VALUE ADDED TAX (VAT)

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UNIVERSITY OF SANTO TOMAS IAC 17 - Integrated Review Course in Taxation VALUE ADDED TAX (VAT)

MULTIPLE CHOICE EXERCISES a.

1.

2.

3.

4.

5.

Statement 1: For a person to be subjected to VAT, it is necessary that he is regularly engaged in the conduct or pursuit of an economic activity.

Statement 2: A non-resident foreign person performing isolated service in the Philippines shall be liable to VAT. A. B. C. D. Statement 1 True True False False Statement 2 True False True False Statement 1: Nonstock and nonprofit private organizations which sell exclusively to their members in the regular conduct or pursuit of commercial or economic activity are exempt from value-added tax.

Statement 2: Government entities engaged in commercial or economic activity are generally exempt from value-added tax a. Both statements are correct. b. Both statements are incorrect. c. Only the first statement is correct. d. Only the second state statement is correct.

Which is incorrect? a. A taxpayer whose annual gross receipts or sales exceed P3,000,000 shall pay VAT even if not VAT registered. b. A taxpayer whose annual receipts or sales do not exceed P3,000,000 but who is VAT registered shall pay VAT. c. The A non-resident lessor or foreign licensor who is not VAT-registered is subject to vat. d. An individual taxpayer whose gross sales or receipts do not exceed P100,000 is exempt from VAT provided he pays the 3% other percentage tax.

In 2018, Mr. Uro’s gross receipts from his practice of profession is P2,600,000 while his wife has gross sales of P2,200,000 derived from her trading business.

Assuming they are not vat registered, will they be subject to vat? a. Yes, because their aggregate gross receipts/sales exceeded the vat threshold of P3,000,000. b. No, because for purposes of vat threshold, husband and wife shall be considered as separate taxpayers. c. Yes, because their gross receipts/sales are not specifically exempt from vat as provided in the Tax Code. d. None of the above In 2018, the following gross receipts/sales were recorded by Apol B: Gross receipts from practice of P1,850,000 profession Gross receipts from transport of 1,450,000 goods and cargoes Gross sales from trading activities 675,000 Assuming Apol B is non-vat registered, will he be subject to vat?

b.

c. d.

6.

No, because his gross receipts/sales in each business do not exceed the vat threshold of P3,000,000.

Yes, because if a professional, aside from the practice of his profession, also derives revenue from other lines of business which are otherwise subject to VAT, the same shall be combined for purposes of determining whether the threshold has been exceeded.

No, because he is not vat registered None of the above

LBJ made the following sales during the 12-month period: Sales, VAT taxable transactions P2,500,000 Sales, VAT zero-rated transactions 400,000 Sales, VAT exempt transactions 100,000 Total P3,000,000 Which of the following statements is correct? a. LBJ may not register under the VAT system because his sales from VAT taxable transactions did not exceed P3,000,000. b. LBJ may not register under the VAT system because his sales from VAT taxable and zero-rated transactions did not exceed P3,000,000. c. LBJ is required to register because his total 12month sales exceeded P3,000,000. d. None of the foregoing.

7.

Taxpayers who are qualified to optionally register may apply for vat registration not later than how many days before the beginning of the calendar quarter? a. 10 days c. 25 days b. 20 days d. 30 days

8.

If a radio and/or television broadcasting company who is not mandatorily required to register under the VAT system chose to be a VAT taxpayer. Its choice is: a. Revocable after 2 years b. Revocable after 3 years c. Revocable after 5 years d. Irrevocable

Use the following data for the next two (2) questions: In 2018, Pedro signified his intention to be taxed at 8% income tax rate on gross sales in his 1st quarter income tax return. His total gross sales during the year exceeded the vat threshold of P3M. The following quarterly data were provided by Pedro: Sales Cost of sales Gross Income Operating expenses Net taxable income

9.

