. bal. on income as franchise grantee
Taxable Gross Receipts

P765,000
P685,000

PT Rate/vat rate
Business Tax Due
Problem 9. continuation
VAT Due (Output Tax)
Less: Vat Credit (VC)
Vat Still Payable

VAT RP

(130,000)
635,000

685,000

X 0.02

X 0.12

P12,700

P82,200

VAT RP
82,200.0
0
13,907.5
8
68,292.4
2

P26,800 x 685,000/1,320,000 = P13,907.58 Allocated VC

685,000 + 635,000 = 1,320,000 Total Receipts
Problem 10. - Franchise Grantees.

PT
a. Mla. Gas

Cash Sales
Collections on Credit Sales

910,000
212,500

Taxable Base
Multiplied by Tax Rates

1,122,500
X 0.02

Business Tax Due

22,450.00

PT
b. DZBB
1,340,00
0
537,250
1,877,25
0
X 0.03
56,317.5
0

VAT
c.Meralco
15,600,00
0
1,100,000
16,700,00
0
X 0.12

Problem 11. China Corp.

Overseas Dispatch from Phil. To USA
Telewriter Exchange to Canada

542,700
174,500

Taxable Base
Multiplied by

Gross Payments

717,200

% Tax Due

Less: Payments included above-exempt

Taxable Gross Payments

2,004,000

PT
d.GTC

PT
e. MWSS

3,000,000
675,000

7,250,000
1,350,000

3,675,000
X 0.10

8,600,000
X 0.02
172,000.0
0

367,500.00

A TIB
702,200
X 1/11

B TIB
702,200
X 0.10

63,837

70,220

15,000
702,200

Problem 12. Excellent Telephone Co. franchise holder

Non-VAT Reg. Person

TEB
TIB

Gross Service Sales on domestic/national communication

Gross Service Sales on Overseas Communication from Phil.

24

2,750,00

2,750,000

VATPerson
TEB
3,680,000

Vat person
TIB
3,680,000

0
X 0.55
1,512,50
0

Multiplied by the Collection rates

Gross Receipts on Overseas Communications from Phil.
Gross Receipts on Local Communication
Multiplied by the Tax Rates
Business Taxes Due

X 0.55

X 0.65

X 65%

1,512,500

X 0.10

X 1/11

2,392,000
X 0.12

151,250

137,500

287,040

Percentage Tax

VAT

2,390,000
X 12/112
256,258.7
1
vat

Problem 13. XYZ Banking Corp.

Amount
Interest, Commissions,
& Discounts Earned
a. On Med. Term 3 1/2yrs
b. On Long Term-less 5 yrs
c. On Long Term-more5yrs
Rental Income from

PT Rate

PT

375,000
520,000
475,000

0.05
0.05
0.01

18,750
26,000
4,750

a. Deposit safety boxes

73,000

0.07

5,110

b. Building / Offices
Net Trading Gains
Other Ordinary Income

260,000
395,000
285,000

0.07
0.07
0.07

18,200
27,650
19,950

Total Percentage Taxes Due

120,410

Problem 14. ABC Banking Corp.

AMOUNT
Interest Income on loans:
a. On short term maturity
b. On medium term maturity
c. On Long-term Maturity
Rental Income, Lease Inc.
Net Trading Gains

PT Rate

216,000
192,000
75,000
250,000
165,800

PT
0.05
0.05
0.01
0.07
0.07

Total Percentage Tax due

10,800
9,600
750
17,500
11,606
50,256

Problems in Chapter 14. percentage taxes sec.122 to 127.

