Question 1 exceed P 10,000,000.
In the first month
(Adapted) A VAT-registered public of the current year, it had the following
works contractor has the following data data:
on services rendered in the Philippines Gross receipts, sale of airtime P
for the first quarter of 2007 (VAT- 2,000,000
exclusive): Payments received from user of radio
Contract price (foreign clients doing station’s
business communications facilities for overseas
outside the Philippines) ($1:P50) $ communications 500,000
100,000 Business expenses 700,000
Contract price (private sector clients) P How much was the overseas
5,000,000 communications tax?
Contract price (Government) 3,000,000 Response: P50,000
Collections from foreign clients $
100,000 Question 4
Collections from Government contracts What are the transactions that will now
1,000,000 be subject to twelve percent (12%) and
Collections from private sector clients no longer be subject to zero percent
2,000,000 (0%), upon the successful establishment
Purchases during the quarter and implementation of an enhanced
(used in private sector clients contracts) VAT refund system by the Department
800,000 of Finance (DOF)?
Payments for services of a VAT- 1. The sale of raw materials or
registered sub- packaging materials to a non-resident
contractor (used in Government buyer for delivery to a resident local
contracts) 400,000 export-oriented enterprise to be used in
Purchases during the quarter (used in manufacturing, processing, packing or
private sector clients and repacking in the Philippines of the said
government contracts only) 300,000 buyer's goods, paid for in acceptable
How much is the VAT payable for the foreign currency, and accounted for in
quarter using 12% VAT? accordance with the rules and
Response: P190,000 regulations of the BSP;
2. The sale of raw materials or
Question 2 packaging materials to an export-
One of the following is subject to the oriented enterprise whose export sales
3% percentage tax under Sec. 116: exceed seventy percent (70%) of total
annual production;
Response: Seller of refined sugar 3. Transactions considered export sales
whose annual gross sales do not under Executive Order No. 226,
exceed the VAT threshold amount otherwise known as the Omnibus
Investments Code of 1987, and other
Question 3 special laws
Vanderwoodsen is a radio-TV 4. Processing, manufacturing or
broadcasting franchise grantee. The repacking goods for other persons doing
previous year, its gross receipts did not business outside the Philippines which
goods are subsequently exported where friends .....................................................
the services are paid for in acceptable ...P30,000
foreign currency and accounted for in Mourning clothing of the widow and
accordance with the rules and unmarried minor
regulations of the Bangko Sentral ng children ............................................
Pilipinas (BSP); and 20,000
5. Services performed by subcontractors Obituary notice in a
and/or contractors in processing, newspaper ..............................................
converting, or manufacturing goods for ................................................. 50,000
an enterprise whose export sales Card of thanks published in a
exceeds seventy percent (70%) of total newspaper ..............................................
annual production. .................................. 30,000
Burial
Response: 1,2,3,4,5
plot ..........................................................
................................................................
Question 5 ....... 80,000
Which of the following shall be exempt Flowers placed on top of the burial lot
from value-added tax? when relatives visited on February 14,
I – Sales by agricultural cooperatives 2018 ............... 5,000
duly registered with the Cooperative Expenses during a family’s gathering to
Development Authority to commemorate the 40th day after death
their members as well as sale of their of the decedent on February 23,
products, whether in its orginal state or 2018 .......................................................
processed form, to ...........................15,000
non-members; Accountant’s fee in gathering the assets
II – Gross receipts from lending activities of the decedent
by credit or multi-purpose cooperatives incurred on February 15,
duly registered with 2018 .......................................................
the Cooperative Development Authority .................................. ... 50,000
whose lending activities is limited to their Lawyer’s fee in representing the estate
members; in case filed
III – Sales of non-agricultural, non- on August 15,
electric and non-credit cooperatives duly 2018 .......................................................
registered with the .........................................................
