UNIVERSITY OF THE VISAYAS

COLLEGE OF BUSINESS ADMINISTRATION

PRELIMS

TRANSFER AND BUSINESS TAXATION

MR. REYMAR ENGLIS DICO, CPA 100%

Instruction: Shade the letter that corresponds your answer in the answer sheet.

Items 1 to 10

In the following questions, write

A – if only the first statement is correct
B – if only the second statement is correct
C – if both statements are correct
D – if both statements are incorrect

1. 1st statement – A VAT Registered Person is subject to VAT regardless of his annual gross sales or
receipts.
2nd statement – A person whose annual gross sales or receipts does not exceed P 1,919,500 (or
3,000,000 in 2019) is not subject to VAT but subject to OPT.

2. 1st statement – Movie house operators are subject to amusement tax.

2nd statement – The 10% overseas communication tax is paid to the person rendering the service.

3. 1st statement – Generally, Other Percentage Taxes are paid within 20 days after the end of each
quarter.
2nd statement – In OPT of bank, the basis of the tax is the bank’s receipt less interest expenses.

4. 1st statement – The Tax Code imposes only one kind of amusement tax – The Amusement Tax on gross
receipts.
2nd statement – Common Carriers tax does not include transportation contractors.

5. 1st statement – Amusement Tax on winnings is based on the winnings before deducting the cost of the
ticket.
2nd statement – The OPT on winnings is deducted from the dividends or prize and remitted to BIR
within 25 days from the date it was withheld.

6. 1st statement – The 6/10 of 1% OPT on shares of stocks are imposed on both the transferor and
transferee
2nd statement – The above tax shall be remitted within 10 banking days from the date of collection by
the seller.

7. 1st statement – The OPT in shares of stocks in closely held corporations is imposed on the issuing
corporation only.
2nd statement – A closely held corporation is any corporation wherein more than 50% of the OCS is
owned directly or indirectly by not more than 20 persons.

8. 1st statement – In case of primary offering, the corporate issuer shall file the return and pay the tax
within 30 days from the date of listing of the shares at the Common Stock Exchange.
2nd statement – The above tax paid (on the initial offering) is deductible expense for income tax
purpose

9. 1st statement – VAT is also a percentage tax.

2nd statement – A person may be subject to VAT and OPT on the same transaction.
10. 1st statement – A person may be subject to VAT and excise tax on same transaction.
2nd statement – A person may be subject to OPT and income tax on the same transaction.

11. Which of the following is incorrect?

a. A taxpayer whose annual gross receipts/sales exceed 3,000,000 shall pay VAT even he is not VAT
registered.
b. A taxpayer whose annual gross receipts/sales do not exceed 3,000,000 but who is VAT Registered
shall pay VAT.
c. Percentage tax may be imposed together with VAT
d. Percentage tax may be imposed together with excise tax.

12. 1st statement – Just like value-added tax, percentage taxes are paid on a quarterly non-cumulative
basis
2nd statement – Generally, every person liable to pay the VAT shall file a quarterly return within 25
days after the end of each taxable quarter.
a. True, True
b. False, False
c. False, True
d. True, False

13. Exempt from percentage tax on overseas dispatch, message or conversation, except
a. Government
b. Diplomatic Services
c. International Organizations
d. Foreign Corporation

14. One of the following is subject to common carrier’s tax

a. Owners of banca
b. Owners of animal-drawn two-wheeled vehicles
c. Common carriers by land for transport of goods or cargoes
d. Common carriers by land for transport of passengers

15. A person whose business is to keep automobiles for hire or keep them stored for use or order
a. Keepers of garage
b. Common carrier
c. Taxicab operators
d. Tourist bus operators

16. The franchise tax of grantees of radio and television broadcasting whose annual gross receipts of the
preceding year do not exceed P 10,000,000 shall be:
a. 2% of the gross receipts
b. 3% of the gross receipts
c. 4% of the gross receipts
d. 5% of the gross receipts

17 & 18 are based on the following:

In the third quarter of 2019, a taxpayer engaged in the sale of services whose annual gross receipts do
not exceed P 1,500,000 has the following data:
Accounting Receivable, beginning of quarter Php 50,000
Sales during the quarter 100,000
Accounts Receivable, end of quarter 75,000
Purchase of supplies, total invoice amount 11,200

17. The percentage tax due for the quarter is:

a. P 2,250
b. P 3,000
c. P 7,500
d. P 6,500
18. Assuming the taxpayer is VAT-registered, the VAT payable is:
a. P 2,250
b. P 3,000
c. P 7,800
d. P 6,500

19. One of the following is not subject to the 3% percentage tax

a. International air carrier doing business in the Philippines
b. International shipping carrier doing business in the Philippines
c. Domestic carriers and keepers of garage
d. Franchise grantee of electric utilities

