ReSA - THE REVIEW SCHOOL OF ACCOUNTANCY

CPA Review Batch 44  Oct 2022 CPALE  31 July 2022  8:00 - 11:00 AM

TAXATION FIRST PRE-BOARD EXAMINATION

INSTRUCTIONS: Select the correct answer for each of the questions. Mark only one
answer for each item by shading the box corresponding to the letter of your choice on
the answer sheet provided. STRICTLY NO ERASURES ALLOWED. Use pencil no. 2 only.

1. There shall be levied, assessed, collected and paid upon the transfer of the net estate of
every decedent, whether resident or nonresident of the Philippines, a tax:
a. at the rate of six percent (6%) based on the value of such net estate.
b. at the rate of six percent (6%) based on the value of such gross estate.
c. at the rate of five percent (5%) based on the value of such net estate.
d. at six percent (6%) computed on the basis of the total net estate in
excess of Two hundred fifty thousand pesos (P250,000) exempt amount.

2. Which of the following ordinary deductions for estate tax purposes is not prorated
with respect to deductions allowed to non-resident alien decedent?
a. Losses
b. Indebtedness (Claims against the estate)
c. Claims against insolvent debtor
d. Transfer for public use

3. The gross estate of a decedent is valued at P5,000,000. Which of the following

statements is/are correct?
I - The estate of the decedent is required to submit notice of death.
II - The estate of the decedent is required to file an estate tax return.
III - The estate of the decedent is required to submit a statement certified
by a CPA.
a. Statements I, II and III
b. Statements II and III
c. Statement II
d. None of the statements
4. The amounts withdrawn from the deposit accounts of a decedent:
a. shall be subjected to the 6% final withholding tax imposed under
Section 97 of the NIRC.
b. shall be subjected to the 6% creditable withholding tax imposed
under Section 97 of the NIRC.
c. shall be claimed as deduction from the gross estate.
d. shall not be allowed under any circumstance.

5. All the following information shall be shown in the estate tax return except:
a. the value of the gross estate of the decedent at the time of his
death, or in case of non-resident alien of that part of his gross
estate situated in the Philippines.
b. the deductions allowed from the gross estate’.
c. such part of such information as may at the time be ascertainable
and such supplemental data as may be necessary to establish the
correct taxes.
d. names of the heirs and beneficiaries.

6. Properties acquired by gratuitous title before the marriage shall be classified

for estate tax purposes:
I - Conjugal properties under conjugal partnership of gains
II - Exclusive properties under absolute community of properties.
a. Both I and II are correct
b. Both I and II are incorrect
c. Only I is correct
d. Only II is correct
7. Which among the following should be treated as a real property?
a. A Manansala painting
b. A BMW sports car
c. A contract for the construction of a public road
d. Shares of stock of Meralco

8. A property was transferred mortis causa. The following data were gathered from the
transaction:
Fair market value, time of transfer – P500,000
Fair market value, time of death – P700,000
Consideration received when transferred – P550,000

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 TAXATION
ReSA Batch 44 – October 2022 CPALE Batch
31 July 2022  8:00 AM to 11:00 AM TAX First Pre-Board Exam

How much shall be included in the gross estate?

a. P500,000 c. P150,000
b. P700,000 d. None of the choices

9. One of the following deductions physically diminishes the gross estate of the
decedent.
a. Standard deduction c. Vanishing deduction
b. Family home deduction d. Claims against the estate

10. The fair market values of the family home which is partly exclusive (owned by
surviving spouse) and partly common are as follows:

Family lot (exclusive) P 5,000,000

Family house (common) 14,000,000
Total P19,000,000

What amount shall be included in the gross estate?

a. P19,000,000 c. P12,000,000
b. P14,000,000 d. P10,000,000

11. Using the same date in the preceding number, how much is the deductible family
home?
a. P12,000,000 c. P7,000,000
b. P10,000,000 d. None

SITUATIONAL

The decedent is a married man with a surviving spouse with the following data died on
February 1, 2021:
Conjugal real personal properties (excluding land
valued at P200,000 transferred inter vivos to a son) P10,000,000
Conjugal personal properties (including P800,000 bank
deposit which was withdrawn and subjected to 6% final
withholding tax) 4,800,000
Conjugal family home 30,000,000
Conjugal ordinary deductions claimed (including P500,000
funeral expenses but excluding P300,000 judicial expenses) 2,500,000

12. Using BIR From No. 1801 what amount shall be reflected in Line 34 page 2 (Gross
estate)
a. P45,000,000. c. P44,000,000.
b. P44,800,000. d. P21,000,000.

