Ddd BAMM 6202 - Long Quiz 002 1 15

Income taxation (University of Mindanao)

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Long Quiz 002
Week 10
30/30

Submitted by: Mr. Alfie G. Rellon (FB and Messenger) (AMA OED Student) (agrsaudi: username in the site)

1. One of the following expenses is deductible from gross income

Select one:
a. Amount paid out for new building construction
b. Personal, living and family expenses
c. Premiums paid on a life insurance policy covering the life of the employee of which the members of the family of the
employee are beneficiaries
d. Any amount disbursed in restoring the property

2. During the taxable year, Mr. Juan Dela Cruz separated legally from his wife, Andrea. The legally separated spouses have four
qualified dependent children. Both spouses were earning with the following gross taxable income: Mr. Juan Dela Cruz, P380,000;
Ms. Andrea, P250,000. For custody, the court granted Mr. Dela Cruz the two children and Ms. Andrea the remaining two children.
Meanwhile, Mr. Juan Dela Cruz is supporting his niece who is 21 years old, unmarried, and not gainfully employed. Both spouses
have monthly premium payment of P150 for health and insurance. The allowable deduction for health and hospitalization insurance
of Mr. Dela Cruz is:
Select one:
a. P3,000
b. P1,800
c. Zero
d. P2,400

3. In 2016, Pedro's wife died of a car accident. His dependents are as follows:
A, child, 22 years old, employed on July 12, 2016 B,
child, 21 years old on November 2, 2016
C, child, 18 years old, married on January 31, 2016
D, child, 17 years old, gainfully employed on October 1, 2016 E,
child, 15 afflicted with sore eyes on May 6, 2016
F, child, 13 died together with his wife in a car accident in 2016 G,
sibling, 28 paralytic
For taxable year 2016, Pedro can claim additional exemptions of Select one:
a. P25,000
b. P100,000
c. P 75,000
d. P125,000

4. Ms. Nene By retired from the company after serving for eight years as receiving clerk. During the period of her
retirement, she received the following:
? Annual basic salary, P144,000
? Christmas bonus and cash gift P20,000
? Cost of living allowance, P2,500 monthly
? Retirement benefits from SSS, P350,000
? Retirement benefits from employer where the company has an approved retirement benefit plan, P45,000
? Monetization of her 10-day leave credits, P4,000
During the same period, the taxpayer has an actual payment for health insurance of P3,600. The taxpayer is a widow who supports
her two qualified children and two children of her husband from his first wife, who are below 21 years old, unmarried and not
gainfully employed.
The gross taxable compensation income will amount to:
Select one:
a. P219,000
b. P234,000
c. P424,000
d. P484,000

5. Mr. A received the following from his employer during the current taxable year:

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Monthly basic salary, P45,000
Monthly representation and travelling allowance not subject to liquidation, P10,000
5% commission on net sales. Sales during the year were P6,300,000; sales return, P250,000
13th month pay, Christmas bonus and productivity pay amounting to 120% of his basic salary The gross taxable compensation
income of Mr. A for the current taxable year is:
Select one:
a. P841,500
b. P986,500
c. P962,500
d. P1,016,500

6. Mirabella's husband died in April 2016, leaving seven (7) unmarried children living with and wholly dependent on her for chief
support. The ages of the children are as follows:
Children Ages Status Aaa
24 jobless
Baa 22 mentally retarted Caa
19 studying in Manila
Daa 10 studying in their hometown Eaa
8 studying in their hometown Faa 6
studying in their hometown
Gaa 3 taken by the grandparents for full support
For purposes of taxable year 2017, how many are the qualified dependents? Select one:
a. 6
b. 7
c. 5
d. 4

7. Ms. AC rented the vacant lot owned by Mr. X for a monthly rental of P10,000. The lease contract took effect on April 1, 2016 for
a lease period of 25 years. The lessee, right after the consummation of the lease contract, constructed a commercial building on the
lot costing P6,000,000 with an estimated useful life of 50 years and a residual value of P400,000. When the building was completed
on January 1, 2017, the fair market value of the property was P8,000,000 per valuation made by the independent appraiser.
The building will become the property of the lessor after the expiration of the lease. In
addition, the annual property tax on the lot of P6,000 will be paid by the lessee.
Using the outright method of reporting income from leasehold improvement, the taxable rent income for the year 2016 will be:
Select one:
a. P126,000
b. P8,126,000
c. P94,500
d. P6,126,000

