Morales, Reinalyn G.

TAX 2 BSAT-4

PROBLEM 1
Juliet a Filipina made the following donations
a. To N, land worth P450,000 in Manila
b. To R, jewelry worth P100,000 in Japan
c. To A, PLDT shares amounting to P150,000
d. To G, a building in Italy P1,600,000 mortgaged for P50,000 assumed by the done
e. To D, land in Davao worth P300,000
f. To H P300,000 cash, PNB New York
g. To J P200,000 receivable, 50% condoned by Juliet
Sold to X the following:

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Car in Makati for P200,000, the FMV is 300,000

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Car in Malaysia for P300,000 the FMV is 200,000

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Rest house in Tagaytay for P1,000,000, the FMV is 2,000,000

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Rest house in Malaysia for P1,500,000, the FMV is 2,500,000

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How much is the gross gift of Juliet?
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A. Resident Citizen
B. Non-Resident alien without reciprocity law
C. Non-Resident alien with reciprocity law
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ANSWER:
A. Resident Citizen B. Non-Resident Alien C. Non-Resident Alien
without reciprocity law with reciprocity law
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To N 450,000 450,000 450,000

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To R 100,000
To A 150,000 150,000
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To G 1,600,000
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To D 300,000 300,000 300,000

To H 300,000
To J 100,000 100,000
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Car in Makat 100,000 100,000 100,000

Rest house in 1,000,000
Malaysia
TOTAL GROSS GIFT 4,100,000 1,100,000 850,000

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 PROBLEM 2
FLOYD (SELF-EMPLOYED) is a non-VAT registered taxpayer who operates a convenience
store. The following were provided for 2020
Sale of processed items P280,000
Sale of non-food items 220,000
Purchases of processed food items 100,000
Purchases of non-food items 80,000
Salaries of helpers 48,000

The percentage tax due is?

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Sale of processed items P280,000

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Sale of non-food items 220,000

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Total Sale 500,000
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Tax rate x 3%
PERCENTAGE TAX DUE P 15,000
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PROBLEM 3
ANA has the following data for the year 2020
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Gross Sales P2,850,000

Collections 1,420,000
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1. If Ana is a seller of goods, her business tax for the year is?
= P2,850,000 x 3% = P 85,500
sh

2. If Ana is a seller of service, her business tax for the year is?
= P1,420,000 x 3% = P 42,600

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 PROBLEM 4
RR TRANSPORTATION is an operator of ten buses with routes from Manila to Subic and is
likewise a transportation contractor with three freight trucks. For taxable 2020, it reported gross
receipts from his bus operations of P36,000,000. His gross receipts, however, from his freight
goods or cargoes amounted only to P800,000 for the year.

1. Assuming RR TRANSPORTATION is non-VAT registered, how much is total business

tax due?
Common carrier’s tax = P36,000,000 x 3% = P 1,080,000
Section 116 = 800,000 x 3% = 24,000

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Total business tax P 1,104,000

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2. Assuming RR TRANSPORTATION is vat registered, how much is total business tax

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due?
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Common carrier’s tax = P36,000,000 x 3% = P 1,080,000
VAT = 800,000 x 12% = 96,000
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Total business tax P 1,176,000

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PROBLEM 5
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QUARTER ENDED, MARCH REVENUES AR, BEG. AR, END

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31, 2017

Covered by the Franchise P4,000,000 600,000 800,000

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Not covered by the franchise 1,200,000 160,000

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 1. If the franchisee is generating and selling electricity, the correct amount of business tax
is?

SOLUTION
Covered By The Franchise
Revenues P 4,000,000
Add: A/R, Beg 600,000
Less: A/R, End -_ 800,000

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COLLECTIONS 3,800,000

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Not Covered By The Franchise

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Revenues 1,200,000
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Add: A/R, Beg
Less: A/R, End - 160,000
COLLECTIONS 1,040,000
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TOTAL BUSINESS TAX = 4,840,000

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VAT RATE x 12%

VALUE ADDED TAX = 580,800
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NOTES: SALE OF ELECTRICITY IS SUBJECT TO VAT INSTEAD OF FRANCHISE TAX

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UNDER SECTION 119

2. If the franchisee is a gas and water utilities, the correct amount of business tax is?
is
Th
sh

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 SOLUTION
Covered By The Franchise
Revenues P 4,000,000
Add: A/R, Beg 600,000
Less: A/R, End -_ 800,000
COLLECTIONS 3,800,000
Franchise Tax Rate x 2% = 76,000

Not Covered By The Franchise

Revenues 1,200,000
Add: A/R, Beg
Less: A/R, End - 160,000
COLLECTIONS 1,040,000

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VAT Rate x 12% = 124,800,000

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TOTAL BUSINESS TAX = 200,800

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rs e NOTES
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1. THE GROSS RECEIPTS FROM THOSE COVERED BY THE FRANCHISE IS SUBJECT TO
THE APPLICABLE FRANCHISE TAX RATE, REGARDLESS TO THE AMOUNT OF THE
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GROSS RECEIPTS.
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2. THE GROSS RECEIPTS NOT COVERED BY THE FRANCHISE IS SUBJECT TO VAT

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BECAUSE THE GROSS RECEIPTS FOR THE TAXABLE YEAR WILL OBVIOUSLY EXCEED
THE VAT THRESHOLD.
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3. If the franchise is a radio television broadcasting company, the correct amount of

business tax is?

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 SOLUTION
Covered By The Franchise
Revenues P 4,000,000
Add: A/R, Beg 600,000
Less: A/R, End -_ 800,000
COLLECTIONS 3,800,000
Franchise Tax Rate x 3% = 114,000

Not Covered By The Franchise

Revenues 1,200,000
Add: A/R, Beg
Less: A/R, End - 160,000
COLLECTIONS 1,040,000
VAT Rate x 12% = 124,800,000

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TOTAL BUSINESS TAX = 238,800

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PROBLEM 6
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SMARTUS has the following data for a particular month:
Gross receipts, domestic calls P 5,000,000
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Gross receipts, overseas calls

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(originating in the Philippines) 3,000,000

Purchase of supplies used in connection with
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domestic calls net of VAT 300,000

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Purchase of equipment used in connection with

domestic calls net of VAT 800,000
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Business expense 1,000,000

Th

1. How much is the overseas communication tax collected from persons who used the
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communications facilities?

Gross receipts, overseas calls

(originating in the Philippines) 3,000,000

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 Rate x 10%
Overseas Communication Tax P 300,000

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