Chapter 7

Multiply Choice – Theory Part 1

1. A 9. B
2. B 10. C
3. C 11. D
4. D 12. C
5. C 13. D
6. A 14. C
7. C 15. B
8. B

Multiple Choice – Theory Part 2

1. B 9. D
2. C 10. C
3. D 11. A
4. C 12. A
5. C 13. A
6. C 14. A
7. C 15. A
8. D

Multiple Choice – Problems Part 1

1. A = P 0 6. C
2. A P270,000 x 12% = P 32 400
(P40,000 + P1,000) x 12% = P 4 920 7. A
3. D 8. B
P350,000 x 12% = P 42 000 P400,000 x 12% = 48 000
4. D 9. B
P500,000 x 12% = P 60 000 (P600K + P200K) x 12% = P 96 000
5. D 10. B
P2M x 12% = P 240 000 (P504K x 12%/112%+ P200K x 12%)
= P 78 000

Multiple Choice – Problems Part 2

1. B
P675,000 x 12% = P 81 000
2. C
(P500,000 – P 20,000) x 12% = P 57 000
3. B
(P500,000 + P50,000) x 12% = P 66 000
4. B
(P300,000 x 12%/112%) = P 32 143
5. B P 600
6. B P 600
7. D P 30 000; P 37 200; P 100 800
8. C
P2,500,000 x 12% = P 300 000
9. D P 43 200; P 48 600
10. D P 32 400

Multiple Choice – Part 3

1. A
P100Kx7/P2M = 35%
P 300 000; P 0
2. A
P4M x 12% x 1/36 = P 13 333
3. C
[(P144,000/12%) /(1/20)) = P 24 000 000
4. B
November = 300K/1.5M x P180K = P36K
P36K+P7.2K = P43.2K
5. D
P2M x 12% = P 240 000
6. D
(P200K+P300K+P400K) x 12% = P 108 000
7. D
P500K x 12% = P 60 000
8. B
P200K + P150K + P250K + 30K) x 12% = P 75 600
9. B
P800,000 x 12% = P 96 000
10. B
P600K + P800,000) x 12% = P 168 000

Multiple Choice – Part 4

1. D
P1,800,000 x 12% = P 216 000
2. D
P250K x 12% = P 30 000
3. C
(P1,200,000+P300,000) x 12% = P 180 000
4. C
(P300K + P900K) x 12% = P 144 000
5. D
P900K x 12% = P 108 000
6. C
(P100K+P150K+P250K+P50K+P120K) x 12% = P 80 400
7. A = P 0
8. C
(P40M+P12M) x 12% = P 6 240 000
9. D
P9M x 12% = P 1 080 000
10. B
P1M x 12% = P 120 000
11. A = P 0
12. A = P 0
13. B
(P4M+P2M) x 12% = P 720 000
14. D
(P1.5M +P2M) x 12% = P 420 000
15. A = P 0
16. B P 360 000

Chapter 8
Multiple Choice – Theory: Part 1
1. B 11. B
2. A 12. B
3. D 13. D
4. A 14. C
5. A 15. A
6. D 16. C
7. B 17. D
8. A 18. C
9. C 19. B
10. D 20. A

Multiple Choice – Theory: Part 2

1. C 9. B
2. A 10. D
3. D 11. B
4. B 12. C
5. B 13. D
6. A 14. D
7. B 15. A
8. D

Multiple Choice – Problems 1

1. B P 300 000
2. B
P400,000 – P200,000 = P200,000
3. B
Tax benefit: P60,000 deduction x 30% = P18,000
P40,000 tax credit x 100% = P40,000
4. B exempt sale
5. B
China ($10,000 x P42) P 420,000
Hong Kong (¥ 800,000 x P0.50) 400,000
Total zero-rated sales P 820,000
6. B
P300,000 x 12% = P36,000
7. D
Direct export sales ($100,000 x P42.50) P 4,250,000
Consignment ($ 50,000 x 60% sold x P42.50) 1,275,000
Total zero-rated sales P 5,525,000
8. A
Export sales 2 commission ($80,000 x P43.00 x 10%) P 344,000
Consignment 1 ($50,000 x P43) 2,150,000
Total zero-rated sales P 2,494,000
9. D
10. C