Q1 P500,000 (300,000)

Q2 P500,000 (300,000)

Q3 P2,000,000 (1,200,000)

Q4/Annual P3,500,000 (1,200,000)

200,000

200,000

800,000

2,300,000

(120,000)

(120,000)

(480,000)

(720,000)

P80,000

P80,000

P320,000

P1,580,000

How much is Pedro’s total business tax due for the year?

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a. P90,000 b. P195,000

c. P510,000 d. nil

b. true, false

10. Assuming the 3M threshold was breached on the month of October, Pedro shall register under the vat system not later than: a. September 30, 2018 b. October 31, 2018 c. November 30, 2018 d. December 31, 2018 11. An importer of flowers from abroad: a. Is liable for VAT, if it registers as a VAT person. b. Is exempt from VAT, because the goods are treated as agricultural products. c. Is exempt from VAT, provided that his total importation of flowers does not exceed P3,000,000. d. Is liable for VAT, despite the fact that it did not register as a VAT person and his total annual sales of flowers do not exceed P3,000,000.

12. Which of the following shall be exempt from vat? a. Services of banks. b. Services of money changers and pawnshops. c. Services of credit cooperatives d. All of the above 13. Which of the following transactions is exempt from value-added-tax? a. Medical services such as dental and veterinary services rendered by professionals. b. Legal services. c. Services arising from employee-employer relationship. d. Services rendered by domestic air transport companies.

14. Which of the following sale or importation of goods shall not be exempt from VAT? a. Fertilizers b. Seeds, seedlings and fingerlings c. Fish, prawn, livestock and poultry feeds, including ingredients, whether locally produced or imported, used in the manufacture of finished feeds d. Specialty feeds.

15. Which of the following transactions is exempt from value added tax. a. Sale by an art gallery of literary works, musical composition, work of art and similar creations, or devices performed for the production of such works. b. Medical, dental hospital and veterinary professional services. c. Sale of cotton and cotton seeds in their original state. d. Sale of books and any newspaper, magazine, review or bulletin, which appears at regular intervals with, fixed prices for subscription and sale which is not devoted principally to the publication of paid advertisements.

16. Statement 1: Sale by agricultural cooperatives to nonmembers can only be exempted from VAT if the producer of the agricultural products sold is the cooperative itself. If the cooperative is not the producer (e.g. trader), then only those sales to its members shall be exempted from VAT. Statement 2: Sale or importation of agricultural food products in their original state is exempt from VAT irrespective of the seller and buyer thereof. a. true, true c. false, false

17. Determine the business taxes in 2018 of the following: I.Lease of residential units with a monthly rental per unit not exceeding P15,000 (regardless aggregate annual gross rentals).

II.Lease of residential units with a monthly rental per unit exceeding P15,000 but the aggregate of such rentals during the year do not exceed P3,000,000.

III.Lease of commercial units regardless of monthly rental per unit.

I II III

A None Vat Vat

B None OPT OPT

C None OPT Vat

D Vat Vat Vat

18. In cases where a lessor in 2018 taxable year has several residential units for lease, some are leased out for a monthly rental per unit not exceeding P15,000 while others are leased out for more than P15,000 per unit, his tax liability will be: a. The gross receipts from rentals not exceeding P15,000 per month per unit shall be exempt from vat regardless of the aggregate annual gross receipts. b. The gross receipts from rentals exceeding P15,000 per month per unit shall be subject to vat if the annual gross receipts from said units including the gross receipts from units leased out for not more than P15,000 exceed P3,000,000. c. Both statements are correct. d. Both statements are incorrect 19. In 2018, a real estate dealer sold two (2) adjacent residential lots in the city for a price of P800,000 each, or a total price of P1,600,000, to a vendee who intends to erect his residential house thereon.

