Sol To Tax Chapter10to15 2013 2014

LT, LIBRARY, DOC.
SOLUTIONS TO INCOME TAX (IIT, CIT) 2013-2014 EDITION, VGL
ANSWERS TO MCQ CPA BOARD IN CHAPTER 10: CORPORATE INCOME TAX
1 C 11 D 21 A 31 D
2 D 12 D 22 C 32 A
3 D 13 B 23 A 33 C
4 A `14 A 24 A 34 D
5 C 15 D 25 D 35 C
6 D 16 C 26 C
7 C 17 B 27 C
8 A 18 B 28 D
9 C 19 B 29 B
10 C 20 D 30 A
D
ANSWERS TO CPA BOARD QUESTIONS IN CHAPTER 11
1. C 11. NONE 21 A
2. D 12. C 22 A
3. C 13. D 23 D,
P67,160
4. A 14. C 24 D, P0
5. C 15. A
6. D 16. C
7. B 17. A
8. D 18. D
9. B 19. C
10. C 20. A
ANSWERS / SOLUTIONS TO PROBLEMS: IN CHAPTER 11
Problem 1. Las Pinas Company (RFC) year 2013

Gross Income 70,000,000
Allowed Deduction 52,700,000
TNI 17,300,000
MCIT 1,400,000
BCIT/ ITD 5,190,000
Branch Profit Remittance Tax 1,362,375
C1. 62,000,000 X 85% = 52,700,000 AD

C2. 17,300,000 – 5,190,000 = 12,110,000 Net Income after Income Tax
C3. 12,110,000 x 75% = 9,082,500 Applied Branch Profit Remittance Abroad
C4. 9,082,500 x 15% = 1,362,375 Branch Profit Remittance Tax
CORPORATE INCOME TAXATION Page 1

LT, LIBRARY, DOC. SOLUTIONS TO INCOME TAX (IIT, CIT) 2013-2014 EDITION, VGL
Problem 2. Various company Year 2013

a) DC b) RFC f) PEI f) PEI
case 1 case 2
Gross Income 1,6I5,000 975,000 1,615,000 1,615,000
Less: Allowed 985,000 560,000 985,000 985,000
Deduction
TNI 630,000 415,000 630,000 630,000
MCIT (2%) 32,300 19,500 Na 32,300
BCIT (30%) 189,000 124,500 NA 189,000
ITD 189,000 124,500 63,000 189,000
(10%)
c) NRFC d) NROV e) RIC

Gross Income 975,000 975,000 975,000
Less: Allowed deductions Na Na NA
TNI / TGI 975,000 975,000 975,000
MCIT (2%) NA NA NA
BCIT (30 %) NA NA NA
Income tax Due At 30% At 4.5 % At 2.5 %
292,500 43,875 24,375
C.1 975,000 + 640,000 = 1,615,000 GI – World

C.2 560,000 + 425,000 = 985,000 AD – World
Problem 3. Enchanted Corp. year 2013

TNI 745,000
MCIT 98,900
BCIT 223,500
Income Tax Due 223,500
C1.4,800,000 + 145,000 = 4,945,000 GI
Net Income After Income Tax 521,500

Rate x 85%
Improperly Accumulated Earnings 443,275
Rate x 10%
Improperly Accumulated Earnings Tax 44,327.50
Prob. 4. Nueva Ecija Co. RFC

Gross Income-Phil. 42,800,000
Less: Allowed Deduction-Phi. 25,200,000
Taxable Net Income-Phil. 17,600,000

MCIT 856,000
BCIT 5,280,000
Income Tax due 5,280,000
Net Income after Income Tax 12,320,000
C1. 5,000,000 X 15% = 750,000 NBPRA

C 2. 5,000,000 – 750,000 = 4,250,000 X 15 % = 637,500 BPRT
Problem 5; Davao Corp., year 2013

Less: Allowed Deduction 2,488,235.29
Taxable Net Income 511,764.71
MCIT 60,000
BCIT 153,529.41
Income Tax Due 153,529.41
FBT 188,235.29
OGIT 450,000
C 1. (1,500,000 + 2,500,000 ) – 1,700,000 = 2,300,000 COS
C 2. 5,300,000 - 2,300,000 = 3,000,000 GPFS
C 3. 1,200,000 + 700,000 + 588,235.29 = 2,488,235.29 Allowed Deduction
C 4. (400,000 / 68%) = 588,235.29 GUMV
C 5. 588,235.29 x 32% = 188,235.29 FBT
C 6. 3,000,000 X 15 % = 450,000 OGIT
Problem 6. Cebu Corp. year 2013

DC RFC
GI 2,100,000 1,300,000
LESS; AD 1,200,000 550,000
TNI 900,000 750,000
MCIT 42,000 26,000

BCIT 270,000 225,000
ITD 270,000 225,000
Ratio of Cost of Sales over Gross 53 % 54 %
Sales
OGIT 315,000 195,000
C 1. 2,800,000 – 1,500,000 = 1,300,000 GPP

C 2. 1,500,000 / 2,800,000 = 54%
C 3. 1,300,000 X 15 % = 195,000 OGIT
C 4. 4,500,000 - 2,400,000 = 2,100,000 GPW
C 5. 2,400,000 / 4,500,000 = 53 %
C6. 1,500,000 / 2,800,000 = 53.35%

Problem 7. YEAR 2013

a) DC b) RFC
Gross Income 1,306.500 841,500
Less: Allowed Ded 1,209,300 975,000
TNI 97,200 (133,500)
MCIT (2%) 26,130 16,830
BCIT (30%) 29,160 0
ITD 29,160 16,830
C.1 (860,000 – 18,500) = 841,500 + 465,000 = 1,306,500 Gross Income World

C.2 975,000 + (312,400 X 75%) = 1,209,300 Allowed Deduction-World
Problem 8. – Domestic Partnership

2013 2014 2015
Gross Income 3,750,000? 2,600,000 1,625,000
Less: Allowed Deductions 3,530,000? 2,000,000 1,300,000
TNI 180,000? 600,000 325,000
MCIT (2%) 75,000 52,000 32,500
BCIT 54,000 180,000 97,500
Income Tax Due 75,000 180,000 97,500
Excess MCIT Carry Over 0 (21,000) 0
Income Tax Payable 75,000 159,000 97,500
Excess MCIT- current (21,000) 0 0
C1. 1,500,000 + 125,000 = 1,625,000 Gross Income
Problem 9. Masagana Corp.-2013

a) DC b) RFC d) ROHMNC
Gross Income 4,750,000 2,500,000 2,500,000
Less: Allowed Deductions 3,165,000 1,675,000 1,675,000
TNI 1,585,000 825,000 825,000
MCIT (2%) 95,000 50,000 NA
BCIT (30%) 475,500 247,500 NA
Income Tax Due 475,500 247,500 10 % 82,500
c) NRCFO g) NPH e) NRLOA f) NRFC h) RIC

