Name: ___________________ rest of the year, amounted to peso equivalent of

Class Schedule: _______________ P630,000, net of foreign income tax of P70,000.

Date: ________________ If Mr. C is a Filipino citizen and an overseas
contract worker (OCW), how much is the total
Instruction: Write the letter of your choice on the space reportable income in the Philippines.
provided before the number. a. P250,000 c. P880,000
b. P300,000 d. P1,000,000
1. Which of the following is subject to final
withholding tax? 8. Peter Favorito is a resident German citizen. He
a. Rent income received P600,000 dividend income from
b. 13th month pay and other benefits in excess Sungad Corporation, a resident foreign
of P90,000 corporation. Data pertinent to the operation of
c. Royalties Sungad Corporation is as follows:
d. Ordinary gains Philippines Germany
Revenue P20,000,000 P10,000,000
2. Statement 1: In general, passive income earned Expenses ​14,000,000 ​4,000,000
within the Philippines is subject to final Net income P6,000,000 P6,000,000
withholding tax The amount of Peter’s dividend income within
Statement 2: All withholding taxes on income would be:
are final taxes. a. P600,000 c. P300,000
a. Statement 1 is correct b. P400,000 d. P200,000
b. Statement 2 is correct
c. Both statements are correct ​For numbers 9-12.
d. Both statements are incorrect Records reveal the following earnings of Mr.
Sabit, a resident Filipino citizen, during a taxable
3. Which of the following taxpayers is prohibited to year:
use fiscal year as basis for filing returns and Salary as a university professor,
computing income? net of P20,000 Withholding tax 240,000
a. Individuals c. Corporations Income derived from audit services,
b. General co-partnerships d. Associations net of 10% creditable tax 135.000
Rent income, net of 5% CWT
4. Which of the following sales is allowed to be 114,000
reported under installment reporting of income? Interest income, net of 20%
a. Regular installment sale of personal property final tax (Metrobank) 8,000
b. Casual sale of personal property with initial Gain from sale of personal car 3,000
payment of 25% and below of the selling price Gain from sale of shares of stock-
c. Sale of real property with initial payment of outside stock exchange, net of
25% of the selling price 5% final tax 2,850
d. All of the above.
9. How much income is classified as compensation
5. Statement 1: All foreign corporations are taxable income?
only for income earned within the Philippines. a. P410,000 c. P260,000
Statement 2: All Filipino citizens are taxable for b. P375,000 d.P240,000
their income earned within and outside the
Philippines. 10. How much is the total income classified as
a. Both statements are correct income from profession or business?
b. Only statement 1 is correct a. P273,000 c. P260,000
c. Only statement 2 is correct b. P270,000 d. P120,000
d. Both statements are incorrect
11. How much income is classified as passive
6. If an individual renders services for a creditor income?
who in consideration thereof cancels his existing a. P21,000 c. P15,000
debt, the cancellation of indebtedness may b. P15,350 d. P12,500
amount to a
a. Gift 12. How much income is classified as capital gains?
b. Capital contribution a. P15,000 c. P10,500
c. Donation inter-vivos B. P12,500 d. P6,000
d. Payment of income
13. In case of deductions and exemptions on
7. From January to March of 2018, Mr. C’s salary income tax returns, doubts shall be resolved
from employment in the Philippines amounted to a. Liberally in favor of the taxpayer
P250,000, net of P50,000 withholding tax. From b. Strictly against the government.
April to December 2018, his total income from c. Strictly against the taxpayer.
employment in Japan where he resided for the d. With compromise.
14. Kikay reports the following earnings: 21. Sue reported the following retirement:
Consultancy fee P240,000 First 30 years received
Salary as a professor 300,000 at the age of 50 P500,000
Gain on sale of real property Second employment for 10 years
as capital asset (cost=P500,000) 400,000 at the age of 60 400,000
Capital gain on sale of interest Third employment for 10 years
in a commercial partnership 100,000 at the age of 70 300,000
Prizes in raffle ticket 10,000 Nontaxable retirement pay is: __________
How much is the gross amount of income
reportable in the ITR and gross amount subject 22. The share of stock is selling at P10 per share in
to final taxes? the stock exchange. This has par value of P5
Subject to ITR Subject to Final tax per share. The shares were acquired by the
a. P550,000 P1,000,000 employer at cost of P8 per share. Which of the
b. P550,000 P500,000 following is the gross compensation income for
c. P540,000 P510,000 1,000 stock certificates received as payment of
d. P540,000 P500,000 services rendered to employer? ____________