20. Franchise grantee of city gas and water utilities is subject to a franchise tax of
a. 2%
b. 3%
c. 4%
d. 5%

21. Amounts received for overseas dispatch, message, or conversation originating from the Philippines
are subject to:
a. 3% franchise tax
b. 10% overseas communication tax
c. 2% franchise tax
d. 10% value-added tax

22. A tax on the right or privilege to enter places of amusement

a. Value-added tax
b. Franchise tax
c. Amusement tax
d. Income Tax

23. One of the following is not subject to amusement tax on gross receipts
a. Disco houses
b. Cockpits
c. Professional basketball
d. Bowling alleys

24. All of the following except one are liable to 6/10 of 1% stock transaction tax Which one is not?
a. Individual taxpayers, whether citizen or alien
b. Corporate taxpayers, whether domestic or foreign
c. Estate and trust
d. Dealers in securities

25.One of the following statements is incorrect

a.The 6/10 of 1% tax shall be collected by the brokers who made the sale and shall be remitted within 5
banking days from the date of the collection.
b. The tax paid on sale of shares through local stock exchange and initial public offering (IPO) and
secondary offering shall not be allowable deduction for income tax purpose.
c. The 6/10 of 1% stock transaction tax is a final withholding tax on income.
d. The 6/10 of 1% stock transaction tax is collected whether there is an income or a loss and is a
percentage tax.

26. J Reyes operates Ayawmagpasakay Taxi with three units in Metro Cebu. During the quarter Taxi No.
1 recorded gross receipts of P 90,000, Taxi No. 2 (net of P 20,000 gasoline expense), P 95,000, and Taxi
No. 3 P 100,000. The common carriers tax due is:
a. P 9,408
b. P 8,916
c. P 8,550
d. None

27. Grandbaby is a common carrier by sea. During a particular quarter, its receipts consist of the
following:
Transport of passengers Php 1,000,000
Transport of goods 1,500,000
Transports of cargoes 500,000

The common carrier tax payable is

a. P 30,000
b. P 90,000
c. P 100,000
d. P 200,000
e. Not given

28. Using the data in no. 27, the output VAT is (Figure w/out VAT)
a. None
b. P 120,000
c. P 240,000
d. P 360,000
e. not given

29. Mr. J Cruz is the owner of a small variety store. His gross sales in any one year do not exceed P
3,000,0000. He is not VAT-registered. The following data are taken from the books of the variety store
for the quarter ending March 31, 2019:

Merchandise Inventory, December 31,2018 P 100,000

Gross Sales 450,000
Purchase from VAT-registered suppliers 350,000
The percentage tax due is
a. P 10,000
b. P 13,500
c. P 16,500
d. None

30. Nasaan and Kuryente Po (NAKUPO) is a holder of franchise to sell electricity. In a particular quarter,
its gross receipts amounted to P 2,000,000 from sale electricity. It has also receipts from the lease of its
auditorium and theater amounting to P 600,000. The percentage tax due for the quarter is:
a. P 40,000
b. P 60,000
c. P 100,000
d. None

31. BERT operates a cockpit. Inside the cockpit, he also has a restaurant. Data for the particular quarter
follows:
Gross receipts
Cockpit operation P 500,000
Restaurant operation
Sale of food 100,000
Sale of Liquor 150,000

The amusement tax due from BERT is:

a. P 90,000
b. P 135,000
c. P 225,000
d. P 7,500
32. Using data in no. 31, except that the restaurant is not owned by BERT but is owned by another
person, Chikabebs, not VAT-registered and whose annual gross sale never exceeded P 3,000,000. The
amusement tax due from BERT is:
a. P 90,000
b. P 135,000
c. P 225,000
d. P 7,500

33. Continuing in no. 32, the percentage due from Chikabebs is:
a. P 90,000
b. P 135,000
c. P 225,000
d. P 7,500

34. J Santos promoted a world boxing championship in Manila featuring Manny Hakot, a Filipino
champion. Gate receipts amounted to P 3,000,000 and additional receipts from television coverage was
P 2,000,0000. The amusement tax due is
a. None
b. P 500,000
c. P 300,000
d. P900,000

35. Assuming the above is not a world championship, but a Philippine national boxing championship,
how much is the amusement tax?
a. None
b. P 500,000
c P 300,000
d. P 900,000

36. ABS-SIRADO is a radio-tv broadcasting franchise grantee. During the preceding year, its gross
receipts did not exceed P 10,00,000. During the first quarter of the current year, it has the following
data:
Gross receipts, sale of airtime P 2,000,000
Gross receipts, use of radio station’s communication facitlities 500,000
Business Expenses 700,000

The franchise tax due for the quarter is:

a. P 60,000
b. P 40,000
c. P 75,000
d. P 39,0000

37. A horseracing enthusiast has the following during a particular race day:
Total winnings P 10,000
Cost of winning tickers 500
The tax on winnings is:
a. P 1,000
b. P 400
c. P 950
d. Zero

