On a separate paper, answer what is asked. Good for one hour.

1. The determination of the fringe benefit tax would entail the following except
A. Valuation of the fringe benefit
B. Determination of the percentage of the benefit subject to the fringe benefit tax
C. Determination of the manner by which the fringe benefit has been utilized by the employee
D. Determination of the grossed-up monetary value of the fringe benefit

2. The monetary value of fringe benefit if given in money is

A. Fair market value or zonal value whichever is higher
B. Amount granted
C. Depreciated value
D. Acquisition cost plus other incidental costs

Answer followed by solutions. (Round answer up to 2 decimal places)

3. Mr. Alegre, a manager of Jollimac, received the following fringe benefits during the taxable year:

Cash travel allowance of P 34,000; House and lot – ownership of real property is transferred to
Mr. Alegre, (FMV, P544,000) cost is P 476,000; Car – ownership was not transferred to Mr.
Alegre. The car has a 10 year estimated useful life, but already 1 year in use at date of transfer.
The net book value of the car is P 680,000.

The monetary value of fringe benefits received during the year would be _______________

4. The grossed-up monetary value of the fringe benefits would be ______________________

5. M Corporation allows its Chief Operation Officer, Mr. Colon, to incur expenses subject to
reimbursement. Mr. Colon presented the following itemized receipts:

Light and power of his residential house P 5,440.00

Grocery items 6,800.00
Transportation – business trip 2,040.00
Meals as representation expense in the name of employer 3,400.00

The reimbursable expense of Mr. Colon subject to fringe benefit tax would amount to
_______________
6. Chan and Lapid are both working with Okinawa Corporation, located inside the Clark Special
Economic Zone. Chan is a Chinese national who stayed in the Philippines for one month to
complete his special process design with Okinawa. He received a fringe benefit of P30,000. Lapid
is a Filipino citizen and he is the plant supervisor of the company. He received P51,000 fringe
benefit.

How much is the total fringe benefit tax to be withheld by Okinawa Corporation?

7. Miss Mabukol, as the head of office, received the following fringe benefits during the taxable
year:

Car P 214,000.00
Uniform and clothing allowance 6,800.00
Rice subsidy (P1,000 per month) 12,000
Employees achievement award (in kind) 10,000
Laundry allowance (P300 per month) 3,600
Medical allowance to dependents (P4,250 per semester) 8,500
Actual medical benefits 10,000

Compute the nontaxable fringe benefits.

8. Compute the fringe benefit tax

9. During her first year as X factor, Philippines President, Melanie Amaro received the following
benefits:

5-year non-interest bearing loan to construct her house P 1,000,000

Use of company’s airplane (share in annual depreciation) 200,000
Annual premium on life insurance 100,000

The monetary value of Amaro’s fringe benefits subject to FBT amounts to

10. Mr. D, a resident Filipino citizen, shows his income and expenses during a calendar year:

Gross compensation income P128,000

13th month pay 10,600
SSS Premium Contribution 2,400
Philhealth Premium Contribution 3,000
Rice Subsidy 18,000
 Actual Hospitalization Expense 20,000
Clothing Allowance 4,000
Food allowance for overtime in 10 days 1,500
Temporary Housing for 3 months 6,000
Rent Income 60,000

For tax purposes, how much is the gross compensation income during the year if D is a minimum
wage earner?

11. For tax purposes, how much is the gross compensation income during the year if D is not a
minimum wage earner?