Instruction: Determine the best answer per question given. This quizzer is intended to test your knowledge on Corporate Taxation under the Philippine Income Tax System.
Estimated time: One (1) hour
(1)
Hungry Shark corporation, in
its third year of operations, had the following data:
Gross Income, Philippines P 2,000,000.00
Gross Income, foreign 1,000,000.00
Expenses, Philippines 1,000,000.00
Expenses, foreign 500,000.00
If the corporation is a domestic
corporation, the taxable income is:
(a)
P1,000,000
(b)
P2,000,000
(c)
P500,000
(d)
P1,500,000
(2)
One of the following statements
is not correct. Which is it?
(a)
For domestic corporations, the
capital gain tax on sale of shares of stock are the same as the capital gain on
such assets of resident citizens of the Philippines.
(b)
The final tax on interest on
foreign currency deposit under the expanded foreign currency deposit system for
domestic corporations is the same as that of resident citizens of the
Philippines at seven and one-half percent (7 ½%)
(c)
Dividend received by a domestic
corporation from a domestic corporation subject to tax is exempt from income
tax of the corporation receiving the dividend.
(d)
Prizes exceeding P10,000
received by a domestic corporation is subject to a final tax of twenty percent
(20%)
(3)
A domestic corporation, in its
fourth year of operations, had the following data for the year:
Net sales P 2,000,000.00
Capital gain on direct sale at
P500,000 to a buyer of shares of
a domestic corporation 200,000.00
Capital gain on sale thru a real
estate broker of land and building
outside Philippines for P5,000,000 1,000,000.00
Dividend from a domestic
corporation 50,000.00
Interest on bank deposit 40.000.00
Cost of sales 600,000.00
Quarterly corporate income tax
paid 190,000.00
Operating Expenses 500,000.00
The income tax still due at the
end of the year is:
(a)
P125,000
(b)
P80,000
(c)
P270,800
(d)
P220,800
(4)
Statement 1: The minimum
corporate income tax of a trading or manufacturing concern is based on gross
profit from sales.
Statement 2: The minimum corporate
income tax of a service concern is based on net revenues or receipts less
direct costs of services.
(a)
Both statements are true
(b)
Both statements are false
(c)
The first statement is true but
the second statement is false
(d)
The first statement is false
but the second statement is true
(5)
The following are true, except
one. Which is exception:
(a)
A domestic corporation is
subject to MCIT on gross income from within and outside the Philippines.
(b)
A resident corporation is
subject to the MCIT on gross income from within the Philippines.
(c)
A non-resident corporation is
not subject to the MCIT
(d)
The optional gross income tax
(GIT) applies to domestic and resident corporations.
(6)
Selected cumulative balances were taken from the records of Flappy Bird
Corporation, a domestic corporation, in its fourth year of operations in 2013,
which had an income tax refundable of P10,000 for a preceding year for which
there is a certificate of tax credit.
The income tax due (or refundable)
at the end of the year:
(a)
P321,000
(b)
P371,000
(c)
P43,000
(d)
P76,000
(7)
Which of the following
statements is wrong?
(a)
The quarterly income tax of a
corporation for any of the first, second or third quarters is filed, and the
tax due is paid, within sixty (60) days after the close of the quarter.
(b)
The annual income tax return of
a corporation is filed, and the tax due is paid on or before the fifteenth day
of the fourth month following the close of the taxable year
(c)
There can be an income tax
refundable in a quarterly income tax return of a corporation
(d)
There can be an income tax
refundable in the final income tax return of a corporation
(8)
One of the following statements
is wrong. Identify. The improperly accumulated earnings tax imposed on
corporations:
(a)
Is calculated to force
corporations to pay-out dividends
(b)
Is computed on the improperly
accumulated income over several years
(c)
Is based on the net income per
books after the income tax
(d)
Is based on a statutory formula
for improperly accumulated income
(9)
All, except one, of the
following, are not subject to the improperly accumulated earnings tax (IAET).
Which is the exception?