Problem 1. Tibo Company-Resident Foreign
a. Sold through the local stock exchange
Selling Price (575 x 265 shares)
Multiplied by % Tax Rate

152,375
X 0.005

Percentage Tax due

761.88
Total Percentage Taxes Due

25

b. Sold through the Initial Public Offering

Selling Price (52 x 2,600 shares)
135,200
Multiplied by % Tax Rate
X 0.01
Percentage Tax due
2,113.88

1,352

Problem 2. XYZ Corp.

a. Sold through the Initial Public Offering
Selling Price
Multiplied by % Tax Rate

b. Sold through the Local Stock Exchange

Selling Price
275,000
Multiplied by % Tax Rate
X 0.005

385,000
X 0.02

Percentage Tax due

7,700

Percentage Tax due

Total Percentage Taxes Due

1,375

9,075.00

Problem 3. VIR Corp.

a.
b.
c.
d.
e.

Dividend Income from Stock Invest.

Interest & Commissions on Loans
Discount on lending activities
Income from rental of appliances
Other Gross Income

Amount
14,600
58,600
130,200
12,650
23,600

PT Rate
0.05
0.05
0.05
0.05
0.05

PT
730
2,930
6,510
632.50
1,180

Total Percentage Taxes

11,982.50

Problem 4. Bahamas Insurance Company

NLIPrem
Life Ins Prem
825,000.00
960,500.00
(0.00)
(27,000.00)
825,000.00
933,500.00

Gross Insurance Premium

Less: Exempt Ins. Prem. Included
Total Gross Insurance Premium
Multiplied by Collection Rates
Taxable Gross Receipts
Multiplied by Tax Rate
Business Taxes Due

X 0.75

X 0.80

618,750.00
X 0.12

746,800.00
X 0.02

74,250.00

97084

VAT

PT

Problem 5. Cuba Corporation-Insurance Co.

Non-Life Ins.

Life Insurance

Collections on the ff: Ins. Prem.

Life/Disability Ins. Premium
Marine Insurance Premium
Health & Accident Insurance Prem.
Property Insurance Premium

282,000

Gross Receipts on Ins. Premiums

Multiplied by Tax Rates

447,000
X 0.12

620,000
X 0.02

53,640

12,400

270,000
350,000
165,000

Business Taxes Due

VAT

26

PT

Problem 6. Mr. Honduras, not thru Agent of FICA

Non-Life
Insurance
29,600

Insurance Policies taken directly

Fire Insurance Premium Payment
Life Insurance Premium Payment

Life
Insurance
35,000

Taxable Gross Receipts

Multiplied by % Tax Rates
Percentage Taxes Paid

29,600

35,000

X 0.05

X 0.02

1,480

700

Problem 7. Lima Company thru Agent of Foreign Ins. Co.

Total Insurance Premium Collectible from the Insured

857,000
Non-Life Ins,
308,520
149,975
102,840

Fire Insurance (857000 x 40% x 90%)

Marine Ins.Prem. (857000x25%x70%)
Misc.Ins. (857000x15%x80%)
Life Ins. Prem. (857000x20%x60%)
Total Gross Receipts
Multiplied by PT Rate

561,335
X 0.10

Percentage Tax Due

Life Insurance

102,840
102,840
X 0.05
5,142.00

56,133.50

Problem 8. Persons liable to Amusement Taxes

San Lazaro Race Track
E.B. Billiard Center
Virgilio Disco Club
PBA Basketball
Movie Theater/Cinema
Music Museum
Letters (b), (e), & (f) are subject to VAT.

Problem 9. VGL Corp.-Night Club

Entrance Fees
Table Charges
Corkage Fees on Drinks & Foods
Entertainment Fees
Sales of Foods & Drinks
Collections on Credit Sales(F/D)
Total Gross Receipts
Multiplied by % Tax Rate
Percentage Tax Due