The sale shall be classified as a: a. 12% VAT transactions b. 0% VAT transactions c. VAT exempt transactions d. None of the foregoing 20. A subdivision developer sold five (5) residential house and lots, each to different vendees, for P3,000,000 per lot, or a total sales of P15,000,000 during 2019 taxable year. These sales shall be: a. Subject to 12% VAT transactions b. Classified as zero-rated transactions c. Under VAT exempt transactions d. None of the foregoing 21. Camella realty corporation sold the following real properties during the 2019 taxable year: 2 units of residential house and lot P6,000,000 at P3,000,000 each 4 residential lots at P2,000,000 each 8,000,000 1 commercial lot at P3,000,000 3,000,000 How much is the total amount of transactions subject to VAT? a. P6,000,000 c. P11,000,000 b. P8,000,000 d. P17,000,000 22. Which of the following transactions of a VAT-registered seller is not subject to VAT? a. Remaining inventory upon retirement from business b. Sale of company’s used car to its officers c. Sale of goods or services to the national government d. Sale of residential lot amounting to P1,000,000

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d. false, true

23. The value added tax due on the sale of taxable goods, property and services by any person whether or not he has taken the necessary steps to be registered. a. input tax c. excise tax b. output tax d. sales tax 24. Gross selling price includes all of the following, except: a. Total amount which the purchaser pays to the seller. b. Total amount which the purchaser is obligated to pay to the seller. c. Excise tax. d. Value-added tax.

25. Which of the following is not deductible from Gross Selling Price for vat purposes? a. 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. b. Discount determined and granted after the agreed sales quota is met by the buyer. c. Sales discount indicated in the invoice at the time of sale, the grant of which is not dependent upon the happening of a future event, deductible within the same month or quarter given. d. 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.

26. On January 5, 2018, Towell Co., VAT-registered, sold on account goods for P112,000, gross of VAT. The term was: 2/10, n/30. Payment was made on January 10, 2018. The total amount due is: a. P110,000 c. P112,000 b. P107,800 d. P109,760 27. Mr. Andres, VAT-registered real estate dealer, transferred a parcel of land held for sale to his son as gift on account of his graduation. For VAT purposes, the transfer is: a. Not subject to VAT because it is a gift b. Subject to VAT because it is a deemed sale transaction c. Not subject to VAT because it is subject to gift tax d. Subject to VAT because it is considered an actual sale 28. One of the following is not a transaction deemed sale: a. Transfer, use or consumption not in the course of business of goods or properties originally intended for sale or for use in the course of business. b. Distribution or transfer to shareholders or investors of goods or properties as share in the profits of a VAT-registered person or creditors in payment of debt. c. Retirement from or cessation from business with respect to all goods on hand as of the date of such retirement or cessation. d. Consignment of goods if actual sale is made within 60 days following the date such goods were consigned.

29. Genson Distribution Inc., a VAT taxpayer, had the following data in a month: Cash sales P200,000 Open account sales 500,000 Consignment: 0 to 30 days old (on which there were remittances from consignees of P200,000) 600,000 31 to 60 days old 700,000 61 days old and above 900,000

How much is the output tax? a. P348,000 c. P264,000 b. P216,000 d. P108,000 30. The following are the data of Davao Appliances Marketing Co. for the last quarter of 2018: Sales up to December 15, total invoice value P380,800 Purchases up to December 15, net of input taxes 150,000 Additional information: On December 16, 2018, the Company retired from its business and the inventory valued at P190,000 remained unsold. There is a deferred input tax from the third quarter of P3,500.

How much is the total value-added taxes payable by Davao Appliances Marketing Co.? a. P42,100 c. P22,800 b. P21,500 d. P19,300 31. Evelyn, a trader of appliances, made the following sales of goods during the month of March 2018, exclusive of VAT: Cash sales P 200, 000 Open account sales 100, 000 Installment sales 100, 000 Note: Receipt from installment sales is P20,000 Consignment made: (net of VAT) January 15, 2018 100, 000 February 15, 2018 200, 000 March 15, 2018 300, 000 Output tax is: a. P60,000 c. P72,000 b. P40,800 d. P64,800 32. Construction by Mikee-Mega Builders (MMB) of concrete barrier for the Asian Development Bank (ADB) in Ortigas Center to prevent car bombs from ramming the ADB gates along ADB avenue in Mandaluyong City is subject to what business tax? a. 12% vat c. exempt from vat b. 0%vat d. 3% OPT 33. Any input tax attributable to zero-rated sales by a VAT-registered person may at his option be: a. Deducted from output tax b. Refunded c. Converted into tax credit certificate which may be used in payment of internal revenue taxes. d. All of the above 34. Tax credit for input taxes shall be allowed if: a. Both the seller and the purchaser are VATregistered b. Either one of the seller or the purchaser is VATregistered. c. Neither one of the seller or the purchaser is VATregistered as long as VAT invoice is issued. d. The seller is VAT-registered regardless of whether the purchaser is VAT-registered or not.