(a)
Publicly-held corporations
(b)
Banks and other financial
intermediaries
(c)
Insurance Companies
(d)
Service Enterprises
(10)The
following except one, give rise to the presumption that a corporation is
improperly accumulating profits. Identify the exception:
(a)
The corporation is mere holding
company
(b)
The corporation is an
investment company
(c)
The corporation permits its
profit to accumulate beyond the reasonable needs of the business
(d)
The corporation is a service
enterprise
(11)Angry
Birds Inc., a domestic corporation, had the following selected data for 2009,
the accumulated earnings for which year the Bureau of Internal Revenue (BIR)
considered to be improper:
Cost of Sales P 2,000,000.00
Minimum Corporate Income Tax 110,000.00
Business expenses 1,000,000.00
Interest on Philippine currency
bank deposit 50,000.00
Capital gain on sale directly to
buyer of shares 120,000.00
Dividend income from domestic
corporation 60,000.00
Dividends declared and paid during
the year 500,000.00
Maturing bonds in 2010 150,000.00
The improperly accumulated
earnings tax (IAET) is:
(a)
P175,000 (b) P264,300 (c)
P256,300 (d)
380,300
(12)A mother
corporation is abroad, with business in the Philippines through its branch in
the Philippines. Which of the following statements is wrong?
(a)
In a year, the branch in the
Philippines is subject to a profit remittance tax on its remittance of profits
to the mother company abroad, even if the profits from which the remittance was
made was a prior year’s profits.
(b)
The profit remittance tax is
fifteen (15%) percent of the total amount or profit for remittance, as applied
for with the bank.
(c)
The bank with which the
application for remittance was filed would be the withholding agent of the
Bureau of Internal Revenue
(d)
Even activities registered with
the Philippine Economic Zone Authority (PEZA), from the profits from which the
remittance is applied for, will be subject to the profit remittance tax.
(13)Statement
1: A private educational institution is a special corporation subject to income
tax on all its income at ten percent (10%)
Statement 2: A private educational
institution may be treated as an ordinary corporation subject to all the income
tax rules on corporation.
(a)
Both statements are true
(b)
Both statements are false
(c)
First statement is true but
second statement is false
(d)
First statement is false but
second statement is true
(14)Statement
1: Corporations, agencies or instrumentalities owned or controlled by the
government shall pay the income tax as their counterpart private corporations.
Statement 2: The Government
Service Insurance System and the Social Security System are subject to income
tax.
(a)
Both statements are true
(b)
Both statements are false
(c)
First statement is true but
second statement is false
(d)
First statement is false but
second statement is true
(15)Corporations
exempt from income tax are enumerated under Section 30 of the National Internal
Revenue Code.
Statement 1: They are not subject
to income tax on income received which are incidental or necessarily connected
with the purposes for which they were organized and are operating.
Statement 2: They are subject to
income tax on income of whatever kind and character from any of their properties,
real or personal, or from any activity conducted for profit, regardless of the
disposition of such income.
(a)
Both statements are true
(b)
Both statements are false
(c)
First statement is true but
second statement is false
(d)
First statement is false but
second statement is true
(16)Which of
the following is treated as a corporation?
(a)
General partnership in trade
(b)
General professional
partnership
(c)
Joint venture or consortium for
construction project
(d)
Joint venture or consortium for
engaging in energy operations under a service contract with the government.
(17)Temple Run
Company is a general professional partnership for gaming applications, with Mr.
Temple and Mr. Run as partners and equally participating in the income and
expenses. The following are the data for the partnership and the partners in
the calendar year:
The net taxable income of Temple
Run Company is:
(a)
P250,000 (b) P410,000 (c)
P60,000 (d) P -0-
(18)Using the
information on question 17, what is the income tax due of Temple Run Company:
(a)
P75,000 (b) P123,000 (c)
P18,000 (d) P -0-
(19)Using the
information on question 17, what is the net taxable income of Mr. Temple:
(a)
P80,000 (b) P250,000 (c)
P125,000 (d) P -0-
(20)Using the
information on question 17, what is the net taxable income of Mr. Run:
(a)
P80,000 (b) P250,000 (c)
P125,000 (d) P -0-
(21)Zombie
Tsunami Corp., a domestic corporation, is engaged in architectural design
services. The following are pertinent data:
Gross receipts P 5,000,000.00
Sales returns and allowances
200,000.00
Sales discounts 250,000.00
Cost of services 2,250,000.00
Deductions 1,000,000.00
The Optional Corporate Income Tax or Gross Income Tax of Zombie Tsunami is:
(a)
P345,000 (b) P195,000 (c)
P682,500 (d)
P750,000
(22)Candy
Crush Inc., a domestic corporation has the following data in 2013:
Gross Sales P 4,000,000.00
Cost of Sales 1,500,000.00
Business Expenses 1,000,000.00
The Gross Income Tax of Candy
Crush assuming it is a trading business:
(a)
P375,000 (b) P600,000 (c)
P480,000 (d)
P125,000
(23)Using the
same information on question 22, the Optional Corporate Income Tax of Candy
Crush assuming it is a service business:
(a)
P375,000 (b) P600,000 (c)
P480,000 (d)
P125,000
Use the following
information for question 24 through 27
In 2006, Skater Boy Corporation, a
resident foreign corporation, was on its sixth year of operation. The following
data pertain to its operation in the Philippines for the years 2006 and 2007:
(24)The
regular corporate income tax for 2006 is:
(a)
P6,000
(b)
P12,000
(c)
P14,000
(d)
P15,000
(25)The income
tax due for 2006
(a)
P6,000
(b)
P12,000
(c)
P14,000
(d)
P15,000
(26)The
minimum corporate income tax for 2007:
(a)
P6,000
(b)
P12,000
(c)
P14,000
(d)
P15,000
(27)The normal
corporate income tax for 2007:
(a)
P6,000
(b)
P12,000
(c)
P14,000
(d)
P15,000
(28)Reasonable
needs of the business is inconsistent with the concepts of IAET when:
(a)
The direct correlation of
anticipated needs to the accumulation of profits is proved.