Amount
14,690,000
588,000
818,000
22,095,000
4,900,000
595,000

Rate
0.30
0.12
0.18
0.15
0.12
0.12

Bus. Taxes
4,407,000
70,560
147,240
3,314,250
588,000
71,400

April
350,000
210,000
150,000

May
450,000
320,000
165,000

June
500,000
440,000
195,000

430,000

390,000

615,000

762,000
215,000
2,117,000
0.18

935,000
75,600
2,335,600
0.18

820,000
65,800
2,635,800
0.18

381,060

420,408

474,444

27

Problem 10. Mr. Masuerti - winnings on his racing activities

A. Owner of Horses
Bombastic (net of % tax)
Fantastic (before % tax)
Introvoys (after % tax)
Streetboys gross of%tax)

Prizes Won
100,000.00
250,000.00
66,666.67
175,000.00

PT Rate
0.10
0.10
0.10
0.10

PT
10,000.00
25,000.00
6,666.67
17,500.00

591,667

0.10

59,166.67

Total
B. Winnings/Prizes on Bets
Gross Dividend-after cost, before tax
Gross Winnings-net of 2500cost,bef.tax
Multiplied by % Tax Rates

Double
45,600

Percentage Taxes Due

Place

0.04

30,200
0.10

1,824.00

3,020.00

Problem 11. Resident bettor in horse races

Gross Winnings, before cost & tax

Less: Cost of Winning Tickets
Gross Winnings, after cost, before tax
Multiplied by % Tax Rates

WIN
1,600.00
100.00
1,500.00
0.10

Percentage Taxes Due

150.00

Winning B E T S
PLACE
Forecast
DOUBLE
7,500.00
7,200.00
4,200.00
150.00
800.00
120.00
7,350.00
6,400.00
4,080.00
0.10
0.04
0.04

Quinella
6,300.00
360.00
5,940.00
0.04

256.00

163.20

(20 x 80)

735.00
(15x2)
x250

(40x4)x45

(12 x 350)

237.60
(18x2)x17
5

1,600.00

7,500.00

7,200.00

4,200.00

6,300.00

Problems in Chapter 15. percentage tax credits

Problem 1. Cupids Cocktail Lounge
Show and Corkage Charges collected
Sales of Foods/Beverages
Multiplied by collection rate
Cash Receipts on Foods/Beverages
Sales of Liqours, wines
Multiplied by collection rate
Cash Receipts on Liqours, Wines
Gross Receipts
Multiplied by Percentage Tax Rate
Percentage Tax Due
Less: Tax Credit
Percentage Tax Still Payable

215,600
450,000
0.85
382,500
760,000
0.90
684,000
1,282,1000
X 0.18
230,778
15,400
215,378

Problem 2. Galaxy Store - Seller of Goods NVRP

28

1,541.80

Cash Sales of Goods

Credit Sales of Goods
Other Charges on Sales, billed to customers
Gross Sales
Less: Sales Returns, Allowances, Discounts
Net Sales
Multiplied by % Tax Rate
Percentage Tax Due
Less: Tax Credit
Percentage Tax Still Payable

36,700
19,600
760
57,060
1,450
55,610
X 0.03
1,668.30
850.00
818.30

Problem 3. Neptune Enterprises - Seller of Goods - NVRP

Purchase Price of Goods Sold
Gross Profit Rate based on Cost
Gross Profit from Sales
Add: Purchased Price of Goods Sold
Gross Sales Price of Goods Sold (28,000 x 180%)
Percentage Tax passed on to customers
Gross Sales Price
Less: Sales Returns & Discounts
Net Sales Price
Multiplied by % Tax Rate
Percentage Tax Due
Less: Tax Credit
% Tax Paid on Original Return (25,000 x 0.03)
Percentage Tax Withheld by customers
Percentage Tax Still Payable (Refundable)

50,400
1,395
51,795
3,900
47,895
X 0.03
1,436.85
750
750

1,500
(63.15)