Tax Base 2,500,000 1,585,000 2,500,000 2,500,000 2,500,000
Tax Rate X 25% X 10% X 7½% X 30% 7.5%X
ITD 625,000 158,500 187,500 750,000 62,500
Problem 10. ABC Corporation YEAR 2013

a) DC b) RFC
Gross Income 1,045,000 580,000
Less: Allowed Deductions 730,000 350,000
TNI 315,000 230,000

MCIT (2%) 20,900 11,600

BCIT (30%) 94,500 69,000
Income Tax due 94,500 69,000
C1. (895,000 + 950,000) = 1,845,000 – (25,000 + 30,000) = 55,000 = 1,790,000 – (410,000 + 540,000) =
950,000 = 840,000 GPFS
C2. 1,845,000 – 55,000 = 1,790,000 – 950,000 = 840,000 + 205,000 = 1,045,000 Gross Income-World
C3. 895,000 – 25,000 = 870,000 – 410,000 = 460,000 + 120,000 = 580,000 Gross Income – Phil.
C4. 350,000 + 380,000 = 730,000 = Allowed Deduction-World
Problem 11. TRS Corporation
2011 – 30% 2012 – 30% 2013 – 30% 2014 – 30% 2015 – 30%
ITD 95,000 150,000 150,000 235,000 160,000
EMCIT-CO 0 35,000 0 25,000 0
ITP 95,000 115,000 150,000 210,000 160,000
EMCIT-Current (35,000) (0) (25,000) ( 0 ) ( 0 )
Problem 12. TOK TOK Colleges, 2013
1) PEI 2) PEI
Gross Income 10,500,000 10,500,000
Less: Allowed Deductions 9,040,000 8,665,000
TNI 1,460,000 1,835,000
MCIT NA NA
BCIT NA NA
ITD at 10 % 146,000 183,500
C1. 8,540,000 + 500,000 = 9,040,000 Allowed Deductions C3. 500,000 x 25% = 125,000 YDE
C2. 7,600,000 + 2,900,000 = 10,500,000 = Gross Income C4. 8,540,000 + 125,000 = 8,665,000 AD
Problem 13. Magaling Hospital, year 2013
1) NPH 2) POH
Gross Income 20,900,000 20,900,000
Less: Allowed Deductions 18,800,000 18,800,000
TNI 2,100,000 2,100,000
MCIT Na 418,000
BCIT NA 630,000
Income Tax Due at 10 % , 30 % 210,000 630,000
C.1 12,500,000 + 8,400,000 = 20,900,000 GI C.2 17,600,000 + 1,200,000 = 18,800,000 AD

C3. 8,400,000 divided by 20,900,000 = 40%

Problem 14 Bulacan Corp. 2013
TNI P400,000
ADD; ADJ. ITEMS
IEFIT P50,000
IEFGI 70,000
NOLCO deducted .in 2013 60,000
Rental income (not yet included in TNI) P45,000
ISTFIT 80,000 305,000
TOTAL P705,000
LESS; ADJ. ITEMS
RFBN P150,000
DIV PD 130,000
1TPD. 150,000 430,000
IAE OR ADJTNI P275,000
Tax rate x 10 %
IAET P 27,500
ANSWERS TO CPA BOARD QUESTIONS IN CHAPTER 12:
1 D 16 A
2 B 17 B
3 A 18 A
4 B 19 C
5 D P455,000 20 C
6 D, 92,823.53 21 C
7 D P488,823.53 22 B
8 D 311,176.17 23 C
9 C 24 C
10 A 25 A
11 A 26 C
12 B
13 C
14 A
15 B

ANSWERS /SOLUTIONS TO PROBLEMS IN CHAPTER 12:
Problem 1. Bohol Corp year 2013

A. Sales of Real property in the Philippines. Capital asset
Land Land & Bldg

Gross Sales Price P750,000 P1,750,000
Fair Market Value P1,400,000 P1,240,000
Tax Base P1,400,000 P1,750,000
Tax Rate X 0.06 X 0.06
Final Capital Gains Tax 84,000 105,000
B. Sale of Shares of Stocks

1. Shares of Stocks sold thru PSE - Income Exempt, but subject to percentage tax
2. Shares not sold thru the local stock exchange, FIT at 5 % and 10 % on capital gain
Selling Price P186,700

Cost Price 49,500
Capital Gain 137,200
Capital Gains Tax (100,000 x 5%) + (37,200 x 10%) = 8,720
3. Shares sold directly to the buyer - FIT at 5 % and 10 % on capital gain but No final income tax,
because there was no capital gain. Instead there was a capital loss of P 8,750 (30,000 less 21,250)
C1. SP (85 x 250 shares) = 21,250 CP = (120 x 250 shares) = 30,000
Problem 2. Palawan Company year 2013
Gross Income 665,650

Allowed Deduction 389,800
TNI 275,850
MCIT 13,313
BCIT 82,755
ITD 82,755
C 1. 980,500 – (15,700 + 320,000 ) = 644,800 GPFS
C 2. 644,800 + 14,600 + 6,250 = 665,650 GI
C 3. 460,000 – 70,200 = 389,800 AD
Final Taxes
d. 12,500 x 20% 2,500
i. 60,000 x 7 ½ % 4,500
j. 25,000 x 20% 5,000
m. 63,000 x 5% 3,150
n. 52,000 x 20% 10,400
o. 730,000 x 6% 43,800
Total 69,350

Problem 3. Tacloban Corp. year 2013

DC RFC
Gross Income 2,489,200 1,781,000
Allowed Deduction 1,260,650 980,250
Taxable Net Income 1,228,550 800,750
MCIT 49,784 35,620
BCIT 368,565 240,225
ITD 368,565 240,225
C1. 1,781,000 + 580,000 + 12,000 + 14,500 + 15,000 + 68,000 + 18,700 = 2,489,200 GI World
C2. 980,250 + 280,400 = 1,260,650 AD World
C3. 1,750,000 + 10,800 + 20,200 = 1,781,000 GI Phil
C4. (39,500 + 167,500 + 43,800) x 20% = 50,160 Total Final Income Tax
Problem 4. Las Pinas Company (RFC) year 2013

ADD STATEMENT: 100% OF THE NET INCOME AFTER INCOME TAX IS APPLIED/REMITTED ABROAD

TNI 23,500,000
MCIT 1,400,000
BCIT/ ITD 7,050,000
Branch Profit Remittance Tax 2,467,500
C1. 62,000,000 X 75% = 46,500,000 AD
C2. 23,500,000 – 7,050,000 = 16,450,000 Net Income after Income Tax/ ABPRA
C4. 16,450,000 x 15% = 2,467,500 Branch Profit Remittance Tax
Problem 5. Enchanted Corporation year 2013

TNI 1,355,000
MCIT 98,500
BCIT 406,500
C1. 4,800,000 + 125,000 = 4,925,000 GI C2. 4,200,000 X 85% = 3,570,000 AD.
Problem 6. Nuva Ecija Company, 2013

DC RFC
Gross Income 73,800,000 42,300,000
Less: Allowed Deduction 39,820,000 21,420,000
Taxable Net Income 33,980,000 20,880,000
MCIT 1,476,000 846,000