13. Using BIR From No. 1801 what amount shall be reflected in Line 35 page 2 (Ordinary
deductions)
a. P2,800,000 c. P2,000,000
b. P2,500,000 d. P1,700,000

14. Using BIR From No. 1801 what amount shall be reflected in Line 37D page 2 (Total
special deductions)
a. P30,000,000 c. P10,000,000
b. P15,000,000 d. P1,000,000

15. Using BIR From No. 1801 what amount shall be reflected in Line 40 page 2 (Net
taxable estate)
a. P31,500,000 c. P27,000,000
b. P27,500,000 d. P21,000,000

16. Using BIR From No. 1801 what amount shall be reflected in Line 18 page 1 (Estate
tax due)
a. P1,890,000 c. P1,620,000
b. P1,632,000 d. P1,260,000

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 TAXATION
ReSA Batch 44 – October 2022 CPALE Batch
31 July 2022  8:00 AM to 11:00 AM TAX First Pre-Board Exam

17. Which of the following statements is incorrect in connection with cash installment
payment of estate tax?
a. The cash installments shall be made within two (2) years from the
date of filing of the estate tax return.
b. The estate tax return shall be filed within one year from the date of
decedent’s death.
c. The frequency (i.e., monthly, quarterly, semi-annually or annually),
deadline and amount of each installment shall be indicated in the
estate tax return, subject to the prior approval by the BIR.
d. In case of lapse of two years without the payment of the entire tax
due, the remaining balance thereof shall be due and demandable without
the applicable penalties and interest.

18. The donor’s tax for each year shall be

a. six percent (6%) computed on the basis of the total gifts in
excess of Two hundred fifty thousand pesos (P250,000) exempt gift
made during the calendar or fiscal year.
b. six percent (6%) computed on the basis of the total gifts in
excess of Two hundred fifty thousand pesos (P250,000) exempt gift
made during the calendar year.
c. six percent (6%) computed on the basis of the total gifts in
excess of Two hundred fifty thousand pesos (P250,000) exempt
gross gift made during the calendar year.
d. six percent (6%) computed on the basis of the total gifts made
during the calendar year.

19. Gross gifts of non-resident citizen donor shall be composed of:

a. real properties, personal properties and taxable transfers wherever
situated.
b. real properties and personal properties wherever situated.
c. real properties, personal properties and taxable transfers situated
in the Philippines.
d. real properties and personal properties wherever situated except
intangible personal properties when there is reciprocity.

20. A sale, exchange, or other transfer of property made in the ordinary course of
business (a transaction which is a bona fide, at arm’s length, and free from
any donative intent):
a. will be considered as made for an adequate and full consideration
in money or money’s worth and not subject to donor’s tax.
b. will not be considered as made for an adequate and full consideration
in money or money’s worth and subject to donor’s tax.
c. will be considered as made for an adequate and full consideration
in money or money’s worth but considered deemed gift subject to
donor’s tax.
d. will not be considered as made for an adequate and full consideration
in money or money’s worth and not subject to donors tax.

21. Mr. J. Santos donated P500,000 to AST Foundation, a philanthropic organization.

The organizations total administrative expenses amounted to P7,000,000 out of its
expenses of P20,000,000. How much was the exempt gift to the philanthropic
organization?
a. P6,000,000 c. P500,000
b. P5,000,000 d. None

22. A resident alien donor donated to a Philippine domestic corporation a property

located abroad valued at P500,000. The foreign donor’s tax on the donation was
P20,000. A donation earlier within the same calendar year, was donated to a
legitimate daughter, a property valued at P300,000.