(b)
It is not necessary for the
purpose of the business considering all the circumstances of the case
(c)
The “immediacy test” under the
American jurisprudence is adopted in Philippine jurisdiction
(d)
Construed as immediate needs of
the business including reasonable anticipated needs
(29)For
purposes of determining the Improperly Accumulated Taxable Income for a taxable
year, the following, except one, are added to that year’s taxable income. Which
one?
(a)
Income exempt from tax
(b)
Income excluded from gross
income
(c)
Income subject to final
withholding tax
(d)
The amount of net operating
loss carry-over (NOLCO)
(30)For
purposes of determining the Improperly Accumulated Taxable Income for a taxable
year, the following except one, are reduced from that year’s taxable income
after appropriately adding certain items. Which one?
(a)
10% improperly accumulated
earnings tax
(b)
Income tax paid/ payable for
the taxable year
(c)
Dividends actually or
constructively paid/ issued
(d)
Amount reserved for the
reasonable needs of the business
(31)Which of
the following is not true?
(a)
For purposes of the MCIT, the
taxable year in which business operations commenced shall be the year in which
the domestic corporation registered with the BIR.
(b)
Firms which were registered
with BIR in 1994 and earlier years shall be covered by the MCIT beginning
January 1, 1998.
(c)
Firms which were registered
with the BIR in any month in 1998 shall be covered by the MCIT in 2002 after
the lapse of three (3) calendar years from 1998.
(d)
None of the above
(32)The MCIT
applies to which of the following domestic corporations?
(a)
Proprietary Educational
Institutions
(b)
Non-profit Hospitals
(c)
Depository banks under the
Expanded Foreign Currency Deposit System (FCDS) on income from foreign currency
transactions with the local commercial banks.
(d)
Firms that are taxed under a
special income tax regime
(e)
All of the above
(f)
None of the above
(33)Which of
the following need not be deducted from gross sales to arrive at gross income
for purposes of computing MCIT of a merchandising/ manufacturing concern?
(a)
Sales returns and allowances
(b)
Sales discounts
(c)
Cost of sales
(d)
None of the above
(34)Which of
the following need not be deducted from gross sales to arrive at gross income
for purposes of computing MCIT of a service concern?
(a)
Sales returns and allowances
(b)
Sales discounts
(c)
Cost of sales
(d)
None of the above
(35)Which of
the following need not be deducted from gross sales to arrive at gross income
for purposes of computing OCIT or GIT of a merchandising/ manufacturing
concern?
(a)
Sales returns and allowances
(b)
Sales discounts
(c)
Cost of sales
(d)
None of the above
(36)Which of
the following need not be deducted from gross sales to arrive at gross income
for purposes of computing OCIT or GIT of a service concern?
(a)
Sales returns and allowances
(b)
Sales discounts
(c)
Cost of sales
(d)
None of the above
(37)A
PEZA-registered enterprise has a “registered” and an “unregistered” activity.
The MCIT shall apply to the:
(a)
Registered activity
(b)
Unregistered activity
(c)
Both activities
(d)
Neither registered nor
unregistered activity
(38)The
minimum corporate income tax of a domestic or resident corporation is:
(a)
15% of gross income
(b)
2% of gross sales
(c)
2% of gross income
(d)
2% of gross income for Domestic
Corporations while Resident Foreign Corporations are exempted from MCIT
computation.