ANSWERS TO REVIEW MATERIALS ON OTHER PERCENAGE TAXES, chapter15

PROBLEMS

THEORIES
A1
A2
A3
A4
A5
A6
A7
A8

28,000
X 0.80
22,400
28,000

A
B
A
A
C
C
A
D

A9
A10
A11
A12
A13
A14
A15

B
A
D
A
D
C
B

B1
B2
B3
B4
B5
B6
B7
B8

C
A- (D)
A (D)
A
C
A
B (D)
B

B9
B10
B11
B12
B13
B14
B15
B16

SOLUTION TO PROBLEMS ON VALUE ADDED TAX CHAPTER 18

Problem 1.Dwelling units, SOS, YEAR 2013

29

C
C
C
A
A
A (B)
D - 100,400
D -290,400

A. If residential dwelling units

1
2,500,000
PT X
2
1,500,000
PT X
3
1,800,000
VAT X
4
1,400,000
PT X
B. If
1
2
3
4

0.03
0.03
0.03
0.03

75,000
45,000
54,000
42,000

Non-residential dwelling units

2,500,000
VAT X 0.12
1,500,000
PT X 0.03
1,800,000
PT X 0.03
1,400,000
PT X 0.03

300,000
45,000
54, 000
42,000

Problem 2. Non-Vat Registered Seller of Goods

Sales Price of Goods to Vat Reg. Customers
Sales Price of Goods to Non-Vat Reg. Cust.
Sales Price of Goods to Non-merchant cust.
Gross Sales
Multiplied by tax rate
Business Tax Due

NVRP
35,600
27,600
22,400
85,600
X 0.03
2,568

VRP
0.00
0.00
22,400
22,400
X 12 / 112
2,400

Total Business tax

Problem 3. LGV Enterprises
1st Week
a. Gross Purchase Price of Mdse
b. Purchase Price of Supplies
c. Invoice Price of Goods Sold
Total
2nd Week
d. Gross Purchase Price of Goods
e. Invoice Price of Goods Sold

3rd Week
f. Cost Price of Services Purchased
g. Sales of Merchandise
h. Invoice Price of Goods Purchased

4,968

Amount
500,000
60,000
1,120,000

720,000
1,300,000

150,000
448,000
840,000

Rate
0.12
0.12
12 / 112

12 / 112
0.12

0.12
12 / 112
12 / 112

Output Tax

120,000
120,000

Net Purchase Price

2,100,000
160,000
1,940,000
896,000
56,000

0.12

840,000

0.12

52,800

77,142.86

78,857.14

18,000
48,000
90,000
108,000

(60,000)

100,800
100,800

132,000

232,800

232,800

30

67,200

77,142.86
156,000
156,000

48,000
4th Week
i. Sales Price of Merchandise
Less: Sales Returns, Allow,Disc.
Net Sales Price
k. Purchase Price of Goods
Less: Purchase Ret. Allow. Disc.

a) Weekly Vat
Input Tax
Payable
60,000
7,200

b. Monthly

556,800

Problem 4. Jamaica Corp. Seller of Services VRP

Cash Sales
Collection on Credit Sales
Deposit for future contract of Services
Sales- rentals
Sales Price of used/old office assets

Gross Receipts
Multiplied by VAT rate
Value Added Tax (Output Tax)
Less: Vat Credit (Input Tax)
VAT Still Payable

193,760
140,000
25,000
34,800
3,248
396,808
X 0.12
47,616.96
7,795.20
39,821.76

353,142.86

203,657.14

Gross Purchase Price of Capital Goods/Mat.

Less: Purchase Returns of Goods & Mat.
Net Purchase Price of Capital Goods & Mat.
Multiplied by VAT Rate
Value Added Tax (Input TAX0

96,320
31,360
64,960
X 0.12
7,795.20

Problem 5. Panama Trading Co,. VRP

Sales Price of Goods
Less: Sales Returns, Allow, Disc.
Net Sales Price of Goods
Multiplied by VAT Rate
Value Added Tax (Output Tax)
Less: Vat Credits
Input Taxes
Vat Paid Prior Months of Qtr
Total VAT Credits
VAT Still Payable

April
195,000
0.00
195,000
0.12
23,4000

May
210,000
23,400
186,600
0.12
22,392

8,088

11,880

8,088
15,312

11,880
10,512

June

C1. 15,312 + 10,512= 25,824

May
65,000
34,000
99,000
0.00
99,000
0.12

June
198,000
61,000
247,000
31,000
216,000
0.12

Input Tax
8,088
11,880
Note: The amounts on the last month of each calendar or
fiscal quarter shall be on a cumulative amounts.

