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    Chapter 9 Taxation of Corporations

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    Elizabeth
    This document contains sample exercises from Chapter 9 on taxation of corporations. Exercise 9-1 contains true or false questions about corporate taxation. Exercise 9-3 provides examples of computing corporate income tax for domestic and foreign corporations. Exercise 9-4 and 9-5 contain multiple choice questions testing understanding of concepts like corporate income tax rates, deductions, and minimum corporate income tax. Exercise 9-6 provides additional problems calculating corporate income tax liability based on different levels of taxable income.

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    Chapter 9 Taxation of Corporations

    Uploaded by

    Elizabeth
    205 views4 pages
    This document contains sample exercises from Chapter 9 on taxation of corporations. Exercise 9-1 contains true or false questions about corporate taxation. Exercise 9-3 provides examples of computing corporate income tax for domestic and foreign corporations. Exercise 9-4 and 9-5 contain multiple choice questions testing understanding of concepts like corporate income tax rates, deductions, and minimum corporate income tax. Exercise 9-6 provides additional problems calculating corporate income tax liability based on different levels of taxable income.

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    CHAPTER 9 TAXATION OF CORPORATIONS

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    This document contains sample exercises from Chapter 9 on taxation of corporations. Exercise 9-1 contains true or false questions about corporate taxation. Exercise 9-3 provides examples of computing corporate income tax for domestic and foreign corporations. Exercise 9-4 and 9-5 contain multiple choice questions testing understanding of concepts like corporate income tax rates, deductions, and minimum corporate income tax. Exercise 9-6 provides additional problems calculating corporate income tax liability based on different levels of taxable income.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    205 views4 pages

    Chapter 9 Taxation of Corporations

    Uploaded by

    Elizabeth
    This document contains sample exercises from Chapter 9 on taxation of corporations. Exercise 9-1 contains true or false questions about corporate taxation. Exercise 9-3 provides examples of computing corporate income tax for domestic and foreign corporations. Exercise 9-4 and 9-5 contain multiple choice questions testing understanding of concepts like corporate income tax rates, deductions, and minimum corporate income tax. Exercise 9-6 provides additional problems calculating corporate income tax liability based on different levels of taxable income.

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    CHAPTER 9 TAXATION OF CORPORATIONS

    EXERCISE 9-1 TRUE OR FALSE


    1. True 9. True
    2. True 10. False
    3. False 11. True
    4. False 12. False
    5. True 13. True
    6. True 14. False
    7. True 15. True
    8. True

    EXERCISE 9-3
    1. Definition of corporation
    a. Business partnership, corporation
    b. Joint stock companies, corporation
    c. Joint ventures, not a corporation
    d. GPP, not a corporation
    e. Joint stock companies, corporation
    2. Classification of a corporation
    a. Domestic, within and without the Philippines, taxable income
    b. Resident foreign, within the Philippines, taxable income
    c. Non-resident foreign, within the Philippines, gross income
    3. Computation of income tax
    a. Sales, domestic 3,000,000
    Sales, abroad 7,000,000
    COGS (5,000,000)
    Expenses, domestic sales (1,000,000)
    Expenses, abroad sales (2,000,000)
    Taxable income 2,000,000
    X 30%
    Income tax payable 600,000

    b. Sales, domestic 3,000,000


    Expenses, domestic (1,000,000)
    Taxable income 2,000,000
    X 30%
    Income tax payable 600,000

    c. Sales, domestic 3,000,000


    X 30%
    Income tax payable 900,000

    4. Minimum corporate income tax


    a. 2017
    b. Yes

    EXERCISE 9-4 MULTIPLE CHOICE


    1. B
    2. D
    3. D
    4. B
    5. C
    6. D
    7. Sales (2,968,000 / 112%) 2,650,000
    COGS (1,725,000)
    Expenses, inclusive of vat (386,400 / 112%) (345,000)
    Expenses, exclusive (450,000)
    Taxable income 130,000
    X 30%
    Income tax payable 39,000 – A