35. Which statement is not correct? a. The excess input taxes of a taxable month arising from domestic sales may be carried over to the succeeding month. b. The excess input taxes of a taxable quarter arising from domestic sales may be carried over to the succeeding quarter. c. The excess input taxes of a taxable period arising from domestic sales is refundable.

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d.

The excess input taxes of a payable period arising from exports sales may be refunded.

36. Magnifeco Corp. is a VAT-registered dealer of appliances. The following data are for the last quarter of 2018: Sales, total invoice value P6,920,000 Purchases, net of input taxes 5,500,000 Sales return, total invoice value 200,000 Purchase return, net of VAT 300,000 Deferred input taxes (carried over from the third quarter of 2018) 12,000 The value added tax payable for the last quarter of 2018 by Magnifeco Corp. is: a. P84,000 c. P108,000 b. P96,000 d. P130,500 37. CG Corporation is a vat registered entity with the following data for a taxable month: Domestic sales P500,000 Transaction deemed sales 500,000 Export sales 500,000 Sales to DEF, an export oriented 500,000 enterprises (2/3 of DEF’s annual output is actually exported) Purchases (invoice cost from vat 224,000 registered entities) Purchases (invoice cost from non-vat 100,000 registered entities) The vat payable of CG should be a. P180,000 c. P120,000 b. P156,000 d. P108,000 38. The vat on importation of goods which are subsequently used or sold in the course of trade or business by a vat registered importer shall be treated as I. Tax credit II. Inventoriable cost III. Expense a. I only c. III only b. II only d. none of the above 39. Which of the following statements is incorrect? a. VAT on importation is paid to the Bureau of Customs before the imported goods are released from its custody. b. When a person who enjoys tax-exemption on his importation subsequently sells in the Philippines such imported articles to non-exempt persons, the purchaser-non-exempt person shall pay the VAT on such importation. c. Expenses incurred after the goods are released from Customs custody are disregarded in computing VAT on importation. d. Imported goods which are subject to excise tax are no longer subject to value-added tax.

40. Bryan, vat registered person, imported machines from Australia as follows: Machine Acquisition Cost Purpose A P100,000 Personal use B 200,000 Business use C 300,000 For sale The importations were subjected to 50% excise tax based on purchase price. Machine C was sold for P1,000,000 exclusive of vat. How much is the vat paid to the BOC? a. P108,000 c. P54,000 b. P90,000 d. P36,000

41. Using the above data, the amount of vat to be remitted to the BIR should be a. P12,000 c. P106,000 b. P30,000 d. P84,000 42. World Power Corp. imported an article from Japan. The invoice value of the imported articles was $7,000 ($1P50). The following were incurred in connection with the importation: Insurance P 15,000 Freight from Japan 10,000 Postage 5,000 Wharfage 7,000 Arrastre charges 8,000 Brokerage fee 25,000 Facilitation fee 3,000 The imported article was imposed P50,000 customs duty and P30,000 excise tax.

The Company spent P5,000 for trucking from the customs warehouse to its warehouse in Quezon City.

