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Seatwork #1. On a separate sheet of paper, answer the following problems.

Provide a solution and box


your final answer for each item/s in each problem.

Part I. Application of computing for Tax Base as the basis for VAT

1. The Pastry Shop sells cakes and pastry items to well-known hotels around the Metro Manila area. The
hotels are allowed credit based on the track record of the hotels. The total amounts received or
receivable from the sales by the Pastry Shop in April 2014 were P224,000, including the value-added tax.
75% of the sales are normally on account. How much is the VAT on the sales for the month of April
2014?

2. The following data are taken from the sale of real estate dealer on January 2, 2012:

Consideration the deed of sale P5,000,000


Fair Market Value per tax declaration 4,800,000
Fair Market Value per BIR 5,200,000
Selling Price of an adjacent lot sold on the same date 6,000,000
Payments on the consideration:
January 2, 2012 1,000,000
January 3, 2013 2,000,000
January 4, 2014 2,000,000
How much is the output tax for January 2, 2012, January 2, 2013, and January 2, 2014, using 12% VAT
rate?

3. The following data are taken from the books of a dealer in securities:
Selling Price, shares held as inventory P3,000,000
Selling Price, shares held as investment 2,000,000
Acquisition Cost, shares held as inventory 1,000,000
Acquisition Cost, shares held as investment 1,500,000
Other Income, shares held as inventory 200,000
How much is the output tax using 12% rate?

4. A VAT-registered contractor has the following selected VAT exclusive data for the month of July 2013:
Collections from the contracts completed in June 2013 P500,000
Advances from contracts to be completed in August 2013 300,000
Collections from the contracts completed in July 2013, net of 10% retention 198,000
on billings transferred by the payor to the account of the contractor
Materials charged with the services rendered by a sub-contractor, July 2013 100,000
Payments for services rendered by a sub-contractor, July 2013 200,000
How much is the:
a. Gross Receipts for the month of July 2013?
b. Output tax for the month of July 2013 using 12%?
5. A VAT-registered taxpayer has the following VAT-Exclusive data for the month of January 2013:
Accounts receivable, January 1, 2013 P500,000
Sales on account for the month of January 1,000,000
Cash Sales for the month of January 300,000
Accounts Receivable, January 31, 2013 700,000
Cash Purchases for the month of January 2013 400,000

How much is the output tax for the month of January, 2013 using 12% rate assuming the tax payer is a:
a. Trader
b. Service Provider

Part II. Output VAT


1. The following information taken from the books of a VAT-registered enterprise was provided to you:
Domestic Sale of Goods P3,000,000
Sales of Packaging materials to an export oriented enterprise 2,000,000
whose export sales exceed 70% of the total annual production
Local Sales of goods to Asian Development Bank 500,000
Consignment of goods (not returned within 60 days following the date of consignment) 200,000
Goods transferred for the personal use of the owner (cost is P90,000), market value 100,000
How much was the total taxable sales and the output tax using 12% VAT Rate?

2. Mr. Cris T. James, not VAT-registered, imported an article from Japan for his personal use. The invoice
value of the imported article was Y1,000,000(1Y=P.35). The following were incurred in connection with
the importation:
Insurance P15,000
Freight 10,000
Postage 5,000
Wharfage dues 7,000
Arrastre Charges 8,000
Brokerage Fees 25,000
Facilitation Fees 3,000
The imported article was subject to P50,000 customs duties and to P30,000 excise tax.
How much was the VAT on importation using 12% rate?

3. A customer, with his beloved wife, had lunch at Dean and Deluca. He ordered the following (with the
corresponding VAT inclusive price): Margherita Parma Pizza, P780; Cesar Salad P380; New York
Cheesecake, P220; Hot Lemon Grass Tea, P110; Mango Basi Smoothie, 160.
Dean and Deluca added 10% service charge to the selling price.
How much was the (1)output VAT and the (2) total amount due including passed-on VAT and service
charge?
Note: Service charge and local taxes are not part in the tax base for VAT computation.

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