Multiple-Choice- Problem 1

1. Mrs. Belle, self-employed, generated the following receipts during the year:
Proceeds of Health Insurance
Receipts from business advisory services
Receipts of rentals from boarding house

300,000
250,000
100,000

What is the total amount subject to business tax?

a. P 100,000
c. P 350,000
b. P 250,000
d. P 650,000
2. A person engaged in business sold the following properties:
Sales of goods held for sale
Sales of personal residence
Sales of personal car

P 200,000
2,200,000
500,000

Compute the sales in the course of business subject to business tax.

a. P 0
c. P 2,200,000
b. P 200,000
d. P 2,700,000

3. Mr. Julio, employed, received the following from his employer:

Proceeds of property insurance
Proceeds of bank loan
Compensation income

P 200,000
300,000
500,000

What is the amount subject to business tax?

a. P 0
c. P 300,000
b. P 200,000
d. P 500,000
4. Mr. Jun Kim, a security broker effected the sales of sale of several securities resulting of
Kim Jong-un in the following commissions:
Sales
Commission
Sales of stocks
P 120,000
P
1,200
Sales of bonds
280,000
2,800
Total
P 400,000
P
4,000
Compute the amount of receipts or sales of Mr. Jun Kim subject to business tax.
a. P 0
c. P 400,000
b. P 4,000
d. P 404,000
5. Assuming Kim Jong-un is an investor in stocks, what is the amount subject to business tax?
a. P 0
c. P 400,000
b. P 4,000
d. P 404,000
6. Mr. Masipag had annual gross receipts not exceeding P 100,000. During the month, he
made the following sales:
Sales of car rugs
Sales of cigarettes
Sales of candies
Total
Compute the total amount subject to business tax.

P 2,000
3,000
3,000
P 8,000

a. P 0
c. P 5,000
b. P 2,000
d. P 8,000
7. Mr. Kim Jong, a security dealer, sold the following during the month:
Sales of securities for own account
Commission income on sale of securities of clients
Sale of vacant lot held as investment

P 400,000
36,000
1,000,000

What is the amount subject to business tax?

a. P 0
c. P 500,000
b. P 200,000
d. P 900,000
8. A non- stock charitable organization realized the following during the month:
Membership contributions
P 300,000
Donation from various donors
400,000
Sale of Souvenirs
200,000
Compute the amount subject to business tax.
a. P 0
c. P 500,000
b P 200,000
d. P 900,000
9. JDC Corporation, a merchandiser, made had the following sales during the month:
Sale of merchandise
Commission income from consignors
Sales of stocks investments

P 200,000
50,000
180,000

Compute the amount subject to business tax.

a. P 200,000
c. P 380,000
b. P 250,000
d. P 430,000
10.Mang Indio has a sari-sari store with P 500,000 annual sales. He had the following sales
during the month:
Sales of various merchandise
Cash donated by his brother
Cash from proceeds of bank loan

30,000
200,000
300,000

Compute the amount subject to business tax.

a. P 0
c. P 230,000
b. P 30,000
d. P 530,000
11.Mr. McCullot is a consultant. During the month, he has only one client from which he
derived the following receipt:
Professional fees
Less: Withholding tax
Net amount received

P 150,000
7,500
142,500

What is the amount subject to business tax?

a. P 0
c. P 142,500
b. P 7,500
d. P 150,000
12.Mang Pandong is a farmer. He sold his agricultural land costing P 200,000 for P 1,000,000
to start a palay trading business. What is the amount subject to business tax?
a. P 0
c. P 800,000
b. P 200,000
d. P1,000,000

13.Ms. Cumacaliua is concurrently employed to Cumanan Corporation and Paatras Company.

He received the following during the month:
Cumacanan
Paatras
Professional fees
P
50,000
P 40,000
Less:
Creditable withholding tax
7,000
6,000
Loan repayment
12,000
SSS, PhilHealth, HDMF
Net pay

3,000
40,000

22,000

Compute the amount subject to business tax.

a. P 0
c. P 77,000
b. P 62,000
d. P 90,000
14.Effective 2015, Kanlaon Corporation, a VAT-taxpayer, changed its accounting period to a
fiscal year ending every August 30. What is the deadline for the first quarter VAT return
under the new accounting period?
a. September 25,2015
c. November 25,2015
b. September 25, 2015
d. December 25,2015
15.In the immediately preceding problem, the third quarterly VAT return shall be filed on
before
a. May 20, 2016
c. June 20, 2016
b. May 25, 2016
d. June 25, 2016

Multiple-Choice- Problem 2
1. Jackpruit, a seller of goods, had the following transactions in January 2015.
Cash Sales
Credit/ Installment sales (40% collected)
Sales Returns and Allowances
Freight-out charged to customers

P 200,000
300,000
40,000
20,000

What is the amount subject to business tax?

a. P 0
c. P 480,000
b. P 460,000
d. P 500,000
2. Atty. Saturday Sabado and Atty. Sunday Domingo formed a general professional
partnership for the exercise of their legal professional. Their partnership Sabado-Domingo
Law Office started operation on July 1,2014 as a VAT taxpayer. The partnership adopted
the calendar year basis.
The professional partnership shall file its first monthly VAT return on
a. July 20, 2014
c. August 20, 2014
b. July 20, 2014
d. August 30, 2014
3. In immediately preceding problem, what is the deadline of the first quarterly VAT return?
a. July 30, 2014
c. August 25, 2014
b. August 30, 2014
d. October 25, 2014
4. A service provider had the following income during the month:
Fees, paid in cash and checks
Fees, paid in notes