    8. A
    9. D
    10. D
    11. C
    12. A
    13. C
    14. C
    15. A
    16. Gross income 632,000
    Deductions (610,000)
    Taxable income 22,000
    X 30%
    Income tax payable 6,600 – B

    17. Gross income, 2018 2,950,000


    Expenses (1,750,000)
    NOLCO (300,000)
    Taxable income 900,000
    X 30%
    Income tax payable 270,000 – B

    18. Taxable income 900,000


    NOLCO 300,000
    Dividend from domestic corporation 75,000
    Interest on bank deposit (16,000/80%) 20,000
    Insurance proceeds 1,200,000
    Income tax on 2018 income (270,000)
    Dividends paid (500,000)
    Tax on interest on bank deposits (20k – 16k) (4,000)
    Improperly accumulated taxable income 1,721,000
    X 10%
    Improperly accumulated earnings tax 172,100 – D

    19. D
    20. D
    EXERCISE 9-5 MULTIPLE CHOICE
    1. C
    2. Tuition fees 9,500,000
    Miscellaneous fees 1,200,000
    Income of bookstore 350,000
    Salary, allowances and bonus (6,400,000)
    Other operating expenses (2,600,000)
    Income from related activities 2,050,000

    Interest on bank deposits 70,000


    Income of school canteen 180,000
    Cash dividend from domestic corporations 80,000
    Income from unrelated activities 330,000

    Percentage of unrelated activities to gross income = 330,000 / (2.05M + 330k) = 13.87%


    Applicable tax rate = 10%

    Tuition fees 9,500,000


    Miscellaneous fees 1,200,000
    Income from bookstore 350,000
    Income of school canteen 180,000
    Salary, allowances and bonus (6,400,000)
    Other operating expenses (2,600,000)

    Taxable income 2,230,000


    X 10%
    Income tax due 223,000 - A

    3. Tuition fees 9,500,000


    Miscellaneous fees 1,200,000
    Income of bookstore 350,000
    Salary, allowances and bonus (6,400,000)
    Other operating expenses (2,600,000)
    Income from related activities 2,050,000

    Interest on bank deposits 70,000


    Income of school canteen 180,000
    Cash dividend from domestic corporations 80,000
    Allowance for depreciation (48,750 + 10k) (58,750)
    Income from unrelated activities 271,250

    Percentage of unrelated activities to gross income = 271,250 / (2.05M + 271.25k) = 11.69%


    Applicable tax rate = 10%

    Tuition fees 9,500,000


    Miscellaneous fees 1,200,000
    Income from bookstore 350,000
    Income of school canteen 180,000
    Salary, allowances and bonus (6,400,000)
    Other operating expenses (2,600,000)
    *Allowance for depreciation (48,750 + 10k) (58,750)
    Taxable income 2,171,250
    X 10%
    Income tax due 217,125 – C

    *computation of allowance for depreciation:


    Facility = 1.3M / 20 x 9/12 = 48,750
    F & Equipment = 400k/20 x 6/12 = 10,000
    Allowance for depreciation 58,750

    4. B
    5. B
    6. C
    7. A
    8. D
    16. D
    17. C
    18.

    EXERCISE 9-6
    1. A
    2. 150,000 X 30% = 45,000 – D
    3. 2.8M – 1.3M X 30% = 450,000 – B
    4. 2,583,000 x 30% =
    5. 400,000 x 30% = 120,000 – C
    6. 1.2M x 30% = 360,000 – D
    7. 1.2M x 2.5% = 30,000 – A
    8. 1.2M x 15% = 180,000 – D
    9. 400k x 15% = 60,000 – B
    10. 1.2M x 25% = 300,000 – B
    11. 1.2M x 4.5% = 54,000 – B
    12. A
    13. C
    14. 40M x 15% = 6,000,000 – B
    15. 40M + 3.5M + 4M = 47,500,000 – A
    16. D
    17. D
    18. A
    19. C
    20. C

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