NAME: _____________________________________ COURSE AND YEAR: _________ DATE: ________

Business and Transfer Taxation

Preliminary Examination

I. True or False (2 pts)

______ 1. Importation of ordinary feeds for poultry chicken is vatable.
______ 2. Sale of shells and coral products by a dealer is not subject to VAT.
______ 3. Income and business taxpayers pay on a quarterly basis.
______ 4. The tax basis of a professional is his actual receipts from practice of his service.
______ 5. The governing taxation theory for consumption taxes is the ability to pay theory.
______ 6. Excise tax can be a privilege tax.
______ 7. Income tax is a business internal revenue tax included in the Tax Code.
______ 8. Value added tax is an example of progressive tax.
______ 9. Importers of goods for personal use is not subject to VAT if he is not VAT registered.
______ 10. Monthly VAT declaration is filed on the 20th day from the end of each month.
______ 11. The statutory taxpayer and the economic taxpayer are not the same with the VAT on
importation.
______ 12. Excise taxes imposed and based on selling price or other specified value of the goods shall be
referred to as specific tax.
______ 13. A person who issues a VAT invoice is nevertheless liable to VAT only if he is VAT registered.
______ 14. A VAT-registered person whose total sales for the year is P 1,919,500 is subject to 12% VAT.
______ 15. If a person is excise tax exempt he is also VAT-exempt.
______ 16. International travel of passenger or cargo by domestic corporation is VAT-exempt.
______ 17. Transport of cargo by domestic corporation is subject to other percentage taxes.
______ 18. Lechon baboy is a food product considered to be in its original state.
______ 19. The importation of books and newspapers is VAT- exempt.
______ 20. Businesses for mere subsistence have gross receipts not exceeding P 100,000 per year.

II. Identification (2 pts)

_____________ 1. Quarterly VAT return shall be filed on or before the _________.
_____________ 2. The owner of a business for mere subsistence.
_____________ 3. He may revoke applications for business registration.
_____________ 4. These are people who make casual sale of goods or properties.
_____________ 5. The BIR form for monthly VAT filing.
_____________ 6. Stalls or outlets not permanently fixed to the ground which are put up during special
events such as festivals or fiestas.
_____________ 7. The technical term for a taxpayer in income taxation.
_____________ 8. 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.
_____________ 9. Amounts earmarked for payment to an unrelated third party or received as
reimbursement for advanced payment on behalf of another which do not redound
to the benefit of the payor are not part of his gross receipt.
_____________ 10. A person whose business is to keep automobile for hire or keep them stored for use
or order.
II. Problem Solving. Encircle final answer. (5 pts)
Problem 1
Skye, operates a convenience store, from which the gross receipts from sales, and payments on
purchases from VAT-registered supplies, were as follows:

Sales of processed food items P 280,000

Sales of non-food items 220,000
Purchases of processed food items 100,000
Purchases of non- food items 80,000
Salaries of helpers 48,000

a) What is the percentage tax (tax due)? **(above amount are net of taxes)
b) If Skye opted to be registered under the VAT scheme, the VAT payable is?

Problem 2
The following relates to the importation of distilled spirits.

Total invoice value P 2,500,000

BOC charges 400,000
Customs duties 350,000
Excise taxes 500,000
Arrastre charge 150,000
Bank Charge 50,000

What is the pure consumption tax?

Problem 3
X, building contractor showed to you the following data:

Contract price, net P5,000,000

Cash received (VAT included) 2,240,000
Receivables 3,000,000
Advances on other contracts still unearned (w/o VAT) 1,000,000
Payments (VAT excluded):
For materials 500,000
For supplies 100,000
For operating expenses 200,000
For services of sub-contractors (VAT included) 1,680,000

What is the VAT payable?

Problem 4
A, VAT-registered, made the following purchases during the month of January:
Goods for sale, inclusive of VAT P224,000
Supplies, exclusive of VAT 20,000
Office air conditioner, total invoice amount 56,000
 Home appliances for residence, gross of VAT 17,600
Repair of store, total invoice amount evidenced by
ordinary receipt of the contractor 4,000

Total creditable input tax is?

Problem 5
A VAT-taxpayer received a P68,000 plus P4,800 creditable withholding tax certificate. All other
creditable withholding taxes are expensed outright. What is the percentage tax?

Problem 6
Mr. Z imported an article from USA. The invoice value of the imported article was $ 7,000 ($1 = P50).
The following were incurred in relation with the importation
Insurance P15,000
Freight 10,000
Postage 5,000
Wharfage 7,000
Arrastre charges 8,000
Brokerage fee 25,000
Facilitation fee 3,000

The imported article is subject to P50,000 customs duty and P30,000 excise tax. Z spent P5,000 for
trucking from the customs warehouse to its warehouse in Quezon City.

What is the VAT on importation?

Problem 7
In the third quarter of 2018, Procopio Magbanua, a taxpayer engaged in the sale of services whose
annual gross receipts do not exceed P1,919,500 has the following data:
Accounts Receivable, beginning of the quarter P50,000
Sales during the quarter 100,000
Accounts Receivable, end of the quarter 75,000
Purchase of supplies, total invoice amount 11,200

The percentage tax due for the quarter is?

- END -

“If it is important enough to you, you will find a way. If it is not, you will find an excuse.”
-David Roads

Prepared by: Checked and verified by:

________________________ ________________________
KEVIN ELREY E. ARCE Dr. ELMER M. DELA CRUZ
Instructor Dean