VAT PAYABLE – Assignment Part 1

1. For 2018 taxable year, determine the applicable business tax of the following:

Lease of residential units:

Case Monthly rental Aggregate Annual Rental Answer

A P 14,000 P 3,200,000 Exempt
B P 16,000 P 2,800,000 3% OPT
C P 16,000 P 3,000,000 3% OPT
D P 18,000 P 3,200,000 12% VAT

Lease of commercial units:

Case Monthly rental Aggregate Annual Rental Answer

E P 12,000 P 3,200,000 12% VAT

F P 16,000 P 2,800,000 3% OPT
G P 16,000 P 3,000,000 3% OPT
H P 10,000 P 3,500,000 12% VAT

2. Assume the following transactions with the corresponding invoice costs/prices: (inclusive)

Apol, Non-VAT registered taxpayer, sells to LJ, VAT taxpayer P 89,600

LJ, VAT taxpayer, sells to Chris, VAT taxpayer 134,400
Chris, VAT taxpayer, sells to Abi 201,600
Abi, Non-VAT taxpayer, exported the goods in Canada 300,000

Required: Determine the following:

a. VAT payable of Apol – None (0)
b. VAT payable of LJ -
c. Vat payable of Chris
d. Vat payable of Abi – VAT exempt (Sec. 109)

Solution:

LJ:

Output tax (134,400/1.12 x 12%) 14,400

Input tax 0
VAT payable 14,400

Chris:
Output tax (201,600/1.12 x 12%) 21,600
Input tax (134,400/1.12 x 12%) (14,400)
VAT payable 7,200
3. Conanan is a VAT registered taxpayer. It had the following data for the month of January (VAT
inclusive):
Cash sales, invoice amount P 660,800
Sales on account 246,400
Purchases 291,200 – input tax
Consignment shipments
Less than 60 days 38,500
More than 60 days 22,400
Goods paid to creditors (dacion en pago) 16,800
Goods given as Christmas gift to employees 19,040
Property dividends to stockholders 8,960

Required: Determine the VAT payable for the month.

Solution:
Cash sales (660,800/1.12 x 12%) 70,800
Sale on account (246,400/1.12 x 12%) 26,400
Transaction deemed sales:
Consignment 22,400
Dacion en pago 16,800
Gift to employees 19,040
Property dividends 8,960
Total 67,200 7,200
Total output tax 104,400
Input tax (291,200/1.12 x 12%) (31,200)
VAT payable 73,200

4. ABC Corporation (vat reg.) has the following data for the month of March: (at the end of month)

Gross sales (VAT exclusive) P 8,000,000

Sales returns 400,000

Goods shipped on consignment (net):

Units Unit Price

March 25 40 P 10,000
February 14 30 10,000
January 8 20 10,000

Goods withdrawn for use by the company P 50,000

Goods taken as payment to creditor 30,000
Purchases for the month of (net of VAT):
Goods P 600,000
Supplies 75,000
Capital goods (U.L = 4 years) 1,100,000
Freight and insurance 8,500
 Salaries of employees 385,000

Additional information:
 Received cash representing payment for ten (10) units delivered on February 14.
The amount received was net of ten percent (10%) commission.
 A consignee reported and remitted P200,000 (gross of 10% commission)
representing 20 units sold from goods consigned in March.

Required: Determine the VAT payable for the month of March.

Output tax:
Net sales (7.6M x 12%) 912,000
Consignment – Jan. 8 (20 x 10,000 x 12%) 24,000
Other deemed sales (80,000 x 12%) 9,600
Consignment – Feb. 14 (10 x 10,000 x 12%) 12,000
Consignment – March 25 (20 x 10,000 x 12%) 24,000
Total output tax 981,600
Input tax (683,500 x 12%) (82,020)
Capital goods (1,100,000 x 12%/4 years x 1/12) (2,750)
VAT payable 896,830

5. Bobs Bookstore, VAT registered, is engaged in business of selling books, school supplies, and gift
items. The following were provided to you during the month of October (inclusive of VAT, if
applicable):
Sale of school supplies P 1,680,000
Sale of books 1,200,000
Sale of gift items 1,008,000
Purchase of school supplies and gift items for sale 1,344,000
Purchase of books 600,000
Purchase of computers used in vatable and non-vatable transactions 448,000
Purchased of office supplies used in vatable and non-vatable
transactions from non-VAT registered suppliers 200,000

Required: Determine the vat payable for the month of October.

