TAX 302 – Business and Transfer Taxes

ASSIGNMENT 2

NAME: __________________________________ SR Code: ____________________

Directions:
PROBLEM SOLVING: Provide your solutions and final answer on a separate sheet of paper.

1. (10 points) Astra Company, a VAT-registered company, is engaged in the business of

selling paper and paper products. During the quarter, its total sales as indicated in the
invoice amounted to:
Cash Sales 1,760,000
Sales on account 513,000
Sales returns and allowances 16,500
Sales discounts 16,500
Input taxes on the purchases 230,000

How much is the gross selling price? ___________________

How much is the VAT payable? ________________

2. (15 points) The following data relates to the transactions of Villa Lina Company for the
month of November (amounts are gross of tax):
Sales 594,000
Sales returns and allowances 13,200
Payment of goods to creditors 27,500
Consignment sales 34,100
Goods out on consignment – 45 days 22,000
Goods out on consignment – 75 days 68,750
Distribution of goods as goodwill to employees 11,000
Purchases 253,000

How much is the output tax? __________________

How much is the VAT payable? ________________
How much is the transactions deemed sale? _____________

3. (5 points) Development Company, a VAT-registered business, had the following selected

data for the month:
Export Sales (0%) 1,815,000
Domestic sales 1,452,000
Purchases of goods for export 422,000
Purchases of goods for domestic sales 618,200
Purchases of supplies 254,100
The input taxes on purchases of goods for export are claimed as tax credit.
Compute for the VAT Payable if the amounts given are inclusive of tax.
 4. (5 points) Combined Company operates a VAT-business and a Non-VAT business. The
total sales and purchases during the month are as follows:
Sales (VAT business) 1,000,000
Sales (nonVAT business) 500,000
Purchases (VAT business), VAT included 448,000
Purchases (nonVAT business) 253,000
Purchases (VAT and nonVAT business), VAT included 110,880
Compute the VAT payable of Combined Company.

5. (5 points) Tracing Company became subject to VAT effective January 1, 2019. The
records of its inventory on hand follow:
Goods purchased from VAT suppliers for resale 1,350,000
Goods purchased from nonVAT suppliers 654,320
Goods manufactured by the company 1,562,000
Goods in process 616,000
Goods purchased for processing 429,000
How much is the transitional input tax of Tracing Company?

Additional Notes: (I did not include this in the materials, so please study this also.)
This is included in the previous lesson, Exemptions from VAT)

Sale of Real Property not subject to VAT

Only the sale of real properties held primarily for sale to customers or held for lease in
the ordinary course of trade or business of the seller shall be subject to VAT.
Thus, the sale of the following real properties are not subject to VAT.
1. Sale of real properties not primarily held for sale to customers or held for lease in the
ordinary course of trade or business
2. Sale of real properties utilized for low-cost housing under RA 7279 (and other related
laws) otherwise known as Urban and Development Housing Act of 1992
3. Sale of real properties utilized for socialized housing
4. Sale of residential lot valued at P1,500,000 and below, and house and lot and other
residential dwellings valued at P2,500,000 and below.