DE LA SALLE UNIVERSITY (DLSU) Short Quiz 8

Taxation (INTAXTN) Second Term 2018-2019

Set B March 12, 2019

Name: ________________________________________________________________ Section: __________

Answers
1. 6. 11. 16.

2. 7. 12. 17.

3. 8. 13. 18.

4. 9. 14. 19.

5. 10. 15. 20.

Instruction: Choose the letter of the best answer from the given choices. University policies on
academic honesty as stated and inferred in the student handbook are strictly enforced.

1. Which of the following transactions of VAT-registered taxpayer is exempt from VAT following the
provisions of the law?
a. Sale of appliances by appliance dealer.
b. Sale of a warehouse used for storage of inventories by a manufacturer.
c. Tax services rendered by a CPA.
d. Export sale of electronic products by an export-oriented enterprise.

2. Which of the following transactions is exempt from VAT?

a. Export sales by a non-VAT entity.
b. Services rendered within the Philippines to a non-resident foreign corporation.
c. Services rendered to a PEZA-registered entity.
d. Sale of goods to a tax-exempt charitable institution.

3. Which of the following transactions is subject to VAT in 2019?

a. Sale of medicines prescribed for diabetes by hospital pharmacy to outpatients.
b. Parking fees collected from car owners by taxpayer with annual gross receipts of P2,000,000.
c. Association dues collected by lessor of commercial properties.
d. Sale of gold to Bangko Sentral ng Pilipinas (BSP).

4. The following are valid support for purposes of claiming input tax, except:
a. VAT invoices for purchases of office supplies.
b. VAT official receipts for construction services.
c. VAT billing statement for air transportation services.
d. Single Administrative Document (SAD) and Statement of Settlement of Duties and Taxes (SSDT) for
importation of office equipment.

5. Which of the following transactions is not subject to withholding VAT?

a. Sale of goods to government institution.
b. Royalties collected by a non-resident foreign corporation for use of know-how or technology in the
Philippines.
c. Services rendered by a non-resident foreign corporation outside the Philippines for a domestic
corporation.
d. Lease of equipment from a non-resident foreign corporation brought into the Philippines.

6. Which are of the following transactions is subject to VAT?

a. Sale of fresh vegetables by a supermarket.
b. Sale of school supplies by sari-sari store with annual gross sales of P2,500,000.
c. Sale of rice by a rice dealer.
d. Sale of fresh fruits served to customers by a restaurant.

7. The following are transaction deemed sales subject to VAT, except:

a. Condominium units held for sale distributed as property dividend.
b. Inventories transferred in payment of debt.
c. Food products inventories withdrawn and served during business meeting.
d. Donation of supplies inventories.

8. The following sale of services may qualify for VAT zero-rating, except:
 a. Consultancy services rendered within the Philippines to a foreign corporation with Philippine branch
paid in foreign currency.
b. Electricity generated by wind power paid in Philippine peso.
c. Construction services rendered to a PEZA-registered enterprise for construction of plant paid in
Philippine peso.
d. Transport of passengers by a Philippine air carrier from the Philippines to a foreign country paid in
foreign currency.

9. Which of the following will not qualify as sale of services for VAT purposes?
a. Spare parts supplied for car maintenance services.
b. Sale of cooked food by a restaurant’s take-out counter.
c. Air transportation services.
d. Broadcasting services.

10. For a dealer in securities, gross receipts means:

a. Gross selling price of securities which was actually collected.
b. Gross selling price less cost of securities sold.
c. Gross selling price of securities regardless of whether collected or not.
d. Gross selling price before deduction for discounts not meeting the requirements but net of sales
returns.

Use the following problem for the next three questions:

Aladdin Corporation launched its latest curve TV. On June 30, 2018, it tapped the services of GetMe
Advertising Agency, for 15% commission, to air its TV commercial in Channel X on its prime-time spot in the
evening. The contracted price was P450,000, ex-VAT, for each 30-seconder air time of TV commercial.
Aladdin availed 15 air time spots with 5% prompt payment discount if paid before airing. It directly paid
Channel X for the media cost and GetMe for the agency fee on July 15, 2018 before airing.