How much was the total net gifts subject to tax?

a. P800,000 c. P500,000
b. P550,000 d. None of the choices

23. Using the same data in the preceding number, how much is the donor’s tax payable?
a. P33,000 c. P10,000
b. P13,000 d. None of the choices

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 TAXATION
ReSA Batch 44 – October 2022 CPALE Batch
31 July 2022  8:00 AM to 11:00 AM TAX First Pre-Board Exam
24. Mr. Gerardo Ireneo transfers inter vivos a personal property to his son on March
15, 2018. His son who lives in another province let his father know that he is
accepting the gift on March 31, 2018. The personal property was delivered and
received on April 15, 2018. When shall be the last day to file the donor’s tax
return and pay the donor’s tax to avoid penalties?
a. April 14, 2018 c. May 15, 2018
b. April 30, 2018 d. None of the choices
25. In order that the donation of an immovable may be valid:
I - It must be made in a public document specifying therein the property donated.
II - The acceptance may be made in the same Deed of Donation or in a separate
public document, but it shall not take effect unless it is done during
the lifetime of the donor.
IIII - If the acceptance is made in a separate instrument, the donor shall be
notified thereof in an authentic form, and this step shall be noted in
both instruments.
a. I, II and III are correct
b. I and II correct
c. I and III are correct
d. Only I is correct
SITUATIONAL
On January 15, 2022, Daisy gave a piece of land to her brother-in-law who is getting
married on February 14, 2022. The assessed value and zonal value of the land were
P750,000 and P1,000,000 respectively. It was acquired by Daisy at a cost P1,500,000
in 2018. An adjacent lot to the donated property was valued at P2,000,000. The land
had an unpaid mortgage of P200,000, which was assumed by the donee and an unpaid realty
tax of P10,000 which was not assumed by the donee. The donor and the donee agreed that
the latter will assume the donor’s tax amounting to P33,000.

Daisy donated other properties to her sister and brother in 2021. Gift to sister had
a zonal value of P500,000 and an assessed value P300,000. Gift to brother was cash
P300,000 of which she specially provided that 10% of the gift should be given to the
church where Daisy was a member,

26. Using BIR From No. 1801 what amount shall be shown in Line 27 page 2 (Total gifts
in this return)
a. P2,800,000 c. P1,800,000
b. P2,300,000 d. P1,000,000

27. Using BIR From No. 1801 what amount shall be shown in Line 33 page 2 (Total
deductions allowed)
a. P243,000 c. P210,000
b. P233,000 d. P200,000

28. Using BIR From No. 1801 what amount shall be shown in Line 35 page 2(Total prior
net gifts during the calendar year)
a. P800,000 c. P500,000
b. P600,000 d. None

29. Using BIR From No. 1801 what amount shall be shown in Line 38 page 2 (Total net
gift subject to tax)
a. P1,370,000 c. P800,000
b. P1,340,000 d. P550,000

30. Using BIR From No. 1801 what amount shall be shown in Line 18 page 1 (Tax payable)
a. P82,200 c. P48,000
b. P80,400 d. P33,000

31. No VAT shall be imposed to form part of the cost of goods sold destined for
consumption outside of the territorial border of the taxing authority.
a. Cross Border Doctrine
b. Rule of Reciprocity
c. Constructive Receipt Doctrine
d. International Comity

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 TAXATION
ReSA Batch 44 – October 2022 CPALE Batch
31 July 2022  8:00 AM to 11:00 AM TAX First Pre-Board Exam
32. Which of the following is not subject to VAT?
a. Sale of goods or properties not in the course of trade or business
b. Sale of services and lease of properties in the course of trade or
business
c. Importation in the course of trade or business
d. Importation not in the course of trade or business.

33. Which of the following sale of services is subject to VAT?

a. Transport of passengers by land by a transportation contractor
b. Sale of gas and water by a franchise grantee
c. Sale of health and accident insurance by non-life insurance companies
d. Sale of services regardless of whether or not the performance thereof
calls for the exercise or use of the physical or mental faculties.

34.In computing the taxable base during the month or quarter, which of the
following shall be allowed as deductions from gross selling price?
I - Discounts determined and granted at the time of sale, which are expressly
indicated in the invoice, the amount thereof forming part of the gross sales
duly recorded in the books of accounts.
II - Sales discount indicated in the invoice at the time of sale, the grant of
which is dependent upon the happening of a future event,
IIII - Sales returns and allowances for which a proper credit or refund was made
during the month or quarter to the buyer for sales previously recorded as
taxable sales.
a. I, II and III
b. I and II only
c. I and III only
d. None of I, II and III

35. Sale of gold by a VAT-registered taxpayer to the Bangko Sentral ng Pilipinas is:
a. subject to 12% VAT.
b. subject to 0% VAT.
c. subject to 3% percentage tax.
d. Exempt from VAT