80,000
150,000

Advances by clients for future services

Reimbursement for out-of-pocket expenses
Reimbursement for client expenses
Total

20,000
40,000
20,000
P
330,000

Compute the amount subject to business tax.

a. P 350,000
c. P 160,000
b. P 250,000
d. P 140,000
5. A taxpayer had the following sales or receipt in the past twelve months:
Exempt Sales
P
1,500,000
Services subject to percentage tax
400,000
Other Sales
800,000
Total
P
2,700,000
Which is correct?
a. The taxpayer is subject to VAT on all sales
b. The taxpayer is subject to VAT on taxable sales other than exempt sales
c. The taxpayer is subject to percentage tax to taxable sales other than exempt sales.
d. The taxpayer is subject to percentage tax on all sales.
6. Kudarat Company had the following sales and receipts data in the past twelve months
Exempt Sales
Services subject to percentage tax
Other Sales
Total

200,000
400,000
2,000,000
2,600,000

Which is correct?
a. The taxpayer is subject to VAT on other sales
b. The taxpayer is subject to VAT on taxable sales other than exempt sales
c. The taxpayer is subject to percentage tax to taxable sales other than exempt sales.
d. The taxpayer is subject to percentage tax on all sales.
7. The following data pertains to a business taxpayer during a quarter:
January
February
March
Revenue (Sales)
P 200,000
P 240,000
P 230,000
Cash Collections
180,000
240,000
220,000
Which of these properly reflect the monthly reporting of a non-VAT service provider?
January
February
March
a.
P 170,000
P
240,000
P 640,000
b.
P 200,000
P
250,000
P 220,000
c.
P 180,000
P
240,000
P 220,000
d.
P
200,000
P
250,000
P 670,000
8. Which of these properly reflect the monthly reporting of a non-VAT seller of goods?
January
February
March
a.
P 170,000
P
240,000
P 640,000
b.
P 200,000
P
250,000
P 220,000
c.
P 180,000
P
240,000
P 220,000
d.
P
200,000
P
250,000
P 670,000
9. Which of these properly reflect the monthly reporting of a VAT service provider?
January
February
March
a.
P 170,000
P
240,000
P 640,000
b.
P 200,000
P
250,000
P 220,000

c.
P 180,000
P
240,000
P 220,000
d.
P
200,000
P
250,000
P 670,000
10.Which of these properly reflect the monthly reporting of a VAT seller of goods?
January
February
March
a.
P 170,000
P
240,000
P 640,000
b.
P 200,000
P
250,000
P 220,000
c.
P 180,000
P
240,000
P 220,000
d.
P
200,000
P
250,000
P 670,000
11.Mrs. Bote sells cakes to jeepney drivers who patronize her hot and sweet cakes. During the
month, Mrs. Bote sold P 300,000 worth of cakes and collected P 280,000. What is the
amount to be reported for business tax purposes?
a. None
b. P 280,000
c. P 300,000
d. Indeterminable
12.The Non-Taste is a restaurant offering local cuisines. Which is correct?
a. No-taste is engaged in the sale of service
b. No-taste is engaged in the sale of goods
c. No-taste is engaged both in sale of goods and service
d. No-taste is not engaged in business
13.Marilyn is a beautician operating a beauty parlor. She is indebted to Zeus for P 30,000.
Unable to pay her debt, Marilyn agreed to render services to Zeus. In return, Zeus cancels
Marilyns indebtedness. Which is correct?
a. The cancellation of the P 30,000 indebtedness is a gratuity subject to donors tax
b. The cancellation of the P 30,000 indebtedness is exempt from income tax
c. The cancellation of the P 30,000 indebtedness is a constructive receipt of Marilyn
subject to tax
d. The cancellation of the P 30,000 indebtedness is a constructive receipt of Zeus subject
to business tax.
14.A is a VAT registered seller with annual sales of P 1,000,000. During the month, he
recorded only P 10,000 in sales and sustained an operating loss of P 40,000. Which is
correct?
a. The tax payer is exempt from business tax during the month since there is an operating
loss.
b. The taxpayer shall pay VAT
c. The taxpayer shall pay percentage tax
d. The taxpayer shall pay VAT if their annual sales exceeds P 1,919,500 during the year.
Otherwise, he shall pay percentage tax
15.Chemrex Company, a non-VAT taxpayer paying 3% percentage tax, exceeded the VAT
threshold on September 2014. Chemrex generated P 300,000 and P 400,000 sales in
October and November and paid P 12,000 and P 28,000 input vat in these month,
respectively. Chemrex immediately registered to the VAT system at start of November
2014.
Compute the business tax in October, assuming no claim for tax credit was filed
a. P 9,000
b. P 24,000
c. P 27,000
d. P 36,000
16. Compute the business tax in October, assuming Chemrex claim for tax credit and was
approved by the BIR
a. P 9,000
b. P 24,000

c. P 27,000
d. P 36,000
17.Compute the business tax in October, Chemrex filed for her claim for tax refund
a. P 9,000
b. P 24,000
c. P 27,000
d. P 36,000
18.Compute the business tax payable in November
a. P 12,000
b. P 20,000
c. P 36,000
d. P 48,000
19.A non-VAT taxpayer paying 3% percentage tax received P 104,000 cash and P 6,000 CWT
from the sales of services by the period. Compute the percentage tax
a. P 3,000
b. P 3,120
c. P 3,240
d. P 3,300
20.A VAT taxpayer received P 52,000, plus P4,000 creditable withholding ta certificate. What
is the output VAT?
a. P 5,571
b. P 5,760
c. P 5,820
d. P 6,000