BCIT 10,194,000 6,264,000
Income Tax due 10,194,000 6,264,000

C1, 42,600,000 — 500,000 = 42,300,000 GIP, C2. 25,200,000 X 85% = 21,420,000 ADP
C3. 42,300,000 + 31,500,000 = 73,800,000 GIW C4.21,420,000 +18,400,000 =39,820,000 ADW
Problem 7. Davao Corporation 2013

Less: Allowed Deduction 2,488,235.29
Taxable Net Income 511,764.71
MCIT 60,000
BCIT 153,529.41
Income Tax Due 153,529.41
FBT 188,235.29
OGIT 450,000
C 1. (1,500,000 + 2,500,000 ) – 1,700,000 = 2,300,000 COS

C 2. 5,300,000 - 2,300,000 = 3,000,000 GPFS
C 3. 1,200,000 + 700,000 + 588,235.29 = 2,488,235.29 Allowed Deduction
C 4. (400,000 / 68%) = 588,235.29 GUMV
C 5. 588,235.29 x 32% = 188,235.29 FBT
C 6. 3,000,000 X 15 % = 450,000 OGIT
C7. 2,300,000 / 5,30,000 = 43%
Problem 8. Cebu Corporation, 2013

DC RFC
GI 2,295,000 1,375,000
LESS; AD 1,200,000 550,000
TNI 1,095,000 825,000
MCIT 45,900 27,500

BCIT 328,500 247,500
ITD 328,500 247,500
Ratio of Cost of Sales over Gross 53% 54%
Sales
OGIT 315,000 195,000
C 1. 2,800,000 – 1,500,000 + 75,000 = 1,375,000 GIP

C 2. 1,500,000 / 2,800,000 = 54 %
C 3. 1,300,000 X 15 % = 195,000 OGITP
C 4. 4,500,000 - 2,400,000 + 75,000 + 120,000 = 2,295,000 GIW
C 5. 2,400,000 / 4,500,000 = 53 %
C6. 550,000 + 650,000 = 1,200,000 ADW

Problem 9. RDN Corporation,

DC RFC
Gross Income 2,424,350 1,514,200
Less: Allowed Deduction 1,741,000 947,500
Taxable Net Income 683,350 566,700
MCIT 48,487 30,284

BCIT 205,005 170,010
ITD 205,005 170,010
C 1. 1,200,000 + 9,300 + 24,000 + 226,600 + 210,000 + 16,600 + 18,300 = 1,514,200 GIP

C 2. 945,000 + 2,500 = 947,500 ADP
C 3. 242,000 - 15,400 = 226,600 NCGP
C 4. 32,000 - 36,500 = ( 4,500) NCLW
C 5. 8,600 - 2,500 = 6,100 NOGW
C 6. 945,000 + 796,000 = 1,741,000 ADW
C 7. 1,200,000 + 9,300 + 24,000 + 18,300 + 36,000 + 900,000 + 65,000 + 14,700 + 3,750 + 10,900
+ 120,500 + 15,800 + 6,100 = 2,424,350 Gross Income-World
C 8. FIT , (80,000 + 27,500 ) X 20 % = 21,500
C 9. 32,000 – (14,900 + 15,400 + 6,200 = (4,500) NCLW.
Notes: 1. The final capital gains tax on sale of real property in Phil can not be computed since
the sales price and/or fair market value is/are not given.
2. The capital gain on sale of real property in Phil. is income subject to basic tax under the rules
on capital gains and losses in the case of Resident Foreign Corp. (RFC)

ANSWERS TO PROBLEMS IN CHAPTER 13
Problem 1. Domestic Corporation, 2013
1st qtr 2nd qtr 3rd qtr 4th qtr

Gross Income 480,000 865,000 1,432,000 1,982,000
Allowed Deduction 230,000 540,000 875,000 1,236,000
TNI 250,000 325,000 557,000 746,000
ITD 75,000 97,500 167,100 223,800
Tax Credits 29,000 87,500 110,500 208,100
ITP (creditable) 46,000 10,000 56,600 15,700
C6. 345,000 -217,500 = 127,500 NIA

C4. 16,000 + 15,000 + 12,500 + 14,000 + 46,000 + 10,000 + 56,600 + 13,000 = 183,100 + 25,000
=208,100 TC 4Q
Problem 2. Manila Corporation YEAR 2013

DC RFC
Gross Income 925,000 580,000
Less: Allowed Deduction 461,000 243,500
MCIT 18,500 11,600
BCIT 139,200 100,950
Income Tax Due 139,200 100,950
Tax Credits 46,347 31,000
Income Tax Payable 92,853 69,950
C1. 580,000 + 345,000 = 925,000 GIW

C2. 243,500 + 217,500 = 461,000 ADW
C3. 345,000 -217,500 = 127,500 NIA
C4. Limit A 127,500 / 464,000 x 139,200 = 38,250, 15,347, 15,347 TC FOR ITA
C5. 15,347 + 31,000 = 46,347 TOTAL TC
C6.. 16,000 + 15,000 = 31,000TOTAL TC
Problem 3. San Juan Corp. YEAR 2013

DC RFC
Gross Income 1,280,000 680,000
MCIT 25,600 13,600
BCIT 165,000 90,000
Tax Credits 173,700 110,000
Income Tax Payable (Refundable) (8,700) (20,000)

C.1 680,000+ 250,000+ 350,000 = 1,280,000 C.2 380,000 + 150,000 + 200,000 = 730,000
C.3 250,000 – 150,000 = 100,000 NI Malaysia C4. 350,000 – 200,000 = 150,000 NI USA
C5. 100,000 + 150,000 = NI Abroad C6. 63,700 + 75,000 + 35,000 =173,700Tax Credits
C.7 Limit A. LIMIT ACTUAL ALLOWED
Malaysia, 100,000 / 550,000 x 165,000 = 30,000 18,700 18,700
USA, 150,000 / 550,000 x 165,000 = 45,000 68,600 45,000
63,700
C.8 Limit B. 250,000 / 550,000 x 165,000 = 75,000 87,300 75,000
C9. 75,000 + 35,000 = 110,000 TC
Problem 4. Paranaque Corp. YEAR 2013

If Income Tax paid Abroad
A. As Allowed B. as Tax RFC
Deduction Credit
Gross Income 1,550,000 1,550,000 1,010,000
Less: Allowed Deductions 900,000 880,000 510,000
Taxable Net Income 650,000 670,000 500,000
MCIT 31,000 31,000 20,200
BCIT 195,000 201,000 150,000
ITD 195,000 201,000 150,000
Tax Credits (22,000) (42,000) (22,000)
Income Tax Still Payable 173,000 159,000 128,000
C.1 950,000 + 540,000 + 60,000 = 1,550,000 GIW C.2 510,000+370,000+20,000 = 900,000 ADW
C.3 8,500 + 13,500 = 22,000 C.4 510,000 + 370,000 = 880,000 ADW
C.5 Abroad 170,000 / 670,000 x 201,000 = 51,000, VS 20,000 = 20,000 ATC
C. 6 20,000 + 22,000 = 42,000 C.7 950,000 + 60,000 = 1,010,000
C.8 540,000 - 370,000 = 170,000 NIA
Problem 5. Makati Corp. YEAR 2013