The carrier is not subject to VAT. The VAT on importation is: a. P60,000 c. P60,600 b. P42,000 d. P80,000 43. Based on the preceding number, if the imported article was sold for P800,000, VAT exclusive, the VAT payable is: a. P24,000 c. P36,000 b. P12,000 d. P11,040 44. Sofia had the following data for the month of June (all amounts are vat exclusive): CASE 1 CASE 2 Sales P1,900,000 P1,800,000 Purchases of goods 1,260,000 1,600,000 for sale Purchases of 1,440,000 900,000 machines Machine life 6 years 3 years The amounts of vat payable(excess tax) shall be: (a) (b) (c) (d) CASE 1 P54,000 P73,920 P73,920 None CASE 2 (84,000) (84,000) 20,000 None 45. Maymay, VAT-registered, made the following purchases during the month of January, 2018: Goods for sale, inclusive of VAT P 246,400 Supplies, exclusive of VAT 20, 000 Packaging materials, total invoice amount 56, 000 Home appliances for residence, gross of VAT 17,920 Office machines (5 pcs.), 8 years 2,000,000 useful life, net of VAT Repair of store amounted to P20,000, no supporting official receipt. Creditable Input taxes are: a. P38,800 c. P37,440 b. P34,800 d. P35,520 46. All of the following are allowed presumptive input tax, except for one. a. Processor of sardines, mackerel and milk. b. Manufacturer of refined sugar and cooking oil. c. Producers/manufacturers of packed noodles. d. Supplier of books and other school supplies.

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47. Mantika Corp., a VAT-registered Corp., is a producer of cooking oil from coconut and corn. It had the following data for the month of January 2018: Sales, gross of VAT Corn & Coconut, 12-31-17 Purchases of Corn & Coconut Corn & Coconut, 1-31-18 Purchases from VAT suppliers, VAT included: Packaging Materials Supplies

P784,000 50,000 330,000 20,000 56,000 16,800

52. Dong Inc., a manufacturer, had the following data for the first month of 2018: (First year as a VAT Taxpayer) Sales: Exports P2,000,000 Domestics (Without VAT) 1,000,000 Purchases, excluding VAT: Raw Materials 300,000 Services 100,000 Machinery (estimated useful life 2 years) 400,000 On January 1, 2018, the company had inventories and taxes paid thereon as follows: Cost VAT Paid Raw Materials P120,000 P2,000 Supplies 40,000 4,000

The value-added tax payable for the month: a. P56,060 c. P60,650 b. P54,900 d. P63,000 48. Taxpayers who became VAT registered persons upon exceeding the minimum turn-over of P3,000,000 in any 12-month period, or who voluntarily register even if their turnover does not exceed P3,000,000 shall be entitled to a transitional input tax on the inventory on hand as of the effectivity of their vat registration on the following, except; a. Supplies for use in the course of taxpayer’s trade or business b. Goods which have been manufactured by the taxpayer c. Goods in process for sale d. Capital goods being used in the operation of the business 49. Transitional input tax can be claimed as deduction from output tax. Which of the following statements is correct? a. It can be claimed by a vat registrable person. b. It can be claimed by a taxpayer who registered as vat taxpayer from the inception of business. c. It can be claimed by a taxpayer who is initially subject to vat and subsequently cancelled his vat registration. d. It can be claimed by a taxpayer who is initially paying percentage tax and subsequently registered as vat taxpayer.

50. Which of the following shall be included in the beginning inventory for purposes of determining the transitional input vat? a. Goods purchased for resale in the ordinary course of trade or business. b. Materials purchased for further processing which have not yet undergone processing c. Goods which have been manufactured by the taxpayer d. All of the above 51. A taxpayer registered under the VAT system on January 1, 2018. His records during the month show: Value of inventory as of December 31, 2017 purchased from VAT-registered P112,000 persons VAT paid on inventory as of December 31, 2017 12,000 Value of inventory as of December 31, 2017 purchased, from non-VAT persons 518,000 Sales, net of VAT 240,000 Sales, gross of VAT 45,920 Purchases, net of VAT 70,000 Purchases of VAT exempt goods 50,000 VAT payable is: a. P23,080 b. P25,320

c. P12,720 d. P12,320

During the month, raw materials were purchased from another enterprise with a total invoice value of P61,600, not included above.