25,920

Purchase Price of Supplies

Purchase Price of Services
Total
Less: Purchase Ret. Disc.
Net Purchase Price
Multiplied by VAT Rate

April
71,000
15,000
86,000
18,600
67,400
0.12

Problem 6. Venezuela Company - VRP, Fiscal quarter

Feb.
March
Sales Price of Goods(Vat
Inclusive)
320,000
475,000
Less: Sales Returns, Allow, Disc.
15,000
19,600
Net Sales Price of Goods
305,000
455,400
Multiplied by VAT Rate
X 12 / 112
X 12 / 112

31

F. M. Apr

X 12 / 112

Value Added Tax (Output Tax)

Less: Vat Credits
Input Taxes
Vat Paid Prior Months of
Qtr
Total VAT Credits
VAT Still Payable

Purchases (VAT Exclusive)

Less: Purchase, Ret. Disc.
Net Purchase Price
Multiplied by Tax Rate
Input Taxes

32,678.57

48,792.86

22,272

19,860

22,272
10,406.57

19,860
28,932.86

Feb.
198,000
12,400
185,600
X 0.12
22,272

March
176,000
10,500
165,500
X 0.12
19,860

F. M. April
619,000
36,900
582,100
X 0.12
69,852

10,406.57 + 28,932.86 = 39,339.43

Problem 7. XYZ Company & MNO Corporation
XYZ Co., SOG
Invoice Price of Merchandise - VAT inclusive
Sold to MNO Corp.
Sold to Other Customers
Gross Sales
Mulitplied by tax rate
Output Tax
Less: VAT Credits
Purchase Price of Goods-Vat Exclusive
Merchandise
75,000
Office Furniture
25,000
Service from VRP
21,000
Total
121,000
Multiplied by Tax Rate
X 0.12
Input Tax
14,520
Actual Input Tax on Inventory
17,600
Total VAT Credits
VAT Still Payable

135,200
330,000
465,200
X 12 / 112
49,842.86

32,120.00
17,722.86

Locom of MI 12/31/12 P296,000 X 2% = P5,920 TIT

But claim actual IT on MI P17,600
MNO Corporation, SOG
Invoice Price of Merchandise-VAT inclusive
Sales to Customers-net of sales returns
Consignment Sales
Mdse on consignment unsold 61-90 days
Gross Sales
Multiplied by tax rate
Output Tax

397,500
75,000
66,000
538,500
X 12 / 112
57,696.43

32

Less: VAT Credits

Purchase Price of Merchandise
Mdse purchase from XYZ Co.
Multiplied by tax rate
Input Tax
Mdse purchase from VRP
Multiplied by tax rate
Input Tax
Total Input Taxes
VAT Still Payable

135,200
X 12 / 112
14,485.71
265,000
X 0.12
31,800
46,285.71
11,410.72

C!. 412,000 14,500 = 397,500

Problem 8. Granada Corp. Seller of Goods VRP
Output Tax
43,028.57
Less: VAT Credits
31,600.00
VAT Still Payable
11,428.57

C1. 245,000 x 112% = 274,400

C2. 274,400 + 160,000 = 434,400
C3. 434,400 - 32,800 = 401,600
C4. 401,600 x 12/112 = 43,028.57
C6. 27,600 + 2,400 + 1,600=31,600
C5. 230,000 x 12% = 27,600

Problem 9. Guyana Company - VRP

Output Tax
Less: VAT Credits
VAT Still Payable

36,000
27,780
8,220

C1. 336000 x 12/112 = 36,000

C2. 145,000 x 12% = 17,400
C3. 26,880 x 12/112 = 2,880
C4. 17,400 + 2,880 + 7,500= 27,780

Problem 10. Surinam Corp. VRP, please modify

the wrong problem data and requirements
shown after these solutions:
Solutions to Case A. mark up based on gross
purchase price
Output Tax
52,128.00
Less: VAT Credits
32,000.00
VAT Still Payable
20,128.00
GPP IS 100%, MU IS 80%, GSP IS 180%

