Rent for year 200B + Refundable deposit = tax return for year 200B

= 480, 000 + 120, 000 = P600, 000 tax return

The taxable gross receipts was P450, 000 which is the sum total of all the amount that was
received from the lease.
1. The value on the basis of Spread out Method will be P0, because there is no
reportable income from leasehold improvement because it was completed at the
end of the year.
Annuity = Premium (non-taxable) + Interest (taxable)

Annuity = 18, 000 (non-taxable) + 2, 000 (taxable)

Annuity = Premium (non-taxable) + Interest (taxable)

Annuity = 5, 174.4 + 705.6

For DOMESTIC CORPORATION The taxable Income and Income tax due is P4,000,000
AND P1,200,000 respectively.

For RESIDENT FOREIGN CORPORATION This option is the best answer among any
other choices because it uses a 30% income tax rate based on the taxable income
4,000,000. There might be some typographical errors in the business expenses. The
business expense might be 4,000,000 instead. The tax due is 1, 200, 000
Or

Taxable Income = 3, 000, 000

Tax due @30% = 900, 000

 P5,000,000 + 2,000,000 - 4,000,000 = P3,000,000 x 30% = P900,000
  P900,000 - P100,000 = P800,000 
 The amount of income tax for the period would be P100,000.
Sasuke Film taxable income = Gross Receipts – Cost of firm distributed – Operating expenses

= 10, 000, 000 – 6, 000, 000 – 3, 000, 000

= P1, 000, 000

Tax payable by Sasuke film = 25% x 1, 000, 000

= P250, 000

Sakura aircraft

Taxable income

= 20, 000, 000 – 15, 000, 000

= 5, 000, 000

Tax payable by Sakura aircraft = 25% x 5, 000, 000

= P1, 250, 000

1. Income earned outside the Philippines by domestic helpers is tax-exempt.

2. The corporate tax rate is 25% on the income 
Domestic Corporation Resident Foreign Corporation

Gross income = 945, 000 – 495, 000 Gross income = 530, 000 – 290, 000

= 450, 000 x 30% = 135, 000 = 240, 000 x 30% = 72, 000

= 450, 000 – 135, 000 = 240, 000 – 72, 000

Tax still due = 315, 000 Tax still due = 168, 000
1. DEDUCTIBLE - Section 34(D)(3) of the Tax Code provides that the net operating loss
of a business or enterprise for any taxable year immediately preceding the current taxable
year and not previously offset as a deduction from gross income can be carried over as a
deduction from gross income for the next three consecutive taxable years immediately
following the year of the loss. However, any net loss incurred in a taxable year during
which the taxpayer was exempt from income tax will not be allowed as a Nolco
deduction.
2. NON-DEDUCTIBLE
3. DEDUCTIBLE - Corporate taxpayers can claim a deduction for all taxes paid or accrued
within the taxable year in connection with their trade or business, except for the
following: Philippine CIT. Income taxes imposed by authority of any foreign country,
unless the taxpayer elects to take a deduction in lieu of a foreign tax credit.
4. DEDUCTIBLE - If you paid or accrued foreign taxes to a foreign country or U.S.
possession and are subject to U.S. tax on the same income, you may be able to take
either a credit or an itemized deduction for those taxes.
5. DEDUCTIBLE - Yes. In general terms, the expenditure is deductible under section 8-
1 if it is both relevant and incidental to the income producing activities of the
business, and not of a capital nature.
6. NON-DEDUCTIBLE
7. NON-DEDUCTIBLE – Because it is a donation
8. DEDUCTIBLE - Manager's expense account subjected to fringe benefit tax
9. NON-DEDUCTIBLE – Personal Expenses
10. DEDUCTIBLE - As long as there's a tax withheld
11. NON-DEDUCTIBLE - Illegal activities
12. NON-DEDUCTIBLE - Personal Expenses
13. NON-DEDUCTIBLE
14. NON-DEDUCTIBLE - Must be managerial or supervisor
15. NON-DEDUCTIBLE
16. DEDUCTIBLE
17. NON-DEDUCTIBLE
18. NON-DEDUCTIBLE
19. NON-DEDUCTIBLE
20. DEDUCTIBLE - Lodging, meals and tips are deductible
The IRS allows business travelers to deduct business-related meals and hotel costs, as long as
they are reasonable considering the circumstances—not lavish or extravagant.

Answer keys
https://www.studocu.com/ph/document/don-honorio-ventura-technological-state-university/bs-
accountancy/exclusion-from-gross-income/11005339