1. Which of the following is a correct nature of restriction (limitation) to exercise taxation power?

Constitutional Inherent

a. Territorial Jurisdiction Yes No

b. International Comity No Yes

c. Rule of Uniformity and Equity Yes Yes

d. Due Process of Law No  No

2. Statement 1:  Taxation is the act of laying a tax, i.e. the process or means by which the sovereign,
through its lawmaking body, raises income to defray the necessary expenses of government. . 
Statement 2: Power of eminent domain is the power of the State or those to whom the power has been
delegated to take private property for public use upon paying the owners a just compensation to be
ascertained according to law. 
Statement 3: To implement the police power of the State to promote the general welfare is a
compensatory purpose of taxation. 
A. False, True, False
B. True, True, False
C. False, False, False
D. True, False, True

3. Which of the following statements is correct?

A. The power of taxation must first be expressly granted, either by law or by the constitution for the
State to validly exercise it 
B.  The power of taxation and police power rnay be exercised simultaneously 
C. The Philippine government may subject the land area where embassies of foreign governments
are located to real estate taxes 
D. Government owned and controlled corporations are exempted from taxes because it would be
impractical for the government to be taxing itself

4. Mr. Andes asks your professional expertise whether the following items of income need be reported
in his Income Tax Return

I. Capital Gains on Shares of Stocks

II. Passive income
III. Creditable Withholding 
IV. Exempt or exclusion from gross income e.g. Proceeds of Life Insurance

A. All of the above must be included in the ITR

B. None of the above is includable in the ITR
C. Only items I and II must be included in the ITR
D. Only items I, II and IV must not be included in the ITR

5. The Commissioner of Internal Revenue cannot

A. Abate or cancel tax liabilities
B. Compromise payment of internal revenue taxes
 C. Credit or refund taxes erroneously or illegally collected.
D. Compromise cases involving tax fraud

6. S1: The RATE Program is a means of generating revenue for the government
S2: Oplan Kandado’s closure order can be lifted when there is a payment of deficiency taxes and
penalties as well as any compromise penalties
S3: Business operations can be suspended by BIR when there is a failure to file a VAT return

A. True, True, True

B. False, True, False
C. False, False, True
D. False, True, True

7. Which of the following is taxable? 

A. Government Service Insurance System (GSIS)
B. Social Security System (SSS)
C. Philippine Health Insurance Corporation (PHIC)
D. Philippine Sweepstakes Office (PSCO)

8. Under CREATE Law (RA 11534), What is the tax rate for resident foreign corporations? 
A. 30%
B. 25%
C. 20%
D. 15% 

9. When is the effectivity of the final withholding tax rate for a non-resident corporation Under CREATE
Law (RA 11534)?
A. January 01, 2020
B. June 30, 2020
C. January 01, 2021
D. July 01, 2020

10. What are the requirements in order for a domestic corporation to be able to avail of the 20% tax rate? 
I. Taxable income does not exceed 3,000,000
II. Taxable income does not exceed 5,000,000
III. Total assets does not exceed 100,000,000 excluding the land on which the office, plant, and
equipment is situated

A. I and III
B. II and III
C. III only
D. None of the above

11. The following data are presented in annual audited financial statements of Merchandise
Merchandising Corporation for 2021. Calculate the income tax still due when the net income recorded
in the books is 5,100,000. The following amounts were included in the computation of the net income
per books. 

Royalty income received 26,400

Dividends Income 30,000
Gain from sale of shares in a domestic corporation 42,000
Net capital loss 15,000
Bad debts directly written off 39,000
Inventories written off  due to spoilage or expiry 72,000
Depreciation on revalued property 90,000
Surcharge and compromise 480,000
Contribution to local government exclusively for public purpose 300,000
Contribution to Government's priority program in sports 63,000
Quarterly income tax payments 390,000
Allowance for bad debts 48,000

How much is the taxable net income? 

A. 6,420,600
B. 6,057,600
C. 6,051,000
D. 5,985,600

12. How much is the tax payment still due? 

A. 1,514,400
B. 1,605,150
C. 1,124,400
D. 1,49,400

13. In 2021, Sasuke Uchiha sold shares of stocks of a domestic corporation directly to a buyer, Itachi
Uchiha, for 100,000. He bought the shares back in 2018 for only 37,500

The selling price was paid in installment. The following is the installment schedule: 
Down  12,500
2021 12,500
2022 25,000
2023 25,000
2024 25,000

How much is the capital gains tax in 2021? 

