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Quizzer TAX- Percentage-TAX

Accountancy (Adamson University)

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PCBA CPA REVIEW

Concordia Sur, Nueva Valencia, Guimaras

TAXATION - PROBLEMS IN PERCENTAGE TAXES

1. A tax on business is a/an–

a. Direct tax b. Indirect tax c. Property tax d. None of the above
ANSWER 1: B

2. A is the owner of a small variety store. His gross sales in any one year do not exceed P3,000,000. He is not VAT
registered. The following data are taken from the books of the variety store for the quarter ending March 31,
2019:
Merchandise inventory, December 31, 2018 P100,000
Gross sales 450,000
Purchase from VAT-registered supplies 350,000

The percentage tax due is

a. P10,000 b. P13,500 c. P16,500 d. None
SOLUTION (2): B
450,000*.03 = 13,500

3. In the third quarter of 2018, a tax payer engaged in the sale of services whose annual gross receipts do not
exceed P3,000,000 has the following data
Accounts receivable, beginning of the quarter P 50,000
Sales during the quarter 100,000
Accounts receivables, end of the quarter 75,000
Purchase of supplies, total invoice amount 11,200

The percentage tax due for the quarter is

a. P2,250 b. P3,000 c. P7,500 d. P6,500

SOLUTION (3): A
(50,000 + 100,000) -75,000 = 75,000
75,000 * .03 = 2,250

4. Which of the following statements is incorrect?

a. A taxpayers whose annual gross receipts/sales exceed P3,000,000 shall pay VAT even if he is not VAT
registered
b. A taxpayer whose annual gross receipts/sales do not exceed P3,000,000 but who is VAT-registered shall
pay VAT
c. Percentage tax maybe imposed together with VAT
d. Percentage tax maybe imposed together with excise tax
ANSWER 4: C

5. Which of the following taxes is not replaced by the value added tax law?
a. Common carrier’s tax b. Compensating tax c. Contractor’s tax d. Sales tax on original sales
ANSWER 5: A

6. Benjamin owns the following businesses/establishments:

Annual Gross Receipts
I. Restaurant P1,350,000
II. Barbershop 625,000
III. Seller of agricultural food products 1,875,000

Which combination will subject Benjamin to 12% VAT?

a. I only b. I and II c. I, II and III d. None
ANSWER 6: B

(7-8) Jansen owns a restaurant which has annual gross receipts ranging from P400,000 to P450,000. In January, the
gross receipts amounted to P27,500 while purchases of goods subject to VAT is P6,000 and not subject to VAT,
P13,000.

7. If Jansen is a non-VAT registered taxpayer, his percentage tax due for the month is –
a. P12,000 b. P1,900 c. P825 d. P2,500

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SOLUTION (7): C
27,500 * .03 = P825

8. Assuming that Jansen is a VAT-registered taxpayer and the amounts indicated are exclusive of VAT, the
value-added tax due is –
a. P12,000 b. P1,900 c. P2,580 d. P2,500

SOLUTION (8): C
27,500 - 6,000 = 21,500
21,500 * .12 = P2,580

9. Johnny operates two (2) pedicabs, two (2) passenger jeepneys plying the route Trinidad-Baguio in Baguio City,
and three (3) cargo trucks. The gross receipts for the month are:

Jeepney No. 1 – P22,000 Truck No. 1 – P 7,250

Jeepney No. 2 – 23,300 Truck No. 2 – 8,500
Pedicab No. 1 – 800 Truck No. 3 – 14,000
Pedicab No. 2 – 1,000

The percentage tax due on Johnny is –

a. P831 b. P795 c. P1,359 d. P1,413

SOLUTION (9): C
(22,000 + 23,300) * .03 = P1,359

(10-11) Benny Transport Company is a transportation contractor. During the month, it had the following gross
receipts:
From transport of passengers P 485,000
From transport of cargo 220,000
From rental of its cargo trucks to individual lessees 33,000
From rental of its “rent-a-car” to balikbayans (with chauffeur) 30,000
Payments to VAT registered persons during the month amount to P 99,000