The VAT payable by Dong Inc. is: a. P72,000 c. P11,000 b. P57,000 d. P66,000 53. What institution is required to deduct and withhold a final VAT of 5% on the purchase of goods or services subject to VAT? a. National government or any political subdivision thereof b. Government-owned or controlled corporations c. Both (a) and (b) d. Neither (a) nor (b) 54. The withholding agent of creditable value added tax is required to remit the amount of value added tax withheld within a. 25 days following the end of month the withholding was made b. 20 days following the end of month the withholding was made c. 15 days following the end of month the withholding was made d. 10 days following the end of month the withholding was made 55. A VAT-registered supplier sold goods amounting to P500,000 to a government-controlled corporation during a particular quarter. Which of the following statements is incorrect in relation to the sale in relation to the sale of goods? a. The sale is subject to final withholding VAT. b. The government-controlled corporation will withhold P25,000 withholding VAT. c. The government-controlled corporation shall remit the withholding of VAT to the BIR within 10 days following the end of the month the withholding was made. d. The VAT-registered supplier may refuse the withholding of VAT as long as it is willing to pay the full 12% VAT. Use the following data for the next two questions: A VAT-registered trader has the following transactions: Sales of good to private entities, P2,500,000 net of VAT Purchases of goods sold to 896,000 private entities, gross of 12% VAT Sales to a government owned 1,000,000 corporation (GOCC), net of VAT Purchases of goods sold to 700,000 GOCC, net of 12% VAT

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56. How much is the output tax? a. P300,000 c. P420,000 b. P120,000 d. nil

65. The amount of input vat not available for tax credit but may be recognized as cost or expense is: a. P60,000 c. P80,000 b. P70,000 d. P140,000

57. How much is the standard input tax? a. P20,000 c. P50,000 b. P70,000 d. nil

66. Leomar, a VAT-registered person has the following data:

58. How much is the creditable input tax? a. P166,000 c. P70,000 b. P96,000 d. P180,000

Export sales, total invoice amount Domestic sales, total invoice amount Purchases used to manufacture Goods for export and domestic sales: Raw Materials, VAT inclusive Supplies, VAT inclusive Equipment, VAT exclusive

59. How much is the input tax closed to (expense) income? a. P14,000 c. (P14,000) b. P34,000 d. (P34,000)

616,000 448,000 300,000

The amount of input tax which can be refunded or converted into tax credit certificates at the option of Leomar is: a. P120,000 c. P39,600 b. P118,800 d. P50,000

60. How much is the VAT payable to the BIR? a. P404,000 c. P204,000 b. P390,000 d. nil 61. A VAT-registered trader has the following transactions for the month of July 2019: Sale of goods to private entities, P2,500,000 net of VAT Purchases of goods sold to 896,000 private entities, gross of 12% VAT Sales to a government owned 1,500,000 corporation (GOCC), net of VAT Purchases of goods sold to 700,000 GOCC, net of 12% VAT Purchases of Machineries, gross 11,200,000 of VAT, useful life is 6 years How much is the VAT payable to the BIR? a. P280,000 c. P191,500 b. P224,000 d. P300,000 62. Based on the preceding number, how much is the input tax closed to (expense) income? a. (P13,500) c. P13,500 b. P21,000 d. (P21,000) 63. PISC, a vat- registered government owned or controlled corporation (GOCC), sold goods to Alpha Corporation, a private company. Selling price is P1,000,000 while the cost (all purchased from vatregistered suppliers) is P800,000. How much is the VAT-payable by PISC? a. P120,000 c. P24,000 b. P50,000 d. P0 Use the following data for the next two questions: Alpha Corporation (vat registered) has the following data for the month: Sales – private entities P2,000,000 Sales – vat exempt goods 1,000,000 Sales – government 1,000,000 The following input taxes were passed-on by vat suppliers to Alpha Corporation during the month: Input vat on taxable goods P80,000 Input vat on sale of exempt goods 20,000 Input vat on sale to the government 40,000 Input tax on depreciable capital 160,000 goods not directly attributable to any specific activity (monthly amortization for 60 months)