Cooperative Development Authority. 70,000
Response: I, II, III Executor’s fee:
January 15, 2018 to July 15, 2018
Question 6 P120,000
(Adapted) A decedent dies on January July 16, 2018 to December 31, 2018
15, 2018. The interment is on January 120,000 240,000
31, 2018. The gross estate of the
decedent is P4,000,000. The following The deductible judicial expenses are:
expenses are presented to you: Response: None
Expenses during the wake borne by Question 7
relatives and
First statement: An importation of goods Unutilized input VAT as
by a non-profit charitable organization of end of second quarter 97,000
shall not be
subject to the value-added tax. Fourth quarter: Sales P2,000,000
Purchases 1,000,000
Second statement: In the case of
importation, the importer is not the one How much is the VAT payable (excess
liable for the VAT but the person who input tax) for the third quarter?
shall buy the imported goods.
Response: (P25,000);
Response: False; False
Question 12
Question 8 In 2019, George James, single,
Which is of the following period for filing supports the following: Earl, his
is true? significant other; Elirie, a legally adopted
child who became 21 years old during
1. Notice of death is filed - Not required the year; Vanessa, an 18-year-old niece
2. Estate tax returns are filed - 1 year and Gorgonio, a senior citizen who is
after the decedent’s death not related to him. He earned
P2,500,000.00 from his beauty parlor
Response: True; True
and received P250,000.00 as Christmas
Score: 0 out of 1 No gift from his spinster aunt. He had no
other receipts for the year. The cost of
Question 9 services of the parlor was P500,000.00
Donor’s return shall be filed within: and the expenses for the operation of
his beauty parlor amounted to
Response: thirty (30) days after the P250,000.00.
date the gift is made.
The Output VAT for 2019 is:
Question 10
Mr. A has 20 residential units with Response: P300,000
monthly rent of P10,000 per unit and his
accumulated gross receipts during the Question 13
taxable year amounted to P3,480,000, Which of the following is subject to
which of the following statement is common carriers’ tax?
false? Response: Domestic carrier by land
Response: He is subject to VAT relative their transport of passengers.
whether he is a VAT registered entity
or not. Question 14
Properties acquired by gratuitous title
Question 11 during the marriage are generally
The following data (net of VAT) are classified as:
available for the year 2020: I – Conjugal properties under conjugal
Third quarter: Sales P1,500,000 partnership of gains;
Purchases 800,000 II – Community properties under
Purchase of machinery 2,000,000 absolute community of properties.
Response: False; False Response: P60,000
Question 15 Question 18
First statement: The transitional input Which of the following shall be allowed
tax shall be 2% of the value of the as deduction from the gross estate of a
beginning inventory on hand, or actual non-resident alien decedent?
VAT paid on such goods, materials and
Response: Standard deduction
supplies, whichever is higher, which
amount shall be creditable against the
output tax on VAT-registered persons. Question 19
What are the transactions which are no
Second statement: The value allowed longer subject to zero-percent (0%)?
for income tax purposes on inventories 1. Sale of gold to BSP
shall be the basis for the computation of 2. Foreign-currency denominated sales
the 2% transitional input tax, including Response: Both 1 and 2
goods that are exempt from VAT under
Sec. 109 of the Tax Code. Question 20
Response: True; False Harry had the following
donations/transactions:
Question 16 Date Donations
Rentals of property, real or personal, January 1 Donated a P150,000 diamond
received by bank and non-bank financial ring to her sister who
intermediaries performing quasi-banking was getting married in March 15 of the
functions are: same year.
March 1 Sold her personal car valued at
Response: subject to Gross Receipts P500,000 for
Tax at 7%. P200,000 to his uncle.
April 1 Sold his residential house to his
Question 17 brother for P1,500,000. The fair market
Vanderwoodsen is a radio-TV value of the residential
broadcasting franchise grantee. The house at the time of sale was
previous year, its gross receipts did not P2,000,000.
exceed P 10,000,000. In the first month June 1 Donated P100,000 to Binan City
of the current year, it had the following for public purpose and P50,000 to her
data: brother who graduated from De La Salle
Gross receipts, sale of airtime P University.
2,000,000 How much was the donor’s tax for the
Payments received from user of radio gift made on June 1?
station’s
Response: P 3,000
communications facilities for overseas
communications 500,000
Business expenses 700,000 Question 21
Which of the following is not subject to
How much was the franchise tax due? amusement tax?