Solution:
Mixed: Ratio the VAT based on the sales, net of VAT
448000/1.12 x 12% = 48,000

Sales, vat exempt 1,200,000

Sales, 12% (net) 2,400,000 2.4/3.6 x 48,000
Total 3,600,000

Output tax 288,000

Input tax:
 Gift items and supplies (144,000)
Computer (32,000)
VAT payable 112,000

6. Omega Corporation is engaged in a business subject to value added tax and another business
which is not subject to value added tax. Omega’s business data for the current year were
provided as follows:
Sales, vat business, invoice amount P 896,000
Sales, non-vat business, 200,000
Purchases of goods, vat business, invoice amount 224,000
Purchases of goods for non-vat business, inclusive of input vat 33,600
Purchase of depreciable asset for common use, vat included 112,000
Purchase of supplies for common use, vat included 2,240
Rental of premises for both types of business. The lessor
is non-vat registered person 22,400

Required: Determine the vat payable for the year.

Solution:
Output tax (896,000/1.12 x 12%) P 96,000
Input tax:
Purchases (224,000/1.12 x 12%) (24,000)
Allocated input tax (9,792)
VAT payable P 62,208

Allocation:
12,240
Sales, VAT, business P 800,000
Sales, non-VAT business P 200,000
Total sales P 1,000,000

VAT business (8/10 x 12,240) 9,792

7. The following data for the month relates to William Company, a VAT registered person (amounts
are vat inclusive):
Domestic sales P 330,000
Other domestic sales (sales to export traders) 274,996
Export sales 200,000
Purchases of goods for domestic sales 374,000
Purchases of supplies on domestic sales 69,848
Purchase of service 154,000
Purchase of goods for export 55,000

Required:
a. Determine the total input tax P 69,948 – add all the purchases.
 b. Determine the value added tax payable if excess input taxes on exports are claimed
as tax credit.

Output tax P 64,821

Input tax (69,948)
Deferred VAT P (5,127)

VAT PAYABLE – Assignment Part 2

8. ABC Company imported merchandise for resale. Using the following information, determine the
value added tax on the importation before the same can be release from customs custody.
CIF (cost, insurance, freight) value P229,195
Charges/expenses incurred in claiming the goods: 1,540
Wharfage 2,295
Arrastre 4,090
Customs duty 330
Brokerage fee and documentary stamps 3,000
Facilitation expense 2,550

Other charges:
Freight from customs to warehouse (vat exclusive) 5,000

REQUIRED:

Determine the following:

a) Vat on information

Total cost 240,450

VAT (240,450 x 12%) 28,854

b.) The value added tax payable assuming the goods were subsequently sold for P350,000

Output tax (350,000 x 12%) 42,000

Input tax - importation (28,854)
Input tax – freight (5,000 x 12%) (600)
VAT payable 12,546

9. The following data (vat exclusive) are available for the first two (2) quarters of 2018:

1st Quarter
Sales P3,000,000
Purchases 1,200,000
Purchase of machinery on Jan 1 2,500,000
With useful life of 3 yrs.
Unused input vat as of end of 2017` 125,000
 2nd Quarter
Sales 4,800,000
Purchases 3,000,000

REQUIRED:
a. Determine the vat payable/excess input tax for the 1 st quarter

Output tax (3M x 12%) 360,000

Input tax (1.2M x 12%) (144,000)
Capital goods (2.5M x 12%/3 yrs x 3/12) (25,000)
Unused input VAT – 2017 (125,000)
VAT payable 66,000

b. Determine the value added tax payable/ excess input tax for the second quarter assuming the
machinery bought on January 1 was sold on June 30