10. The percentage tax due is –

a. P22,740 b. P21,150 c. P7,590 d. P15,450
SOLUTION (10): D
(485,000 + 30,000) * .03 = P15,450

11. Assuming that the amounts given do not include the tax, the value-added tax due is –
a. P23,000 b. P18,480 c. P59,909 d. None

SOLUTION (11): B
(220,000 + 33,000) - 99,000 = 154,000
154,000 * .12 = P18,480

(12-13) Pagong Lines is engaged in provincial transport operation. It has the following gross receipts in June:

Bus 1 (carriage of goods, P8,000) 100,000

Bus 2 (carriage of goods, P3,500) 65,000
Salaries of drivers an conductors 25,000
Cost of oil and gasoline 160,000
Taxi 30,000
Jeepney 22,000
Cargo truck 45,000
Sea vessel 250,000
During the month, Bus 1 was bumped by another bus owned by D Tulak Lines and paid Pagong Lines P20,000 for
the damage done.

12. The percentage tax due on Pagong Line in June is –

a. P6,180 b. P6,165 c. P14,430 d. P5,730

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SOLUTION (12): B
Bus 1 (100,000 - 8,000) = 92,000
Bus 2 (65,000 - 3,500) = 61,500
Taxi = 30,000
Jeepney = 22,000
TOTAL RECEIPTS 205,500 * .03 = P6,165

13. The output tax on Pagong Lines is –

a. P37,380 b. P31,150 c. P33,375 d. P36,780

SOLUTION (13): A
Bus 1 = 8,000
Bus 2 = 3,500
Cargo Truck = 45,000
Sea Vessel = 250,000
TOTAL 306,500 * .12 = P37,780

(14-15) Love Bus Transport Company operates ten (10) units of buses. During the month, it had the following data in
its books:

Receipts from passengers P2,000,000

Receipts from cargoes 500,000
Receivables for transport of passengers 15,000
Receivables for transport of cargoes 5,000
Payments for repair of transport units 30,000
Salaries of personnel 300,000
Purchase of spare parts 60,000
Registration with LTO 10,000
Premiums on insurance 15,000

14. How much is the percentage tax payable?

a. P60,000 b. P60,450 c. P39,000 d. None
SOLUTION (14): A
2,000,000 * .03 = P60,000

15. How much is the VAT payable?

a. P39,600 b. P43,800 c. P39,000 d. P57,480
ANSWER 15: D

16. Common carrier 1: Domestic sea or air carriers for passengers or cargoes.
Common carrier 2: International sea or air carriers for passenger or cargoes.

What is the respective business tax rate on the common carriers identified above if they travel from the
Philippines to a foreign country?

Common Carrier 1 Common Carrier 2

a. 0% 3%
b. 3% 3%
c. 0% 0%
d. 12% 3%
ANSWER 16: A

17. ABC Corporation is a holder of franchise to operate transporation units in land. The records for the month show
(net of any tax):
Cargo Passenger
Gross receipts from transporting P 2,000,000 P 3,000,000

VAT Supplier’s Non-VAT Supplier’s

Payments to P800,000 P300,000

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The percentage tax due is

a. P150,000 b. P60,000 c. P90,000 d. P144,000

SOLUTION (17): C
3,000,000 * .03 = P90,000

18. Using the preceding number, but the franchise is for air and sea transport, within the Philippines, the VAT due is
a. P144,000 b. PP600,000 c. P468,000 d. P504,000

SOLUTION (18): D
(2,000,000 + 3,000,000 - 800,000) * .12 = P504,000

19. Using the preceding number, but the route is from the Philippines to foreign country, which of the following is
correct?
a. The corporation is exempt from VAT
b. The corporation is subject to percentage tax
c. The output VAT is 0, hence the corporation cannot claim input tax
d. May claim a refund or credit the input taxes against other internal revenue taxes

ANSWER 19: D

20. One of the following is subject to common carrier’s tax

a. Owners banca
b. Owners of animal-drawn two wheeled vehicles
c. Common carriers by land for transport of goods or cargoes
d. Common carriers by land for transport of passengers

