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Practice Problems BEITAX PDF

The document contains several practice problems related to taxation. It includes questions about how a lessor recognizes income from prepaid rent, security deposits, and leasehold improvements made by the lessee. It also includes problems about calculating capital gains and losses from the sale of real property under different conditions. Additional questions cover calculating installment income and determining taxable income for a non-resident alien receiving dividends. Answers to multiple choice questions at the end relate to topics in business taxation.

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372 views3 pages

Practice Problems BEITAX PDF

The document contains several practice problems related to taxation. It includes questions about how a lessor recognizes income from prepaid rent, security deposits, and leasehold improvements made by the lessee. It also includes problems about calculating capital gains and losses from the sale of real property under different conditions. Additional questions cover calculating installment income and determining taxable income for a non-resident alien receiving dividends. Answers to multiple choice questions at the end relate to topics in business taxation.

Uploaded by

melodyx
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Practice Problems

1. A lessee made the payments to a lessor in 2020:

Advance rental, applicable 2 years Ph480,000.00


Security deposit 400,000.00
and made a leasehold improvement on 02 January 2020 that will belong to the lessor
ewhen the lease expires, with the following data:

Cost of leasehold improvements 2,000,000.00


Estimated useful life 25 years
Remaining term of the lease 10 years

a) How does a lessor recognize income from a prepaid rent of the lessee?
P 480,000
b) How does a lessor recognize income from a security deposit of the lessee? 0
c) How does a lessor recognize income from leasehold improvements made by the
lessee? P 1,200,000
d) From the problem, how much was the income of the lessor in 2020? P 1,680,000
e) How much is the income from leasehold improvements using the spread-out
method? P 120,000

Note: When problem or the question is silent, the method used for income from
leasehold improvement is outright method.

2.
Cost of leasehold improvement PhP 1,000,000
Estimated useful life of improvement 50 years
Remaining term of the lease 40 years

1. Income from the improvement, if reported in one lump sum: P200,000


2. If the income from the improvement is reported annually, the annual income is:
P5,000
3. If the income from the improvement was reported annually, and at the beginning
of the twenty-first year of the improvement, when the fair market value thereof
was P250,000, the lessor took possession of the improvement, his income in
year 21 is: P150,000
4. A certain taxpayer has the following data:
Lot A Lot B Lot C
Acquisition mode Inheritance Donation Purchase
Basis 80,000.00 120,000.00 150,000.00
Mortgage 120,000.00 80,000.00 -
Sold in 2015 under the following terms:
2015 Downpayment 50,000.00 50,000.00 40,000.00
Installment Payment 20,000.00 40,000.00
2016 Installment Payment 160,000.00 100,000.00 80,000.00
2017 Installment Payment 150,000.00 130,000.00 80,000.00
Mortgaged assumed 120,000.00 80,000.00 -

a. The selling prices are: Lot A- 500,000; Lot B-400,000; Lot C-200,000
b. The contract prices are: Lot A- 420,000; Lot B-320,000; Lot C-200,000
c. The initial payments are: Lot A- 110,000; Lot B-90,000; Lot C-40,000
d. The gross profits are: Lot A- 420,000; Lot B-280,000; Lot C-50,000
e. The gross profit rates are: Lot A- 84%; Lot B-70%; Lot C-25%

5. Unilab sold a factory site for P5,000,000. It had a book value of P4,000,000. Payments on
the selling price were: assumption by the buyer of a mortgage on the property of
P2,500,000; on the date of sale in June 2015, P500,000; and P500,000, every six months
thereafter. The gross income to report on the installment method in 2016 is: P400,000

6. Mr. Araki, a non-resident alien stockholder, received a dividend income of P300,000 in


2020 from a foreign corporation doing business in the Philippines. The gross income of
the foreign corporation from within and outside the Philippines for 3 years preceding 2020
were as follows:

Source of Income 2018 2019 2020


From Within the Philippines P 16,000,000.00 12,000,000.00 14,000,000.00
From outside the Philippines 18,000,000.00 14,000,000.00 16,000,000.00

How much is the Philippine Income? 0

Chapter 5: Multiple Choice Problems 1 Answers


1. D
2. C
3. A
4. A
5. C
6. C
7. C
8. D
9. B
10. B
11. A
12. A
13. B
14. A
15. D
Chapter 5: Multiple Choice Problems 2 Answers
1. C
2. B
3. C
4. D
5. A
6. B
7. B
8. D
9. C
10. D
11. D
12. D
13. C
14. A
15. B
Chapter 5: Multiple Choice Problems 3 Answers
1. B
2. A
3. D
4. D
5. B
6. D
7. D
8. A
9. C
10. C
11. D
12. C

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