Multiple Choice – Problems 2

1. C
P1,200,000 + P800,000 = P 2 000 000
2. B
P9,500 x 12% = P1,140
3. A = P 0
4. C
P3,000,000 + P1,200,000 = P 4 200 000
5. B P 500 000
6. D P 5 000 000
7. D
Sales to diplomatic missions P 2,000,000
Sales to eco zones ($50,000 x P42) 2,100,000
Total zero-rated sales P 4,100,000
8. C
Sale to BOI-registered entity with no domestic sales 2,500,000
Sale to export-oriented enterprise (with 90% export last year) 1,500,000
Total P 4,000,000

9. A = P 0

10. A = P 0

Chapter 9
Multiple Choice – Problems Part 1
1.A. ₱ 0
Input VAT on purchases made not in the course of business is non-creditable

7. C
Purchases of goods, exclusive of VAT (P 50,000 x 12%) P 6,000
Purchases of goods, inclusive of VAT (P 44,800 x 12/112) 4,800
Purchase of services, inclusive of VAT (P 23,520 x 12/112) 2,520
Total Input VAT P 13,320

9. C.

2020 August P 32,000

2020 September 40,000
Claimable Input VAT P 72,000

10. C
Vatable goods P 40,000
Multiply by: 12/112
Input VAT P 4,286.11

12. C

Purchases from VAT taxpayers P 250,000

Multiply by: 12/112
Input VAT P 26,786

Chapter 10
Multiple Choice – Problems Part 3
1. B

Sale of Goods P 3,000,000

Multiply by: 12%
Output VAT P 360,000
Less: Input VAT
 Carry-over in the prior month 60,000
Purchase of vatable goods 150,000
Building (180,000/60months x 2) 6,000
VAT paid in prior months 80,000
VAT Payable P 64,000

2. B

Output VAT (300,000 x 12%) P 36,000

Less: Prorated Input VAT
Gasoline 50,000
Bus insurance and repairs 60,000
Purchase of new bus 6,000
Total 86,000
Multiply by: (300,000/36,000) 10% 8,600
VAT payable P 27,400
3. A

Receipts from passengers. P 2,400,000

Receipts from cargoes 600,000
Total vatable receipts P 3,000,000
Output VAT 12% 360,000
Input VAT for the month 240,000
VAT payable P 120,000

5. C

Sales of school supplies, exclusive of VAT P 700,000

Output VAT 12% 84,000
Input VAT on rental expense (56,000 x 12/112) 6,000
Input VAT on Utilities expense (20,000 x 12%) 2,400
Total Input VAT P 8,400
Allocation of claimable input 0.07
Claimable Input VAT P 5,880
Vat Payable P 78, 120

6. D

Sales of breads P 4,000,000

Sales of cakes 500,000
Total P 4,500,000
Multiply by: 12%
Output VAT P 540,000
Less: Input VAT
Other purchases 240,000
Other expenses 120,000
 Vat Payable P 180,000

Chapter 11
Multiple Choice – Problems

1. D

Production Cost P 1,000,000

Transport Cost and other expenses of sale 200,000
Total Cost P 1,200,000
Minimum Margin (10% x 1 200 000) 120,000
Tax Base P 1,320,000
2. C

Total Selling Price P 43,500,000

Multiply by: 10%
3. Excise Tax P 4,350,000 A

Wholesale price P 6,000,000

Multiply by: Number of units 2
Total P 12,000,000
Multiply by: 50%
Total P 6,000,000
Divide by: 2
4. Ad valorem tax P 3,000,000 A. ₱ 3,000,000
Hybrid vehicle

5. D. ₱ 0
Electric Vehicles are exempt on excise tax on automobiles

Chapter 13A
Multiple Choice – Problems Part 1

1. B

Fair Value P 7, 000, 000

Less: Income received 300,000
TOTAL P 6,700,000
Net expenses 600,000
Gross Estate P 7,300,000
2. C

Car, registered in his name P 400, 000

 Family Home 5,000,000
Other Properties 350,000
Gross Estate P 5,750,000
3. B

Motorcycle P 80, 000

Residential Lot 900,000
Other Personal Properties 70,000
Gross Estate P 1,050,000
4. D P 12,000,000

