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1.

RMC 50-2018, in relation to Revenue Regulation 8-2018, enumerates those who are not qualified to
avail of the 8% income tax option, determine the exception
a. VAT-registered taxpayers
b. Non-VAT registered taxpayers whose gross sales and other non-operating income exceeds the
P3,000,000 VAT threshold
c. Those who earns compensation income
d. Individuals enjoying income tax exemption

2. R.A. 10963 requires submission of financial statement to the BIR under the following instances,
except
a. Taxpayer chose itemized deductions and his gross income does not exceed P3,000,000
b. Taxpayer chose itemized deduction and his gross income exceeds P3,000,000
c. Taxpayer opted to be taxed at 8%
d. None of the above

3. Statement 1: Under the TRAIN law, there is no change in the mandatory deductions such as SSS,
Philhealth, etc. from gross compensation of employees.
Statement 2: Under the TRAIN law, there is no change in the taxability of “de minimis” benefits.
a. Only 1 is correct c. Both are correct
b. Only 2 is correct d. Both are incorrect

4. Determine which is inaccurate following Revenue Memorandum Circular No. 50-2018.


a. The benefits given in excess of the allowed non-taxable de minimis forms part of the P90,000
tax exempt ceiling
b. As a rule, benefits granted to employees are taxable
c. Premium Health Card paid by employer to rank and file employees under a group insurance
forms part of the P90,000 threshold
d. Premium Health Card paid by employer to supervisory and managerial employees under a group
insurance is subject to fringe benefit tax

Lady Grace is an employee of Key Pi Em Gi Drugs Store Philippines, she has been working as
pharmacist for more than 40 years. The firm pays her around P20, 000 per month as salary.

5. Suppose Lady Grace is a qualified PWD, how much can Key Pi Em Gi include the salary as part of its
itemized deduction?
a. 20,000
b. 23,000
c. 24,000
d. 25,000

6. Suppose Lady Grace is a qualified Senior Citizen, how much can Key Pi Em Gi include the salary as
part of its itemized deduction?
a. 20,000
b. 23,000
c. 24,000
d. 25,000
Arnaldo, a VAT taxpayer, operates a convenience store. His total income during the taxable year is
P2,500,000. Sales returns and allowances amounted P100,000, cost of sales is P500,000 and other
expenses is P300,000.

7. How much is his tax due if he signified his intent to be taxed at 8%?
a. P200,000 c. P128,000
b. P192,000 d. P370,000

8. Assume that Arnaldo is an Other Percentage Taxpayer (OPT), how much is his tax due if he signified
his intent to be taxed at 8%?
a. P200,000 c. P128,000
b. P192,000 d. P370,000

9. How much is his taxable income if he opted to use OSD?


a. P1,440,000 c. P1,140,000
b. P1,500,000 d. P 960,000

10. Suppose Arnaldo is a corporation and earned interest of P200,000, how much is the taxable income?
a. P1,560,000 c. P1,140,000
b. P1,260,000 d. P 960,000

11. Reek Review Center Inc. provides preparatory review services for professional examinees. Reek had
the following expenses:

Salaries of reviewers P 800,000


Administrative staff salaries 80,000
Marketing salaries and other expenses 150,000
Rent expense on review rooms 300,000
Rent on administrative offices 100,000
Printing costs of reviewee hand-outs 100,000
Classroom & library electricity expense 30,000
Office utilities 40,000
Classroom supplies expense 5,000
Loss on sale of old chairs 15,000
Interest expense 50,000

Compute the amount of direct cost of services to be presented in the income tax return.
a. P1,230,000 c. P1,235,000
b. P1,325,000 d. P1,285,000

A corporate taxpayer had the following income on its fifth year of operations:

Within Phils. Without Phils. Total


Gross receipts and
sales P300,000,000 P200,000,000 P500,000,000
Cost of services
and sales 180,000,000 100,000,000 280,000,000
Gross income P120,000,000 P90,000,000 P210,000,000
Less: Expenses 114,000,000 40,000,000 154,000,000
Net income P6,000,000 P50,000,000 P56,000,000

Total of BIR Form


2307s P400,000 400,000
Income tax paid *1,500,000 12,000,000 13,500,000

*Paid through BIR Form 1702Q

12. Assuming the corporation is a domestic corporation, compute the tax still due per BIR Form 1702-
RT.
a. P 0 c. P 4,400,000
b. P 2,900,000 d. P 14,900,000

13. Assuming the corporation is a resident foreign corporation, compute the income tax still due
(refundable).
a. P 0 c. P 500,000
b. (P 100,000) d. P 300,000

14. Jali Be reported the following income tax items for the past 3 years:
2016 2017 2018
NCIT 100,000 130,000 170,000
MCIT 150,000 140,000 130,000

How much is the income tax payable of Jali Be in 2018?

a. 120,000 c. 130,000
b. 110,000 d. 170,000

The following data on income and expense for 2018 were provided as follows:

Gross sales 10,000,000


Interest income on peso deposit 80,000
Interest income dollar deposit 20,000
Dividend income from DC 90,000
Dividend income from RFC 50,000
Capital gains (long term) 40,000
Capital loss (short term) 60,000
Cost of sales 4,000,000
Salaries and wages 800,000
Rental for 2018 and 2019 1,200,000
Provision for bad debts 30,000
Interest expense 250,000
Utilities expense 88,000
Payment for pension cost (normal cost is P500,000) 700,000
Entertainment expenses 65,000
Contributions to charitable institution 320,000
Contribution to a priority program 600,000
Other operating expenses 25,000

15. How much capital loss can be claimed as deduction for the current year?
a. P60,000 c. P20,000
b. P40,000 d. P 0

16. How much is the deductible amount of rental expense?


a. P1,200,000 c. P120,000
b. P600,000 d. P 0

17. How much is the deductible pension cost?


a. P500,000 c. P1,200,000
b. P700,000 d. P 0

18. How much is the deductible entertainment expense?


a. P65,000 c. P50,000
b. P100,000 d. P 0

19. How much is the deductible contribution?


a. P600,000 c. P786,000
b. P920,000 d. P 0

20. How much is the taxable net income using itemized deduction?
a. P3,600,000 c. P2,934,000
b. P2,800,000 d. P 0

21. How much is the taxable net income using OSD?


a. P6,000,000 c. P3,630,000
b. P3,600,000 d. P3,654,000

22. How much is the tax payable of the corporation?


a. P880,200 c. P120,000
b. P1,080,000 d. P 0