(39)The
records of DOTA Inc., a closely-held corporation, show the following calendar
years:
2011: Gross Income P 3,000,000.00
Less:
Expenses 2,500,000.00
Net
Income 500,000.00
2012: Gross Income 5,000,000.00
Expenses 3,000,000.00
Other
income
Rent,
net of 5% withholding tax 475,000.00
Interest
on money market, net 80,000.00
Inter-corporate
dividends 500,000.00
Additional
information:
Dividends
paid 1,500,000.00
Tax
payments, 1st to 3rd quarter
50,000.00
How much is the improperly
accumulated earnings tax in 2012?
(a)
P70,500 (b) P83,000 (c)
P101,900 (d)
P103,900
Use the following
information for questions 40 to 44
“Cut the rope” Corporation, a domestic
corporation, was registered with the BIR in 1997. The following data on income
taxes during the years 2004 to 2011 were made available.
(40)Income tax
payable for 2004
(a)
P25,000 (b) P100,000 (c)
P75,000 (d) P -0-
(41)Income tax
payable for 2005
(a)
P130,000 (b) P150,000 (c)
P20,000 (d) P-0-
(42)Income tax
payable for 2009
(a)
P60,000 (b) P150,000 (c)
P105,000 (d) P-0-
(43)Income tax
payable for 2010
(a)
P8,000 (b) P40,000 (c) P32,000 (d)
P -0-
(44)Income tax
payable for 2011
(a)
P150,000 (b) P50,000 (c)
P118,000 (d) P -0-
(45)Bubble
Blast Company, a domestic corporation, has the following income taxes
computation for the year 2013 as follows:
Year 2013: RCIT - P50,000
MCIT - P12,000
The journal entry for in 2013 to
record Income Tax is:
(a)
Income Tax Expense P 50,000
Income Tax Payable P 50,000
(b)
Deferred Charges – MCIT P 12,000
Income Tax Payable P 12,000
(c)
Income Tax Expense P 50,000
Deferred Charges – MCIT 12,000
Income Tax Payable P 62,000
(d)
Income Tax Expense P 50,000
Deferred Charges – MCIT 12,000
Income Tax Payable 38,000
(46)A tax
imposed whether a corporation has zero or negative taxable income or whenever
the minimum income tax is greater than the normal income tax due from such
corporation:
(a)
Improperly accumulated earnings
tax (IAET)
(b)
Optional Corporate Income Tax
(OCIT)
(c)
Capital Gains Tax (CGT)
(d)
Minimum Corporate Income Tax
(MCIT)
(47)A
corporation which was registered with the Bureau of Internal Revenue in May
2007 shall be covered by MCIT in:
(a)
2008 (b) 2009 (c) 2010 (d) 2011
(48)The BIR
form used by corporations to file quarterly income tax returns:
(a)
1702 (b) 1702Q (c) 2550 (d)
2550Q
(49)The BIR
form used by corporations to file its annual income tax return:
(a)
1702 (b) 1702Q (c) 2550 (d)
2550Q
(50)According
to tax code, the last payment of filing income tax returns for all corporations
– having calendar year or fiscal year of reporting is:
(a)
At the end of every taxable
year
(b)
Once the income tax return,
regardless of the month, is completed, it may be filed at any day of the year
immediately following the taxable year
(c)
Every April 15 immediately
following the taxable year for all corporations having calendar year and fiscal
year of reporting
(d)
On the 15th day of
the fourth (4th) month immediately following the taxable year
_________________________________________________________________________________
ANSWERS:
(1)
Hungry Shark corporation, in
its third year of operations, had the following data:
Gross Income, Philippines P 2,000,000.00
Gross Income, foreign 1,000,000.00
Expenses, Philippines 1,000,000.00
Expenses, foreign 500,000.00
If the corporation is a domestic
corporation, the taxable income is:
(a)
P1,000,000
(b)
P2,000,000
(c)
P500,000
(d)
P1,500,000
Answer: (d)
Gross Income, Philippines P 2,000,000.00
Less: Expenses, Philippines 1,000,000.00 P 1,000,000.00
Gross Income, foreign P 1,000,000.00
Less: Expenses, foreign 500,000.00 500,000.00
Taxable Income P 1,500,000.00
(2)
One of the following statements
is not correct. Which is it?
(a)
For domestic corporations, the
capital gain tax on sale of shares of stock are the same as the capital gain on
such assets of resident citizens of the Philippines.
