Tax2 Finals
Tax2 Finals
Tax2 Finals
Multiple Choice: Write the correct letter of choice on answer sheet. Support with solutions if necessary. (2 pts)
1. Royal Mining is a VAT-registered domestic mining entity. One of its products is silver being sold to Bangko
Sentral ng Pilipinas. It filed a claim with the BIR for tax refund on ground that under Section 106 of the NIRC,
sales of precious metal to Bangko Sentral ng Pilipinas are considered export sales subject to zero-rated VAT.
Is Royal Mining’s claim for refund meritorious?
a. Yes, sale of precious metal to Bangko Sentral ng Pilipinas are deemed zero-rated transactions.
b. Yes, sale of precious metal to Bangko Sentral ng Pilipinas is deemed and exempt sale.
c. No, sale of gold to Bangko Sentral ng Pilipinas is zero-rated transactions not silver.
d. No, sale of precious metal to Bangko Sentral ng Pilipinas is creditable not refundable
2. Lily’s Fashion, Inc. is a garment manufacturer located and registered as a Subic Bay Freeport Enterprise under
Republic Act No. 7227 and a non- VAT taxpayer. As such, it is exempt from payment from all local and national
internal revenue taxes. During its operations, it purchased various supplies and materials necessary in the
conduct of its manufacturing business. The suppliers of these goods shifted to Lily’s Fashion, Inc. the 12%
VAT on the purchased items amounting to P500,000. What is the proper remedy of Lily’s Fashion Inc.?
a. Lily’s Fashion Inc., may use the P500,000 as tax credit
b. Lily’s Fashion Inc., may ask for a refund of the P500,000
c. Lily’s Fashion Inc., may convert the P500,000 into tax warrants
d. Lily’s Fashion Inc., may charge it to cost or expense
8. 1st Statement: Excise taxes imposed and based on weight or volume capacity or any other physical unit of
measurement shall be referred to as ad valorem tax.
2nd Statement: Excise taxes imposed and based on selling prices or other specified value of the god shall be
referred to as specific tax.
a. True, false b. True, true c. False, true d. False, false
9. Mr. C is a manufacturer of fermented liquors. In making sales, all taxes on the products and transactions are
passed on to the buyers. For purposes of the value-added tax, which of the three taxes mentioned here that
pays form part of the gross selling price?
a. Excise tax
b. Value-added tax
c. Percentage tax
d. None of the above
12. Statement 1: A taxpayer whose gross sales or receipts exceeded the amount of P1,919,500 shall pay the VAT
even if he is not vat registered; consequently, he is also entitled to input taxes.
Statement 2: Importers of goods for personal use is not subject to VAT if he is not VAT registered.
a. Both statements are true
b. Both statements are false
c. Only Statement 1 is true
d. Only Statement 2 is true
17. Which of the following is not allowed with presumptive input tax
a. Those engaged in the manufacturing of refined sugar
b. Those engaged in manufacturing packed noodle based instant meals
c. Those engaged in the processing of canned products
d. Those engaged in pasteurizing milk
18. There is no taxable income until such income is recognized. Taxable income is recognized when the
a. Taxpayer fails to include the income in his income tax return
b. Income has been actually received in money or its equivalent
c. Income has been received, either actually or constructively
d. Transaction that is the source of income is consummated
22. ERA Corporation has the following sales during the month:
Sale to private entities 224,000
Sale to export-oriented enterprise 100,000
Sale of exempt goods 100,000
The following input taxes were passed on by its VAT suppliers during the month:
Input tax on taxable goods 5,000
Input tax on zero-rated sales 3,000
Input tax on sale of exempt goods 2,000
Input tax on depreciable capital good not attributable 20,000
to any specific activity
23. During the month of May, XYZ Corporation had domestic sales amounting to P1,680,000 and export sales
amounting to P1,500,000. During the same month, XYZ’s total purchases directly attributable to domestic
sales amounted to P1,120,000 and total purchases directly attributable to export sales P1,008,000.
24. K imported a car from USA for her personal use. Total landed cost is P250,000, including customs duties of
P50,000. VAT on importation is
a. P0
b. P20,000
c. P36,000
d. P30,000
25. An importer wishes to withdraw its importation from the Bureau of Customs. The imported goods were
subjected to 10% customs duty in the amount of P12,500 and other charges in the amount of P9,500. The
VAT due is
a. P12,500 b. P17,640 c. P13,364 d. P14,700
26. A taxpayer registered under the VAT system on January 1, 2016. His records during the month show:
Value of inventory as of Dec 31, 2015,
purchased from VAT registered persons P50,000
VAT paid on inventory as of Dec 31, 2015 6,000
Value of inventory as of Dec 31, 2015, VAT exempt goods 60,000
Sales, net of VAT 140,000
Sales, gross of VAT 45,000
Purchases, net of VAT 70,000
VAT payable is
a. P11,100
b. P7,221
c. P3,100
d. P18,100
27. A, is a VAT-registered dealer of appliances. The following data are for the last quarter of 2016.
Sales, net of output tax P6,800,000
Purchases, net of input tax 5,500,000
Sales return 200,000
Purchase return 300,000
Deferred input tax (carried over from
the third quarter of 2016) 9,500
28. A VAT registered person is engaged in the sale of VAT taxable goods and at the same time is also engaged in
non-VAT business, in the same business establishment. During the year, total sales of the VAT business
amounted to P336,000. The sales of the non-VAT business amounted to P200,000 with a separate percentage
tax of P6000 for a total of P206,000. During the same quarter, repairs on the building amounted to P50,000
plus value added tax of P6,000. Supplies purchased for common use amounted to P10,000 plus P1,200 VAT.
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 current year, it has the following data:
Gross receipts, sale of airtime P 2,000,000
Gross receipts, use of radio station’s
communication facilities 500,000
Business expenses 700,000
32. A vat taxpayer has the following data for a particular quarter during the current year:
Sale of shares of stock:
Held as inventory P 1,000,000
Held as investment 500,000
Cost of shares sold:
Held as inventory 300,000
Held as investment (thru local stock exchange) 600,000
A, a vat taxpayer, made the following purchase of capital goods from vat registered sellers for use in his
business (amounts are net of vat) for the 3rd quarter
36. A domestic sea carrier had the following receipts and attributable input VAT for the month
Receipts from passengers P 2,400,000
Receipts from cargos 600,000
Total input VAT for the month 240,000
37. A VAT registered television company with annual receipts of P 8M reported P 1M total revenue for the month
of June 2015. It collected P 1,200,000 from various clients including advances and paid P 800,000 of expenses,
P 560,000 of which was paid to VAT suppliers. The collections and payments are inclusive of VAT.
38. A bookstore had the following summary of transactions during the month:
40. A lessor of commercial spaces had the following receipts and input VAT data for the month:
-END-
Godbless!
________________________ ________________________
KEVIN ELREY E. ARCE Dr. ELMER M. DELA CRUZ
Instructor Dean