Response: Lessee of bowling alleys wherein price ceiling per unit is Php
450,000.00 or as may from time to time
be determined by the HUDCC and the
NEDA and other related laws;
Question 22 2. Sale of residential lot valued at One
Audrey Foam Manufacturing Corp. is a Million Five Hundred Thousand Pesos
VAT-registered enterprise. It has the (P1,500,000.00) and below, or house
following data taken from its books of and lot and other residential dwellings
accounts for the first quarter of the fiscal valued at Two Million Five Hundred
year starting May 1, 2019 and ending Thousand Pesos (P2,500,000.00) and
April 30, 2020): below, as adjusted using latest
Domestic sale of goods P5,000,000 Consumer Price Index values. (If two or
Sale of goods to senior citizens, net of more adjacent lots are sold or disposed
20% discount 800,000 in favor of one buyer, for the purpose of
Beginning inventory 300,000 utilizing the lots as one residential lot,
Domestic purchases of goods for use in the sale shall be exempt from VAT only
all transactions 500,000 if the aggregate value of the lots do not
Importation of goods for use in all exceed One Million Five Hundred
transactions 700,000 Thousand Pesos (P1,500,000.00).
Ending inventory 200,000 Adjacent residential lots, although
Payment for services for all transactions covered by separate titles and/or
450,000 separate tax declarations, when sold or
Purchase of vehicle for land transport for disposed to one and the same buyer,
use in all transactions (estimated life 5 whether covered by one or separate
years purchased May 1, 2019) Deed of Conveyance, shall be
2,500,000 presumed as a sale of one residential
Maintenance expense for the vehicle for lot.)
land transport 100,000 Under the TRAIN Law which is true?
Other operating expenses (including
salaries of P100,000 given to senior Response: Both 1 and 2
citizen-employees)
500,000 Question 24
Assistance given under Adopt-A-School WPM is a rice dealer. His total annual
Program to a state college 100,000 gross sales and/or receipts do not
Monthly VAT paid (May and June) exceed Three Million (P3,000,000.00),
300,000 allowing him to avail the following:
How much is the creditable input tax? (a) WPM is a VAT-exempt taxpayer. He
may elect to avail of the optional
Response: P198,000 registration for VAT of exempt person
Score: 0 out of 1 No under Section 236 (H) of the 1997 Tax
Code, as amended. Upon election of
Question 23 such option, he shall not be entitled to
1. Sale of real properties utilized for cancel his VAT registration for the next
specialized housing as defined under three (3) years;
RA No. 7279, and other related laws, (b) WPM may elect to pay the 8%
such as RA No. 7835 and RA No. 8763, commuted tax rate on gross sales or
receipts and other non-operating income
in lieu of the graduated income tax rates Response: I, II, III and IV;
and the percentage tax under Section
24(A)(2)(b) of the 1997 Tax Code, as
amended, since his gross sales or
receipts did not exceed Three Million Question 28
Pesos (P3,000,000) during the taxable A domestic carrier by water is engaged
year. If he elects to pay the 8% in the transport of passengers, goods
commuted tax, he shall not be allowed and cargoes. It is not VAT-registered
to avail of the optional registration for and its annual gross receipts do not
VAT of exempt person provided by exceed P3,000,000. To what business
Section 236(H) of the 1997 Tax Code, taxes is it liable?
as amended. Response: 3% tax on VAT-exempt
Response: True; True persons;
Question 25 Question 29
S1-Under the TRAIN Law, the standard In all cases the VAT payable arising
deduction is now P5,000,000 from sales to the Philippine government
S2-Under the TRAIN Law, a CPA is
certification is required if the gross Response: 5% of sales
estate exceeds P5,000,000.
S3-Under the TRAIN Law, payment of Score: 0 out of 1 No
estate tax is now allowed within 2 years
from the date of death without civil Question 30
penalties or interest. A lessor rents his 2 commercial and 10
residential units for monthly rent of
Response: True; True, True
P60,000 and P15,000 per unit,
respectively. During the taxable year, his
Question 26 accumulated gross receipts amounted to
A keeper of garage whose gross P3,240,000 (P1,440,000 from
receipts for the year exceed P3,000,000 commercial units and P1,800,000 from
is subject to: residential units). Which of the following
Response: common carrier’s tax; statements are false?