A. 9,375
B. 2,344
C. 1,172
D. None of the above

14. How much is the capital gains tax in 2024?

A. 9,375
B. 2,344
C. 1,172
D. None of the above

15. Hokage Corp declared and distributed dividends of 1,000,000. Naruto Corp was the only corporate
subscriber holding 60% of Hokage’s shares of stock. How much is the final taxes withheld by Hokage
Corp? 
A. 0 because of inter-corporate dividends exemption
B. 40,000
C. 60,000
D. 100,000
16. As you were preparing your income tax return for 2020, you got confused because of the new
changes brought about by RA 11525, so you tried to determine whether a rental income was due to
be declared this year or next year. Because of this, you sought the advice of an attorney who said
that you report the income next year. You followed this advice and it turned out to be wrong. In your
defense against a BIR assessment, are you guilty of fraud?

A. Not guilty of fraud because you simply followed lawyer’s advice.

B. Guilty of fraud because it was deliberate
C. Not guilty because it is the lawyer’s fault.
D. Guilty for failure to consult an accountant.

17. An individual taxpayer, other than a corporation may elect to pay the income tax due in two equal
installments if the tax due is
A. More than P100
B. More than P1,000
C. More than P 2,000
D. More than 5,000

18. A corporation has the following income for 2022

Interest income derived from depository bank under Expanded Foreign Currency Deposit 200,000
System (EFCDS) 

Interest on government debt instrument and securities in which the number of lenders at time 150,000
of origination is thirty (30)

Interest on government debt instrument and securities in which the number of lenders at time 500,000
of origination is ten (10)

Prizes and Winnings (10,000 of which came from prizes) 60,000

Royalties  10,000

Interest from overdue accounts and notes receivable (30% of which are from accounts 80,000
receivable)

How much is the final tax on the passive income assuming the corporation is a resident foreign
corporation? 
A. 162,000
B. 188,000
C.  62,000
D. 190,000

19. How much is the final tax on the passive income assuming the corporation is a non-resident foreign
corporation? 
A. 230,000
B. 200,000
C. 260,000
D. 162,500
20. Oni Chan, a non-resident foreign corporation has the following income items for the 2021:

Stock Dividend from a domestic corporation (no tax sparing credit) 400,000

Property Dividend from foreign corporation 600,000

Interest income received from a depositary bank under FCDS 150,000

Rent Income, net of withholding taxes 75,000

Interest Income from a debt instrument not within coverage of a deposit substitute, 80,000
Philippines

Interest Income from a debt instrument not within coverage of a deposit substitute, USA 90,000

Prizes  10,000

Sales 900,000

Cost of Sales 500,000

Operating Expenses 100,000

Interest on foreign loans 50,000

How much is the total final withholding taxes of Oni Chan?

A. 200,000
B. 182,500
C. 160,000
D. 157,500

21. Mirana and Luna are sisters who are both resident citizens of the Philippines. They invested
P1,000,000 each in buying a banana plantation. The land is registered in their names as co-owners. 

In 2021, during the fifth year of operations, the co-ownership had a gross sales of coconut amounting to
P30,000,000; gross income of P20,000,000 and expenses of P15,000,000

How much is the final tax on each co-owner share in the co-ownership’s net income?
A. 187,500
B. 175,000
C. 300,000
D. 100,000

22. An instrument with maturity period of 15 years was held by Mr. Taylor (a non-resident citizen) for 3
years and transferred to Mr. Edward (a resident alien). Mr. Edward held It for 2 years before
subsequently transferring it to Mr. Cullen (a non-resident alien not engaged in business), who held it
until the day of maturity. How much is the final withholding tax due?

Mr. Taylor Mr Edward Mr. Cullen

A. 12% 20% Exempt

 B. 12 % 20 %  20 %

C 20% 20% 20%

.

D 12% 20% 25%

.

