MULTIPLE CHOICE VALUE ADDED TAX

TEST 1. TRUE OR FALSE

1.

6.

11.

16.

2.

7.

12.

17.

3.

8.

13.

18.

4.

9.

14.

19.

5.

10.

15.

20.

TEST 2.

MULTIPLE CHOICE - THEORIES

1.

8.

15.

22.

2.

9.

16.

23.

3.

10.

17.

24.

4.

11.

18.

25.

5.

12.

19.

6.

13.

20.

7.

14.

21.

TEST 3. MULTIPLE CHOICE THEORY

1.

6.

11.

16.

2.

7.

12.

17.

3.

8.

13.

18.

4.

9.

14.

19.

5.

10.

15.

20.

TEST 4. MULTIPLE CHOICE PROBLEMS

1.

ANSWER:

Cash sales
Open account sales
Installment sales
Consignment sales, April 15
Total sales
Rate of tax
Output tax
2.

ANSWER:

P 200,000
100,000
100,000
100,000
500,000
12%
60,000

Total sales
Multiply by

P 220,000
3/28

75

Value-added tax
3.

ANSWER:

23,571

Export sales by VAT registered persons are zero rated sales.

4.

ANSWER:

Total landed cost

Rate of tax
VAT payable
5.

ANSWER:

P 250,000
12%
30,000

On purchase of goods

P120,00
0
18,00
0
15,000
153,00
0
36,00
0
117,00
0

On purchase of services
Carry over from previous quarter
Total
Less: Input taxes on purchase returns
Net creditable input tax
6.

ANSWER:

Output tax (120,000 + 24,000)

P144,00
0
117,00
0
27,00
0

Less: Input tax (see solution to Question

5)
VAT payable
7.

ANSWER:

8.

ANSWER:

Output tax (469,000 x 3/28)

Less: Input tax
On purchases (57,400 x 3/28)
Transitional input tax Inventory (204,000 x 50%) x 2%
2,040
Actual VAT paid
16,000
Allowed (higher)
VAT payable
9.

ANSWER:

10.

ANSWER:

50,250
6,150

16,000

76

22,150
28,100

Output tax:
Sales
Less: Sales returns
Net sales

6,800,000
200,000
6,600,00
0
3/28
5,500,000
300,000
5,200,00
0
12%
624,000
9,500

Multiply by
Purchases, net of input tax
Less: Purchase returns
Net purchases
Rate of tax
Input tax
Add: Deferred input tax carry-over
VAT payable
11.

ANSWER:

707,143

633,500
73,643

Gross receipts (371,250 / 99%)

P
375,000
3/2
8
40,179

Multiply by
Value added tax

Note: The transportation contractor is subject to VAT because it is engaged in the

carriage of the products of A.
12.

ANSWER:

Output tax:
Sales up to Dec. 15 (313,500 x 3/28)
Inventory on Dec. 16 (190,000 x 12%)
Input tax:
Purchases (215,000 x 12%)
Deferred input tax carry-over
VAT payable
13.

ANSWER:

33,589
22,800 P 56,389
25,800
3,500

Dutiable value on importation

(12,500/10%)
Customs duty

P
125,000
12,50
0
9,50
0
147,00
0
12
%
17,64
0

Other charges
Total
Rate of tax
VAT payable
14.

ANSWER:

29,300
27,089

Output tax (4,200,000 x 12%)

P504,00

77

0
Less: Input taxes
On purchases (3,850,000 x 3/28)
Input taxes carry-over
VAT payable
15.

ANSWER:

412,500
22,000

Output tax (8,721,500 - 240,500) x 3/28

P
908,679

Less: Input taxes

On purchases (7,398,000 - 215,000) x 3/28
Carry over
VAT payable
Note:

16.

434,500
69,500

P
769,607
58,00
0

827,607
81,072

This is an actual CPA Board Examination Problem. The phrase "carried over
from the previous quarter" is more appropriate than "carry over to the next
quarter."

ANSWER:

Transitional input tax (P300,000 x 2%)

P 6,000

Note:
The transitional input tax is based on the 2% of the beginning inventory on
December 31 because the actual VAT paid on such inventory is not given in the
problem.
17.

ANSWER:

Note: There is a debit to input tax of P6,000 to establish that account in the books.
The credit is inventory because it reduces the amount appearing in the books by
P6,000 which is the amount set up for input tax.
18.

ANSWER:

Output tax (P770,000 x 3/28)

Less: Input tax (414,400 x 3/28)
VAT payable

P 82,500
44,400
38,100

Note: The transitional input tax which is based on the higher amount between 2% of
the inventory and actual VAT paid is allowed only when the taxpayer is subject
to VAT for the first time. In this problem, the XYZ Merchandising is already a
VAT-registered taxpayer.
19.

ANSWER:

Output tax (P336,000 x 3/28)

Less: Input tax (100,000 x 12%)
VAT payable

P 36,000
12,000
24,000

78

ANSWER:

Output tax (P550,000 x 3/28)

Less: Input tax (P165,000 x 3/28)
VAT payable

P 58,929
17,679
41,250

TEST 5. MULTIPLE CHOICE PROBLEMS

1.