1st qtr 2nd qtr 3rd qtr 4th qtr
Gross Income 360,000 845,000 1,357,000 1,772,000
Allowed 235,000 550,000 940,000 1,285,000
Deductions
TNI 125,000 295,000 417,000 487,000
ITD 37,500 88,500 125,100 146,100
Tax Credits (28,000) (58,500) (109,000) (165,100)
ITP (creditable) 9,500 30,000 16,100 (19,000)
C.1 13,000 + 15,000 = 28,000 TC 1Q C.2 9,500 + 34,000 + 15,000 = 58,500 TC 2Q

C.3. 15,000 + 54,500 + 9,500 + 30,000 = 109,000 TC 3Q
C 4. 94,500 + 15,000 + 30,000 + 16,100 + 9,500 + 30,000 = P 165,100 TC 4Q

===========================================================================
Problem 6. Quezon City Corp. YEAR 2013
DC RFC
Gross Income 1,544,800 814,500
MCIT 30,896 16,290
BCIT 273,540 146,850
Tax Credits 71,550 31,450
C 1. 695,000 + 550,000 + 24,500 + 38,300 + 80,000 + 7,000 + 95,000 + 55,000 = 1,544,800 GI-World
C 2. 325,000 + 308,000 = 633,000 ADW
C 3. 695,000 + 24,500 + 95,000 = 814,500 GI – Phil.
C 4. 26,700 + 4,750 = 31,450 TOTAL TC
C 5. 550,000 + 38,300 + 80,000 + 7,000 + 55,000 = 730,300 GI-Abroad
C 6. 730,300 – 308,000 = 422,300 NI- Abroad
C 7. 422,300 / 911,800 x 273,540 = 126,690 vs 40,100; 40,100 Allowed Tax Credit
C 8. 31,450 + 40,100 = 71,550 total Tax Credit
Problem 7. RSO Corp year 2013
DC RFC
Gross Income 1,020,000 620,000
Income Tax Due BCIT 75,000 51,000
Tax Credits (61,500) (37,500)
C1. 620,000 + 400,000 = 1,020,000 GI – World C2. $48,000 X P50 = P400,000

C3.$6,400 X P50 = P320,000 C4. $500 X P50 = P25,000
C2. 450,000 + 320,000 = 770,000 AD – World C4. 400,000 – 320,000 = 80,000 NI – Abroad
C4. 80,000 / 250,000 x 75,000 = 24,000 vs 25,000 Allowed Tax Credit – 24,000
C5. 7,500 + 24,000 + 30,000 = 61,500Tax Credit C6. 7,500 + 30,000 = 37,500 total Tax Credit

Problem 8. VGL Corp. 20013
DC; If Income Tax paid Abroad

a. as Tax Credit c. As allow, ded. b. RFC
Gross Income 5,000,000 5,000,000 2,500,000
Less:Allowed Deduction 3,850,000 3,926,000 1,800,000
Taxable Net Income 1,150,000 1,074,000 700,000
MCIT 100,000 100,000 50,000
BCIT 345,000 322,200 210,000
Income Tax Due 345,000 322,200 210,000
Tax Credits 177,200 126,200 126,200
Income Tax Payable 167,800 196,000 83,800
C1. 2,500,000 + 1,500,000 + 1,000,000 = 5,000,000 GIW

C2.1,800,000 + 1,200,000 + 850,000 = 3,850,000 ADW
C3. USA 300,000 / 1,150,000 x 345,000 = 90,000 45,000 45,000
Canada 150,000 / 1150,000 x 345,000 = 45,000 31,000 31,000
76,000
C4. Abroad 450,000 / 1150,000 x 345,000= 135,000 76,000 76,000
C5. 76,000 + 40,000 + 16,200 + 45,000 = 177,200 Tax Credits
C6.3,850,000+76,000 =3,926,000 ADW
C7. 40,000+ 16,200 + 45,000 = 101,200 + 25,000 = 126,200 TC
Problem 9. DEF Corp. 2012 2013

st
1 qtr 2nd qtr
Gross Income ? 1,000,000 2,300,000
Allowed Deduction ? 860,000 1,910,000
Taxable Net Income ? 140,000 390,000
BCIT 250,000 42,000 117,000
Tax Credits (280,000) (40,000) (68,000)
ITP /ITC (30,000) 2,000 49,000
C.1 990,000 / 99% = 1,000,000 – 990,000 = 10,000 WTAS

C.2 10,000 + 30,000 = 40,00 TC 1Q C.3 1,000,000 + 1,300,000 = 2,300,000 GI – 6 mos.
C.4 860,000 + 1,050,000 = 1,910,000 AD 2Q C5. 1,300,000 x 2 % = 26,000 EWTAS
C7. 250,000 - 280,000 = (30,000) ETC C6. 26,000 + 2,000 + 10,000 + 30,000 = 68,000 TC 2Q
Problem 10. EFC Corp. year 2013

DC RFC
Gross Income 3,750,000 1,500,000
Allowed Deduction 3,400,000 1,450,000
MCIT 75,000 15,000

BCIT 105,000 30,000

ITD 105,000 15,000
Tax Credits (76,000) (19,000)
ITP / ETC 29,000 (11,000)
C.1 HKGN, 200,000 / 350,000 x 105,000 = 60,000 45,000 45,000

C.2 AUS, 100,000 / 350,000 x 105,000 = 30,000 12,000 12,000
57,000
C. 3 Abroad, 300,000 / 350,000 x 105,000 = 90,000 57,0000 57,000
C4. 57,000 + 19,000 = 76,000 Tax Credit
NRFC, P1,500,000 X 30% = 450,000 ITD
ANSWERS TO CPA BOARD QUESTIONS IN CHAPTER 13
1 D 11 D
2 A 12 C P450,000
or D NGA
3 C 13 B
4 A 14 A
5 A 15 D
6 A 16 B
7 B 17 A
8 D 18 B
9 B
10 A

ANSWERS TO PROBLEMS IN CHAPTER 8. GROSS INCOME FOR CORPORATIONS, 2013
Problem 1. Domestic Corp. year 2013

Cost Price Acc. Depr. Book Value Sales Price Gain (Loss)
OE – Ord.A 67,500 19,900 47,600 22,500 OL (25,100)
Cert.of Bonds- Cap..A 126,500 126,500 249,500 CG 123,000
RMI- Ord. A 48,000 48,000 31,200 OL (16,800)
L&B- Ord. A 750,000 72,000 678,000 1,200,000 OG 522,000
Ordinary Gain 522,000

Ordinary Loss – OE (25,100)
Ordinary Loss – RMI (16,800)
Net Ordinary Gain 480,100
Net Capital Gain 123,000
Total Gain 603,100
Shares of stocks sold not thru the local stock exchange.