23. Tabachingching, a non-resident foreign corporation had the following:

Rent from lease of aircraft to a domestic corporation  800,000

Royalty from the use of patent in the Philippines 500,000

Interest on US dollar deposit with a domestic Bank operating as foreign currency US $

depository unit 30,000

Interest on US dollar loan to a domestic corporation Engaged in design and construction  US $

20,000

The final withholding tax is 

a. 185,000 and US $ exempt
b. 185,000 and US $ 4,000
c. 325,000 and US $ exempt
d. 185,000 and US $ 5,000

24. IDK Corporation had the following income in 2022:

Interest on bank deposit in PNB
i. Philippine peso deposit, gross Php 300,000
ii. US dollar deposit, gross
US $ 10,000

Royalty
iii. Philippines Php 400,000
iv. USA US $20,000

Rate of exchange 1 US  $ = P50.00

The final withholding tax if IDK corporation is a domestic corporation is 

A. 215,000
B. 415,000
C. 440,000
D. 140,000

25. Which of the following is correct under RA 11534 (CREATE Law)? 

I. Non-resident aliens engaged in trade or business are exempt from final taxes on PCSO/Lotto
Winnings amounting to 10,000 and below
II. Non-resident aliens engaged in trade or business are exempt from final taxes on PCSO/Lotto
Winnings amounting to below 10,000
 III. Non-resident aliens not engaged in trade or business are exempt from 25% final taxes on
PCSO/Lotto Winnings amounting to 10,000 and below
IV. Non-resident aliens not engaged in trade or business are not exempt from 25% final taxes on
PCSO/Lotto Winnings amounting to 10,000 and below

A. All of the above

B. Only one statement is true
C. Two statements are true
D. None of the statements are true

26. Which of the following statements is correct? 

I. Beginning January 1, 2018, PCSO lotto winnings of not more than P10,000 received by citizens
and residents are exempt from income tax.
II. Beginning from the effectivity of CREATE, PCSO lotto winnings of not more than P10,000
received by non-resident aliens engaged in trade or business are exempt from income tax. 
III. Beginning from the effectivity of CREATE, PCSO lotto winnings of not more than P10,000
received by non-resident aliens not engaged in trade or business are exempt from income tax. 

A. I only
B. I and II only
C. I and III only
D. All of the above

27. Which of the following rates are correct?

A B C D

Non-resident citizen -Interest Income from long-term deposit 20% 20 % 5% 12 %

evidenced by certificates prescribed by BSP pre-terminated 2
years before maturity

Non-resident aliens not engaged in trade or business-  Lotto 25% 25% 10% 25%
winnings amounting to P10,000

Non-resident foreign corporation - Royalties on books 10% 25% 25% 25%

Resident Domestic Corporation - Stock dividends from another Exempt Exempt 20% Exempt
domestic corporation

28. Statement 1 All royalty income derived from sources within the Philippines are subject to final tax. 
Statement 2: All royalty income derived from sources outside of the Philippines received by resident
citizens are subject to basic income tax.

A.  Only statement 1 is correct

B. Only statement 2 is correct 
C. Both statements are correct
D. Both statements are incorrect
 

29. A taxpayer received during the taxable year the following passive income derived from within the
Philippines: 

Interest on bank deposit under FCDU (net) 231,250

Royalty on a software application (gross) 95,000

Royalty literary composition, Mexico, USA 10,000

Dividend Income, resident corporation (gross) 150,000

If taxpayer is a non-resident alien engaged in business, the final tax on the above passive income would
amount to
a. P 52,750
b. P 19,000
c. P 28,250
d. P 37,750

30. Lenovo, Inc., a resident foreign corporation, has earned the following income during 2022
DIVIDEND INCOME FROM
 Entrego, a non-resident foreign corporation 200,000
 Shopee, a resident foreign corporation (ratio of Philippine income over world income for the 300,000
past 3 years is 40%)
 Lazada, a domestic corporation 400,000

INTEREST INCOME FROM

 Current account, Security Bank 200,000
 Savings Deposit, CIMB, US 700,000
 FCDU deposits 600,000

ROYALTY
On books from various domestic corporations 100,000
Computer software programs from various domestic corporations 50,000
On musical compositions from various domestic corporations 50,000

The total final tax on passive income for the taxable year is
A. 310,000
B. 410,000
C. 170,000
D. 100,000

31. Which of the following rates are correct:

Rentals, charter and other fees Nonresident Nonresident owner or
derived by a non-resident lessor of cinematographic film owner, lessor of vessels chartered
aircraft, machineries and other lessor or distributor by Philippine nationals
equipment

A. 4.5 % 30 % 7.5 %
 B. 4.5 % 25 % 7.5 %

C 7.5 % 25 % 4.5 %
.

D 4.5 % 7.5 % 30 %
.