8. All of the following are requisites in the carry-over of net operating loss, except:
Select one:
a. There must be no substantial change in the ownership of the business
b. The carry-over is good for only one (1) year
c. Carry over is not allowed if the corporation is subject to MCIT during the taxable year
d. Even if a corporation paid tax based on MCIT, the running of the prescriptive period is not interrupted

9. Ms. Nene By retired from the company after serving for eight years as receiving clerk. During the period of her
retirement, she received the following:

Annual basic salary, P144,000 Christmas

bonus and cash gift P20,000 Cost of living
allowance, P2,500 monthly Retirement
benefits from SSS, P350,000
Retirement benefits from employer where the company has an approved retirement benefit plan, P45,000 Monetization
of her 10-day leave credits, P4,000

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During the same period, the taxpayer has an actual payment for health insurance of P3,600. The taxpayer is a widow who supports
her two qualified children and two children of her husband from his first wife, who are below 21 years old, unmarried and not
gainfully employed. Using the same data in Number 24, the net taxable compensation income is:

Select one:
a. P321,600
b. P131,600
c. P116,600
d. P381,600

10. A building was partially destroyed by fire in 2016. Its book value was P2,000,000. The insurance company was willing to
pay P1,000,000 which was refused by the owner of the building. Finally, the claim was settled in 2017 for P1,500,000. The
P1,500,000 proceeds is
Select one:
a. Subject to final tax
b. Taxable in full
c. Party taxable, partly exempt
d. Exempt from income tax

11. Juana, widow, earning an annual gross compensation income of P300,000 has the following dependent children in 2017
Aubrey - baby, born on January 31
Barbara - celebrated her 21st birthday last June 12 Cristeta -
married on January 1
Diana -gainfully employed effective July 1 Eliza -
died of dengue fever on September 30
Assuming Juana has two employers, her taxable income in 2017 is:
Select one:
a. P150,000
b. P32,000
c. P63,000
d. P100,000

12. Juana, widow, earning an annual gross compensation income of P300,000 has the following dependent children in 2017
Aubrey - baby, born on January 31
Barbara - celebrated her 21st birthday last June 12 Cristeta -
married on January 1
Diana - gainfully employed effective July 1 Eliza -
died of dengue fever on September 30 The taxable
income of Juana in 2018 is:
Select one:
a. P95,000
b. P120,000
c. P87,000
d. P225,000

13. Mirabella's husband died in April 2016, leaving seven (7) unmarried children living with and wholly dependent on her for chief
support. The ages of the children are as follows:
Children Ages Status Aaa
24 jobless
Baa 22 mentally retarted Caa
19 studying in Manila
Daa 10 studying in their hometown Eaa
8 studying in their hometown Faa 6
studying in their hometown
Gaa 3 taken by the grandparents for full support
For purposes of taxable year 2017, how much total personal exemptions would Mirabella be entitled to? Select one:
a. P150,000

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b. P50,000
c. P175,000
d. P100,000

14. Ms. AC rented the vacant lot owned by Mr. X for a monthly rental of P10,000. The lease contract took effect on April 1, 2016
for a lease period of 25 years. The lessee, right after the consummation of the lease contract, constructed a commercial building on
the lot costing P6,000,000 with an estimated useful life of 50 years and a residual value of P400,000. When the building was
completed on January 1, 2017, the fair market value of the property was P8,000,000 per valuation made by the independent
appraiser.

The building will become the property of the lessor after the expiration of the lease.

In addition, the annual property tax on the lot of P6,000 will be paid by the lessee. Using the outright method, the taxable rent
income for the year 2017 will be:

Select one:
a. P126,000
b. P8,126,000
c. P6,126,000
d. P94,500

15. Assume that Mr. A has P1,062,500 as his gross income. He is single and supports the following dependents: His

parents are both unemployed

His younger sister, 16 years old, single and unemployed, and
His elder brother, 30 years old, physically and mentally incapacitated The net taxable compensation income is: Select one:
a. P912,500
b. P966,500
c. P936,500
d. P791,500

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