36. A VAT-registered taxpayer service provider has the following data taken from the
books of account for the month of January 2021:
Accounts receivable, January 1, 2021 P 560,000
Sales on account for the month of January 1,120,000
Services paid in cash for the month of January 336,000
Accounts receivable, January 31, 2021 784,000
Cash purchases for the month of January 2021 448,000

How much is the output tax for the month of January, 2021 using 12% rate?
a. P201,600 c. P132,000
b. P147,840 d. P96,000

37. Sale of bamboo shoots (labong) and saluyot (leafy vegetable) is:
a. subject to 12% VAT. c. exempt from VAT.
b. subject to 0% VAT. d. none of the choices

38. The sale of parking lot by a VAT-registered real estate dealer:

a. shall be subject to VAT regardless of the amount of selling price.
b. shall be subject to VAT provided the amount of selling price exceeds
the threshold amount.
c. shall be subject to VAT only when it is included as part of the sale
of condominium unit.
d. shall be subject to VAT only when it is sold separately from the sale
of condominium unit.

39. A VAT- registered lessor rents his 5 commercial and 20 residential units for monthly
rent of P50,000 and P15,000 per unit, respectively. His accumulated gross receipts
during the taxable year amounted to:
Rent from 5 commercial units (P50,000 per unit x 12) P3,000,000
Rent from 20 residential units (P15,000 per unit x 12) 3,600,000
Aggregate gross receipts P6,500,000

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 TAXATION
ReSA Batch 44 – October 2022 CPALE Batch
31 July 2022  8:00 AM to 11:00 AM TAX First Pre-Board Exam
What will be the business taxes consequences?
a. Both will be subject to VAT because the aggregate gross receipts exceed
the VAT threshold.
b. Both will be exempt from VAT because rent from commercial units did not
exceed the VAT threshold and rent from residential units shall be exempt
regardless of the gross annual receipts.
c. Only the rent from commercial units shall be subject to VAT
d. Only the rent from residential units shall be subject to VAT because
it exceeded the VAT threshold.

40. Which of the following sales to senior citizens shall not be exempt from VAT?
a. Sale of food, drinks, dessert and other consumable items served by the
establishments, including value-meals and promotional meals, offered
for consumption of the general public
b. Sale of single serving seat meals with beverage for an individual senior
citizen
c. Bulk orders which are within the context of pre-contracted or pre-
arranged group meals or packages
d. Sale of medicines from drug stores, hospital pharmacies, medical and
optical clinics and similar establishments including non-traditional
outlets dispensing medicines

SITUATIONAL

A taxpayer is engaged in VAT-subject transactions but his annual gross sales do not
exceed the VAT threshold. Hence, he did not register under VAT system. However,
during the current year, his quarterly gross sales follow:

First quarter P1,000,000

Second quarter 1,000,000
Third quarter 1,000,000
Fourth quarter 1,000,000

41. How much is the total percentage tax due for the first three (3) quarters?
a. P480,000 c. P90,000
b. P120,000 d. P30,000

42. How much is the VAT due?

a. P480,000 c. P90,000
b. P120,000 d. None of the choices

43. Who amoung the following shall not be allowed input tax credit?
a. importer upon payment of VAT prior to the release of goods from customs
custody.
b. purchaser of the domestic goods or properties upon consummation of the
sale
c. purchaser of services or the lessee or licensee upon payment of the
compensation, rental, royalty or fee.
d. seller of the domestic goods or properties upon consummation of the
sale

SITUATIONAL

A VAT-registered taxpayer is also engaged in VAT-exempt transactions. The following

VAT exclusive data are made available:

Domestic VAT-subject cash sales P1,000,000

VAT-exempt sales on account 500,000
Export cash sales 300,000
Cash purchases of supplies from VAT supplier
used for all transactions) 150,000
Purchase on account of merchandise from VAT-registered trader
(for VAT sales only) 200,000

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 TAXATION
ReSA Batch 44 – October 2022 CPALE Batch
31 July 2022  8:00 AM to 11:00 AM TAX First Pre-Board Exam
44. How much is the amount reflected in line 22 BIR Form 2550Q (total available input
tax)?
a. P42,000 c. P34,000
b. P37,000 d. P24,000