11. How much output tax should be declared by Channel X for the quarter ended September 30, 2018 on the
above transaction?
a. P654,075.
b. P688,500.
c. P769,500.
d. P810,000.

12. How much output tax should be declared by GetMe for the quarter ended September 30, 2018 on the
above transaction?
a. P115,425.
b. P121,500.
c. P769,500.
d. P810,000.

Use the following problem for the next two questions:

Silky Janitorial Agency is engaged in the sale of manpower services which registered with the BIR on April 1,
2018. During the second quarter of 2018, it entered into a contract with the local government of Manila City for
janitorial services. The contract provides that Silky’s service fee was 10% of the salaries of janitors assigned to
Manila City. The salaries of janitors for April amounted to P15,000, May for P18,000 and June for P20,000.
Manila City paid the service fees and salaries to Silky for the months of April and May, on April 1 and May 1,
respectively. However, the June service fees and salaries were paid on July 5.

13. How much output tax should be declared by Silky for the quarter ended June 30, 2018?
a. P47.
b. P76.
c. P4,356.
d. P6,996.

14. Assuming Silky had gross receipts from non-government sales subject to 12% VAT of P63,700 and actual
common input tax of P10,000, how much input tax should be charged to cost or expense for the quarter
ended June 30, 2018?
a. P34.
b. P54.
c. P698.
d. P1,089.

Use the following problem for the next two questions:

Briesce Company, Inc., a VAT registered forklift dealer, purchased ten (10) units of forklift from Japan at
P500,000 each during the third quarter of 2018. It incurred the following charges in transporting the units to
the Philippines:
 Custom duty P102,500 per unit
Excise tax 250,000 per unit
Insurance ½ of 1%
Storage 2%

Briesce sold eight (8) units of forklift the third quarter of 2018 for P1,200,000 each (exclusive of VAT), subject
to prompt payment discount of 2%.

15. How much VAT importation was paid by Briesce when it imported the forklift?
a. P103,800.
b. P738,000.
c. P1,023,000.
d. P1,038,000.

16. Assuming there are no other purchases, how much is the VAT payable/excess input tax credits of Briesce
for the third quarter of 2018?
a. P90,960.
b. P105,960.
c. P114,000.
d. P129,000.

Use the following problem for the next three questions:

On April 30, 2018, Happy Life Corporation bought an office building from Revitalite Realty Corporation for a
contract price of P25,000,000, excluding VAT. Happy Life paid 20% downpayment with agreed monthly
installment of P200,000, excluding VAT, payable starting May 30, 2018. The zonal value of the property
P28,000,000 while its fair market value was at P30,000,000 on April 30, 2018. The office building had a useful
life of 30 years.

17. How much output tax should be declared by Revitalite for the second quarter of 2018?
a. P777,600.
b. P950,400.
c. P3,360,000.
d. P3,600,000.

18. Assuming Happy Life paid 10% downpayment on April 30, 2018, how much output tax should be declared
by Revitalite for the second quarter of 2018?
a. P348,000.
b. P417,600.
c. P590,400.
d. P3,600,000.

Use the following problem for the next two questions:

Mango Bravo Inc. decided to enter into a one-year contract with Macho Men Security Agency for security
services. This is intended to provide all the security service requirements of its branches in Metro Manila.
Macho Men billed Mango Bravo P1,436,000, VAT inclusive for the month of September 2018. This amount
includes P1,100,000 salaries of security guards. Mango Bravo paid the entire amount on November 15, 2018.

19. Assuming Macho Men issued VAT OR for the agency fee and non-VAT acknowledgement receipt for the
salaries of the guards, how much output tax should be declared for the quarter ended December 31,
2018?
a. P36,000.
b. P40,320.
c. P153,857.
d. P172,320.

20. Assuming Macho Men issued VAT OR for the entire amount collected, how much output tax should be
declared for the quarter ended December 31, 2018?
a. P36,000.
b. P40,320.
c. P153,857.
d. P172,320.

GOOD LUCK AND GOD BLESS!!!