(b)
The final tax on interest on
foreign currency deposit under the expanded foreign currency deposit system for
domestic corporations is the same as that of resident citizens of the Philippines
at seven and one-half percent (7 ½%)
(c)
Dividend received by a domestic
corporation from a domestic corporation subject to tax is exempt from income
tax of the corporation receiving the dividend.
(d)
Prizes exceeding P10,000
received by a domestic corporation is subject to a final tax of twenty percent
(20%)
Answer:
(d)
(3)
A domestic corporation, in its
fourth year of operations, had the following data for the year:
Net sales P 2,000,000.00
Capital gain on direct sale at
P500,000 to a buyer of shares of
a domestic corporation 200,000.00
Capital gain on sale thru a real
estate broker of land and building
outside Philippines for P5,000,000 1,000,000.00
Dividend from a domestic
corporation 50,000.00
Interest on bank deposit 40.000.00
Cost of sales 600,000.00
Quarterly corporate income tax
paid 190,000.00
Operating Expenses 500,000.00
The income tax still due at the
end of the year is:
(a)
P125,000
(b)
P80,000
(c)
P270,800
(d)
P220,800
Answer:
(b)
Net sales P 2,000,000
Less: Cost of sales 600,000
Gross Profit from sales 1,400,000
Less: Operating Expenses 500,000
Taxable Income for the year 900,000
MCIT P
28,000
RCIT P
270,000
Whichever is higher on RCIT or MCIT
Less Income taxes paid 190,000
Income tax due P
80,000
(4)
Statement 1: The minimum
corporate income tax of a trading or manufacturing concern is based on gross
profit from sales.
Statement 2: The minimum corporate
income tax of a service concern is based on net revenues or receipts less
direct costs of services.
(a)
Both statements are true
(b)
Both statements are false
(c)
The first statement is true but
the second statement is false
(d)
The first statement is false
but the second statement is true
Answer: (a)
(5)
The following are true, except
one. Which is exception:
(a)
A domestic corporation is
subject to MCIT on gross income from within and outside the Philippines.
(b)
A resident corporation is
subject to the MCIT on gross income from within the Philippines.
(c)
A non-resident corporation is
not subject to the MCIT
(d)
The optional gross income tax
(GIT) applies to domestic and resident corporations.
Answer: (d)
(6)
Selected cumulative balances were taken from the records of Flappy Bird
Corporation, a domestic corporation, in its fourth year of operations in 2013,
which had an income tax refundable of P10,000 for a preceding year for which
there is a certificate of tax credit.
The income tax due (or refundable)
at the end of the year:
(a)
P321,000
(b)
P371,000
(c)
P43,000
(d)
P76,000
Answer: (c) P43,000 [page
2-19 quizzer on tax]
(7)
Which of the following
statements is wrong?
(a)
The quarterly income tax of a
corporation for any of the first, second or third quarters is filed, and the
tax due is paid, within sixty (60) days after the close of the quarter.
(b)
The annual income tax return of
a corporation is filed, and the tax due is paid on or before the fifteenth day
of the fourth month following the close of the taxable year
(c)
There can be an income tax
refundable in a quarterly income tax return of a corporation
(d)
There can be an income tax refundable
in the final income tax return of a corporation
Answer: (c)
(8)
One of the following statements
is wrong. Identify. The improperly accumulated earnings tax imposed on
corporations:
(a)
Is calculated to force
corporations to pay-out dividends
(b)
Is computed on the improperly
accumulated income over several years
(c)
Is based on the net income per
books after the income tax
(d)
Is based on a statutory formula
for improperly accumulated income
Answer: (b)
(9)
All, except one, of the
following, are not subject to the improperly accumulated earnings tax (IAET).
Which is the exception?
(a)
Publicly-held corporations
(b)
Banks and other financial
intermediaries
(c)
Insurance Companies
(d)
Service Enterprises
Answer: (d)
(10)The
following except one, give rise to the presumption that a corporation is
improperly accumulating profits. Identify the exception:
(a)
The corporation is mere holding
company
(b)
The corporation is an
investment company
(c)
The corporation permits its
profit to accumulate beyond the reasonable needs of the business
(d)
The corporation is a service
enterprise
Answer: (d)
(11)Angry
Birds Inc., a domestic corporation, had the following selected data for 2009,
the accumulated earnings for which year the Bureau of Internal Revenue (BIR)
considered to be improper:
Cost of sales P 2,000,000.00
Minimum Corporate Income Tax 110,000.00
Business expenses 1,000,000.00
Interest on Philippine currency
bank deposit 50,000.00
Capital gain on sale directly to
buyer of shares 120,000.00
Dividend income from domestic
corporation 60,000.00
Dividends declared and paid during
the year 500,000.00
Maturing bonds in 2010 150,000.00
The improperly accumulated
earnings tax (IAET) is:
(a)
P175,000 (b) P264,300 (c)
P256,300 (d) 380,300
Answer: (c) P256,300 [page
2-21 quizzer on tax]
(12)A mother
corporation is abroad, with business in the Philippines through its branch in
the Philippines. Which of the following statements is wrong?