C1. 89,600 x 12/112 = 9,600 IT

C2. 125,000 x 12% = 15,000 IT
C3 (89,600 - 9,600) = 80,000 x 180% = 144,500 x 12% = 17,280 OT
C4. 125,000 x 220% = 275,000 x 12% = 33,000 OT
C5. 15,400 x 12% = 1,848 OT
C6. 17,280 + 33000 + 1848 = 52,128 OT

C7. 9600 + 15000 + 7400 = 32,000 VC

Solutions to Case B. mark up based
gross sales price
Output Tax
Less: VAT Credits
VAT Still Payable

on
66,848
32,000
34,848

GPP IS 30%, MU IS 70%, GSP IS 100%

C1. 89,600 x 12/112 = 9,600 IT

C2. 125,000 x 12% = 15,000 IT
C3 (89,600 9,600) = 80,000 / 30% = 266,667 X 12% = 32,000 OT
C4. 125,000 x 220% = 275,000 x 12% = 33,000 OT
C5. 15,400 x 12% = 1,848 OT
C6. 32,000 + 33000 + 1848 = 66,848 OT

C7. 9600 + 15000 + 7400 = 32,000 VC

33

Problem10. Surinam Corp. VRP,SOG.

Please modify the problem data and requirements as follows:

Surinam Corporation, a vat registered person provided us its business information in

a quarter in year 2013 as follows:
Invoice price of local goods bought
P89,600
Landed cost of imported goods
P125,00
Gross selling price of imported goods with 120% margin based on landed cost
Output tax paid for the first two months of the said quarter P7,400
The owner took home for his family use some items of imported goods worth
P15,400
Required: Compute for the output tax, vat credit and vat payable for each of the following
cases/situations:
Case a. Gross selling price of locally purchased goods with 80% mark up based on
gross purchase price
Case b. Gross selling price of locally purchased goods with 70% mark up based on
gross sales price
Problem 11. Various Business Establishments
If silent,

Based on
Gross Sales

Merchants
Dealer of Securities
Lending Investor
Bank
Finance Company
Broker
Restaurant / Caterer
Hotel, Motel, Resort
Dealer/Distributor of Goods
Producer/Manufacturer of Articles
Contractor
Life Insurance Company
Beauty Salon / Hair Spa
Operator of Taxis/Buses

generally
SOS-12%Vat
SOS-12%Vat
SOS- PT
SOS-12%Vat
SOS-12%Vat
SOS-12%Vat
SOS-12%Vat
SOG-12%Vat
SOG-12%Vat
SOS-12%Vat
SOS-5% PT
SOS-12%Vat
SOS-3% PT

Gross Sales

291,500
175,900
1,074,150
150,860
132,500
415,000
1,250,000
356,400
1,792,600
165,000
845,000
132,000
345,800

Collection
Rates

85%.
0.70
0.65
0.75
0.90
0.95
0.60
N.A.
N.A.
0.85
0.75
0.80
0.95

Cash
Receipts
247,775 X 12/112
123,130 X 12%
698,198 X 7%
113,145 X 12/112
119,250 X 12%
394,250 X 12/112
750,000 X 12%
356,400 X 12/112
1,792,600 X 12%
140,250 X 12/112
633,750v X 2%
105,600 X 12/112
328,510 X 3%

Problem 12. Toronto Enterprises

Output Tax
Less: VAT Credits
VAT Still Payable

100,200.00
53,841.57
46,358.43

C1. 750,000 + 85,000 = 835,000 x 12% = 100,200 OT

C2. 835,000 + 341,200 = 1,176,200
C3. 835,000 / 1,176,200 x 39,500 = 28,041.57
C4. 25,800 + 28,041.57 = 53,841.57 IT

Problem 13. Excellent Manufacturing Co.