Selling Price (950 sh x P89.50) = P85,025
Cost Price (950 sh x P31) = 29,450
Capital Gain P55,575 x 0.05 = P2,778.75 Final Income Tax
Problem 2. Year 2013

DC
Taxable Net Income 263,000
C.1 850,000 + 50,000 + 33,000 (48,000 – 15,000) = 933,000 GI

C 2. 630,000 + 40,000 = 670,000 AD
Problem 3. – Partnership – year 2013

LTCG 58,000
STCG 38,000
Total CG 96,000
LTCL (26,000)
STCL (19,700)
Total CL (45,700)
C1. 52,000 less 30,000 = 22,000 NOG
Gross Profit from Sales 490,000

GP from sale of OA 22,000
NCG 50,300
Less: AD (315,000)

TNI 247,300
MCIT 11,246
BCIT 74,190
ITD 74,190
Problem 4. Partnership year 2013
C1. Gross Income – Phil. 485,000 + 24,000 + 17,500 + 32,500 + 113,000 = 672,000
C2. Gross Income – World 485,000 + 360,000 + 24.000 + 36,000 + 17,500 + 24,500 + 5,000 + 50,000 +
17,500 + 134,000 = 1,153,500
C3. 300,000 + 200,000 = 500,000 ADW
C4. FOR DC, RFC
d. 6,900 x 20% 1,380
f. 50,000 x 20% 10,000
Total Final Income Taxes 11,380
C5.
DC RFC
Gross Income 1,153,500 485,000
Allowed Deduction (500,000) (300,000)
MCIT 23,070 9,700
BCIT 196,050 55,500
ITD 196,050 55,500
Tax Credits
ITP / ETC
Problem 5. Corporation year 2013

DC RFC GI-ABROAD
Business Income- Phil. 600,000 600,000 0
Business Income- USA 300,000 0 300,000
Unidentified Income-
600,000/900,000x 150,000 =100,000 150,000 100,000 50,000
Gross Income 1,050,000 700,000 350,000
Less: Business Expenses
Philippines P500,000 500,000
USA 200,000 700,000 0 200,000

Problem 6. Corporation year 2013

DC RFC
Gross Income 1,979,500 1,896,500
Allowed Deduction 1,500,000 1,500,000
MCIT 39,590 37,930
BCIT 143,850 118,950
ITD 143,850 118,950
C 1. 1,800,000 + 16,500 + 75,000 + 65,000 + 8,000 + 15,000 = 1,979,500 GIW
C 2. 1,800,000 + 16,500 + 65,000 + 15,000 = 1,896,500 ADW
C 3. 75,000 + 8,000 = 83,000 GIA
Problem 7. YEAR 2013

a. Gross profit from sale of merchandise P
452,965
d. Interest income on government bonds/securities 45,000
f. Interest income on trade receivables-Philippines 42,000
g. Property dividend from a resident foreign corporation 12,000
h. Rental Income on real property-abroad 73,000
i. Rental income on personal property-Philippines 24,000
n. Awards and prizes from Philippines 75,000
o. Refund for overpayment of deductible business
Expense in prior year 43,000
q Interest on loans to customers 7,500
s. Recovery of bad debts written off in 2006 23,500
u. Compensation/damages received for lost profit
(such as patent infringement) 300,000
y. Gain from sale of real property in Makati used in business 243,600
z. Dividend income from a non-resident foreign corporation 28,000
aa. Interest income from bonds/securities of private corporation 17,600
l.. Gain from sale of shares of stocks of a foreign

Corporation held as capital asset 49,300
m. Profit from short sale of property 18,500
p. Profit from retirement of bonds of Y corporation 48,500
w. Long-term capital gain 82,000
x. Short-term capital gain 53,700
bb. Liquidation dividend (275,000 – 200,000) 75,000
Total Capital Gain 327,000
cc. Cost of marketable securities becoming worthless (50,000)
Final income tax = (36,000 + 36,000 + 260,000) x 20% = P66,400

ANSWERS TO PROBLEMS IN CHAPTER 9:

ALLOWED DEDUCTIONS FOR CORPORATIONS AND PARTNERSHIPS
Problem 1.- Domestic Partnership – year 2013

Allowed Deduction (1,037,250)
MCIT 33,000
BCIT 183,750
ITD 183,750
C1. 1,500,000 + 150,000 = 1,650,000 = Gross Income

C2. 1,650,000 – (970,000 + 35,000 ) = 1,005,000 = 645,000 Net Income before Charitable Contribution
C3. 645,000 x 5% = 32,250 Limit on Allowed Charitable Contribution
C4. 970,000 + 35,000 + 32,250 = 1,037,250 Allowed Deduction from Gross Income
Problem 2. Domestic Corp. – year 2013
Itemized Deduction Optional Standard Deduction

Gross Income 5,600,000 Gross Income 5,600,000
Allowed Deduction 4,365,000 Allowed Deduction 2,240,000
Taxable Net Income 1,23,500 Taxable Net Income 3,360,000
MCIT 112,000 MCIT 112,000
BCIT 370,500 BCIT 1,008,000
C 1. 4,100,000 + 15,000 + 250,000 = 4,365,000 AD C2. 5,600,000 x 40% = 2,240,000
Problem 3. Domestic Corp. Year 2013

Itemized Deduction Optional Standard. Deduction
Jan. to Jan. to Dec. Jan. to Jan. to Dec.
Sept. Sept.
Gross Income 2,650,000 3,592,500 2,650,000 3,592,500
Allowed Deduction 1,800,000 2,445,000 1,060,000 1,437,000
Taxable Net Income 850,000 1,147,500 1,590,000 2,155,500
MCIT 53,000 71,850 53,000 71,850
BCIT 255,000 344,250 477,000 646,650
ITD 255,000 344,250 477,000 646,650
Tax Credits 255,000 0 477,000
ITP 255,000 89,250 477,000 169,650
C.1 2,650,000 + 24,500 + 30,000 + 13,000 + 875,000 = 3,592,500 Gross Income

C.2 1,800,000 + 85,000 + 560,000 = 2,445,000 Allowed Deduction
C.3 86,000 + 47,000 – 120,000 = 13,000 NCG

C 4. 850,000 X 30% = 255,000 Tax Credit

C5. 75,000 – 160,000 = (85,000) – Net ordinary Loss –Allowed Deduction
C6. 2,650,000 X 40 % = 1,060,000 OSD
C7. 3,592,500 X 40 % = OSD 1,437,000
Problem 4. Corp. year 2013

DC RFC
Gross Income 1,305,000 934,000
Allowed Deduction 535,000 305,000
MCIT 26,100 18,680
BCIT 231,000 188,700
ITD 231,000 188,700
C.1 860,000 + 350,000 + 74,000 + + 21,000 = 1,305,000 – Gross Income-World

C.2 305,000 + 230,000 = 535,000 Allowed Deduction-World
C.3 860,000 + 74,000 = 934,000 Gross Income-Phil.
Problem 5. Corp. year 2013

DC
MCIT 22,890
BCIT 90,780
ITD 90,780
C.1 860,000 + 375,000 + 163,000 + 140,000 = 1,538,000 GS

C.2 214,000 + 179,500 = 393,500 COS
C.3 1,538,000 – 393,500 = 1,144,500 GI
C.4 246,000 + 150,000 + 125,000 + 30,000 + 27,500 + 48,000 + 105,000 + 17,200 + 12,500 + 80,700 =
841,900 AD
Problem 6. –Domestic Corp.

