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JMJ MARIST BROTHERS BLT 134 - QUIZ

NOTRE DAME OF MARBEL UNIVERSITY ELSA A. RETONEL, CPA, MBA


ACCOUNTANCY DEPARTMENT February 3, 2016

NAME ________________________________________ TIME ____________________


INSTRUCTIONS: WRITE YOU ANSWERS USING BALLPEN ONLY.

TEST I. TRUE OR FALSE. WRITE TRUE IF YOU AGREE WITH THE SENTENCE, ELSE, FALSE.
TRUE 1. Generally, partnerships are to be taxed at 30%.
FALSE 2. The tax due from a partner of GPP is to be computed using corporate income tax.
TRUE 3. Tax on income of estate and trust is to be computed using individual graduated tax
schedule.
TRUE 4. Estates and trusts are allowed to deduct from their income either itemized
deductions or optional standard deductions (OSD)
FALSE 5. The income on estates and trusts are allowed to have a personal exemptions of
P50,000 similar to individual taxpayer.
FALSE 6. Fringe benefits subject to FBT are benefits given to the rank-and-file employees.
FALSE 7. The cash or non-cash considerations given as fringe benefits is the basis in
computing the FBT.
FALSE 8. The fringe benefits given to employees are creditable from the tax to be paid by
the employer.
TRUE 9. The income from partnership if distributed to partners are finally taxed at 10%.
TRUE 10. Generally, fringe benefits given to non-resident alien not engaged in trade or
business in the Philippines is to be taxed at 25%.

TEST II. SHORT PROBLEMS (NO NEED TO PRESENT SOLUTIONS)


PROBLEM 1: Ms. Megan Beauty died on February 15, 2015. Her estate is now under judicial
settlement. The estate had P5,500,000 gross income from February 15, 2015. Expenses related to this
income was P3,700,000. The heirs/beneficiaries are entitled for a 50% on net income. How much was
the tax due for the year? (2 PTS.)
ANSWER: P246,600

PROBLEM 1 - SOLUTIONS - ESTATES


Gross Income of the Estates 5,500,000.00
Less: Itemized deductions 3,700,000.00
Distribution to heirs 900,000.00
Personal exemptions 20,000.00
Total Allowable Deductions 4,620,000.00
Taxable Income of the Estates 880,000.00

First P500,000 125,000.00


Excess of P380,000 x 32% 121,600.00
Income Tax Due 246,600.00
PROBLEM 2. Mr. Juan Maganto created an irrevocable trust designating his two daughters, aged 4 and 3
as beneficiaries. Under the terms of the trust, only two-third of the income shall be distributed when
the beneficiaries reach 21 years of age. For the 2015, income of the trust was P3,500,000. Compute for
the tax due. (2 PTS.)
ANSWER: P331,933.33

PROBLEM 2 - SOLUTIONS - TRUSTS


Gross Income of the Estates 3,500,000.00
Less: Undistributed income to heirs 2,333,333.33
Personal exemptions 20,000.00
Total Allowable Deductions 2,353,333.33
Taxable Income of the Estates 1,146,666.67

First P500,000 125,000.00


Excess of P646,666.67 x 32% 206,933.33
Income Tax Due 331,933.33

PROBLEM 3. Mr. dela Cruz maintains two irrevocable trusts that name his three children, all minors, as
common beneficiaries. The terms of the trusts provide that no income shall be distributed to the
beneficiaries until the youngest should become 25 years of age. Compute for the total tax due and tax
due from each trust. (4 PTS.)
Trust 1 Trust 2
Gross Income 1,450,000 2,600,000
Deductions 500,000 1,100,000
ANSWER: TOTAL TAX DUE P742,600.00
TAX DUE ON TRUST 1 P287,946.94
TAX DUE ON TRUST 2 P454,653.06

PROBLEM 3: CONSOLIDATED TRUSTS


Trust 1 Trust 2 Total
Gross Income 1,450,000.00 2,600,000.00 4,050,000.00
Less: Deductions 500,000.00 1,100,000.00 1,600,000.00
Total 950,000.00 1,500,000.00 2,450,000.00
Less: Personal Exemptions 20,000.00
Taxable Income from Trusts 2,430,000.00

Income Tax Due


First P500,000 125,000.00
Excess of P500,000 x 32% 617,600.00
Income Tax Due 742,600.00

Trust 1
950,000.00 x 742,600.00 287,946.94
2,450,000.00

Trust 2
1,500,000.00 x 742,600.00 454,653.06
2,450,000.00
PROBLEM 4. Felipe Sandoval, Filipino, and a manager of San Miguel Corp., received a cash fringe
benefits in the amount of P150,000 last December 15, 2015.
Required: Compute the fringe benefits and the fringe benefits tax due thereon. (2 PTS.)
ANSWER: a. FRINGE BENEFITS EXPENSE P220,588.24 b. FBT P70,588.24

Monetary Value 150,000.00


Fringe Benefits Expense (Grossed-up Value) 220,588.24
FB Tax 70,588.24

PROBLEM 5. Chris Lawrence, a non-resident alien not engaged in trade, received a fringe benefits from
Nestle Phils. in the amount of P76,500 last December 2015.
Required: Journalize the entries to record the fringe benefits and the tax due thereon. (3 PTS.)