67. Based on the preceding number, if the refundable input taxes were not refunded but used as tax credit, the VAT due is: a. P576,000 c. P666,888 b. P697,888 d. P570,000 68. But assuming further that the taxpayer opted to claim them as refund, the VAT due is: a. P576,000 c. P746,888 b. P697,888 d. P620,000 69. Data from the books of accounts of a VAT taxpayer for a month: Domestic Exports Sales P2,000,000 8,000,000 Purchases: From VAT Suppliers: Goods for sale 600,000 2,400,000 Supplies & services 90,000 360,000 From Suppliers paying percentage tax: Goods for sale 100,000 1,500,000 Supplies & services 20,000 80,000 If the input taxes attributable to zero-rated sales are claimed as tax credit, the net value-added tax refundable is: a. P136,000 c. P145,000 b. P203,924.70 d. P174,000 70. Rommel is an operator of taxi cabs. During a particular month, he purchased from Mahindra, a VAT-registered car dealer, 10 sedan type units for a total selling price of 5 million pesos. The estimated useful life of each vehicle is four (4) years. How much will be the amount due from Rommel? a. P5,600,000 c. P5,000,000 b. P5,150,000 d. P4,480,000 71. Based on the preceding number, how much input tax can be claimed by Rommel? a. P600,000 c. P150,000 b. P12,500 d. P0 72. Kaktus Realty Inc. developed a condominium in Manila.

During the month of January 2013, it had the following data (VAT included,if applicable):

64. The vat payable for the month is a. P40,000 c. P160,000 b. P80,000 d. nil

Cash sale of a 3 bedroom unit Sale of parking lot

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P3,000,000 6,720,000

Selling Price P5,040,000 560,000

Installment sale of 2 bedroom unit (initial payments exceed 25% of the selling price)

The value added tax payable is a. P59,808 c. P82,608 b. P62,208 d. P86,208

3,920,000

The 3 bedroom unit sold for cash had a zonal value of P5,000,000 and the 2 bedroom unit had a fair market value per Tax Declaration of P3,000,000.

How much is the output tax for the month? a. P920,000 c. P1,020,000 b. P900,000 d. P1,080,000

78. Tore Inc., a building contractor, showed to you the following data for the month of August 2015: Cash received, gross of VAT 2,240,000 Receivables, net of VAT 3,000,000 Advances on other contracts still 1,000,000 unearned (w/o VAT)

73. Bahay Kubo Inc. is a real estate dealer. Details of its sales during the year showed the following: Date of sale Consideration in the deed of sale Fair market value in the assessment rolls Zonal Value Schedule of payments: June 2, 2018 June 2, 2019 June 2, 2020

Unpaid Purchases: For materials, VAT excluded For supplies, VAT excluded For services of sub-contractors (VAT included)

June 2, 2018 P5,000,000 4,800,000

Payments for purchases made in July: Materials, gross of VAT Services of subcontractors, net of VAT

5,200,000 1,000,000 2,000,000 2,000,000

How much is the output tax to be recognized for the June 2, 2020 payment? a. P0 c. P249,600 b. P24,000 d. P624,000 74. Assuming that the scheduled payment on June 2, 2018 is P2,000,000, how much is the output tax to be recognized for the June 2, 2020 payment? a. P0 c. P249,600 b. P24,000 d. P624,000

79. Cebu Airlines is a corporation organized in the Philippines. It has the following data for the taxable year 2018: Passengers Fare (Net of VAT): Flights from Philippines to Hongkong Flights from Hongkong to Philippines Domestic Flights (gross of 2% withholding tax) Fares from cargoes & mails (Net of VAT): Flights from Philippines to Hongkong Flights from Hongkong to Philippines Domestic Flights (gross of 2% withholding tax) Other Income: Interest income from bank deposits Rent income