Itemized ded. Optional ded.
Gross Income-Accrual basis 784,000 784,000
Allowed Deduction 467,039.12 313,600
Taxable Net Income 316,960.88 470,400
MCIT 15,680 15,680
BCIT 95,088.26 141,120
ITD 95.088.26 141,120
C1.
Gross Service Fees 935,000
Cost of Services 223,000
GP from Sale of Services 712,000
Add: Rent 15,000
Misc. Income 35,000
Gain from sale of OE 22,000
C2. 784,000 X 40 % = P 313,600 OSD
b. Supplies Expense 41,600

d. Light & Water (12,500 – 4,200) 8,300
e. Salaries 70,800
f. Insurance Premium 10,500
g. Depreciation 14,500
h. Telephone/Communication 12,300
i. Rentals 60,000
j. Interest Expense (7,300 – 4,000) less (3,500 x 0.33) 1,155 2,145
k. Representation (25,000 – 4,300) 20,700
l. Advertising 12,900
m. Fully Deductible Contributions 4,600
n. Traveling 30,000
o. Grossed Up Monetary Value of Fringe Benefit to officers (75,000 / 68%) 110,294.12
p. Other business expense 68,400
Total 467,039.12
Problem 7. Resident Foreign Corp. 2013
2013 20014 2015

Gross Income 2,600,000 4,500,000 8,750,000
Allowed Deduction 3,000,000 5,300,000 7,400,000
TNI (400,000) (800,000) 1,350,000
MCIT 52,000 90,000 175,000
BCIT 0 0 405,000
ITD 52,000 90,000 405,000
Tax Credits 0 0 (142,000)
ITP 52,000 90,000 263,000
EMCIT- current (52,000) (90,000) 0
C1. 6,200,000 + 400,000 + 800,000 = 7,400,000 ADFGI

C 2. 52,000 + 90,000 = 142,000 EMCIT CO

Problem 8. Resident Foreign Partnership – year 2013

Itemized OSD
Gross Sales 3,750,000 3,750,000
Less: SRA 3,750,000 x 8% 300,000 300,000
Net Sales 3,450,000 3,450,000
Less: Cost of Sales 3,750,000 x 45% 1,687,500 1,687,500
Gross Profit 1,762,500 1,762,500
Add: Other Income (1,687,500 x 70%) x 15% 177,187.50 177,187.50
Gross Income 1,939,687.50 1,939,687.50
Less: Allowed deductions 1,687,500 x 70% 1,181,250 775,875
Taxable Net Income 758,437.50 1,163,812.50
MCIT 1,762,500 x 0.02 35,250 35,250
BCIT 758,437.50 x 0.30 227,531.25 349,143.75
ITD 227,531.25 349,143.75
Tax Credit 227,531.25 x75% 170,648.44 170,648.44
ITP 56,882.81 178,495.31
O S D is = P 1,939,678.50 X 40 % = P 775,875
Problem 9. Domestic Corp. Year 2013

MCIT 10,566
BCIT 50,067.90
ITD 50,067.90
C1.
Gross Profit as reported P540,000
Add: Purchase Disc. 3,200
Less: Sales Returns & Discounts (20,400 + 8,200) (28,600)
Gross Profit from Sales 514,600
Add: Interest Income 10,600
Dividend Income 3,100

C2
Salaries & Wages (142,000 – 8,000) 134,000
Traveling Expense 21,000
Rent Expense (46,000 – 14,000) 32,000
Light, Heat & Water 14,300
Postage & Telephone 1,800
Representation/Entertainment (12,600 – 6,000) 6,600
Advertising Expense 4,500
Depreciation Expense 3,500
Repair & Maintenance Expense 4,700
Other Operating Expenses 50,800
Loss from Fire (76,000 – 40,000) 36,000
Deductible Interest Expense (37,900 – 693)* 37,207
Allowed Charitable Contribution 15,000

ANSWERS /SOLUTIONS TO PROBLEMS IN CHAPTER 14 SPECIAL TOPICS

AND CHAPTER 15 COMMUNITY TAX
Problem 1.Mr. X year 2013

Taxable Estate
Less: Allowed Deduction (264,000)
Income distributed to Heirs
Son-after EWTAS (52,941)
Daughter -before EWTAS (75,000)
Total Allowed Deduction (391,941)
Net Income 88,059
Less: Allowed Personal Ex. (20,000)
Income Tax Due

On 30,000 2,500.00
On 38,059 x 15% 5,708.85
Total 8,208.85
Daughter Son
Compensation Income 450,000
Business Income 517,000 300,000
Share of Income on Estate 75,000 52,941
Gross Income 592,000 802,941
Less: Allowed Deductions
Business Expenses (319,000) (186,500)
Net Income 273,000 616,441
Less: Allowed Personal Exempt.
Basic Personal Exemp. (50,000) (50,000)
Addtional Per. Exemp. (100,000) (50,000)
Total (150,000) (100,000)
Less: Tax Credit - EWTAS 15 % (11,250) (7,941)

Problem 2. Mr. Y year 2013

Taxable Estate
Rental Income on Real Prop. 296,000
Interest Income on Loan 4,500
Depreciation (75,000)
Income distributed to Heirs (80,000)
Total Allowed Deduction (155,000)
Net Income 145,500
Less: Allowed Personal Ex. (20,000)
Income Tax Due

On 70,000 8,500.00
On 55,500 x 20% 11,100.00
Total 19,600.00
Problem 3. Mr. R year 2013

Taxable Trust
Expenses 385,000
Income given to Mr. R 65,000
Income given to Mr. T 95,000 (545,000)
Net Income 205,000
Less: Allowed Personal Exem. (20,000)
MR. R MR. T
Business Income 980,000 495,000
Income from Trust 65,000 95,000
Gross Income 1,045,000 590,000
Less: Allowed Expenses (525,000) (210,000)
Net Income 520,000 380,000
Less: Allowed Personal Exemp. (50,000) (50,000)


Less: EWTAS 15% (9,750) (14,250)
C1. 65,000 x 15% = 9,750 EWTAS

C2. 95,000 x 15% = 14,250 EWTAS
Problem 4. Mr.Z year 2013 Combined

Trust 1 Trust 2 Trust
Gross Income 395,000 195,000 590,000
Less: Allowed Deduction (147,000 (63,500) (210,500)
Income given to Mr. X (85,000) (46,000) (131,000)
Income given to Mr. M (25,000) (15,000) (40,000)
Total Allowed Deductions (257,000) (124,500) (381,500)
Net Income 138,000 70,500 208,500
Less: Allowed Personal Exemption. (20,000) (20,000) (20,000)*
Income Tax Due 18,100 5,575 34,625
Income Tax Paid -Trust 1/2 23,675
Income Tax Still Payable 10,950
Trust 1 Trust 2 Total trusts