ANSWER 20: D

21. A person whose business is to keep automobile for hire or keep them stored for use or order
a. Keepers of garage c. Taxicab operators
b. Common Carrier d. Tourist bus operator
ANSWER 21: A

22. What is the proper business tax for A and B who are both engage in keeping automobile for hire.

Keepers of Garage A with gross Keepers of Garage B with gross

receipts exceeding P3,000,000 receipts not exceeding P3,000,000
a. Value added tax Value added tax
b. Value added tax Percentage tax
c. Percentage tax Value added tax
d. Percentage tax Percentage tax
ANSWER 22: D

23. A, operates a ferryboat. During a particular quarter, its receipts consists of the following
Gross receipts: (without VAT)
Transport of passengers P 1,000,000
Transport of goods 1,500,000
Transport of cargoes 500,000

The common carrier’s tax payable is

a. P30,000 b. P90,000 c. P100,000 d. None
ANSWER 23: D

24. Using the data above, the output VAT is

a. P360,000 b. P90,000 c. P100,000 d. P240,000
ANSWER 24: A

25. The franchise tax of grantees of radio and television broadcasting whose annual gross receipts of the preceding
year do not exceed P10,000,000 shall be

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a. 2% of the gross receipts c. 4% of the gross receipts

b. 3% of the gross receipts d. 5% of the gross receipts
ANSWER 25: B

26. Sealiner Ferries transports passengers, goods and cargoes between the islands of Cebu and Bohol. During
2019, it disclosed the following gross receipts, net of any business taxes:
Transport of passengers P2,000,000
Transport of goods 1,000,000
Transport of cargoes 500,000

Compute the Output Vat and the percentage tax respectively.

a. P420,000; P105,000 c. P180,000; P60,000
b. P0; P105,000 d. P420,000; P0
ANSWER 26: D

27. Congress enacted a law imposing a 5% tax on gross receipts of common carriers. The law does not define the
term ‘gross receipts’. Express Transport, Inc., a bus company plying the Manila – Baguio route, has time
deposits with ABC Bank. In 2005, Express Transport earned P1,000,000 after deducting the 20% final
withholding tax from its time deposits with the bank. The BIR wants to collect a 5% gross receipt tax on the
interest income of Express Transport deducting the 20% final withholding tax. Is BIR correct?
a. Yes, gross receipts mean cash collected whether actually or constructively without any deductions.
b. Yes, gross receipts means all cash collections actually received without any deductions
c. No, gross receipts means actual receipts after deducting the withholding tax
d. No, gross receipts means actual receipts after deducting tax credits.
ANSWER 27: A

28. One of the following is not subject to the 3% percentage tax

a. International air carrier doing business in the Philippines
b. International shipping carrier doing business in the Philippines
c. Domestic carriers and keepers of garage
d. Franchise grantee of the electric utilities
ANSWER 28: D

29. Franchise grantees of the city gas and water utilities are subject to franchise tax of
a. 2% b. 3% c. 4% d. 5%
ANSWER 29: A

30. A, is a holder of franchise to sell electricity. In a particular quarter, its gross receipts amounted to P2,000,000
from sale of electricity. It has also receipts from the lease of its auditorium and theater amounting to P600,000.
The percentage tax due for the quarter is
a. P40,000 b. P60,000 c. P100,000 d. None
ANSWER 30: D

31. A is a Radio-TV broadcasting franchise grantee. During the preceding year, its gross receipts did not exceed
P10,000,000. During the first quarter of the currents year, it has the following data:
Gross receipts, sale of airtime P2,000,000
Gross receipts, use of radio station’s communication facilities 500,000
Business expenses 700,000

The franchise tax due for the first quarter is

a. P60,000 b. P40,000 c. P75,000 d. P39,000

SOLUTION (31): C
(2,000,000 + 500,000) * .03 = P75,000

32. The franchise tax on grantees of radio and television broadcasting companies whose annual gross receipts in
any year do not exceed P10,000,000 shall be
a. 1% of gross receipts c. 3% of gross receipts
b. 2% of gross receipts d. 4% of gross receipts
ANSWER 32: C

