Name: Instructor:

Course/Year: Score:
Instruction: Read and solve the following problems below. Write your answer on a piece of paper. Provide your
solutions.
PROBLEM 1:
Cumulative data as at the end of:
1st Q 2nd Q 3rd Q Year
Gross sales P3,500,000 P5,500,000 P8,100,000 P9,900,000
Cost of sales 1,000,000 1,700,000 2,000,000 2,160,000
Operating expenses 320,000 1,000,000 1,400,000 2,000,000

The income tax at the end of each quarter and end of the year if –
a. The choice is the Itemized Deductions for costs and expenses?
b. The choice is the Optional Standard Deduction?

PROBLEM 2:
Lito Ako had the following income and expenses:
Compensation income (gross of P10,000 withholding tax) P120,000
Business income, Philippines 350,000
Business income, Canada $200,000
Cash dividend from Ok Ako, a domestic corporation 40,000
Interest income from savings account – PNB 20,000
Winnings in lotto, Philippines 1,000,000
Business expenses, Philippines 220,000
Business expenses, Canada $150,000
Exchange rate: Canadian $1 = P30

a. Income tax still due if Lito Ako is a resident citizen.

b. Total final taxes paid by Lito Ako.
c. The taxable income of Lito Ako if he is a resident alien.

PROBLEM 3:
Non-cumulative amounts (for each quarter) for an individual in business subject to the 3% percentage tax:
Gross sales Costs/Expenses
First quarter P1,000,000 P1,000,000
Second quarter 1,500,000 900,000
Third quarter 2,000,000 1,200,000
Fourth quarter 3,000,000 2,000,000

Income tax, if the initial choice was the 8% tax:

a. First quarter
b. Second quarter
c. Third quarter
d. Fourth quarter

PROBLEM 4:
Taxpayer received the following income in 2018:
Rent, Philippines P250,000
Rent, Hongkong 20,000
Interest, peso deposit, PNB 10,000
Interest, US$ deposit, PNB ($1,000 x P56) 56,000
Interest, deposit in Hongkong (HK$1,000 x P7) 7,000
Prize (cash) won in a local contest 8,000
Prize (TV) won in a lottery valued at 15,000
Prize won in contest in US 30,000
Lotto winning in US 10,000
Dividend, domestic company 60,000
Compute for the reportable (returnable) gross income if the taxpayer is:
a. resident citizen b. nonresident citizen c. resident alien d. NRAEB e. NRANEB