(a)
In a year, the branch in the
Philippines is subject to a profit remittance tax on its remittance of profits
to the mother company abroad, even if the profits from which the remittance was
made was a prior year’s profits.
(b)
The profit remittance tax is
fifteen (15%) percent of the total amount or profit for remittance, as applied
for with the bank.
(c)
The bank with which the
application for remittance was filed would be the withholding agent of the
Bureau of Internal Revenue
(d)
Even activities registered with
the Philippine Economic Zone Authority (PEZA), from the profits from which the
remittance is applied for, will be subject to the profit remittance tax.
Answer: (d)
(13)Statement
1: A private educational institution is a special corporation subject to income
tax on all its income at ten percent (10%)
Statement 2: A private educational
institution may be treated as an ordinary corporation subject to all the income
tax rules on corporation.
(a)
Both statements are true
(b)
Both statements are false
(c)
First statement is true but
second statement is false
(d)
First statement is false but
second statement is true
Answer: (a)
(14)Statement
1: Corporations, agencies or instrumentalities owned or controlled by the
government shall pay the income tax as their counterpart private corporations.
Statement 2: The Government
Service Insurance System and the Social Security System are subject to income
tax.
(a)
Both statements are true
(b)
Both statements are false
(c)
First statement is true but
second statement is false
(d)
First statement is false but
second statement is true
Answer: (c)
(15)Corporations
exempt from income tax are enumerated under Section 30 of the National Internal
Revenue Code.
Statement 1: They are not subject
to income tax on income received which are incidental or necessarily connected
with the purposes for which they were organized and are operating.
Statement 2: They are subject to
income tax on income of whatever kind and character from any of their
properties, real or personal, or from any activity conducted for profit,
regardless of the disposition of such income.
(a)
Both statements are true
(b)
Both statements are false
(c)
First statement is true but
second statement is false
(d)
First statement is false but
second statement is true
Answer: (a)
(16)Which of
the following is treated as a corporation?
(a)
General partnership in trade
(b)
General professional
partnership
(c)
Joint venture or consortium for
construction project
(d)
Joint venture or consortium for
engaging in energy operations under a service contract with the government.
Answer: (a)
(17)Temple Run
Company is a general professional partnership for gaming applications, with Mr.
Temple and Mr. Run as partners and equally participating in the income and
expenses. The following are the data for the partnership and the partners in
the calendar year:
The net taxable income of Temple
Run Company is:
(a)
P250,000 (b) P410,000 (c)
P60,000 (d) P -0-
Answer: (d) Zero
(18)Using the
information on question 17, what is the income tax due of Temple Run Company:
(a)
P75,000 (b) P123,000 (c)
P18,000 (d) P -0-
Answer: (d) Zero
(19)Using the
information on question 17, what is the net taxable income of Mr. Temple:
(a)
P80,000 (b) P250,000 (c)
P125,000 (d) P -0-
Answer: (c)
(20)Using the
information on question 17, what is the net taxable income of Mr. Run:
(a)
P80,000 (b) P250,000 (c)
P125,000 (d) P -0-
Answer: (c)
(21)Zombie
Tsunami Corp., a domestic corporation, is engaged in architectural design services. The following are
pertinent data:
Gross receipts P 5,000,000.00
Sales returns and allowances
200,000.00
Sales discounts 250,000.00
Cost of services 2,250,000.00
Deductions 1,000,000.00
The Optional Corporate Income Tax
or Gross Income Tax of Zombie Tsunami is:
(a)
P345,000 (b) P195,000 (c)
P682,500 (d)
P750,000
Answer: (c) P682,500
(22)Candy
Crush Inc., a domestic corporation has the following data in 2013:
Gross Sales P 4,000,000.00
Cost of Sales 1,500,000.00
Business Expenses 1,000,000.00
The Gross Income Tax of Candy
Crush assuming it is a trading business:
(a)
P375,000 (b) P600,000 (c)
P480,000 (d)
P125,000
Answer: (a)
(23)Using the
same information on question 22, the Optional Corporate Income Tax of Candy
Crush assuming it is a service business:
(a)
P375,000 (b) P600,000 (c)
P480,000 (d)
P125,000
(24)In 2006,
Skater Boy Corporation, a resident foreign corporation, was on its sixth year
of operation. The following data pertain to its operation in the Philippines
for the years 2006 and 2007:
The regular corporate income tax
for 2006 is:
(a)
P6,000
(b)
P12,000
(c)
P14,000
(d)
P15,000
Answer: (a)
(25)The income
tax due for 2006
(a)
P6,000
(b)
P12,000
(c)
P14,000
(d)
P15,000
Answer: (b)
(26)The
minimum corporate income tax for 2007:
(a)
P6,000
(b)
P12,000
(c)
P14,000
(d)
P15,000
Answer: (c)
(27)The normal
corporate income tax for 2007:
(a)
P6,000
(b)
P12,000
(c)
P14,000
(d)
P15,000
Answer: (d)
(28)Reasonable
needs of the business is inconsistent with the concepts of IAET when:
(a)
The direct correlation of
anticipated needs to the accumulation of profits is proved.