C1. 546,785 x 12% = 65,614.20 OT
C2. 33,450 x 12 / 112 = 3,583.93 IT
C3. 97,800 x 4% = 3,912 Presumptive Input Tax
C4. 25,875 x 12% = 3,105 IT
C5. 13,200 x 12 / 112 = 1,414.29 IT
C6. 3,583.93 + 3,912 + 3,105 + 1,414.29 = 12,015.22
Note. Fish is a marine food product, not an agricultural food product, hence no PIT
Output Tax
Less: VAT Credits
VAT Still Payable

65,614.20
12,015.22
53,598.98

34

SOLUTION TO PROBLEMS IN VALUE ADDED TAX CHAPTER 19

Problem 1. Chicago Import & Export Co.

Cost Price of Jewelries from USA

Ins. Prem. & Freight Cost
Dutiable Value
Custom Duties (35% of DV)
Other Import Charges(30% of CP)
Landed Cost
Multiplied by tax rate
Vat on Imported Goods
C1, 211,000 x 35% = 73,850
C2. 165,000 x 30% = 49,500

165,000.0
0
46,000.00
211,000.00
73,850.00
49,500.00
334,350.0
0
X 0.12
40,122.00

Sales Price of Imported Goods

Multiplied by tax rate
Output Tax
Less: VAT Credits
VAT on Imported Goods
Vat on Local Goods
Total VAT Credits
Excess VAT Credits

Problem 2. NVRP, Dealer of Toys

Dutiable Value
Other Import Charges &
Expenses
Custom Duty (75% of DV)
Landed Cost
Multiplied by tax rate
Input tax on importation
Sales Price of local toys
Sales Price of imported toys
Gross Sales
Multiplied by tax rate
Percentage Tax
Total Business Taxes Due

158,000.00
17,600.00
118,500.00
294,100.00
X 0.12
35,292.00
48,900.00
96,400.00
145,300.00
X 0.03
4,359.00
39,651.00

Problem 3. Australia Mfg. Co. _VRP

Invoice Price of Imported Goods
900,000
(15000 x 60)
Transportation Charges on Imported Goods
42,000
(700 x 60)
Insurance Premium on Imported Goods
30,000
(500 x 60)
Dutiable Value
972,000
Custom Duties
35,000
Other Import Chages & Expenses
87,200
Landed Cost
1,094,200
Multiplied by tax rate
X 0.12
VAT on Imported Goods
131,304
C1. 500 + 25800 + 6700 + 35000 + 7500 + 1500 + 2600 + 7600= 87200
Problem 4. Canada Enterprises
Sales of Imported Goods

463,000.00

35

275,000.00
X 12/112
29,464.29
40,122.00
17,500.00
57,622.00
(28,157.71)

Multiplied by tax rate

Output Tax
Less: VAT Credits
Dutiable Value
Custom Duties (65% of DV)
Legal Charges within BoC
Landed Cost
Input Vat on LC at 12 %
I T on purchases(65,000 x 12/112)
Value Added Tax still payable

0.12
55,560.00
158,000.00
102,700.00
35,000.00
295,700.00
35,484.00
6,964.28

Problem 5. Virginia Corporation - VRP

Output Tax
17,678.57
Less: VAT Credits
16,470.00
VAT Payable
1,208.57
CP of Local Mdse
Multiplied by tax rate
Input Tax -Local
Input Tax - Imported
Total Input Taxes

84,600
X 0.12
10,152
6,318
16,470

42,448.28
13,111.72

CP of Imported Goods
Ins.Prem & Freight
(20,000 x 35%)
Dutiable Value
Custom Duties
(65% of DV)
Other Import Charges(30% X DV)
Landed Cost
Multiplied by tax rate
VAT on Importation

20,000
7,000
27,000
17,550
8,100
52,650
X 0.12
6,318

C1. 165,000 x 12 / 112 = 17,678.57

SOLUTION TO PROBLEMS IN VALUE ADDED TAX CHAPTER 20

Problem 1. Spain Corporation
Taxable Sales
Multiplied by tax rate
Output Tax
Less: VAT Credits
VAT Still Payable
C1. 700,000 / 1,000,000 x 34,000 = 23,800
C2. 23,800 + 26,000 + 5,600 = 55,400 Vat Credits