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Radio station DZWT has an annual gross receipts ranging from P4,000,000 to P5,000,000. During the month, it had
a gross receipts from advertisements of P330,000 (net of tax), while the disbursements subject to VAT amounted to
P224,000, inclusive of tax.
33. How much franchise tax is payable by DZWT?
a. P30,000 b. P9,900 c. P50,000 d. P10,000

SOLUTION (33): B
330,000 * .03 = P9,900
Net of tax mean “exclusive of tax”

34. How much is the VAT payable if it is registered under the VAT system?
a. P10,000 b. P9,900 c. P11,357 d. P15,600

SOLUTION (34): D
OUTPUT VAT: 330,000 * .12 = 39,600
INPUT VAT : (224,000/1.12) * .12 = 24,000
VAT PAYABLE P15,600
Net of tax mean “exclusive of tax”

35. Amounts received for overseas dispatch, message or conversations originating from the Philippines are subjects
to
a. 3% franchise tax c. 2% franchise tax
b. 10% overseas communication tax d. 10% VAT
ANSWER 35: B

Too Big Company, a public service company, is a holder of a franchise to engage in the business of supplying water
to several towns and cities in Luzon. As recorded in its books during the month, its total gross receipts from the sale
of water amounted to P 2,550,000, while the receipts from rental of equipment and other services was P280,000. The
operating expenses amounted to P2,000,000, 11% of which was paid to VAT registered persons.

36. The percentage tax due is –

a. P51,000 b. P5,000 c. P16,500 d. P56,500

SOLUTION (36): A
2,550,000 * .02 = P51,000

37. The value-added tax payable for the month is –

a. P33,600 b. P5,000 c. P16,500 d. P7,200
SOLUTION (37): D
OUTPUT VAT: 280,000 * .12 = 33,600
INPUT VAT : (2,000,000 * .11) * .12 = 26,400
VAT PAYABLE P7,200

38. A tax on the right or privilege to enter places of amusement

a. VAT c. Amusement tax
b. Franchise tax d. Income tax
ANSWER 38: C

39. One of the following is not subject to amusement tax on gross receipts
a. Disco houses c. Professional basketball
b. Cockpits d. Bowling alleys
ANSWER 39: D
c.

40. A operates a cockpit. Inside the cockpit, he also operates a restaurant. Data for the particular quarter follow
Gross receipts:
Cockpit operations P 500,000
Restaurant operation:
Sale of foods 100,000
Sale of liquor 150,000

The amusement tax due from A is

a. P90,000 b. P135,000 c. P225,000 d. P75,000

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SOLUTION (40): B
(500,000 + 100,000 + 150,000) * .18 = P135,000

41. Using the above data, except the restaurant is not owned by A but is owned by another person, B, not VAT
registered and whose annual gross sales never exceeded P3,000,000. The amusement tax due from A is
a. P90,000 b. P135,000 c. P225,000 d. P75,000

SOLUTION (41): A
500,000 * .18 = P90,000

42. Continuing the preceding number, the percentage tax due from B is
a. P90,000 b. P135,000 c. P225,000 d. P7,500
SOLUTION (42): D
250,000 * .03 = P7,500

43. A promoted a world boxing championship in Manila featuring B, a Filipino champion. Gate receipts amounted to
P3,000,000 and additional receipts from television coverage was P2,000,000. The amusement tax due is
a. None b. P500,000 c. P300,000 d. P900,000
ANSWER 43: A

44. Assuming that the above data is not a world championship but a Philippine national boxing championship, how
much is the amusement tax?
a. None b. P500,000 c. P300,000 d. P900,000

SOLUTION (44): B
5,000,000 * .10 = P500,000

Panda Hotel offers the following services to its guests and from which revenues were derived for the month, as
follows:
Revenues Collections
Hotel rooms P1,250,000 P984,000
Dining hall:
Sale of food and refreshments 940,000 860,000
Sale of wine, beer and liquors 780,000 620,000
Disco:
Admission fee 25,000 15,000
Sale of food and softdrinks 250,000 115,000
Sale of wines, beer and liquor 650,000 540,000