32. Which of the following  is a capital asset?

A.  Land used in business
B. Accounts Receivable
C. Office Equipment
D. Apartment House

33. In 2021, a general professional partnership was organized. Solo contributed P600,000 for  40%
interest. The partnership's net income in 2021 was P800,000, and in 2022 P400,000. The net income
in 2021 was distributed to the partners while no distribution of income was made in 2022. 
 
In 2022, the partnership was dissolved, and Solo received P700,000 as his share in the liquidation. 

How much was the capital gain (loss) of Solo in 2022? 

A. (30,000)
B. (60,000)
C. (110,000)
D. (180,000)

34. Roberta loves reading threads on Reddit investment community. She saw the controversy
surrounding Gamestop, a domestic corporation. She decided to join the bandwagon and short sell
Gamestop stocks of 50,000 for 11 from her broker. The current price of Gamestop is 10 per share
and Roberta expects the price to go down. Unfortunately, the share price rises to 18 per share. 

How much is the capital gain (loss) from the short sale?

A. (175,000)
B. 175,000
C. 350,000
D. (350,000)

35. Big D, a resident citizen sold the following real property

Location Acquisition Cost Fair Market Value Selling Price

Family Home Phils Php 4M 5M 8M

Apartment Houses Leased to tenants Phils 10M 15M 20M

Residential Land USA 8M 10M 15M

Residential Land Phils 10M 8M  15M

The capital gains tax due is:
A. 0
B. 3,480,000
C. 780,000
D. 1,380,000

36. Using the preceding number, if the proceeds of the sale were used to buy a new family home, the
capital gain tax is: 
A. 0
B. 480,000
C. 900,000
D. 780,000

37. Aldrich is a jewelry dealer and he has a jewelry which he purchased 2 years ago at a cost of P
200,000. He sold it to Marco on the following terms

Downpayment March 1, 2022 100,000

Installment December 31, 2022 400,000

payment
February 15, 2023 200,000

February 15, 2024 100,000

For the year 2022, Aldrich will report gross income of :

A. 375,000
B. 187,500
C. 600,000
D. 300,000

38. Shrinkage in value of the stock and loss from wash sale are nondeductible losses because 
Statement 1: Loss on account of shrinkage in value of the stock through fluctuation in the market or
otherwise are not realized loss. 
Statement 2: Loss from wash sale is only an artificial loss. 
Statement 3: Loss from some wash sales can be deductible

A. Only statement 1 is correct

B. Only statement 2 is correct
C. Only statement 3 is correct 
D. All statements are correct

39. Francyne sold a residential house and lot in Mexico,USA for P 10,000,000 to his friend. Its FMV,
when he inherited it from his father, was P 12,000,000 although its present FMV is P 15,000,000.

Assuming the house and lost was Francyne’s principal residence and she used ½ of the proceeds to buy
a new principal residence in Mexico, Pampanga within 18th months after the above sale and she infrared
the BIR about the sale. Capital gains tax shall be:
A. 0
B. Subject to 720,000 capital gains tax
 C. Subject to 360,000 capital gains tax
D. Subject to 450,000 capital gains tax

40. A transferred his commercial land with a cost of 11,600,000 and with a FMV of 12,900,000 to ABC
Corp in exchange of the stock of the corporation with par value of 10,800,000. As a result of the
transfer A gained control of the corporation. As a result,
A. The gain recognized is the difference between the par value of the shares of stocks and the cost
of the land 
B. The loss recognized is the difference between the FMV of the land and the par value of the
stocks. 
C. No gain shall be recognized because the land was in exchange for shares of stock of a
corporation and A became the majority stockholder thereof.
D. No loss shall be recognized because the par value of the shares is greater than the cost of the
land. 

41. Alex Stardew Corporation had the following information for the taxable year 2021:
Gross Sales 900,000
Cost of Sales 200,000
Less:  Business expenses (P 540,000 )
     Provision for bad debts ( 90,000 )  ( 630,000 )
Net income before tax P 70,000

Additional information:
 Accounts written off during the year and charged to allowance for bad debts 50,000;
Recoveries on accounts receivable previously written off in 2020 and credited to allowance for bad
debts:
Allowed as deduction by BIR 30,000
Disallowed as deduction by BIR 20,000

How much was the taxable net income?