Monetary Value 76,500.00


Fringe Benefits Expense (Grossed-up Value) 102,000.00
FB Tax 25,500.00

Fringe Benefits Expense 102,000.00


Cash 76,500.00
FBT Payable 25,500.00

PROBLEM 6. Melissa Cruz, a manager of HSBC, an OBU, received P188,900 as fringe benefits last
December 2015.
Required: Compute the fringe benefits and the fringe benefits tax due thereon. (2 PTS.)
ANSWER: a. FRINGE BENEFITS EXPENSE P222,235.29 B. FBT P33,335.29

Monetary Value 188,900.00


Fringe Benefits Expense (Grossed-up Value) 222,235.29
FB Tax 33,335.29

PROBLEM 7.
PROBLEM 7. David
David Celdran,
Celdran, aa Filipino,
Filipino, employed
employed byby Solane
Solane International,
International, aa multi-national
multi-national petroleum
petroleum
company is
company is housed
housed in
in Makati
Makati City
City wherein
wherein the
the employer
employer pays
pays the
the rent
rent in
in the
the amount
amount of
of P50,000
P50,000 per
per
month.
month.
Required: 7.1
Required: 7.1 Compute
Compute the
the fringe
fringe benefits
benefits and
and FBT
FBT due
due thereon
thereon in
in each
each quarter.
quarter.
7.2 Journalize
7.2 Journalize the
the transaction
transaction in
in aa month.
month. (5
(5 PTS.)
PTS.)
ANSWER: a. FRINGE BENEFITS EXPENSE P88,235.29
ANSWER: a. FRINGE BENEFITS EXPENSE _____________________ b. FBT P13,235.29
b. FBT ___________________

Monetary Value 75,000.00


Fringe Benefits Expense (Grossed-up Value) 88,235.29 A
FB Tax 13,235.29 B

Fringe Benefits Expense 29,411.76


Salaries Expense 25,000.00
Cash 50,000.00
FBT Payable 4,411.76

PROBLEM 8. BPI purchased house and lot to house its manager in Zamboanga City wherein its title of
ownership will be transferred to the employee. The following are the data given in this purchase
Zonal Value P 5,500,000
Acquisition Cost 4,800,000
Required: 8.1 Compute the fringe benefits and tax due thereon.
8.2 Journalize the transaction : (5 PTS.)
ANSWER: a. FRINGE BENEFITS EXPENSE P7,388,235.29 b. FBT P2,588,235.29
Monetary Value 5,500,000.00
Grossed-up Value 8,088,235.29
FB Tax 2,588,235.29
Fringe Benefits Expense 7,388,235.29

Fringe Benefits Expense 7,388,235.29


Cash 4,800,000.00
FBT Payable 2,588,235.29

9. Manila Lending Corp. lends money to its manager in the amount of P2M with an interest of 7% per
annum.
Required: 9.1 Compute the fringe benefits and tax due thereon.
9.2 Journalize the transaction : (5 PTS.)
ANSWER: a. FRINGE BENEFITS EXPENSE P147,058.82 b. FBT P47,058.82
Required: Journalize the transaction related to fringe benefits.
Monetary Value 100,000.00
Fringe Benefits Expense (Grossed-up Value) 147,058.82
FB Tax 47,058.82

Fringe Benefits Expense 147,058.82


Interest Income 100,000.00
FBT Payable 47,058.82

TEST III. COMPREHENSIVE PROBLEM (PRESENT THE SOLUTIONS IN GOOD FORM)


ALPHA, BRAVO AND CHARLIE PARTNERSHIP, a GPP, with a P/L ratio of 4:3:3 has a gross receipts of P2M
in year 2015. The following are their individual data of their other source of income: (10 pts.)
Civil Status Income from Income from Tax
Trading Employment Withheld
Alpha Single P1,600,000 P 580,000 P 150,000
Bravo Married P 800,000 P 275,000
Charlie Married with 2 children P 2,800,000 P 200,000
Required: Compute the tax due from each partner under the following assumptions: The partnership
has cost of services of P1.2M and opted to use the 40% OSD as their deductions in the partnership.
ALPHA BRAVO CHARLIE
4 3 3
Share in Partnership's Income 480,000.00 360,000.00 360,000.00
Add: Other Source of Income
Business Income (Note 1) 960,000.00
Compensation Income 580,000.00 800,000.00 2,800,000.00
Total Income 2,020,000.00 1,160,000.00 3,160,000.00
Less: Personal Exemptions (50,000.00) (50,000.00) (50,000.00)
Additional Exemptions (100,000.00)
Taxable Income 1,970,000.00 1,110,000.00 3,010,000.00
Income Tax Due 595,400.00 320,200.00 928,200.00
Less: Tax Withheld 150,000.00 275,000.00 200,000.00
Income Tax Due and Payable 445,400.00 45,200.00 728,200.00

Note 1 ALPHA
Business Income 1,600,000.00
Less: OSD 640,000.00
Taxable Income from the Business 960,000.00
ANNUAL GRADUATED TAX TABLE FOR INDIVIDUAL
If taxable income is: Tax Due is:
Not over P10,000 5%
Over P10,000 but not over P30,000 P500 + 10% of the excess over P10,000
Over P30,000 but not over P70,000 P2,500 + 15% of the excess over P30,000
Over P70,000 but not over P140,000 P8,500 + 20% of the excess over P70,000
Over P140,000 but not over P250,000 P22,500 + 25% of the excess over P140,000
Over P250,000 but not over P500,000 P50,000 + 30% of the excess over P250,000
Over P500,000 P125,000 + 32% of the excess over P500,000

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