Gross sales 6,000,000.

00
Cost of sales (2,000,000.00)
Gross Income from operations 4,000,000.00
Total operating and non-operating expense (3,000,000.00)
Non deductible Interest 60,000.00
Non deductible Penalties 13,500.00
Non deductible decline in value of properties 46,000.00
Charitable contributions 1,900,000.00 (980,500.00)
Gross income before charitable contributions 3,019,500.00
Charitable contributions (1,050,975.00)
Taxable income 1,968,525.00

Deductible Non-deductible
Penalties:
Late filing and payment of income tax return 1,000.00
Breach of lease contract 20,000.00
Traffic violation 5,000.00
Filing of income tax return in wrong R.D.O 12,500.00
Total deductible penalties 25,000.00 13,500.00

Decrease in value of properties: Deductible Non-deductible

Unrealized loss from change in fair value of TS 16,000.00
Loss from impairment of store equipment 30,000.00
Loss from sale of investment property 70,000.00
Loss from sale of office equipment 10,000.00
Total deductible losses 80,000.00 46,000.00

Total deductible contribution expense 1,050,975.00

Deductible interest expense 105,200.00
Total deductible penalties 25,000.00
Total deductible losses 80,000.00
Total Itemized deductions 1,261,175.00
Final tax:
Interest income from bank deposit 60,000.00
 Deductible in full Deductible with
limit
Itemized allowable deductions:
Charitable Contributions:
Government for education 200,000
Government for health 600,000
City Government of Pasig City 500,000
Tahanang Walang Pinto, an accredit 100,000
Bahay Walanga, unaccredited NGO 150,000
Feeding Program to street dwellers
UNICORN, an orphanage is North Dakota, U.S.A

Actual
City Government of Pasig City 500,000.00
Bahay Walanga, unaccredited NGO 150,000.00
Partially deductible contributions 650,000.00

Taxable income before contribution 3,019,500.00

Corporate tax rate, limit percentage 5%
Deduction limit 150,975.00

650,000.00
Lower amount 150,975.00

Fully deductible contributions:

Government for education 200,000
Government for health 600,000
Tahanang Walang Pinto, an accredit 100,000 900,000.00
Partially deductible contributions:
City Government of Pasig City 500,000
Bahay Walanga, unaccredited NGO 150,000
Total contributions subject to limit 650,000
Deduction limit 150,975.00
Deductible contributions with limiy (LOWER) 150,975.00
Total deductible contribution expense 1,050,975.00

Deductible with
Deductible in full
limit
Interest Expense:
On tax deliquency 25,000.00
On loans payable to Tina Quarantina, a share -
On loans payable to Banco de Oro 100,000.00
Total 125,000.00 0

Interest expense 125,000.00

Interest income from bank deposit 60,000.00
Arbitrage rate 33%
Limit 19,800.00
Deductible interest expense 105,200.00
 Non deductible

50,000
300,000

Non-deductible

60,000.00
60,000.00