15. Transportation allowance is nontaxable if: 23. Campo Santo received stock options of 500
I. Pre-computed on a daily basis SMC shares with a fair market value of P100 per
II. Paid to employee while on duty share. He subsequently donated the stock
III. Received by employee under employer’s options to his brother. How much is the tax on
benefit rule. the transfer of stock option? _____________
a. I only c. I and II
b. II and III d. I, II and III ​For numbers 24 and 25
X, an officer of Y Corporation granted stock
16. The amount of 13th month pay and other option for 1,000 shares with P20 par at the
benefits limit for exemption in TRAIN law is: option price P23. The option was exercised
a. P82,000 c. P90,000 when the market price was P30.
b. P30,000 d. P0
24. The tax on the grant of stock option would be
17. These benefits are relatively small value and ____________
they are not considered compensation subject to
income tax. 25. The tax on the exercise of the option would be
a. Fringe benefits ____________
b. 13th month pay and other benefits of P90,000
c. Minimum wage 26. A manufacturing business reported the following
d. De minimis for its first year of operation:
Purchases of raw materials P540,000
18. Which of the following is a taxable compensation Freight in 20,000
income? Raw materials, ending inventory 10,000
a. Separation pay due to resignation Direct Labor 400,000
b. Retirement pay under BIR approved Factory overhead 200,000
retirement plan WIP, end 100,000
c. Separation pay due to disability Finished goods, end 50,000
d. Terminal pay by fact of death Sales 1,275,000
Freight out 12,000
19. Which of the following is a taxable compensation Sales return 25,000
income? Its gross business income is ____________
a. Professional fee, net of CWT
b. Separation pay due to closure of the business 27. Metrobank, Inc. reported the following during the
c. Terminal pay inclusive of P15,000 13th month taxable year:
pay. Interest income P10,000,000
d. Separation pay due to early retirement. Gain on sale of capital
assets (personal) 5,000,000
20. The employee reported a net take home pay of Rent income 2,000,000
P180,000. The amount is net of P180,000 Salaries of bank employees 3,700,000
withholding tax and P1,000 SSS. The amount is Salaries of janitors and guards 1,000,000
inclusive of P5,000, covering a 10-day vacation Depreciation of building 800,000
leave(de minimis) actually availed and P86,000 Depreciation of computers 600,000
13th month pay. His gross compensation Direct supplies used 200,000
income is ______________ Interest expense paid
to depositors 1,500,000
Gross income of Metrobank: ____________
 ​For numbers 28 and 29: Interest income
On March 1, 2018, CLaudette leases a portion (lending) 78,000 43,000
of its commercial building to Mark with the
following terms:
Interest income
Advanced deposit P40,000
Monthly rental 20,000
(from a bank) 61,000 22,000
Annual insurance premium Royalty income
to be paid by the lessee 6,000 (invention) 89,000 17,000
Portion (10 mos.) of real estate Royalty income (books) 5,000 11,500
tax to be paid by lessee 3,000/year Winnings 50,000 60,000
The lease contract also stipulates that a 5% of Prizes 10,000 20,000
Mark’s net revenue will be credited to Claudette Cost of living expenses 97,000 15,000
as commission. Mark’s net revenue during the
year is P2,000,000. 33. Compute the gross income to be reported by
Ralph in 2018: __________
28. Claudette’s 2018 rent income would be
____________ 34. How much is the total income subject to final
income tax? ____________
29. Assume that the advanced deposit is restricted,
the CLaudette’s gross reportable income would
35. Compute the total final income tax:​ _________
be ______________

​For numbers 30 and 31:

For numbers 36 to 39
The following information are available related to The real property classified as capital asset with
a 10-year lease contract which commenced on cost of P400,000 was sold by installments in 4
June 30, 2018 years including the year of sale with the
Cost of improvement put up following terms:
by the lessee P180,000 Down payments:
Estimated useful life of the Cash P50,000
Improvement 12 years FV of property received 100,000
Date completed December 31, 2018 Mortgage assumed by the buyer 450,000
Installment payments:
30. The reported income from leasehold 1st year 100,000
improvement for the year 2018 under outright 2nd year 200,000
method: ______________ 3rd year 300,000
4th year 400,000
31. The reported income from leasehold
improvement for the year 2018 under spread-out 36. How much is the selling price of the installment
method ______________ sales? _________________

32. The following data pertaining to a 5-year lease 37. How much is the contract price?
contract which started October 31, 2018 _________________
Cost of improvement put up
by the lessee P300,000 38. How much is the initial payments?
Estimated useful life of the _________________
improvement 6 years
Date completed March 31, 2019 39. The seized property of a delinquent taxpayer
The income from leasehold improvement was becomes the property of the government. This
reported by the lessor using spread-out method. refers to:
Assuming that the lease contract was a. Distraint c. Forfeiture
pre-terminated on December 31, 2021, how b. Levy d. Compromise
much would be the additional income in 200D
from pre-termination of contract? ____________ 40. The tax rate on inter-corporate dividend income
received by nonresident foreign corporation from
a domestic corporation
For numbers 33 to 34
a. 0% c.15%
Ralph, a resident alien has the following
b. 10% d. 30%
data in taxable year 2018:

Within Outside
Gross sales 1,566,000 342,000
Cost of Sales 567,000 546,000
Business Expenses 99,000 45,000