38. Karen sold 350,000 shares of stocks of Manila Trading Corp. The corporation’s shares are listed and
are traded in the local stock exchange. The percentage tax on the sale is:
a. None
b. P 2,500
c. P 1,750
d. P 50,000
39. Using the same data in no. 38 assuming that Karen sold the shares to GINA, a direct buyer, the
percentage tax on the sale is:
a. None
b. P 2,500
c. P 1,750
d. P 50,000

40. DOROTHY, a dealer in securities, sold P 1,500,000 worth of shares she held as investment. The
shares sold were acquired for P 1,000,000 and were listed and traded in the local stock exchange. The
percentage tax due on the sale is:
a. None
b. P 7,500
c. P 2,500
d. P 5,000

41. One of the following is not a major business internal revenue tax in the Tax Code
a. Value Added Tax
b. Excise Tax
c. Income Tax
d. Percentage Tax

42. Gross Selling Price includes all of the following except one. Which one?
a. Total amount which the purchaser pays to the seller
b. Total amount which the purchaser is obliged to pay to the seller
c. Excise tax
d. Value added tax

43. The value added tax on the installment sale of real property is
a. The higher between the selling price stated in the sales
b. Selling price stated in the sales document
c. Installment received plus interest and other charges
d. Gross receipts

44. The following are zero rated if paid in acceptable foreign currency or its equivalent and accounted
for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas except one:
a. Sale and actual shipment of goods from the Philippines to a foreign country.
b. Sale or raw materials or packaging materials to a non-resident buyer for delivery to a resident local
export-oriented enterprise.
c. Sale to a non-resident of goods assembled or manufactured in the Philippines delivery to a resident in
the Philippines.
d. Sale of real property to a non-resident person for delivery to a resident in the Philippines.

45. The value added tax due on the sale of taxable goods, property and services by any person whether
or not he has taken the necessary steps to be registered.
a. Input Tax
b. Output Tax
c. Excise Tax
d. Sales Tax

46. One of the following is not an export sale.

a. Sale to bonded manufacturing warehose of export-oriented manufacturers and to export processing
zones.
b. Sale to foreign military bases, diplomatic missions or agencies and/or instrumentalities granted tax
immunities, of locally manufactured, assemnled or repacked products whether paid for in foreign
currency or not.
c. Sale of gold to Bangko Sentral ng Pilipinas
d. Exportations of goods on consignment
47. One of the following is not a transaction deemed sale:
a. Transfer, use or consumption not in the course of business of goods or properties originally intended
for sale or for use in the course of business.
b. Distribution or transfer to shareholders or investors of goods or properties as share in the profits of a
VAT-registered person or creditors in payment of debt.
c. Retirement from or cessation from business, with respect to all goods on hand as of the date of such
retirement or cessation.
d. Consignment of goods if actual sale is made within 60 days following the date such goods were
consigned.

48. Tax credit for input taxes shall be allowed if:

a. Both the seller and the purchaser are VAT-registered.
b. Either one of the seller or the purchaser is a VAT-registered.
c. Neither one of the seller or the purchase is VAT-registered as long as VAT invoice is issued.
d. The seller is VAT-registered regardless of whether the purchaser is VAT-registered or not.

49. Quarterly VAT Return shall be filed on:

a. The 10th day of each quarter
b. The 20th day of each quarter
c. The 20th day of each quarter
d. The 25th day of each quarter

50. Value Added Tax is a/an

a. Indirect Tax
b. Direct Tax
c. Local Tax
d. Personal Tax

51. Marwin Company, a VAT registered, has the following vat sales for the month:

Sale to private 224,000

Sale to export-oriented enterprise 100,000
Sale of exempt good 100,000
The following input taxes were passed on by its vat suppliers during the month:
Input tax on taxable goods 5,000
Input tax on zero-rated sales 3,000
Input tax on sale of exempt goods 2,000
Input tax on depreciable capital good not 20,000
attributable to any specific activity
The VAT payable for the month:
a. P1,000 b. P7,200 c. P9,000 d. P16,000

52. During the month of August, Lyle’s Company, a VAT registered company, had domestic invoice
price sales amounting to P1,680,000 and export sales amounting to P1,500,000. During the same month,
Lyle’s Company had total invoice price purchases of P1,120,000 attributable to domestic sales and
P1,008,000 attributable to export sales. For the month of , August what is the VAT payable?
a. P(48,000) b. P48,100 c. P60,000 d. P62,000
53.Which of the following lessors of residential units is/are subject to VAT?
A B C D
No. OF UNITS 20 15 10 10
MONTHLY RENT 10,000 12,800 14,000 16,000
a. B and D b. C and D c. B, C, and D d. D only