45. The amusement tax due is –

a. P110,700 b. P120,600 c. P552,240 d. P386,640

SOLUTION (45): B
DISCO GROSS RECEIPTS : (15,000 + 115,000 + 540,000) * .18 = P120,600

46. If Panda Hotel is subject to value-added tax, the output tax thereon is (assume the amounts are tax inclusive) –
a. P295,680 b. P264,000 c. P218,000 d. P120,600

SOLUTION (46): B
HOTEL ROOMS AND DINING HALL : (984,000 + 860,000 + 620,000)/1,12 * .12 = P264,000

47. Boy Arana is the operator of Arana Coliseum. During the month, it had the following gross receipts fro various
activities, to wit:

Concert by Rosa Mia P 85,000

Professional basketball 120,000
Amateur basketball 36,700
Billiard 45,000

The percentage tax payable by Boy Arana on the coliseum is –

a. P18,000 b. P23,505 c. P43,005 d. P24,750

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SOLUTION (47): A
GROSS RECEIPTS FROM PROFESSIONAL BASKETBALL ONLY : P120,000 * .15 = P18,000

48. ABC Insurance Corporation, a domestic corporation, received the following premiums (net of any tax):

INSURANCE
Life Fire Marine
Cash received P 400,000P 300,000 P 200,000
Promissory notes 100,000 100,000 ____
TOTALS P 500,000 P 400,000 P 200,000

The percentage tax due is

a. P45,000 b. P55,000 c. P20,000 d. P10,000

SOLUTION (48): D
GROSS RECEIPTS FROM LIFE INSURANCE ONLY : P500,000 * .02 = P10,000

(49-50) Madulag Insurance Company had the following data on collections of premiums and disbursements during
the month:
Life insurance Non-life insurance
Cash collections P520,000 P896,000 (including VAT of 96,000)
Checks 365,000
Accounts receivable 315,000 342,000
Payments of expenses to non- VAT businesses
Payment of expenses to VAT businesses 672,000

49. The percentage tax due is –

a. P24,000 b. P67,200 c. P91,200 d. P0

SOLUTION (49): A
(520,000 + 365,000 + 315,000) * .02 = P24,000

50. The VAT payable is –

a. P24,000 b. P67,200 c. P91,200 d. P0

SOLUTION (50): B
Non-life insurance only
Output Tax 96,000
Less: *Input Tax 28,800
VAT PAYABLE 67,200

*Input Tax
672,000 * 12/112 = 72,000
Allocation of Input Tax
Life Insurance (1,200,000/2,000,000) *72,000 = P43,200
Non-Life Insurance (800,000 / 2,000,000) * 72,000 = P28,800

51. Bayani’s ticket (daily double) won P42,000, gross of withholding tax and cost of ticket, in a horse race in San
Lazaro Hippodrome. His ticket had cost him P250. Bayani had other non-winning tickets costing P2,500. How
much tax was withheld on winnings in horse races by Bayani?
a. P1,680 b. P4,200 c. P1,670 d. P4,175

SOLUTION (51): C
(42,000 - 250) * .04 = P1,670

52. A horseracing enthusiast has the following winnings during a particular racing day
Total winnings (winner take all) P10,000
Cost of winning tickets 500

The tax on winnings is

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a. P1,000 b. P400 c. P950 d. Zero

SOLUTION (52): C
(10,000 - 500) * .10 = P950

53. Using the data above, but the total winnings came from double bet, the percentage tax on winnings is
a. P1,000 b. P400 c. P950 d. P380
SOLUTION (53): D
(10,000 - 500) * .04 = P380

54. All of the following except one are liable to 6/10 of 1% stock transaction tax. Which one is not?
a. Individual tax payers, whether citizens or alien c. Estates and Trust
b. Corporate taxpayers, whether domestic or foreign d. Dealers in securities
ANSWER 54: D

55. One of the following statements is incorrect

a. The 6/10 of 1% tax shall be collected by the brokers who made the sale and shall be remitted within 5
banking days from the date of collection
b. The tax paid on sale of shares through local stock exchange and initial public offering and secondary
offering shall not be allowable deduction for income tax purposes
c. The 6/10 of 1% tax stock transaction is a final withholding tax on income
d. The 6/10 of 1% tax stock transaction is collected whether there is an income or loss and is a percentage tax