Output tax (4.8M x 12%) 576,000

Input tax (3M x 12%) (360,000)
Capital goods (300,000 – 25,000) (275,000)
VAT payable 59,000

Monthly VAT return – 2550M – on or before 20 th of the month after the taxable month
Quarterly VAT return – 2550Q – on or before 25 th of the month after the taxable quarter
Cumulative manner

10. An owner of warehouse, which used to be vat exempt, because its annual receipts never
exceeded the vat threshold, decided to register under the vat system on January 2 ,2018, The
following data were from the 1st quarter ending March 31, 2018:

Rental from warehousing services, net of vat P 336,000

Purchases of supplies in February, gross of vat 112,000
Inventory of supplies, January 1, 2018 100,000
Vat on inventory of supplies, January 1, 2018 10,000

REQUIRED: DETERMINE THE VAT PAYABLE FOR THE QURTER ENDING MARCH 31,2018

SOLUTION:
OUTPUT TAX (336T X 12%) 40,320
INPUT TAX (112T/1.12 X 12%) (12,000)
TRANSITIONAL INPUT TAX
2% X 100,000 2,000
VAT PAID 10,000 (10,000)
VAT PAYABLE 18,320
11. JJ is a vat registered processor of sardines. The following data were provided for purposes of
determining the taxpayer’s payable:

SALES (processed sardines, exclusive of vat) P800,000

PURCHASES/PAYMENTS:
Sardines purchased from fish dealers (invoice amount) 200,000
Tomatoes purchased from farmers 85,000
Purchased of olive oil (invoice amount) 67,200
Purchased of can containers (excl. of vat) 25,000
Payments for paper labels (excl. of vat) 12,000
Purchased of cardboard for boxes (incl. of vat) 8,960
Payments for hauling services from non-VAT registered 100,000

Required:
a. Determine the presumptive input VAT
Solution:
Output tax (800,000 x 12%) 96,000
Input tax:
Presumptive (85,000 x 4%) (3,400)
Purchases of other goods
Olive oil (7,200)
Containers and labels (4,440)
Cardboard (960)
VAT payable 80,000

b. Determine the value added tax payable/excess input tax of JJ None

12. JJ is a VAT registered processor of fruits. The following data were provided for purposes of
determining the taxpayer’s VAT payable:

Sales (processed fruits, inclusive of VAT) P 672,000

Purchases/payments:
Purchased of fruits from farmers 200,000
Purchased of raw sugar from millers 60,000
Purchased of bottles (invoice amount) 22,400
Purchased of can containers (exc. of VAT) 50,000
Payments for paper labels (incl. of VAT) 5,600
Purchased of cardboard for boxes (incl. of VAT) 3,360
Payments for hauling services from VAT registered
Forwarders (exc. of VAT) 60,000

Required:
a. Determine the presumptive input tax - None
b. Determine the value added tax payable/excess input tax of JJ
 Output tax (672,000/1.12 x 12%) 72,000
Input tax:
Bottles 2,400
Can containers 6,000
Paper labels 600
Cardboard 360
Hauling services 7,200 (16,560)
VAT payable 55,440

13. A VAT registered hotel offers different services to its guests. The following data were taken from
the books of the taxpayer for the 1 st quarter of 2018 (exclusive of tax):

Revenues Collections
Hotel rooms P 2M P 1.8M
Dining hall:
Sale of food and restaurant 2.5M 2.2M
Sale of wine, beer, and liquor 1M 950T
Disco:
Sale of food and refreshments 1.6M 1.6M
Sale of wine, beer, and liquor 1.2M 1.2M

Other revenues (rentals, massage, spa) 800T 700T

Required: Determine the correct business tax due for the quarter.