75. How much is the Output tax for the month of October? a. P26,500 c. P31,800 b. P34,800 d. P40,200 c. P6,600 d. none

77. Data for a trader with one line of business subject to value added tax and another line of business not subject to value added tax (amounts presented are gross of vat if applicable): Sales, vat business P896,000 Sales, non-vat business 200,000 Purchases of goods, vat business 224,000 Purchases of goods, nonvat 33,600 business Purchase of depreciable asset, for 112,000 use in vat and non vat business Purchases of supplies, for vat and 2,240 non vat business Rental of premises, for vat and non 22,400 vat business, from non vat lessor

How much is the Output Tax? a. P456,000 b. P516,000

P8,000,000 8,000,000 3,000,000

P1,000,000 1,500,000 800,000 800,000 500,000

c. P420,000 d. P0

80. If a dealer in securities sold shares in the local stock exchange, what business tax will apply to such transaction? a. VAT based on Gross Selling Price b. VAT based on gain c. Capital Gains Tax d. Stock Transaction Tax of 6/10 of 1% 81. The Commissioner or his authorized representative is empowered to suspend the business operations and temporarily close the business establishment of any person for: a. Failure to issue receipts or invoices of a VATregistered entity. b. Failure to file a VAT-return for VAT-registered person as required by the tax code.

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369,600 495,000

How much is the value added tax payable? a. P360,000 c. P330,000 b. P228,600 d. P90,000

Use the following data for the next two (2) questions: JJ is a real estate dealer. During the month of October 2018, he sold three (3) commercial lots under the following terms: Lot 1 Lot 2 Lot 3 Selling Price P250,000 P200,000 P300,000 Cost 150,000 130,000 175,000 Gain/Loss 100,000 70,000 125,000 Terms: Down, Oct. 5 25,000 50,000 40,000 Due: 12/05/ 2016 25,000 20,000 20,000 Year 2017 200,000 130,000 240,000 Zonal Value 350,000 260,000 250,000

76. The Output tax for December is c. P5,400 d. P4,500

500,000 100,000 1,848,000

c. d.

Understatement of taxable sales or receipts by thirty percent (30%) or more of his correct taxable sales or receipts for the taxable quarter All of the above

82. Lola Lita, a senior citizen, bought a medicine with a selling price of P9,520 inclusive of VAT. How much is the net amount to be paid by Lola? a. P8,500 c. P6,916 b. P7,616 d. P6,800 83. Lolo Sot, a senior citizen went to Jollibee to treat his 4 grandchildren on account of his retirement. They consumed food and beverages with gross amount of P1,120 inclusive of VAT. How much is amount to be paid by lolo Sot? a. P896 c. P1,056 b. P920 d. P1,100 84. Lola Trining brought her granddaughter to Jollibee for a treat. Her granddaughter requested that they both order kiddie meals so that the latter will have two (2) new toys since each meal have a free one. The price of each meal is P120, net of VAT. How much is the amount due from Lola Trining? a. P268.8 c. P240 b. P230.4 d. P192 85. Gabriana Clinic, a VAT-registered entity, performed a prosthetic surgery on the legs of Loyd, a person with disability. The total cost of medical operation inclusive of vat was P560,000 . Being a disabled person, Loyd received 20% discount from Gabriana. How much is the total amount to be paid by Loyd? a. P400,000 c. P500,000 b. P448,000 d. P560,000 Use the following data for the next two questions: Alpha Corporation (vat registered) has the following data for the month: Sales – private entities and P2,000,000 individuals (10% to senior citizens) Sales – vat exempt goods 1,000,000 Sales – government 1,000,000 The following input taxes were passed-on by vat suppliers to Alpha Corporation during the month: Input vat on goods sold to private P120,000 entities and individuals Input vat on sale of exempt goods 20,000 Input vat on sale to the government 100,000 86. The vat payable for the month is a. P216,000 c. P96,000 b. P108,000 d. P36,000 87. The amount of input vat not available for tax credit but may be recognized as cost or expense is: a. P20,000 c. P62,000 b. P50,000 d. nil

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