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Individual Taxation Exercises

The objective of this Standard is to prescribe the accounting treatment for property, plant and equipment so that users of the financial statements can discern information about an entity's investment in its property, plant and equipment and the changes in such investment.

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Margaux Corneta
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27 views3 pages

Individual Taxation Exercises

The objective of this Standard is to prescribe the accounting treatment for property, plant and equipment so that users of the financial statements can discern information about an entity's investment in its property, plant and equipment and the changes in such investment.

Uploaded by

Margaux Corneta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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EXCERCISES ON TAXATION OF INDIVIDUALS

1. In preparing the Annual Income Tax Return of Sisa, the following information were culled from his
accounting records:
Gross sales – Php 1,500,000
Cost of sales – Php 500,000
Gross income – Php 1,000,000
Operating expenses:
Salaries and wages – Php 100,000
Rent Expense – Php 100,000
Depreciation – Php 100,000
Utilities Expense – Php 100,000
Repairs and Maintenance – Php 100,000
Other income:
Rental income – Php 950,000
Interest income from bank deposits – Php 100,000
Dividends from ABC Corp. – Php 100,000
Cash Prizes – Php 100,000

a. Compute for the Regular Income Tax.


b. Compute for the total tax
b. Compute the annual income tax due if Sisa opted to be taxed at 8% Gross Receipt Tax.

2. Rhaenyra has the following income and expenses:


Philippines Japan
Compensation Income 500,000 None
Business Income 1,500,000 300,000
Gain on Sale of Jewelry 30,000 20,000
Gain on sale of 10-year bonds 40,000 30,000
Interest on DBO, Domestic bank - net 150,000 NA
Interest on US Bank NA 50,000
Prizes 10,000 15,000
Royalties 30,000 20,000
Loss on sale of Land to her Brother
(FMV 2M, Cost 1.5M) 300,000 None
Loss on sale of Personal Car 50,000 None
Salaries Expense 300,000 60,000
Rent Expense 50,000 70,000
Depreciation 10,000 12,000
Interest Expense 300,000 150,000
R&D to be amortized for 3 years 1,000,000 None
a. Compute for the Philippine income tax assuming Rhaenyra is
i. Resident Citizen
ii. Non-resident Citizen
b. Compute for the Philippine Income tax due assuming Rhaenyria, RC, opt to be taxed at 8% GRT.

3. Daemon has the following gross income and expenses:


Year 1 Year 2 Year 3 Year 4 Year 5
Gross Income 1,150,000 1,300,000 1,280,000 1,250,000 1,350,000
Expenses 1,300,000 1,280,000 1,450,000 1,120,000 800,000

Compute for the income tax due each year.

4. ABC Corporation is using an allowance method for it’s Doubtful Accounts Expense. The Allowance account
has a beginning and ending balance of 500,000 and 600,000 respectively. The doubtful accounts expense
during the year is 300,000. ABC Corp also recovered 20,000 of its accounts receivable previously written off.
How much is the allowable deduction as doubtful account expense during the year?

5. Nica is an online seller has the following income at each quarter during the year 2022:
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Business Income 500,000 700,000 750,000 900,000
Business Expenses 650,000 250,000 300,000 260,000

Compute for the income tax due each quarter and for the taxable year.

6. Fresh Corporation paid the following life insurance premiums:

For the life of Shine, an employee – the beneficiary is her husband Sun P500,000
For the life of Shine, an employee – the beneficiary is Fresh Corp P1,200,000

How much is the deductible expense of Fresh corporation?

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