ANSWER 55: C

56. Chess sold the following shares of stock thru his stock broker:
Selling Price Market Value
Ex Company, not traded P 123,670 P 114,850
Why Company, traded 65,980 62,540
See Company, traded 143,750 156,230
The percentage tax due on the above transactions is –
a. P1,667.00 b. P1,048.65 c. P1,258.38 d. P1,668.10

SOLUTION (56): C
(65,980 + 143,750) * (6/10*.01) = P1,258.38

57. Stock Addict had the following transactions of shares of stock:

Selling Price Cost
Sales:
Bee Corporation, not traded P 32,450 P31,980
Cee Corporation, traded 69,780 64,321
Dee Corporation, traded 123,820 98,760

Purchases:
Eef Corporation, not traded 32,415
Gee Corporation, traded 48,657

The total percentage tax on the above transaction is –

a. P1,130.25 b. P724.89 c. P968.00 d. P1,161.60

SOLUTION (57): D
(65,980 + 143,750) * (6/10*.01) = P1,161.60

58. Tito owns shares of stock of domestic corporations which are actively traded in the Philippines Stock Exchange.
Due to the unstable prices in the stock exchange, he decided to sell the shares to the public. The data of which
are as follows:
Selling Price Cost Gain/Loss
Vic Corporation P230,000 P220,000 P10,000
Joey Corporation 360,000 395,000 (35,000)

The stock transaction tax is –

a. P2,950 b. P3,540 c. P50 d. Zero

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SOLUTION (58): B
(230,000 + 360,000) * (6/10*.01) = P3,540

59. Benzene Corporation, a closely held corporation, decided to open itself to the public. The initial public offering of
its shares had a selling price of P6,250,000 which is 22.5%of its total outstanding shares after the listing in the
local stock exchange. The percentage tax due is –
a. P31,250 b. P125,000 c. P1,406,250 d. P250,000

SOLUTION (59): D
6,250,000 * .04 = P250,000
**See rules in Stock Transaction Tax for IPO in your FT Notes.

60. A domestic corporation paid P40,000 stock transaction tax on Initial Public Offering (IPO) of 500,000 shares.
After the IPO, there were 800,000 shares outstanding. The selling price per share of IPO shares was
a. P10 b. P8 c. P4 c. P2

SOLUTION (60): B
X * .01 = 40,000
X = 40,000 / .01
GSP = P4,000,000
P4,000,000 / 500,000 = P8
**See rules in Stock Transaction Tax for IPO in your FT Notes.

61. RFB Corporation, a closely-held corporation, has an authorized capital stock of 100,000,000 shares with par
value of P1.00/share as of January 1, 2008. Of the 100,000,000 authorized shares, 25,000,000 thereof is
subscribed and fully paid up by the following shareholders:

Mr. Estigoy B. Zabala 5,000,000

Mrs. Rowena V. Posadas 5,000,000
Mr. Conrado G. Cruz 5,000,000
Mr. Benedict O. Sison 5,000,000
Mrs. Linda O. Evangelista 5,000,000
Total shares outstanding 25,000,000

RFB Corporation finally decided to conduct an IPO and initially offers 25,000,000 of its unissued shares to the
investing public for P1.50 per share. Compute the percentage tax.
a. P380,000 c. P325,000
b. P375,000 d. Exempt

SOLUTION (61): B
25,000,000 * P1.50 = P37,500,00
P37,500,000 * .01 = P375,000
**Recall the definition of outstanding shares and see notes in Stock Transaction Tax for IPO in your FT Notes.

62. At the IPO, Mrs. Linda O. Evangelista has likewise decided to sell her entire 5,000,000 shares to the public at
P1.50/share, compute the percentage tax due.
a. P300,000 b. P150,000 c. P75,000 d. Exempt

SOLUTION (62): A
5,000,000 * P1.50 = P7,500,000
7,500,000 * .04 = P300,000
**Linda’s share is 20% of the total outstanding shares. See notes in Stock Transaction Tax for IPO in your FT Notes.