ITD 22,917 11,708 34,625
IT Pd. 18,100 5,575 23,675
ITP 4,817.00 6,133 10,950
C1. 138,000/208500 x 34625 = 22,917

C2. 70,500 / 208,500 x 34625 = 11,708
Problem 5. XYZ year 2013 X & Y Partnership

Ordinary Gen Prof
Grosss Income 975,000 975,000
Less: Allowed Deductions (510,000) (510,000)
MCIT (2%) 19,500 0
BCIT (30%) 139,500 0
Income Tax Due 139,500 Exempt
Net Income After Tax 325,500 465,000

a) Ordinary Partnership
MR. X MR. Y
Gross Income 850,000 1,050,000
Share in Net Income of
Partnership 4:6 0 0
Total Gross Income 850,000 1,050,000
Less: Allowed Deductions (920,000) (710,000)

APE (50,000) (50,000)
Total Allowed Deductions (970,000) (760,000)
Taxable Net Income (Loss) (120,000) 290,000
Income Tax Due 0 62,000
Share in NI of Ord. Part. 130,200 195,300

Final Tax Rate x 0.10 x 0.10
Final Income Tax Withheld 13,020 19,530
b) Gen Prof Partnership

MR. X MR. Y
Gross Income 850,000 1,050,000
Share in Net Income of
Partnership 4:6 186,000 279,000
Total Gross Income 1,036,000 1,329,000

APE 50,000 50,000
Total Allowed Deductions 970,000 760,000
Taxable Net Income (Loss) 66,000 569,000
Less: Tax credit (27,900) (41,850)
Ncome Tax Payable/Excess (20,000) 105,230
Note 1. Share in net income from ordinary partnership is subject to Final Income Tax at 10%
and therefore excluded from taxable gross income subject to basic income tax.
C1. 325,500 x 4/10 = 130,200 C2. 325,500 x 6/10 = 195,300
C3. Share in net income from general professional partnership is subject to income subject to
basic income tax as part of Taxable gross income.
C4. 465,000 x 4/10 = 186,000 to X
C5. 186,000 x 0.15 = 27,900 WTAS
C6. 279,000 x 0.15 = 41,850 WTAS

Problem 6. Mr.B year 2013 A & B Partnership
General General
Prof. Part. Co-Part.
Gross Profit from Sales 1,500,000 1,500,000
Net Capital Gain 15,000 15,000
Rental Income 50,000 50,000
Gross Income 1,565,000 1,565,000
MCIT NA 31,300
BCIT (30%) NA 187,500
Income Tax Due Exempt 187,500
MR. A
Dividend Income-RFC 13,500 13,500
Gross Business Income 798,000 798,000
Net Capital Gain 1,500 1,500
Share in Net Income of Partnership 3/9 208,333 at 10% FT
Gross Income 1,021,333 813,000
Allowed Personal Exemption 125,000 125,000
Total Allowed Deductions 685,000 685,000
Income Tax Due 5-32% 75,900 20,100
Less: EWTAS 15% (208,333 x 15%) 31,250 0
C.1 STCG (100%) 25,000 Less: LTCL (100%) 10,000 = 15,000 NCG
C2. LTCG (50%) 7,500 less: STCL (100%) 6,000 = 1,500 NCG TO A
C3. 625,000 X 3/9 = 208,333 SINIOGPP
C4. 437,500 X 3/9 = 145,833 SINIOOP

Problem 7. Year 2013

Combined
Trust 1 Trust 2 Trust
Gross Income 720,000 480,000 1,200,000
Less: Allowed Deduction 350,000 167,900 517,900
Income given to Grantor 55,500 46,815 102,315
Income given to Beneficiary 259,000 187,260 446,260
Total Allowed Deductions 664,500 401,975 1,066,475
Net Income 55,500 78,025 133,525
Less: Allowed Personal Ex. 20,000 20,000 20,000
Income Tax Due 3,325 6,703.75 17,205
Income Tax Paid -Trust 1/2 10,028.75
Income Tax Still Payable 7,176.25
Allocation of Income Tax
Due 7,151,30 10,053.70 17,205
Income Tax Paid 3,325 6,703.75 10,028.75
Income Tax Still due 3,826.30 3,349.95 7,176.25
C1. Income to be Distributed to beneficiary

Trust 1 - 370,000 x 70%= 259,000
Trust 2 - 312,100 x 60%= 187,260
C.2 Income given to grantor:

Trust 1 -370,000 x 15% = 55,500
Trust II- 312,100 x 15% = 46,815
C.3 WTAS on Income given to Beneficiary:

Trust 1 - 259,000 x 15% = 38,850
Trust 2 - 187,260 x 15% = 28,089
C.4 WTAS on Income given to grantor:

Trust 1 – 55,500 x 15% = 8,235
Trust 2 – 46,815 x 15% = 7,022.25
C5.. Allocation of Income Tax Due
Trust 1 55,500 x 17,205 = 7,151.30
133,525
Trust 2 78,025 x 17,205 = 10,053.70
133,525 17,205

Continuation of Problem 7. Grantor Beneficiary

Gross Income 986,500 136,400
Income from Trust 102,315 446,260
Gross Income 1,088,815 582,660
Less: Allowed Expenses (654,300) 0
Net Income 434,515 582,660
Less: Allowed Personal Exemp. 50,000 50,000
Income Tax Due 90,354.50 135,451.20
Less: EWTAS 15% 15,257.25 66,939.00
Income Tax Payable 75,097.25 68,512.20
Income from Trust 1 and trust 2

C1. To Grantor 46,815 + 55,500 = 102,315
C2. To Beneficiary. 259,000 + 187,260 = 446,260
C3. Total WTAS/TC to grantor, 8,235 + 7,022.25 = 15,257.25
C5. Total WTAS/TC to beneficiary, 38,850 + 28,089 = 66,939
Problem 8. Joint Venture

a) Taxable Venture JV ABC XYZ
Business Income 35,000,000 5,600,000 7,500,000
Share in Net Income of JV (5/8) 0 at 0% FT at 0% FT
Gross Income 35,000,000 5,600,000 7,500,000
Less: Allowed Expenses 21,500,000 3,700,000 5,200,000
Taxable Net Income 13,500,000 1,900,000 2,300,000
MCIT 2% 700,000 112,000 150,000
Income Tax Due -BCIT (30%) 4,050,000 570,000 690,000
Net Income after Tax 9,450,000 1,330,000 1,610,000
b) Non-Taxable venture JV ABC XYZ

Business Income 35,000,000 5,600,000 7,500,000
Share in Net Income of JV (5/8) 0 5,192,308 8,307,692
Gross Income 35,000,000 10,792,308 15,807,692
Less: Allowed Expenses 21,500,000 3,700,000 5,200,000
Taxable Net Income 13,500,000 7,092,308 10,607,692
MCIT 2% NA 215,846 316,154
Income Tax Due -BCIT (30%) Exempt 2,127,692 3,182,308
Net Income after Tax NA 4,964,616 7,425,384