45. How much is the amount reflected in line 24 BIR Form 2550Q (allowable input tax)
assuming the taxpayer decided to refund the input tax attributed to zero-rated
sales?
a. P42,000 c. P34,000
b. P37,000 d. P24,000

46. How much is the amount reflected in line 19A BIR Form 2550Q (total sales)?
a. P1,800,000 c. P1,300,000
b. P1,500,000 d. P1,000,000

47. How much is the VAT-subject sales?

a. P1,800,000 c. P1,300,000
b. P1,500,000 d. P1,000,000

48. How much is the amount reflected in line 25 BIR Form 2550Q (Net VAT payable?
a. P96,000 c. P83,000
b. P86,000 d. P78,000

49. A taxpayer imports motor vehicle for land transport on January 1, 2022. Its total
landed cost is P2,400,000. The estimated life of the vehicle is 5 years. Which of
the following statements is correct?
a. The taxpayer can amortize the input tax because the cost exceeds
P1,000,000 but not P2,400,000.
b. The taxpayer cannot amortize the input tax because the motor vehicle
is acquired on January 1, 2022.
c. The taxpayer can amortize the input tax because the cost exceeds
P1,000,000 but not P2,400,000 up to January 1, 2027.
d. The taxpayer cannot amortize the input tax because the motor vehicle
is acquired is for land transport.
50. SR Pharmaceutical Corporation is an exclusive disctirbutor of certan brand of
prescription drugs for cancer and serveral drugs in the Philippines. For the period
January to March 2021, the said company had the followng:
Inventory of cancer drugs as of December 31, 2020 P200,000,000.00
Sale of cancer medicine (goods from previous inventory) 200,000,000.00
Total sales for the period 500,000,000.00
Percentage of sale of cancer medicines to total sales for
the period 40%

All input taxes from the existng inventory of cancer drugs have been utilized as
of December 31, 2020.

SR Pharmaceutical Corporation incurred P20,000,000.00 of input tax for the period

from purchases of medicine other than those prescribed for cancer and no additonal
purchases of prescription drugs for cancer was purchased during the period.

How much is the VAT payable?

a. P64,000,000 c. P28,800,000
b. P40,000,000 d. P16,000,000

51. Which of the following is incorrect? The percentage tax is:

a. a tax on a sale of sale or services.
b. imposed on a sale of goods.
c. imposed together with the value-added tax.
d. imposed together with the excise tax.

SITUATIONAL

A VAT-registered operator of domestic common carrier by land presented the following

data for the first calendar quarter of the year 2022.

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 TAXATION
ReSA Batch 44 – October 2022 CPALE Batch
31 July 2022  8:00 AM to 11:00 AM TAX First Pre-Board Exam
Gross receipts transport of passengers by land P 1,500,000
Gross receipts transport of goods 1,000,000
Gross receipts transport of cargoes 500,000
Cost of services, transport of passenger 800,000
Cost of services, transport of goods and cargoes 300,000
Operating expense, transport of passenger 200,000
Operating expenses, transport of goods and cargoes
Cost of services and operating expenses are 60% with VAT

52. How much is the common carrier’s tax?

a. P75,000 c. P30,000
b. P45.000 d. P15,000

53. How much is the output VAT?

a. P180,000 c. P60,000
b. P120,000 d. Exempt from VAT

54. Can the taxpayer avail of the 8% income tax rate?

a. Yes. Because his total gross receipts do not exceed the VAT as
long as he signifies his intention when he files his first quarter
return.
b. No. Because he is VAT-registered and therefore not qualified to
avail of the 8% income tax rate.
c. Yes. Because taxpayers with various business is qualified as long
as he signifies his intention when he files his first quarter
return.
d. No. Because as a rule taxpayers with various business is not
qualified even if he signifies his intention when he files his
first quarter return.

55. When shall the Percentage Tax Return be filed?

a. April 25, 2022 c. April 21, 2022
b. April 24, 2022 d. April 20, 2022

56. When shall the Monthly VAT Declaration be filed for the second month of the first
calendar quarter?
a. April 25, 2022 c. April 21, 2022
b. April 24, 2022 d. April 20, 2022

57. Can the VAT-registered taxpayer register his carriage of passengers under the VAT
system?
a. Yes. Any person who is VAT-registered but enters into transactions
which are exempt from VAT (mixed transactions) may opt that the VAT
apply to his transactions which would have been exempt from VAT.
b. No. Any person who is VAT-registered but enters into transactions which
are exempt from VAT (mixed transactions) cannot optionally register his
transactions which would have been exempt from VAT.
c. Yes. As a rule, it is mandatory for VAT-registered taxpayers to register
all transactions under the VAT system.
d. No. It is the other way, the taxpayer may opt that the VAT-subject
transactions be exempted from VAT.