Response: None of the above
Question 27
Which of the following shall be exempt Question 31
from value-added tax? A VAT-registered lessor of apartment
I - Sale of real property not primarily houses has the following gross rentals
held for sale to customers or held for for the first quarter of the current year:
lease; Gross rentals of 30 units at P10,000 per
II - Sale of real property utilized for low- month per unit P3,600,000
cost and socialized housing; Gross rentals of 10 units at P15,000 per
III – Sale of residential lot valued at month per unit 1,800,000
P3,000,000 and below; Total ..................................................
IV – Sale of house and lot and other P5,400,000
residential dwellings valued at
P2,500,000 and below.
The VAT-registered lessor of apartment including the P40,000 medical
houses shall be: expenses.
Response: exempt from VAT on his
How much was the vanishing
total gross rentals.
deduction?
Question 32 Response: P107,611
(Adapted) The following taxes are
claimed as deduction from the gross Question 34
estate of a decedent who dies on July 1, Which of the following is allowed
2018. presumptive input tax?
Income tax on income earned from
Response: Processor of sardines,
January 1 to June 30,
mackerel and milk
2103 ..................................... P100,000
Income tax on income earned from July
1, 2018 to December 31, Question 35
2018 ........................... 120,000 First statement: Only VAT-registered
Real estate tax paid, January 1 to June taxpayers are required to pay Value-
30, 2018 Added Tax.
………………………………………...
50,000 Second statement: Taxpayers whose
Unpaid real estate tax, July 1 to gross annual sales or receipts exceed
December 31, 2018. the VAT threshold amount are required
…………………………………… 50,000 to pay Value-Added Tax in all cases.
Unpaid property tax, January 1 to June Response: False; False
30,
2018 ....................................................... Question 36
......... 60,000 How much is standard input tax?
The correct amount of deductible taxes Response: 7% of sales
shall be:
Question 37
Response: P210,000. Audrey Foam Manufacturing Corp. is a
Score: 0 out of 1 No VAT-registered enterprise. It has the
following data taken from its books of
Question 33 accounts for the first quarter of the fiscal
A decedent died single, leaving year starting May 1, 2019 and ending
properties he inherited 4 ½ years ago April 30, 2020):
with a fair market value of P800,000 at Domestic sale of goods P5,000,000
the time of death (P650,000 at the time Sale of goods to senior citizens, net of
of inheritance, and unpaid mortgage of 20% discount 800,000
P50,000 which remained unpaid at the Beginning inventory 300,000
time of the present decedent’s death.) Domestic purchases of goods for use in
Other properties in his gross estate had all transactions 500,000
fair market value of P1,000,000. The Importation of goods for use in all
losses, taxes and transfer for public transactions 700,000
purpose amounted to P300,000 Ending inventory 200,000
Payment for services for all transactions
450,000 Based on the above data:
Purchase of vehicle for land transport for
Response: The total input taxes on
use in all transactions (estimated life 5
the above transactions shall be
years purchased May 1, 2019)
amortized.
2,500,000
Maintenance expense for the vehicle for
land transport 100,000 Question 41
Other operating expenses (including (Adapted) A decedent dies on January
salaries of P100,000 given to senior 15, 2018. The interment is on January
citizen-employees) 31, 2018. The gross estate of the
500,000 decedent is P4,000,000. The following
Assistance given under Adopt-A-School expenses are presented to you:
Program to a state college 100,000
Monthly VAT paid (May and June) Expenses during the wake borne by
300,000 relatives and
friends .....................................................
How much is the VAT payable? ...P30,000
Mourning clothing of the widow and
Response: P135,000 unmarried minor
children ............................................
Question 38 20,000
Which of the following is not included in Obituary notice in a
the gross estate of a resident decedent newspaper ..............................................
who is under conjugal partnership of ................................................. 50,000
gains? Card of thanks published in a
newspaper ..............................................
Response: SMC Shares of stock
.................................. 30,000
inherited by the decedent’s surviving
Burial
spouse during the marriage
plot ..........................................................