63. After the IPO, RFB Corporation decided to increase the capitalization by offering another 30,000,000 unissued
shares for P2.0 to the investing public. Compute the percentage tax.
a. P 0 c. P800,000
b. P600,000 d. P1,200,000

ANSWER 63: A
The issuing corporation under Secondary Public Offering is not liable to the Stock Transaction Tax Anymore. The would-be seller
will now carry the burden of the stock transaction tax upon selling his share in the future.

10

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64. Gross receipts tax is a business tax paid by a –

a. Hotel operator b. Insurance company c. Franchise holder d. Bank
ANSWER 64: D

65. The China Bank, a domestic bank, shows the following data for January 2010:
Rentals from safety deposit boxes and real property acquired through foreclosure proceeding
for bad loans P 880,000
Net foreign exchange gains (difference between the value of foreign currency sold and 220,000
purchased)
Net trading gains from trading of securities, commercial papers and other financial instruments
(difference between the yield or selling price and the cost of obtaining the same) 660,000
Trust fees 110,000
Dividend from domestic corporation 30,000
Other service fees 220,000
Interest income from lending activities from instrument with remaining term of:
Five years and less 700,000
More than five years 800,000

The percentage or gross receipt tax for the month is

a. P0 c. P43,000
b. P189,300 d. P104,500

SOLUTION (65): B
880,000 * .07 = 61,600
220,000 * .07 = 15,400
660,000 * .07 = 46,200
110,000 * .07 = 7,700
220,000 * .07 = 15,400
700,000 * .05 = 35,000
800,000 * .01 = 8,000
P189,300 TOTAL GROSS RECEIPT TAX

66. Big bank has the following income/loss for the months of March and April:
March April
Interest income maturity of less than 5 years P50,000 P 100,000
Rentals 50,000 50,000
Net trading gain/loss (10,000) 20,000

The gross receipts taxes payable for March and April, respectively –
a. P500,000; P8,500 c. P6,000; P9,200
b. P6,000; P9,900 d. P5,300; P9,200

SOLUTION (66): C
March
50,000 * .05 = 2,500
50,000 * .07 = 3,500
Total 6,000

April
100,000 * .05 = 5,000
50,000 * .07 = 3,500
(20,000 -10,000) * .07 = 700
Total 9,200

67. Which is not subject to gross receipt tax?

a. Development Bank of the Philippines c. Philippine Land Bank
b. Philippine National Bank d. Bangko Sentral ng Pilipinas
ANSWER 67: D

68. Which of the following is subject to percentage tax?

a. Derby winnings c. Premiums on re-insurance contract
b. Cinema houses d. Van for hire driven by lessees

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ANSWER 68: D

69. STATEMENT 1: Banks are subject to value-added tax.

STATEMENT 2: Banks are subject to the gross receipts tax, which is a percentage tax.
a. TRUE, TRUE c.TRUE. FALSE
b. FALSE, FALSE d. FALSE, TRUE
ANSWER 69: D

70. STATEMENT 1: The overseas communications tax of 10% is imposed on the user of the communication facility
and not on the operator.
STATEMENT 2: VAT is imposed on the operator of the communication facility.
STATEMENT 3: The overseas communication tax of 10% is imposed both on the outgoing messages from the
Philippines and inbound messages directly from abroad going to the Philippines.

a.TRUE, TRUE , FALSE c.TRUE. FALSE, FALSE

b.FALSE, FALSE, FALSE d. FALSE, TRUE, FALSE
ANSWER 70: A

71. One of the following is subject to percentage tax

a. Long distance call by a son from Sta. Cruz, Manila to his father in Ilo Ilo City
b. Monthly telephone bill from PLDT
c. Telephone bill on a call by a mother in the Philippines to her son in the United States.
d. Telephone call by Magda in Hong Kong to her friend in Manila.
ANSWER 71: C

72. Balatan Telephone Company (BATELCO) had the following collections from its customers during the quarter:
Regular monthly bills 770,000
Domestic calls 501,600
Overseas calls (outgoing) 533,500

