PROBLEMS

Problem 1: (Classify the following into Capital

Asset or Ordinary Asset)
Classification
1. Accounts receivable
2. Securities held as investment
3. Interest of a partner in a partnership
4. Apartment house
5. Inventories of raw materials, work in process and finished
goods
6. Office equipment
7. Land used in business
8. Land for sale by a real estate dealer
9. Residential house and lot
10. Car for personal use

Problem 2: The following data are available from the records of ABC Corporation:
Year Year Year Year Year
Business 4
P300,0 5
P400,0 6
P500,0 7
P600,0 8
P700,0
Income
Business 00
340,00 00
380,00 00
450,00 00
570,00 00
650,00
Expensegain
Capital 0 0 0 0 0
(loss)
Short-term 50,00 (40,00 30,00 30,00 (40,00
Long-term 0
(40,00 0)10,00 0
(100,00 0
10,00 0)70,00
0) 0 0) 0 0
Required: Compute the taxable income

Problem 3 A single taxpayer has the following income, expenses and transactions in 20X9

Gross income P750,0

Business expenses 00
225,00
Health insurance premium paid 0 2,00
Selling price, partnership interest (investment in 0
180,00
20X4 on
Gain was P60,000)
sale of personal car held for 3 years 030,00
Loss on sale of Jewelry for personal use held for 6 0
15,00
months
Loss on account of failure to exercise two-month 0
12,00
option to buy
Liquidating dividend (investment in 20X6, 0
240,00
P300,000)
Gain on short sales 0 6,00
0
Required:
1. How much is the net capital gain (loss)?
2. How much is taxable net income?

Page 1 of 4