Jack E.

Gagara, a self-employed individual reported the following Income Statement for the taxable year
income tax. Following are the relevant notes:
Note 1 - P15,000 of this amount is given as discounts to senior citizens and disabled persons.
Note 2 - The shares were sold directly to the buyer at P100,000.
Note 3 - The land which was classified as a capital asset had a carrying amount of P1,400,000 and fair ma
P2,000,000.
Note 4 - Included in this amount is the annual depreciation of a vehicle which had was acquired on July 1 o
P2,500,000 and has a useful life of 10 years.
Note 5 - Included in this amount is P25,000 salary of senior citizen employees and P15,000 salary of a dis
employee.
Note 6 - Half of this amount is the monetary value of what is subject to Fringe Benefit Tax.
Note 7 - P25,000 of this amount is applicable to past service costs.

1. How much is the capital gains tax on the sale of domestic shares?

2. How much is the capital gains tax on the sale of land?

3. How much is the final tax on the interest income?

4. How much is the fringe benefit tax expense?

5. How much is the deductible depreciation expense?

6. How much is the deductible entertainment and amusement expense?

7. How much is the deductible interest expense?

8. How much is the deductible pension trust expense?

9. How much is the special itemized deductions?

10. How much is the taxable income if the taxpayer did not opt for the optional standard deduction?

11. How much is the income tax due if the taxpayer chooses the optional standard deduction?
atement for the taxable year, gross of any type of

sabled persons.

nt of P1,400,000 and fair market value of

had was acquired on July 1 of the current year at

and P15,000 salary of a disabled person

Benefit Tax.

standard deduction?

dard deduction?
Jackie Bank is a commercial bank in the Philippines. It pays its depositors interest bimonthly. The followin
occurred during the second quarter of 2019.
• During April, it incurred the following interests on short-term deposits: P250,000 for resident citizens, P70
for resident aliens, P110,000 for non-resident citizens, P200,000 for domestic corporations and P50,000 fo
non-resident foreign corporations.
• During May, a deposit account of a decedent with a balance of P400,000 was withdrawn. A long-term dep
of a resident citizen was preterminated resulting to a holding period of three years. The preterminated de
had a principal of P250,000 and simple interest of 5% per annum which is fully payable upon maturity or pr
termination, whichever is earlier.
• During June, it withheld the following final taxes on interests on short-term deposits: P42,000 for resid
citizens, P10,000 for resident aliens, P20,000 for non- resident citizens, P60,000 for domestic corporations
P12,000 for non-resident foreign corporations. *

11. On the return covering the month of April, what amount is applicable to Item 17?
How much is the FWT

12. How much is the total net cash payments to both withdrawn account and preterminated deposit

13. Same figures from the previous problem

In the 1602Q covering the quarter, how much is the amount applicable to item 23?
(In short, how much is the FWT to be reported.
 2019
1601FQ 0619F
Interest Income FWT Rate
erest bimonthly. The following April RC 250,000 20%
RA 70,000 20%
000 for resident citizens, P70,000
NRC 110,000 20%
corporations and P50,000 for
DC 200,000 20%
s withdrawn. A long-term deposit NRFC 50,000 30%
years. The preterminated deposit
y payable upon maturity or pre-

m deposits: P42,000 for resident

000 for domestic corporations and

to Item 17?
June
RC
and preterminated deposit? RA
NRC
DC
NRFC

MAY
0602 Decedent Account 400,000 6%
Pretermination - RC 37500 12%

Principal 250,000
3 yrs
5%
Interest Income 37500
FWT Liablity Net Proceeds
50,000 200,000
14,000 56,000
22,000 88,000
40,000 160,000
15,000 35,000
141,000 539,000

42,000
10,000
20,000
60,000
12,000
144,000

24000 376,000
4500 33000

659,000