SITUATIONAL

Vanderwoodsen, not VAT-registered, is a radio-TV broadcasting franchise grantee. The

previous year, its gross receipts did not exceed P 10,000,000. In the first month of
the current year, it had the following data:
Gross receipts, sale of airtime P 2,000,000
Payments received from user of radio station’s
communications facilities for overseas communications 500,000
Rentals of office spaces 3,500,000
Business expenses 700,000

58. How much was the franchise tax due?

a. P75,000 c. P50,000
b. P60,000 d. P20,000

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 TAXATION
ReSA Batch 44 – October 2022 CPALE Batch
31 July 2022  8:00 AM to 11:00 AM TAX First Pre-Board Exam

59. How much was the overseas communications tax?

a. P250,000 c. P75,000
b. P200,000 d. P50,000

60. How much is output VAT, if any?

a. P720,000 c. P420,000
b. P660,000 d. None

61. A proprietor of bowling alleys has the following gross receipts during the month
of July, 2022:

Gross receipts from bowling operation P2,000,000

Gross receipts from sale of food and drinks inside the
bowling alley 1,000,000
Gross receipts from rental of stalls inside the bowling alley 500,000

How much is the amusement tax?

a. P1,050,000 c. P525,000
b. P630,000 d. None

62. Under the TRAIN, the term ‘taxable income’ as applied to individuals means:
a. the pertinent items of gross income specified in the Tax Code, less
deductions if any, authorized for such types of income by the Tax
Code or other special laws.
b. the pertinent items of gross income specified in the Tax Code, less
deductions including personal exemptions, if any, authorized for
such types of income by the Tax Code or other special laws.
c. the pertinent items of gross income specified in the Tax Code.
d. the pertinent items of gross income specified in the Tax Code
excluding salaries received from employment.

63. A nonresident citizen arrives in the Philippines on July 31, 2018 to reside here
permanently after many years of living abroad. The following data for the year
2018 on his income are made available:
Gross income, foreign sources (in Philippine pesos)
January 1 to July 31 P500,000
Gross income, Philippine sources, August 1
to December 31 300,000
Gross income, foreign sources, (in Philippine pesos)
August 1 to December 31 400,000

For Philippine income tax purposes, how much is his taxable gross income?
a. P800,000 c. P400,000
b. P700,000 d. P300,000

64. Mr. Elie Cruz, minimum wage earner, earned, aside from his basic
wage of P135,000, additional pay of P140,000.00 which consists of the
overtime pay-P80,000.00, night shift differential- P30,000.00,
hazard pay-P15,000.00, and holiday pay- P15,000.00. He contributed
to the SSS, Philhealth, and HDMF amounting to P5,000.00 and has
received 13th month pay of P11,000.00 which are both excluded from
taxable income.

How much is the income tax due?

a. P1,800 c. P324
b. P 720 d. None

SITUATIONAL
In 2022, Mr. Geri Manuel owns a nightclub and videoke bar, with gross
sales/receipts of P2,500,000.00. His cost of sales and operating
expenses are P1.000,000.00 and P600,000.00, respectively, and with non-
operating income of P100,000.00.

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 TAXATION
ReSA Batch 44 – October 2022 CPALE Batch
31 July 2022  8:00 AM to 11:00 AM TAX First Pre-Board Exam
65. Can the taxpayer avail of the 8% income tax rate?
a. Yes. Because his gross receipts do not exceed the VAT threshold.
b. No. Because he is subject to percentage tax under Sec. 125.
c. Yes. Because night club and videoke bar owners are always allowed
to avail of the 8% income tax rate.
d. No. Because he did not express his intention to be taxed at 8%.