5. B P 12,000,000

Chapter 13B
Multiple Choice – Problems Part 1

Case 1
1. B

Family Home P 1,800,000

Agricultural Land 1,000,000
Total Amount P 800, 000

2. D ₱ 1,800,000
Case 2

3. A ₱ 0
4. A ₱ 0
5. D
Salary savings before marriage
Mr. Boneti P 2,000,000
Mrs. Boneti 1,500,000
Income from savings
Mr. Boneti 200,000
Mrs. Boneti 180,000
Earnings from separate industries
Mr. Boneti 400,000
Mrs. Boneti 500,000
Common property of spouses P 4,780,000
6. C

Exclusive property of Mr. Boneti P0

Common property of the spouses 4,780,000
Gross Estate P 4,780,000

7. C P 2,000,000 Salary savings before marriage

8. C P 1,500,000 Salary savings before marriage
9. B
Savings during marriage (Mr. Boneti) P 200,000
Savings during marriage (Mrs. Boneti) 180,000
Earnings from separate industries (Mr. Boneti) 400,000
Earnings from separate industries (Mrs. Boneti) 500,000
Total P 1,280,000
10. A
Exclusive property of Mr. Boneti P 2,000,000
Common property of the spouses 1,280,000
Gross Estate P 3,280,000
Chapter 15
Multiple Choice – Problems Part 1
1. A.
Gross Estate P 28 000 000
Less: Ordinary deductions
Claims against estate 500 000
Others 300 000
Estate after deduction P 27 200 000
Less: Special Deduction
Family Home 10 000
Standard deduction 5 000 000
NET TAXABLE ESTATE P 12 200 000
2. B.
Gross Estate P 28 000 000
Less: Ordinary deductions
Funeral Expense 400 000
Medical Expense 200 000
Judicial Expense 300 000
Unpaid taxes 300 000
Claim against estate 500 000
NET DISTRIBUTABLE ESTATE P 26 300 000
3. B.
Gross Estate P 30 000 000
Less: Ordinary deductions 2 800 000
Estate after deduction P 27 200 000
Less: Special deduction
Family Home 10 000 000
Standard deduction 5 000 000
NET TAXABLE ESTATE P 12 200 000
4. C
Non Conjugal Properties P 25 600 000
Divided by: 2 12 800 000
Less: Special deduction
Family Home 6 000 000
Standard deduction 5 000 000
NET TAXABLE ESTATE P 1 800 000
5. C
Gross Estate P 20 000 000
Less: Ordinary deductions
Claims against estate 1 500 000
Estate after deduction P 18 500 000
Less: Special deduction
Family Home 10 000 000
Standard deduction 5 000 000
NET TAXABLE ESTATE P 3 500 000
Chapter 17
Multiple Choice – Problems Part 3

1. C

Net gift P 450,000

Less: exempt to donation 250,000
Net gift subject to tax 200,000
Multiply by: 6%
Donor’s tax P 12,000
2. C

Net gift P 450,000

Less: exempt to donation 250,000
Net gift subject to tax 150,000
Multiply by: 6%
Donor’s tax P 9,000
3. C

Net gift to strangers P 340,000

Net gift to relatives 200,000
Net gift P 540,000
Less: exempt to donation. 250,000
Net gift subject to tax P 290,000
Multiply by: 6%
Donor’s tax P 17,400
4. A

Total donation P 340,000

Less:
Donation to government 80,000
Exempt to donation 250,000
Net gift subject to tax P 20,000
Multiply by: 6%
Donor’s tax P 1,200
5. A

Cash, to half sister P 200,000

Less: exempt to donation 250,000
Net gift subject to tax (P 50,000)
Chapter 18
Multiple Choice – Computational
1. B

Selling Price P 4,500,000

Multiply by: (15/1,000) 1.5%
Documentary Stamp Tax P 67,500
2. B

Selling Price P 4,500,000

Multiply by: (15/1,000) 1.5%
Documentary Stamp Tax P 67,500
3. D

Donor’s Tax P 30,000

Divide by: 6%
Amount P 500,000
Multiply by: (15/1,000) 1,5%
Documentary Stamp Tax P 7,500
4. B

Total Subscription (1,000,000 x 10) P 10,000,000

Multiply by: (2/200) 1%
Documentary Stamp Tax P 100,000
5. B

Par Value of Stocks (120,000 x 10) P 1,200,000

Multiply by: (1.50/200) 0.75%
Documentary Stamp Tax P 9,000