Solutions:
Total collections 8,450,000
VAT 12% 1,014,000

14. Omega Construction Company (VAT registered) provided the following data for the 1 st quarter of
2018 (net of VAT):

Contract with Bobads Hotel

 Contract price, P 25M
 Collections, P 15M
 Construction started and finished during the 1 st quarter of the current year
Contract with City Condo
 Contract price, P 20M
 Collections, P 10M
 Construction started and completed 2017
Contract with Urban Development
 Contract price, P 30M
 Collections, P 5M
 Construction will begin in the last quarter of the current year
Payments to suppliers and subcontractors (net of VAT):
 Payments for the purchase of construction materials from Alpha Corporation (VAT
registered supplier), P12M
 Payments for the purchase of construction materials from Bravo, Inc. (non-VAT registered
supplier), P 4M
 Payments to Charlie Company (subcontractor) for services rendered, P4M
 Advances to Delta Corporation (subcontractor), P 2M
 Operating expenses, P 3M

Additional information:
 10% of purchases from Alpha were returned during the quarter
 Payments made to Charlie Corporation was overstated by P1,000,000

Required:
Determine the VAT payable for the 1 st quarter of 2018

Output tax (30M x 12%) 3,600,000

Input tax:
Purchase of const. mat. (12M x 90% x 12%) (1,296,000)
Payment to subcontractors (3M x 12%) (360,000)
VAT payable 1,944,000

15. A dealer in securities has the following for the year 2018:

Sale of securities held for sale in the ordinary course of business P 4M

Cost of securities held for sale in the ordinary course of business 2.5M
Supplies expense, net of VAT 300T
Rent expense, net of VAT 500T

Determine the VAT payable.

Output tax:
Gross income (4M – 2.5M) x 12% 180,000
Input tax:
Supplies and rent (800T x 12%) (96,000)
VAT payable 84,000

16. Delta is a real estate dealer sold three (3) lots on November 2018 with the following terms (net
of VAT):
Lot A Lot B Lot C
Selling price P 250,000 P 200,000 P 300,000
Cost:
Terms:
DP 25,000 50,000 40,000
Due:
12/5/18 25,000 20,000 20,000
 Jan. to Dec. 2019 200,000 130,000 240,000
IP/SP 20% 35% 20%
Ins. Def. Ins.

Required: Determine the following:

a. VAT payable – November 2018
b. VAT payable – December 2018

November 2018:
VAT: Lot A: 250T x 12% = 30,000
Lot B: 200T x 12% = 24,000
Lot C: 300T x 12% = 36,000

Lot A: 25T/250T x 30,000 = 3,000

Lot B: 24,000
Lot C: 40T/300T x 36,000 = 4,800
Total 31,800

December 2018:
Lot A: 25T/250T x 30,000 = 3,000
Lot B: 0
Lot C: 20T/300T x 36,000 = 2,400
Total VAT 5,400

Ratio of IP/SP = 25% or less – installment method – collection of periods covered

Ratio of IP/SP = more than 25% - deferred method

Composition: Initial payment

DP
Receivables to be collected in the year of sale
Interest and penalty, if any
Excess of mortgage over cost

17. A VAT registered real estate dealer sold a residential lot on September 2018.

The following information was made available on the terms of the sale:
Gross selling price (zonal value, P 2,800,000) P 3,000,000
Initial payments consisting of down payment and instalment
in the year of sale 900,000
Balance to be paid in equal installments of P 700,000
starting Jan. 2019 2,100,000

Required:
a. Output VAT – Sept. 2018 – 360,000
b. Output VAT – January 2019 - None

Solution:
VAT: 3M x 12% = 360,000
 IP/SP = 900,000/3M = 30% - deferred method – one time

19. Rest With Me Hotel, a UK based Motel and Restaurant, had the following collections from its
customers during the month:
Room charges P 1,000,000
Laundry services 25,000
Food and beverages 1,500,000
Corkage 15,000
Handling charges for providing telephone, telex, cable, or fax services 4,500
Actual cost of long distance and overseas calls
Collected by establishment for PLDT 35,000
Cake shop sales 80,000
VAT passed on to customers 125,000
Local taxes charged to customers 18,000

Required: Determine the output VAT of the taxpayer

Solution:
Total collection 2,624,500 x 12% = 314,940