A. 90,000
B. 110,00
C. 140,000
D. 130,00

42. PCAD Inc., a Philippine corporation, sold through the local stock exchange 1,000 BDO Unibank
shares that it bought 3 years ago. PCAD sold the shares for P1 million and realized a net gain of
P100,000.00. How shall it pay tax on the transaction?
A. It shall declare a P1 million net gain in its income tax return
B. It shall report the 100,000.00 in its corporate income tax return because the holding period is not
applicable to corporations
C. It shall pay 15% capital gains tax on the net gain 
D. It shall pay a tax of 6/10 of 1% of the P1 million gross sales.

43. Rock Lee was injured in a sand boarding accident in 2021. He incurred and paid medical expenses of
P40,000 and legal fees to sue the company of P50,000 during that year. In 2022, he recovered
P35,000 as settlement from the insurance company which insured the company from accidents.
The amount of income taxable to Rock Lee in 2022 is:
A. 40,000
B. 50,000
C. 90,000
D. 35,000
 E. None of the above

44. Minimum Wage Earners shall refer to

A. Private sector workers being paid the Statutory Minimum Wage.
B. Public sector workers being paid the Statutory Minimum Wage.
C. Non-agricultural sector workers being paid the Statutory Minimum Wage.
D. Private and public sector workers being paid the Statutory Minimum Wage.

45. Clover, an employee of the WOOHP (World Organization of Human Protection), a domestic
corporation, earns 90,000 per month net of 10% withholding tax. Because she was able to capture
drug lords in the Philippines in July, she was given 200  shares of stocks with a par value of 100 per
share and fair market value of 150. She received the shares of stock two months later when the fair
market value is 160. She later on sold the shares of stock when the price was 200. 

How much is Clover’s income for 2014? 

A. 1,220,000
B. 1,200,000
C. 1,230,000
D. 1,232,000

46. Alex from Stardew Valley received the following income:

Interest from Philippine Treasury Certificates 5,000
Refund pertaining to 2019 income tax 10,000
Refund pertaining to 2019 VAT 5,000
Refund pertaining to 2019 Special Assessment 6,000
Refund pertaining to 2019 estate tax 4,000

The total amount of interest subject to tax in Alex’s 2020 income tax return was:
a. P 5,000 c. P15,000
b. P 10,000 d. Zero

47. What is a taxable income?

A. Prize won in a painting and sculpting contest the recipient joined
B. Prize won by Bang Bang in the international Mobile Legends Tournament sanctioned by the PH
E-Sports Association
C. Award not exceeding the amount set by law for being a model employee
D. The Nobel Prize in Literature

48. TabaChonk inherited a parcel of land from his father, Tau Fat Cat, which had a fair market value of
500,000 on the day the land was transferred in his name. The land had a value of 600,000 on the
date of death of Tau Fat Cat. However, the land was bought 5 years ago for only 70,000. 

TabaChonk formed his own company and transferred the land in exchange for shares of stock worth
450,000. How much is TabaChonk’s taxable gain? 
A. 50,000
B. 150,000
C. 380,000
D. None of the above

49. Ms. Clarize is employed in BBC Corporation. She received the following for the current year
 Statutory minimum wage, inclusive of the 13th month pay 200,000

Overtime pay 40,000

Hazard Pay 10,000

Night-shift differential  25,000

Commission from the same employer 20,000

Total amount received 295,000

How much is the exempt compensation income?

A. 295,000
B. 275,000
C. 250,000
D. 210,000

50. How much is his taxable income?

A. 20,000
B. 45,000
C. 85,000
D. 295,000

51. The following shall be considered as de minimis benefits not subject to income tax as well as
withholding tax on compensation income of both managerial and rank and file employees. except 

A. Monetized unused vacation and sick leave credits of private employees not exceeding 10 days during
the year 
B. Monetized value of vacation and leave credits paid to government officials and employees 
C. Medical cash allowance to dependents of employees, not exceeding Php 1,500 per employee per
semester of Php 250 per month
D. Rice subsidy of Php 2,000 or I sack of 50kg rice per month amounting to not more than Php 2,000

52. In 2022, P, a minimum wage earner received from her employer a total amount of Php 210,000
inclusive of the 13th month pay of Php 15,000 She also received overtime pay of Php 48,000 and
night shift differential of Php 22,000. She also received tips from customers amounting to Php 25,000,
thus the total income received from her employer amotneed to Php 305,000. The taxable income of A
is 

A. 0
B. 25,000
C. 280,000
D. 305,000

53. After working for 11 years and due to old age (60 yrs old), Rufino retired from his employment on
December 31,2021 as a rank and file employee of DDS corporation. As a consequence of his
retirement, he received the following from his employer:
 Salary for 2021 600,000