Problem 2. Various Merchants

a. GC
Gross Payments
Whholding VAT Pay .rate
Whholding Vat Payments

Net Cash Payment

165,000

X 0.05
8,250
156,750

b. GA
242,000
X 0.05
12,100
229,900

c. GC
695,000
X 0.05
34,750
660,250

d. PC

Problem 3. France Corporation

Quarters

36

C1. 910,500 + 12,400 = 922,900

Output Tax
Less: Vat Credits
Vat Payable

1st
780,400
614,300
166,100

2nd
826,700
922,900
(96,200)

3rd
693,500
655,500
38,000

4th
934,900
640,700
294,200

C2. 31,500 +527,800 + 96,200 = 655,500

Problem 4. Texas Corporation

Output Tax
Less: Vat Credits
Vat Payable

Months in 3rd quarter (not 2nd quarter)

July
August
96,000
57,000
75,000
95,000
21,000
(38,000.

J. A. Sept.

The amounts for Sept. Is cumulative. (inclusive of July, Aug, Sept.)

C1. 237,000 + 21,000 = 258,000 Vat Credits
Problem 5. Boston Corporation
Output Tax
Less: Vat Credits

October
60,000
101,000

November
95,000
123,000

Excess Vat Credits

(41,000.

(28,000

The amounts for Dec. Is cumulative (inclusive of October,

November and December.)
C1. 87,000 + 14,000 = 101,000 Vat Credit
C2. 41,000 + 82,000 = 123,000 Vat Credit
C3. 60,000 + 95,000 + 112,000 = 267,000 Output Tax
C4. 87,000 + 82,000 + 97,000 + 14,000 = 280,000 Vat Credits
Problem 6. Paris Enterprise
Output Tax on Actual Sales
Output Tax on Transaction Deemed Sales
Output Tax
Less: VAT Credits
Input Taxes on purchases of:
Merchandise
Raw Materials
Capital Goods
Supplies
Services
Real Property
Total
Excess Input Tax in Previous Qtr
Output Tax paid in the last two mos.
Withholding VAT Payments
Vat paid in Original vat return
Total VAT Credits
Excess VAT Credits

60,000
40,000
26,000
19,000
31,000
65,000
241,000
72,000
94,000
3,600
35,900

Problem 7. Germany Company

37

O. N. December

Output Tax on Sales of Mdse

Less: VAT Credits
Input Tax on Purchase of Mdse
Input Tax paid on Inventories
Presumptive Input VAT
Total VAT Credits
VAT Payable

14,200.00
21,300.00
6,500.00

C1. 285,000 x 2% = 5,700 vs. 21,300 (get higher)

ANSWERS TO MCQ REVIEW MATERIALS ON VALUE ADDED TAX

A1.
A2.
A3.
A4.
A5.
A6.
A7.
A8.
A9.
A10.
A11.
A12.
A13.
A14.
A15.
A16.

SET A. THEORIES
ALL
A,B, C
A17.
D
A18.
B
A19.
B
A20.
B
A21.
C
A22.
B
A23.
B
A24.
A
A25.
D vat
A26.
D
A27.
C
A28.
B
A29.
C
A30.
D,
A31.
B
A32.

SET B. PROBLEMS
D
B
A
C
B
A
D
B
A
D
D
C
D
A
B
B

B1.
B2.
B3.
B.4
B5.
B6.
B7.
B8.
B9.
B10.
B11.
B12.
B13.
B14.
B15.
B16.

B
B
C
B
NO DATA
A
A
C
A

D
B
D
B
A

D
A

38

B17.
B18.
B19.
B20.
B21.
B22.
B23.
B24.
B25.
B26.
B27.
B28.
B29.
B30.
B31.
B32.

C
A
A
D
D
D
D

D
D
B
A
B
A
D
C
B

B33.
B34.
B35.
B36.
B37.
B38.
B39.
B40.
B41.
B42.
B43.
B44.
B45.