................................................................
Question 39 ....... 80,000
Donation is completed Flowers placed on top of the burial lot
Response: when the property when relatives visited on February 14,
donated is delivered actually or 2018 ............... 5,000
constructively to the donee. Expenses during a family’s gathering to
commemorate the 40th day after death
Question 40 of the decedent on February 23,
The following transactions during the 2018 .......................................................
month of January, 2013 are recorded in ...........................15,000
the books of a VAT-registered taxpayer: Accountant’s fee in gathering the assets
Purchase of three (3) office equipment of the decedent
at P150,000 each incurred on February 15,
Purchase of five (5) office furniture at 2018 .......................................................
P50,000 each .................................. ... 50,000
Importation of vehicle for transport used Lawyer’s fee in representing the estate
in business, P1,500,000 in case filed
on August 15, January Php 250,000.00
2018 ....................................................... February 250,000.00
......................................................... March 250,000.00
70,000 April 250,000.00
Executor’s fee: May 250,000.00
January 15, 2018 to July 15, 2018 June 250,000.00
P120,000 July 250,000.00
July 16, 2018 to December 31, 2018 August 250,000.00
120,000 240,000 September 250,000.00
October Php 1,000,000.00
The deductible funeral expenses are: November 1,000,000.00
December 1,000,000.00 3,000,000.00
Response: None
Total gross Sales/Receipts Php
5,250,000.00
Question 42
(ADAPTED) Which of the following is Which statement is false?
not included in the gross estate of a
resident decedent who is under conjugal Response: None of the choices
partnership of gains?
Question 46
Response: SMC Shares of stock
A lessor rents his 15 residential units for
inherited by the decedent’s surviving
P14,500 per month. During the taxable
spouse during the marriage
year, his accumulated gross receipts
amounted to P2,610,000. Which is
Question 43 false?
Which of the following is not subject to
franchise tax? Response: He is subject to VAT
whether he is a VAT registered entity
Response: Franchise grantee of or not.
electric utilities
Question 47
Question 44 Harry had the following
The quarterly VAT return is filed: donations/transactions:
Response: Within twenty-five (25) Date Donations
days following the end of the quarter. January 1 Donated a P150,000 diamond
ring to her sister who
Question 45 was getting married in March 15 of the
Mr. JMLH signified his intention to be same year.
taxed at “8% income tax in lieu of the March 1 Sold her personal car valued at
graduated income tax rates and P500,000 for
percentage tax under Section 116” in his P200,000 to his uncle.
1st Quarter Income Tax. However, his April 1 Sold his residential house to his
gross sales/receipts during the taxable brother for P1,500,000. The fair market
year have exceeded the VAT threshold value of the residential
as follows: house at the time of sale was
P2,000,000.
Amount June 1 Donated P100,000 to Binan City
for public purpose and P50,000 to her Response: He is not subject to VAT
brother who graduated from De La Salle since his accumulated gross receipts
University. did not exceed P3,000,000. However,
he is subject to a 3% percentage tax.
How much was the donor’s tax for the
gift made on January 1?
Response: P 0
Question 48
The following data (net of VAT) are
available for the year 2020:
Third quarter: Sales P1,500,000
Purchases 800,000
Purchase of machinery 2,000,000
Unutilized input VAT as
of end of second quarter 97,000
Fourth quarter: Sales P2,000,000
Purchases 1,000,000
how much is the VAT payable for the
fourth quarter assuming the taxpayer
sold the machinery bought in the third
quarter for P2,000,000?
Response: P53,000;
Score: 0 out of 1 No
Question 49
Mr. Clay has 20 residential units with
monthly rent of P15,500 per unit and his
accumulated gross receipts during the
taxable year amounted to P3,720,000,
which of the following statements is
true?
Response: He is subject to VAT since
the monthly rent per unit exceeds
P15,000 and the accumulated
earnings exceeded P3,000,000.
Question 50
A lessor rents his 15 residential units for
P15,500 per month. During the taxable
year, his accumulated gross receipts
amounted to P2,790,000, which of the
following statements is true?