66. How much is the income tax due?

a. P200,000 c. P190,000
b. P198,000 d. P160,000

67. How much is the percentage tax due?

a. P750,000 c. P375,000
b. P450,000 d. P250,000

68. In the case of locally produced of extracted minerals and mineral products or
quarry resources where the mine site or place of extraction is not the same as
the place of processing or production, the return shall be filed with and the
tax paid to the:
a. Revenue District Office having jurisdiction over the locality where
the same are processed.
b. Revenue District Office having jurisdiction over the locality where
the same are mined, extracted or quarried.
c. Revenue District Office having jurisdiction over the locality where
the same are mined, extracted or quarried or processed at the
taxpayer’s discretion.
d. Revenue District Office having jurisdiction over the taxpayer’s
principal place of business.

69. First statement: Unless otherwise provided, the price, including the value-
added tax, at which the goods are sold at wholesale in the place of production
or through their sales agents to the public shall constitute the gross selling
price.
Second statement: If the manufacturer also sells or allows such goods to be sold
at wholesale in another establishment of which he is the owner or in the profits
of which he has an interest, the wholesale price in such establishment shall
constitute the gross selling price.
a. Both statements are correct.
b. Both statements are incorrect.
c. Only the first statement is correct.
d. Only the second statement is correct.

70. A manufacturer of sweetened beverage using purely high fructose corn syrup or
in combination with any caloric or non-caloric sweetener presented the
following data: Each package contains 3.5 liters; Selling price – P150
per package

How much is the excise tax using P12 tax per liter?
a. P42 c. P12
b. P36 d. Not subject to excise tax

-END OF EXAMINATION-

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 TAXATION
ReSA Batch 44 – October 2022 CPALE Batch
31 July 2022  8:00 AM to 11:00 AM TAX First Pre-Board Exam

ANSWERS & SOLUTIONS/CLARIFICATIONS

1 A 26 D 51 C
2 D 27 D 52 B
3 D 28 D 53 A
4 A 29 D 54 B
5 D 30 D 55 A
6 B 31 A 56 Bonus
7 C 32 A 57 A
8 D 33 D 58 B
9 D 34 C 59 D
10 B 35 D 60 D
11 C 36 C 61 D
12 C 37 C 62 A
13 C 38 A 63 B
14 B 39 C 64 D
15 Bonus 40 C 65 B
16 Bonus 41 D 66 C
17 D 42 B 67 B
18 B 43 D 68 B
19 B 44 A 69 D
20 A 45 C 70 Bonus
21 D 46 A
22 B 47 C
23 C 48 B
24 C 49 B
25 A 50 D

12. C (44,000,000)

13. C (P2,000,000)

14. B (P15,000,000)

15. Bonus

16. Bonus

Exclusive Common Total

Gross estate P30,000,000 P14,000,000 P44,000,000
Less: Deductions
- (2,000,000) (2,000,000)
Net estate before special 30,000,000 12,000,000*
deductions 42,000,000
Less: Special deductions
Family home 30,000,000
Maximum 10,000,000 (10,000,000)
Standard deduction (5,000,000)
Net estate after special
deductions 27,000,000
Less: Share of surviving
spouse
(1/2 x 12,000,000*) (6,000,000)
Net taxable estate P 21,000,000
Tax rate 6%
Estate tax due P1,260,000

21. D
The gift was not exempted because the administrative expenses of the
donee-institution exceed 30% of the total expenses
(P7,000,000/P20,000,000 = 35%).

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 TAXATION
ReSA Batch 44 – October 2022 CPALE Batch
31 July 2022  8:00 AM to 11:00 AM TAX First Pre-Board Exam
22. B
Net gift in this return P500,000
Add: Total prior net gifts during the calendar year 300,000
Total net gifts 800,000
Less: Exempt gift 250,000
Total net gifts subject to tax P550,000

23.C
Total net gifts subject to tax P550,000
Tax rate 6%
Total donor’s tax due 33,000
Less: Payments for prior gifts
(300,000 -250,000 x 6%) 3,000
Foreign donor’s tax credit
Actual foreign donor’s tax 20,000
Limit (500,000/800,000 x 33,000) 20,625 20,000 23,000
Donor’s tax payable P10,000