(b)
It is not necessary for the
purpose of the business considering all the circumstances of the case
(c)
The “immediacy test” under the
American jurisprudence is adopted in Philippine jurisdiction
(d)
Construed as immediate needs of
the business including reasonable anticipated needs
Answer: (b)
(29)For
purposes of determining the Improperly Accumulated Taxable Income for a taxable
year, the following, except one, are
added to that year’s taxable income. Which one?
(a)
Income exempt from tax
(b)
Income excluded from gross
income
(c)
Income subject to final
withholding tax
(d)
The amount of net operating
loss carry-over (NOLCO)
Answer: (d)
(30)For
purposes of determining the Improperly Accumulated Taxable Income for a taxable
year, the following except one, are reduced from that year’s taxable income
after appropriately adding certain items. Which one?
(a)
10% improperly accumulated
earnings tax
(b)
Income tax paid/ payable for
the taxable year
(c)
Dividends actually or
constructively paid/ issued
(d)
Amount reserved for the
reasonable needs of the business
Answer: (a)
(31)Which of
the following is not true?
(a)
For purposes of the MCIT, the
taxable year in which business operations commenced shall be the year in which
the domestic corporation registered with the BIR.
(b)
Firms which were registered
with BIR in 1994 and earlier years shall be covered by the MCIT beginning
January 1, 1998.
(c)
Firms which were registered
with the BIR in any month in 1998 shall be covered by the MCIT in 2002 after
the lapse of three (3) calendar years from 1998.
(d)
None of the above
Answer: (d)
(32)The MCIT
applies to which of the following domestic corporations?
(a)
Proprietary Educational
Institutions
(b)
Non-profit Hospitals
(c)
Depository banks under the
Expanded Foreign Currency Deposit System (FCDS) on income from foreign currency
transactions with the local commercial banks.
(d)
Firms that are taxed under a
special income tax regime
(e)
All of the above
(f)
None of the above
Answer: (f)
(33)Which of
the following need not be deducted from gross sales to arrive at gross income
for purposes of computing MCIT of a merchandising/ manufacturing concern?
(a)
Sales returns and allowances
(b)
Sales discounts
(c)
Cost of sales
(d)
None of the above
Answer: (d)
(34)Which of
the following need not be deducted from gross sales to arrive at gross income
for purposes of computing MCIT of a service concern?
(a)
Sales returns and allowances
(b)
Sales discounts
(c)
Cost of sales
(d)
None of the above
Answer: (d)
(35)Which of
the following need not be deducted from gross sales to arrive at gross income
for purposes of computing OCIT or GIT of a merchandising/ manufacturing
concern?
(a)
Sales returns and allowances
(b)
Sales discounts
(c)
Cost of sales
(d)
None of the above
Answer: (d)
(36)Which of
the following need not be deducted from gross sales to arrive at gross income
for purposes of computing OCIT or GIT of a service concern?
(a)
Sales returns and allowances
(b)
Sales discounts
(c)
Cost of sales
(d)
None of the above
Answer: (c)
(37)A
PEZA-registered enterprise has a “registered” and an “unregistered” activity.