Christmas gift 30,000

Anniversary bonus 5,000

Loyalty award, tangible personal property 20,000

Retirement Pay 900,000

13th -15th month pay 150,000

How much is the amount subject to income tax on Rufino:

A. 640,000
B. 700,000
C. 1,600,000
D. 805,000

54. Other benefits under revenue regulations include:

I. Christmas bonus
II. Productivity Incentive bonus
III. Cost of living allowance
IV. Loyalty awards
V. Gifts in cash or in kind and other benefits of similar nature actually received by officials and
employees of both government and private offices
A. I only
B. I,II,III,IV, and V
C. I, II. IV. and V
D. I and II only

55. Allen is working under a pharmaceutical company and has the following data for current year
Salary income 1,000,000

Net capital loss 15,000

Gain on sale from shares of stock direct to buyer 10,000

Gain on sale of shares of stock in the local stock exchange 5,000

Expenses incurred (50% is spent on his rent of an apartment which near the place he 300,000
works)

Health and hospitalization insurance premium paid 2,000

Basic personal exemption  (he has 4 dependents, two of which are Senior Citizen and 50,000
PWD)

Union fees 3,000

Mandatory government contributions 10,000

13th month pay and other benefits exceeding their limit 91,000
How much is his taxable income?
A. 1,091,000
B. 986,000
C. 888,000
D. 988,000

56. The amount of 90,000 under “other benefits” which are excluded from gross income shall
I. Not be applicable to self-employed individuals
II. Not be applicable to income generated from the conduct or trade of business
III. Shall be applicable to all types of income

A. I only
B. I and II only
C. I, II and III
D. None of the above

57. Zagu Corporation gives all its employees (rank and file, supervisors and managers) one sack of rice
every month valued at P3,000 per sack. During an audit investigation made by the Bureau of Internal
Revenue (BIR), the BIR assessed the company for failure to withhold the corresponding Withholding
tax on the amount equivalent to the one sack of rice received by all the employees, contending that
the sack of rice is considered as additional compensation for the rank and file employees and
additional fringe benefit for the supervisors and managers. Therefore, the value of the one sack of
rice every month should be considered as part of the compensation of the rank and file subject to tax.
For the supervisors and managers, the employer should be the one assessed pursuant to Section
33(A) of NIRC. Is there a legal basis for the assessment by the BIR? 
A. No, the benefit is for the convenience of the employer. Thus, it is exempt. 
B. No, the benefit is a de minimis benefit, exempt from income tax. 
C. No, benefit received by the supervisory employees and managerial employees are not subject to
fringe benefit tax. 
D. Yes, excess benefits from de minimis received by the rank and file are subject to compensation
income tax if they exceed the threshold of 90,000 for 13th month pay and other benefits. 

58. In case of travel of employees for business conventions or meetings abroad: 

S1 - In-land travel expense shall not be treated as taxable fringe benefits regardless of its amount
S2- The cost of economy and first class tickets shall not be subject to the fringe benefit tax. airplane
However, 30 percent of the cost of business class airplane tickets shall be subject to the fringe benefit
tax. 
A. True; False
B. True; True 
C. False; True
D. False; False

59. Life of Pi, a non-stock non profit religious organization, owns a condo at the Green Meadows. When it
was bought by the Life of Pi, the price was P5,000,000 while the fair value of the said condo is
P7,500,000 and zonal value of P4,000,000 in the City  Assessors’ Office. This condo is being used by
the Company’s Head Preacher for his residential accommodation. 

Assuming the condo was transferred to the Head Preacher for 4,000,000. What is the fringe benefit tax
due? 
 A. 4,038.462
B. 1,884,615
C. 538,462
D. 942,308

60. Assuming it was transferred for a consideration of 8,000,000. What is the fringe benefit tax due? 
A. 4,038.462
B. 1,884,615
C. 538,462
D. 942,308
E. None of the above

61. Akatsuki Corporation earned a taxable income of 1,000,000 for the year 2021. During the year, it
credited to its miscellaneous income the refund of taxes and recoveries of accounts written off. 