ANSWER:

Sales, local
Less: Sales returns, local
Net sales
Multiply by
Export sales
Output tax
Less: Input tax
Purchases
Less: Purchase returns
Net purchases
Multiply by
VAT payable
Answer:

P 367,500
15,500
352,000
3/28

P 263,900
17,500
246,400
3/28

24,000

13,400
10,600

Hotel
Restaurant food and refreshments
Restaurant wines and beer
Total gross receipts

24,640.00
37,440.00
19,440.00
81,520.0
0
12%
9,782.40

Times
Output tax
Answer:

26,400.00
11,314.29

Output tax: (200,000 x 12%)

Less: Input tax
Purchases (70,000 x 12%)
8,400
Transitional input tax:
On inventory (50,000 x 2%)
1, 000
Actual VAT paid
5,000
Allowed (higher)
5,00
0
VAT payable
Answer:

P 37,714.29
0 .
37,714.29

79

Sales, food and softdrinks

Sales, wines and beer
Purchases, food and softdrinks
Purchases, wines and beer
Net
Rate of tax
VAT payable

P 280,550
152,400
P 110,220
101,250

432,950
211,470
221,480
12%
26,577.60

Answer: D
Food and refreshments
Wines and beer
Cost food and refreshments
- wines and beer
Net
Times
VAT payable

P 116,200
58,600
51,000
39,500

P 174,800
90,500
84,300
12%
10,116

Answer: D
Food and refreshments
Wines and beer
Total gross receipts
Rate of tax
Percentage tax

P 116,200
58,600
174,800
18%
31,464

Answer: B
Accounts receivable, Apr 1

P
180,000
850,0
00
1,030,00
0
120,000
910,000
12%
109,200
57,600
51,600

Add: Bills on completed work

Total
Less: Accounts receivable, Jun 30
Gross receipts
Rate of tax
Output tax
Less: Input tax (480,000 x 12%)
VAT payable
Answer: B
CIF

225,645.0
0
3,550.00
1,525.
00
2,295.
00
6,000.
00
307.
00
2,550.

Bank charges
Wharfage
Arrastre charges
Customs duty
Brokerage fee
Marine cargo insurance

80

00
241,872.
00
12
%
29,024.6
4

Landed cost
Rate of tax
VAT payable on importation
Answer: C
Output tax (275,000 x 3/28)

P
29,464.29

Less: Input taxes

On importation
Freight to warehouse (2,000 x 12%)

29,024.6
4
240.0
0

VAT payable

29,264.64
199.65

Answer: D
Purchases of goods for domestic sales
Purchases of supplies on domestic sales
Purchase of services
Purchases of goods for export
Total purchases
Multiply by
Input tax

374,000
69,848
154,000
55,000
652,848
3/28
69,948

Answer: C
Output tax:
Domestic sales
Domestic sales to export traders
Total
Multiply by

330,000
274,996
604,996
3/28

Input tax:
Goods for domestic sales
Supplies on domestic sales
Services
Goods for export
Total
Multiply by
VAT payable

374,000
69,848
154,000
55,000
652,848
3/28

Answer: C (see computation in Question 15 below)

Answer: D (see computation in Question No.
15)
Answer: C (see computation in Question No.
15)
Answer: C

81

P
64,821

69,948
( 5,127)

Output tax

April
P 70,000

Less: Input taxes

(47,000)

On importation
VAT paid April

May
P
42,000

June
P 192,000
( 162,000)

(55,000)
( 8,000) (13,000)
________

( 21,000)
( 15,000)

VAT payable

15,000

6,000)

.
Output taxes (2nd quarter)
Less: Input taxes
On importation
Net
Less: Tax paid, April
Excess tax to be carried
over

192,000
162,000
21,000

183,000
9,000
15,000
( 6,00
0)

Answer: C
The amount of P 93 is inclusive of the
tax.
Answer:
Output tax "A" (2,240,000 x 3/28)

P
240,000

Less: Input tax

Purchases (537,600 x 3/28)
Input tax on purchases of:
Goods, A & B (772,800 x 3/28 x
20/25)
Supplies, A & B (280,000 x 3/28 x
20/25)
Machineries (274,400 x 3/28 x
20/25)
VAT payable
Supporting computation:
Sales A (2,240,000/112%)

57,600
66,240
24,00
0
23,52
0

68,640

2,000,00
0
500,00
0
2,500,00
0

Sales B
Total sales
Answer: A
Output tax:
Contract 1
Contract 2

1,200,000
950,00
0
200,00

Contract 3

82

171,360

0
2,350,00
0
x
12%

Gross receipts
Rate of tax
Input tax:
Materials (850,000 -[850,000 x 5%])
Subcontractors (1,250,000 50,000)
Advances to subcontractors
Total
Rate of tax

807,500
1,200,000
150,000
2,157,500
12%

VAT payable
19.

282,00
0

258,90
0
23,10
0

Answer: D
Cash sales
Sales on account

660,800
246,40
0
22,40
0
16,80
0
19,04
0
8,960
974,400
3/28
104,4
00
31,200
73,200

Consignment sales
Payment to creditors
Distributed to employees
Property dividends
Gross selling price
Multiply by
Output tax
Less: Input tax (291,200 x 3/28)
VAT payable
Answer: C
Sales
Less:

Portion exempt from VAT (66,000 x

50%)
Sales subject to VAT
Times
Output tax

83

P 66,000
33,000
33,000
12%
3,960