University of Perpetual Help System laguna – Isabela Campus

Minante 1, Cauayan City, Isabela

College of Business and Accountancy

Business Taxation
2 nd
Semester, A.Y. 2017 - 2018

Name: ________________________________________ Date: ___________

Course Year & Section: _____________________ Score: __________

Final Quiz 2

(Erasure/Alteration means wrong)

MULTIPLE CHOICE: Choose the best answer. Encircle the letter of your choice. Show you solutions
for questions 11 to 18.

1. Which of the following businesses is allowed a presumptive input value-added tax? (1 point)

A. Manufacturer of dried fish.

B. Manufacture of canned goods
C. Manufacturer of packed juices.
D. Manufacture of packed noodles.

2. Statement 1: The input value-added tax on purchase of capital goods valued at P1,000,000
shall be spread over the life of the property if the life of property is less than 5 years?

Statement 2: The input value-added tax on purchase of capital goods exceeding P1,000,000
shall be spread over 60 months if the life of the property is equivalent to 5 years or more.

A. Both are true.

B. Both are false.
C. Only statement 1 is true.
D. Only statement 2 is true.

3. Sale of raw materials or packing materials to export-oriented enterprise is considered export

sales when export sales of such enterprise (1 Point)

A. Exceed 50% of total annual production.

B. Exceed 70% of total annual production.
C. Exceed 33 1/3% of total annual production.
D. Exceed 66 2/3% of total annual production.

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4. Which of the following transactions is subject to zero-rated value-added tax? (1 point)

A. Sale to Philippine Economic Zone Authority.

B. Sales by non-agricultural, non-electric, non-credit cooperatives.
C. Services by regional or area headquarters of multi-national corporation.
D. Importation of professional instruments and implements by settlers in the Philippines.

5. A VAT-registered person whose total sales for the year did not exceed P1,919,500 is (1 point)

A. Exempt from VAT.

B. Subject to 0% VAT.
C. Subject to 12% VAT.
D. Subject to percentage tax.

6. Export sales of non-VAT registered person is (1 point)

A. Exempt from VAT.

B. Subject to 0% VAT.
C. Subject to 12% VAT.
D. Subject to percentage tax.

7. Statement 1: The term “export sales” for VAT purposes shall include and limited to sale of
gold to the Bangko Sentral ng Pilipinas. (1 point)

Statement 2: The term “goods” for value added tax purposes shall mean all tangible and
intangible objects which are capable of pecuniary estimation and shall include, but not
limited to radio, television, satellite transmission and cable television time.

A. Both are true.

B. Both are false.
C. Only statement 1 is true.
D. Only statement 2 is true.

8. The value-added tax on the purchase of taxable goods, property, and services by any person
whether or not he has taken the necessary steps to be registered (1 point)

A. Sales tax.
B. Input tax.
C. Output tax.
D. Excise tax.

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9. One of the following is not a transaction deemed sale. (1 point)

A. Transfer, use or consumption not in the ordinary course of business of goods or

properties.
B. Consignment of goods if actual sale is not made within 60 days following the date
such goods were consigned.
C. Retirement from or cessation of business with respect to inventories of taxable goods
on hand as of the date of such retirement cessation.
D. Distribution or transfer to shareholders or investors of goods or properties as share in
the profits of vat-registered person or to creditors in payment of debt.

10. Statement 1: Annual gross receipts of P 5,000,000 received by radio and TV broadcast
franchise holder, which is registered as VAT is subject to 12% VAT

Statement 2: The gross receipts of P 20,000,000 for the year reported by non-VAT TV
broadcast franchise are subject to VAT.

A. Both are true.

B. Both are false.
C. Only statement 1 is true.
D. Only statement 2 is true.

11. ABC made the following sales of goods during the month of June 2017, exclusive of VAT:

Cash sales P200,000

Open account sales 100,000
Installment sales 100,000
Note: receipt from installment sales

Consignment made (net of VAT):

June 15, 2017 100,000
April 25, 2017 100,000
April 15, 2017 100,000

Output tax is (2 points)

A. P 34,000
B. P 50,000
C. P 60,000
D. P 72,000

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Items 12 - 16
One cold rainy evening, Lady Osang saw a handsome man, chilling in a corner of a street, bathe
in the rain. Seeing an opportunity that very moment, Lady Osang rushed to offer her last
remaining piece of “rain coat” to the young man, Mr. Moan Moan, for a big sum worth 1,000
pesos. Assume VA-registered whenever applicable.

12. Suppose Mr. Moan got the big money inside his very wet jeans, how much VAT will result in
the sale transaction?

A. 120 Php
B. 107 Php
C. 134 Php
D. None

13. Suppose Mr. Moan, instead, offered Lady Osang the necessary service of carrying on her
behalf the banana inventories of the lady for the “rain coat” in exchange, how much will be
the related VAT on the transaction?

A. 120 Php
B. 107 Php
C. 134 Php
D. None

14. Suppose Mr. Moan got some 600 pesos in his pocket. If Lady Osang however accepts the
money, hence, incurring a net loss of 400 pesos, how much will be the related VAT?

A. 107 Php
B. 72 Php
C. 64 Php
D. None

15. One year later, Mr. Moan and Lady Osang met again. This time, the handsome man, in
gratitude for the kindness of the lady way back, decided to buy all the banana cue’s in her
stall worth 5,000 pesos.

How much is the related VAT therefrom?

A. 600 Php
B. 536 Php
C. 672 Php
D. None

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16. Suppose, however, Lady Osang, hesitant to accept the offer, instead sold her inventories
worth 5,000 pesos for a loss of 20%. How much will be the resulting VAT, if any?

A. 480 Php
B. 429 Php
C. 600 Php
D. None, its on a loss

17. Sony International acquired 80% of Sony Philippines. During the year, Sony Phil’s incurred
advertising expenses worth P20 million. Sony International decided to subsidize the
subsidiary for the amount incurred. How much output VAT can Sony International claim
from the pertinent transaction?

A. 2,400,000
B. 2,142,857
C. 2,688,000
D. Output VAT not allowed

18. Nokia Corporation acquired 60% of Alcatel Lucent on a condition that the latter will provide
the exclusive services to the former in its mobile division. The service contract, worth P20
million, however provides that the subsidiary will receive payment from the parent on a
reimbursement-on-cost basis only, without realizing profit. How much will be the related
VAT therefrom?

A. 2,400,000
B. 2,142,857
C. 2,688,000
D. The entity is not profit-oriented, hence, VAT not applicable.

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