Problem 9. Co-Ownership, 2013

Taxable Tax-Exempt
Co-Ownership Co-ownership
Gross Income 700,000 700,000
MCIT (2%) 14,000 NA
BCIT (30%) 132,600 NA
Income Tax Due 132,600 Exempt
a) Taxable co-ownership Lilian Virgilio

Compensation Income 230,600 0
Business Income 890,000 1,450,000
Share in NI of Comon property (equally) 0 0
Gross Income 1,120,600 1,450,000
Less: Allowed Deductions 750,000 1,180,000
APE 50,000 50,000
Total Allowed Deductions 800,000 1,230,000
b) Non - Taxable co-ownership Lilian Virgilio

Compensation Income 230,600 0
Business Income 890,000 1,450,000
Share in NI of Comon property (equally)
Gross Income 1,341,600 1,671,000
Less: Allowed Deductions 750,000 1,180,000
APE 50,000 50,000
Total Allowed Deductions 800,000 1,230,000
1. If a taxable co-ownership, it is treated as an ordinary corporation. The share in the net income after
income tax of of the taxable co-ownership, of each individual co-owners is subject to 10% final income tax,
(287,300/2 = 143,650)
2. If a non-taxable co-ownership, it's share in the exempt net income of the non=taxable co-ownership of each individu
co-owner is part his/her taxable gross income subject to basic income tax.
(700,000 - 258,000 = 442,000 / 2 = 221,000)
3. 175,000 x 4 qtrs = 700,000

Answers, Solutions to Questions and Problems in Chapter 15: Community Taxes
Prob. 01. Makisig

C1. BCT is P 5.00 + ACT of P 1,370 = P 1,375
C2. P 1,370,000 / P 1,ooo = 1,370 X P 1.00 = P 1,370
C3. 412,600 + 897,750 + 60,000 = P 1,370,350
Pr0b. 02. XYZ

C1. BCT is P 500 + ACT of P 2,736.68 = P 3,236.68
C2. P 6,841,700 / P 5,000 = 1,368 X P 2.00 = P 2,736.68
C3. 1,200,000 + 12,350 + 4,350 5,625,000 = P 6,841,700
Prob. 03. Ralph, Vilma

C1. BCT is P 10.00 + ACT of P 4,075 = P 4,085
C2. P 4,075,450 / P 1,000 = 4,075 X P 1.00 = P 4,075
C3, 375,450 + 3,500,000 + 200,000 = P 4,075,450
Prob. 04. ABC

C1. BCT is P 500 + ACT of P 1,110 = P 1,610
C2. P 2,777,200 / P 5,000 = 555. X P 2.00 = P 1,110
C3. 3,78,000 – 1,956,000 =1,824,000 + 36,450 + 41,750 + 875,000 = P 2,777,200
Prob. 05. Inhabitant

1. If individual
C1. BCT is P5.00 + ACT of P 3,308 = P 3,313
C2. P 3,308,150 / P 1,000 = 3,308 X P 1.00 = P 3,308
C3. 2,500,000 + 675,450 + 132,700 = P 3,308,150
2. If corporation
C1. BCT is P 500 + ACT of P 3,248 = P 3,748
C2. P 8,120,300 / P 5,000 = 1,624 X P 2.00 = P 3,248
C3. 2,500,000 + 5,475,000 + 132,700 + 12,600 = P 8,120,300
Prob. 06. Resident partnership

C1. BCT is P 500 + ACT of P 3,260 = P 3,760
C2. P 8,50,000 / P 5,000 = 1,630 X P 2.00 = P 3,260
C3. 3,650,000 + 4,500,000 = P 8,150,000


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SOLUTIONS TO INCOME TAX (IIT, CIT) 2013-2014 EDITION, VGL

ANSWERS TO MCQ CPA BOARD IN CHAPTER 10: CORPORATE INCOME TAX

ANSWERS TO CPA BOARD QUESTIONS IN CHAPTER 11

ANSWERS / SOLUTIONS TO PROBLEMS: IN CHAPTER 11

Problem 1. Las Pinas Company (RFC) year 2013

C1. 62,000,000 X 85% = 52,700,000 AD

CORPORATE INCOME TAXATION Page 1

Problem 2. Various company Year 2013

c) NRFC d) NROV e) RIC

C.1 975,000 + 640,000 = 1,615,000 GI – World

Problem 3. Enchanted Corp. year 2013

C1.4,800,000 + 145,000 = 4,945,000 GI

Net Income After Income Tax 521,500

Prob. 4. Nueva Ecija Co. RFC

CORPORATE INCOME TAXATION Page 2

C1. 5,000,000 X 15% = 750,000 NBPRA

Problem 5; Davao Corp., year 2013

Problem 6. Cebu Corp. year 2013

MCIT 42,000 26,000

C 1. 2,800,000 – 1,500,000 = 1,300,000 GPP

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Problem 7. YEAR 2013

C.1 (860,000 – 18,500) = 841,500 + 465,000 = 1,306,500 Gross Income World

Problem 8. – Domestic Partnership

C1. 1,500,000 + 125,000 = 1,625,000 Gross Income

Problem 9. Masagana Corp.-2013

c) NRCFO g) NPH e) NRLOA f) NRFC h) RIC

Problem 10. ABC Corporation YEAR 2013

CORPORATE INCOME TAXATION Page 4

MCIT (2%) 20,900 11,600

Problem 11. TRS Corporation

Problem 12. TOK TOK Colleges, 2013

Problem 13. Magaling Hospital, year 2013

C.1 12,500,000 + 8,400,000 = 20,900,000 GI C.2 17,600,000 + 1,200,000 = 18,800,000 AD

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Problem 14 Bulacan Corp. 2013

ANSWERS TO CPA BOARD QUESTIONS IN CHAPTER 12:

CORPORATE INCOME TAXATION Page 6

ANSWERS /SOLUTIONS TO PROBLEMS IN CHAPTER 12:

Problem 1. Bohol Corp year 2013

Land Land & Bldg

B. Sale of Shares of Stocks

Selling Price P186,700

Problem 2. Palawan Company year 2013

Gross Income 665,650

CORPORATE INCOME TAXATION Page 7

Problem 3. Tacloban Corp. year 2013

Problem 4. Las Pinas Company (RFC) year 2013

Gross Income 70,000,000

Problem 5. Enchanted Corporation year 2013

C1. 4,800,000 + 125,000 = 4,925,000 GI C2. 4,200,000 X 85% = 3,570,000 AD.

Problem 6. Nuva Ecija Company, 2013

MCIT 1,476,000 846,000

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Problem 7. Davao Corporation 2013

C 1. (1,500,000 + 2,500,000 ) – 1,700,000 = 2,300,000 COS

Problem 8. Cebu Corporation, 2013

MCIT 45,900 27,500

C 1. 2,800,000 – 1,500,000 + 75,000 = 1,375,000 GIP

CORPORATE INCOME TAXATION Page 9

Problem 9. RDN Corporation,

MCIT 48,487 30,284