Refund of percentage tax 20,000

Refund of income tax 50,000

Refund of VAT 20,000

Refund of Special assessment 10,000

Bad debt recovered (allowed as deduction) 30,000

Bad debt recovered (not allowed as deduction) 15,000

 How much is the income tax payable if the total asset of Akatsuki Corporation is less than 100,000,000 in
2021. 
A. 300,000
B. 262,500
C. 315,000
D. 210,000

62. Which of the following corporations is taxable? 

A.  Labor, agricultural or horticultural organization not organized principally for profit
B. Mutual savings bank not having a capital stock represented by shares, and cooperative bank
without capital stock organized and operated for mutual purposes and without profit
C. Cemetery company owned and operated by a stock corporation
D. A beneficiary society, order or association, operating for the exclusive benefit of the members
such as a fraternal organization operating under the lodge system, or mutual aid association or a
nonstock corporation organized by employees providing for the payment of life, sickness,
accident, or other benefits exclusively to the members of such society, order, or association, or
nonstock corporation or their dependents

63. In 2021, Hyuga Corporation contributed P60,000 to a qualified charitable organization. Hyuga’s 2021
net income was P420,000. In 2021, what amount can Hyuga Corp deduct as charitable
contributions? 
1. 24,000
2. 48,000
3. 42,000
 4. 21,000

64. MAFD Corporation incurred an interest expense of P 500,090 in calendar year 2020 on its bank loan.
The said loan was secured in 2019 to finance the construction of its warehouse. In calendar year
2020, its gross assets amounted to P50,000,000, excluding the land with a cost of P5,500,000. It
recorded a gross income of P 10,000,000 and incurred operating expenses of P6,000,000, inclusive
of the interest expense. It had interest income earned for the same year amounting to P150,000. 

Compute for the allowable interest expense

A. 500,090
B. 450,590
C. 475,340
D. 460,340

 Kankuro Corporation has the following data for 2021: 

Gross income, Phil. 1,000,000 
Gross income, USA 500,000 
Gross income, China 500,000
Cost of Sales, Phil 500,000
Cost of Sales, USA 100,000
Cost of Sales, China 50,000
Expenses, Phil. 300,000
Expenses, USA 200,000 
Expenses, China 100,000 

Other income not included above:

Dividend from San Miguel Corp. 70,000 
(40% of operation in PH)
Dividend from Ford Motors, USA 120,000 
(40% of operation in PH)
Gain on sale of San Miguel shares direct 150,000
Royalties, Phils 50,000
Royalties, USA 100,000
Interest on notes receivable, Phils 60,000
Rent Income, USA 250,000
Rent Income, PH (net of withholding) 95,000

Kankuro Corp also sold a land classified as capital asset for P2,000,000. The cost of the land is
P1,000,000 while its Zonal Value is P3,000,000.
A. 507,500 
B. 340,000
C. 557,500 
D. 502,500 

65. What is the total final income taxes including the capital gains tax?
A. 10,000
B. 212,500
C. 152,500
D. 180,000
66. If Kankuro Corp is a resident foreign corporation, what is the taxable net income? (Ignore the sale of
land) 
A. 860,000
B. 700,000
C. 360,000
D. 1,010,000

67. If Kankuro is a non-resident foreign corporation and there is no tax sparing, its total final taxes
imposed is (ignoring the sale of land):
A. 342,167
B. 349,167 
C. 308,000
D. 315,000 

68. If Kankuro is a non-resident foreign corporation and there is tax sparing, the total final taxes imposed
is (ignoring the sale of land):
A. 342,167
B. 349,167 
C. 308,000
D. 315,000  

69. A Corporation, a domestic real estate dealer, donated 23 residential lots with the improvements
thereon to B Corporation, a non-stock, non-profit organization established for charitable purposes and
registered with the Philippine Council for NGO Certification (PCNC). Will any subsequent sale or
donation of the properties by B Corporation be subject to tax?
A. Yes. If the same properties are subsequently donated to a non-stock, non-profit educational
institution, the donation is subject to DST on conveyances of real properties.
B. No. The same properties were already subjected to donor’s tax when B Corporation acquired it.
C. Yes. If the same properties are subsequently conveyed by way of sale or exchange, the sale will
be subject to corporate income tax on the gain realized.
D. Yes. If the same properties are subsequently donated even to an exempt donee, the donation
shall be subject to donor’s tax.

70. A retailer of goods, whose accounting method is under the accrual basis, has a gross sales of P
1,000,000 with a cost of sales amounting to P 800,000 for year 2020. The taxpayer is qualified to
choose OSD as deductions. 

How much is the amount of OSD assuming the taxpayer is a corporation?

A. 600,000
B. 120,000
C. 80,000
D. 400,000