The percentage tax to be remitted by BATELCO during the quarter is

a. 73,600 b. 48,500
c. 53,350 d. 80,960
ANSWER 72: B

Makasalanan Corporation had the following data during the month of February:
Net income during the month 40,000
Collections during the month
From services rendered in Jan 50,000
From services rendered in Feb 300,000
From services to be performed in march (advances) 10,000

73. The business tax payable if Makasalanan is a bus company:

a. 12,000 b. 22,800
c. 10,800 d. 21,000
ANSWER 73: C

74. The business tax payable if Makasalanan is a cabaret:

a. 64,000 b. 64,800
c. 72,000 d.136,800
ANSWER 74: B
75. The business tax payable if Makasalanan is a race track:
a. 120,000 b. 228,000
c. 210,000 d. 108,000
ANSWER 75: D
76. Admission fees to cockpits and race tracks are subject to
a. Tax on paid admission
b. Tax on winnings
c. Tax on gross receipts
d. None of the above
ANSWER 76: C

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(77-80) Rose Tear operates a cockpit in Zamboanga City. Inside the cockpit is a restaurant which she operates. The
data during the month are as follows:
Gross receipts from the gates 390,000
Receipts from advertisements inside the cockpit arena 15,000
Gross receipts from restaurant:
Sale of food and softdrinks 21,000
Sale of liquor 33,000
Disbursements (subject to VAT) 24,200
Disbursements (not subject to VAT) 12,000

77. The amusement tax due is

a. 82,620 b. 81,828
c. 72,900 d. 19,980
ANSWER 77: A

78. Suppose the restaurant is owned and operated by Mon, a non VAT registered person, the business tax payable
by Mon is
a. 1,260 b. 534
c. 4,909.09 d. 1,620
ANSWER 78: D
79. Suppose the restaurant is operated by Mon, the percentage tax due on Rose is
a. 3,300 b. 12,150
c. 92,700 d.72,900
ANSWER 79: D

80. Assume that Mon, a VAT registered taxpayer is operating the restaurant. The business tax payable by Mon is
a. 81,600 b. 3,576
c. 4,909.09 d. 2,709.09
ANSWER 80: B

81. Carlos operates the El Combo Nightclub along Malate Avenue, Palayan City. His gross receipts in February 2008
amounted to 126,700. The foods and drinks being served inside the nightclub are being delivered by Tiberio, a
nonVAT taxpayer. During the month, Tiberio sold 32,400 worth of goods and drinks to Carlos.

The amusement tax payable is

a. 19,005 b. 22,806
c. 28,638 d. 5,832
ANSWER 81: B

82. Who is the taxpayer as far as the IPO in the local stock exchange of closely held corporations is concerned?
a. The purchaser of shares of stock offered in the IPO
b. The corporate issuer
c. The corporate purchaser
d. The local stock exchange
ANSWER 82: B
83. Given the following establishments:
I.Cebu Pacific Air
II. Pegasus nightclub
III. Camarines Sur III Electric Cooperative (CASURECO III)
IV. Banco de Oro (Unibank)

Which of the above establishments is/are subject to other percentage tax?

a. II only
b. II and III
c. III and IV
d. II and IV
ANSWER 83: D

84. A common carrier by land is engaged in the transport of passengers, goods and cargoes. He is not
VAT-registered. What business taxes is he liable to the government?
a. 12% VAT
b. 3% common carrier’s tax

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c. 3% tax on VAT-exempt persons on gross receipts from transport of goods and cargoes and 3% common
carrier’s tax on gross receipts from transport of passengers.
d. 12% VAT on gross receipts from transport of goods and cargoes and 3% common carrier’s tax on gross
receipts from transport of passengers.
ANSWER 84: D

85. An international carrier is subject to the following tax-

a. 12% value-added tax and ordinary income tax on gross receipts within the Philippines.
b. 0% VAT and 2.5% income tax on gross receipts within the Philippines.
c. 3% other percentage tax on gross receipt
d. 3% other percentage tax on gross receipts and ordinary income tax on gross income
ANSWER 85: C

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