The MCIT shall apply to the:
(a)
Registered activity
(b)
Unregistered activity
(c)
Both activities
(d)
Neither registered nor
unregistered activity
Answer: (b)
(38)The
minimum corporate income tax of a domestic or resident corporation is:
(a)
15% of gross income
(b)
2% of gross sales
(c)
2% of gross income
(d)
2% of gross income for Domestic
Corporations while Resident Foreign Corporations are exempted from MCIT
computation.
Answer: (b)
(39)The
records of DOTA Inc., a closely-held corporation, show the following calendar
years:
2011: Gross Income P 3,000,000.00
Less:
Expenses 2,500,000.00
Net
Income 500,000.00
2012: Gross Income 5,000,000.00
Expenses 3,000,000.00
Other
income
Rent,
net of 5% withholding tax 475,000.00
Interest
on money market, net 80,000.00
Inter-corporate
dividends 500,000.00
Additional
information:
Dividends
paid 1,500,000.00
Tax
payments, 1st to 3rd quarter
50,000.00
How much is the improperly
accumulated earnings tax in 2012?
(a)
P70,500 (b) P83,000 (c)
P101,900 (d)
P103,900
Answer: (b) P83,000
Use the following
information for questions 40 to 44
“Cut the rope” Corporation, a domestic
corporation, was registered with the BIR in 1997. The following data on income
taxes during the years 2004 to 2011 were made available.
(40)Income tax
payable for 2004
(a)
P25,000 (b) P100,000 (c)
P75,000 (d) P -0-
Answer: (b)
(41)Income tax
payable for 2005
(a)
P130,000 (b) P150,000 (c)
P20,000 (d) P-0-
Answer: (b)
(42)Income tax
payable for 2009
(a)
P60,000 (b) P150,000 (c)
P105,000 (d) P-0-
Answer: (d)
(43)Income tax
payable for 2010
(a)
P8,000 (b) P40,000 (c) P32,000 (d)
P -0-
Answer: (b)
(44)Income tax
payable for 2011
(a)
P150,000 (b) P50,000 (c)
P118,000 (d) P -0-
Answer: (b)
(45)Bubble
Blast Company, a domestic corporation, has the following income taxes
computation for the year 2013 as follows:
Year 2013: RCIT - P50,000
MCIT - P12,000
The journal entry for in 2013 to
record Income Tax is:
(a)
Income Tax Expense P 50,000
Income Tax Payable P 50,000
(b)
Deferred Charges – MCIT P 12,000
Income Tax Payable P 12,000
(c)
Income Tax Expense P 50,000
Deferred Charges – MCIT 12,000
Income Tax Payable P 62,000
(d)
Income Tax Expense P 50,000
Deferred Charges – MCIT 12,000
Income Tax Payable 38,000
Answer: (a)
(46)A tax
imposed whether a corporation has zero or negative taxable income or whenever
the minimum income tax is greater than the normal income tax due from such
corporation:
(a)
Improperly accumulated earnings
tax (IAET)
(b)
Optional Corporate Income Tax
(OCIT)
(c)
Capital Gains Tax (CGT)
(d)
Minimum Corporate Income Tax
(MCIT)
Answer: (d)
(47)A
corporation which was registered with the Bureau of Internal Revenue in May
2007 shall be covered by MCIT in:
(a)
2008 (b) 2009 (c) 2010 (d) 2011
Answer: (d)
(48)The BIR
form used by corporations to file quarterly income tax returns:
(a)
1702 (b) 1702Q (c) 2550 (d)
2550Q
Answer: (b)
(49)The BIR
form used by corporations to file its annual income tax return:
(a)
1702 (b) 1702Q (c) 2550 (d)
2550Q
Answer: (a)
(50)According
to tax code, the last payment of filing income tax returns for all corporations
– having calendar year or fiscal year of reporting is:
(a)
At the end of every taxable
year
(b)
Once the income tax return,
regardless of the month, is completed, it may be filed at any day of the year
immediately following the taxable year
(c)
Every April 15 immediately
following the taxable year for all corporations having calendar year and fiscal
year of reporting
(d)
On the 15th day of
the fourth (4th) month immediately following the taxable year
Answer: (d)
Good day Sir Mark...
ReplyDeletePwede po sir makita solution sa 2014 Quizzer on Corporate Tax nos. 11 & 6.
Thank po.
I found that site very usefull and this survey is very cirious, I ' ve never seen a blog that demand a survey for this actions, very curious... corporate secretarial
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ReplyDelete