54. Aien Company imported and article from USA. The invoice value of the imported article was $7,000
($1:50). The following were incurred in the relation with the importation: Insurance – P15,000; Freight –
P10,000; Postage – P5,000; Wharfage – P7,000; Arrastre charges – 8,000; Brokerage fee – P25,000;
Facilitation – P3,000. The imported article is subject to P50,000 excise tax and P30,000 custom duties.
Aien Company spent P5,000 for trucking from the customs to its warehouse in Angeles, Pampanga. The
VAT on importation is:
a. P60,000 b. P50,500 c. P50,000 d. P35,000

55.Assuming the above article was sold for a sales price of P600,000. What is the VAT payable?
a. P37,000 b. P22,000 c. P12,000 d.P9,500

56. Confidence Company, trader company, made the following sales of goods during the month of June
2013, net of VAT:
Cash sales P200,00
Open account sales 100,000
Installment sales (P40,000 cash were already received) 100,000

Consignment made during the year:

June 15, 2013 100,000
May 15, 2013 100,000
April 15, 2013 100,000
What is the output tax for June?
a. P34, 000 b. P50,000 c. P60,000 d. P72,000

57. The following are the data of Accomplishment Company for the last quarter of 2013:
Sales up to December 15, invoice price 336,000
Purchases up to December 15, net of vat 215,000

Additional information:
On December 16, 2008, Accomplishment Company retired from its business and the inventory valued at
P190,000 was taken and transferred to Brilliant Company. There is a deferred tax from the third quarter
of P3,500. How much is the total VAT due and payable by Accomplishment Company in its operations in
the last quarter and its retirement from business?
a. P10,200 b. P22,800 c. P29,500 d.P32,800

58. Assuming that Bogo Company has the following data for the first quarter of 2014:
Sales, total invoice price 448,000
Purchases, total invoice price 224,000
How much is the VAT payable of Bogo Company for the first quarter of 2014?
a. P30,000 b. P28,000 c. P24,000 d.P1,200

59. A VAT subject real estate dealer sold a residential lot on January 15, 2007. The following information
was made available on the terms of the sale: Gross selling price P3,000,000Initial payments on January
15, 2007 (consisting of down payment and instalment in the year of sale) 900,000 Balance to be
paid in equal instalment, Instalments starting February 15, 2007 2,100,000 The zonal value of the
residual lot was P2,800,000. How much was the output tax on January 15 2007 using 12% VAT rate?
a. P360,000 b. P300,000 c. P108,000 d. None

(60-64) JM Company a VAT-Registered person has the following receipts and purchases:

Cash Receipts P 600,000

Advanced Collections P 250,000
Accounts Receivable P 130,000
Domestic Purchases P 200,000
Importation of Equipment P 150,000
Importation of supplies P 50,000

60.) Compute the total gross receipts subject to output tax.

a. 980,000 c. 730,000
b. 850,000 d. 0

61.) Compute the output tax.

a. 117,600 c.87,600
b. 102,000 d. 0

62.) Compute the total purchases which have claimable input tax.
a. 200,000 c. 400,000
b. 350,000 d. 0

63.) Compute the total claimable input tax.

a. 24,000 c. 48,000
b. 42,000 d. 0

64.) Compute the total VAT on importation.

a. 24,000 c. 48,000
b. 42,000 d. 0

(65-68) Marsy Tailoring Inc, a VAT taxpayer, is engaged in a sewing business. During the month,
University of the Visayas paid P 1,000,000 for the sewing services done by the company for their school
uniforms, Bench a foreign dressmaker paid $200,000 for their garments. While ThaiFab, a foreign textile
manufacturer paid P 2,500,000 for their curtains.
Note: $1=P 50.00

65.) Compute the total receipts subject to 12% VAT.

a. 13,500,000 c. 0
b. 3,500,000 d. 1,000,000

66.) Compute the total receipts exempt from VAT.

a. 12,500,000 c. 2,500,000
b. 13,500,000 d. 0
67.) Compute the total receipts subject to zero rated VAT.
a. 13,500,000 c. 0
b. 10,000,000 d. 12,500,000

68.) Compute the Value Added Tax.

a. 1,620,000 c. 0
b. 420,000 d.120,000

69.) Romina Corporation, a VAT-registered sardines manufacturer, purchased the following materials
and supplies in the processing of sardines during the month:
Sardines P 600,000
Cans P 50,000
Tomatoes P 60,000

Compute the total input VAT.

a. 85,200 c. 24,000
b. 79, 200 d. 26,400

70.) Kathryn imported a car from USA for her personal use. Total landed cost is P 250,000 including
customs duties of P 50,000. VAT on importation is:
a. P 25,000
b. P 20,000
c. P 30,000
d. P 36,000

That in all things, God may be glorified!

Ora et Labora