26. D (P1,000,000)

27. D (P200,000)

28. D (None)

29. D (P550,000)

30. D (P33,000)
27 Total gifts in this return P1,000,000
33 Total deductions 200,000
34 Total net gifts in this return 800,000
35 Add: Total prior net gifts during the calendar year -
36 Total net gifts 800,000
37 Less: Exempt gift 250,000
38 Total net gift subject to tax 550,000
15 Applicable donor’s tax rate 6%
16 Total donor’s tax due 33,000
17 Less: Tax payments/ credits -
18 Tax payable P33,000

36. C
Services paid in cash for the month (336,000/1.12 P300,000
Account receivable beginning (560,000/1.12) 500,000
Add: Sales on account (1,120,000/1,12) 1,000,000
Total 1,500,000
Less: Accounts receivable, ending (784,000/1.12) 700,000
Collections 800,000
Total 1,100,000
Tax rate 12%
Output tax P132,000

41. D
First quarter P1,000,000
Second quarter 1,000,000
Third quarter 1,000,000
Total gross sales 3,000,000
Tax rate 1%
Percentage tax P 30,000

42. B
Gross sales (fourth quarter) P1,000,000
Tax rate 12%
Value-Added Tax P 120,000

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 TAXATION
ReSA Batch 44 – October 2022 CPALE Batch
31 July 2022  8:00 AM to 11:00 AM TAX First Pre-Board Exam
44. A
Cash purchases of supplies from VAT supplier (used for all
transactions) (150,000 x 12%) P18,000
Purchase on account of merchandise from VAT-registered
trader (for VAT sales only) (200,000 x 12%) 24,000
Total available input tax P42,000

45. C
Total available input tax P42,000
Less: Input tax attributed to exempt sale
(500,000/1,800,000 x 18,000) (5,000)
Input tax to be refunded (300,000/1,800,000 x 18,000) (3,000)
Allowable input tax P34,000

46. A
Domestic VAT-subject cash sales P1,000,000
VAT-exempt sales on account 500,000
Export cash sales 300,000
Total P1,800,000

47. C
Domestic VAT-subject cash sales P1,000,000
Export cash sales 300,000
Total P1,300,000

48. B
Output tax (1,000,000 x 12%) P120,000
Less: Allowable input tax 34,000
VAT payable P 86,000

50. D
Output tax (300,000,000.00 x 12%) P36,000,000.00
Less: Input tax 20,000,000.00
VAT payable P16,000,000.00

52. B
Gross receipts transport of passengers by land P1,500,000
Rate 3%
Common carrier’s tax P 45,000

53. A
Output tax on transport of goods (1,000,000 x 12%) P120,000
Output tax on transport of cargoes (500,000 x 12%) 60,000
Total P180,000

56. BONUS
ERRONEOUS CHOICES

When shall the Monthly VAT Declaration be filed for the second month
of the first calendar quarter?
a. April 25, 2022 c. April 21, 2022
b. April 24, 2022 d. April 20, 2022

CORRECT CHOICES SHOULD HAVE BEEN:

a. March 25, 2022 c. March 21, 2022
b. March 24, 2022 d. March 20, 2022

58. B
Gross receipts, sale of airtime P 2,000,000
Tax rate 3%
Franchise tax P 60,000

59. D
Payment received for the use of facilities P 500,000
Tax rate 10%
Overseas communications tax P 50,000

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 TAXATION
ReSA Batch 44 – October 2022 CPALE Batch
31 July 2022  8:00 AM to 11:00 AM TAX First Pre-Board Exam
61. D
Operators of bowling alleys are not subject to amusement tax.

63. B
Gross income, Philippine sources, August 1 to December 31 P300,000
Gross income, foreign sources, (in Philippine pesos) August
1 to December 31 400,000
Taxable gross income P700,000

64. D
Total Compensation Income P135,000.00
Add: Overtime, night shift differential,
hazard, and holiday pay 140,000.00
Total Income 275,000.00
Less: Mandatory contributions P5,000.00
Non-taxable benefits 11,000.00 16,000.00
Taxable compensation income P 259,000
Income tax due Exempt

66. C
Gross Sales P2,500,000
Less: Cost of sales 1,000,000
Gross income 1,500,000
Less: Operating expenses 600,000
Net income from operation 900,000
Add: Non-operating income 100,000
Taxable income P1,000,000
Tax due Sec. 24 (A) 800,000 130,000
200,000 x 30% 60,000 P190,000

67. B
Gross Sales P2,500,000
Tax rate 18%
Amusement tax P 450,000

70. Bonus

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