10 Task Performance 1

Marvin G. Golpo
BSBA 2eve

1. Pioneer College, a private educational institution, has presented the following data for the
year:

Gross Income, related Activities P5,000,000

Gross Income, unrelated activities 5,000,000

Rental income (gross 5% WT) 2,000,000

Expenses, related activities 2,000,000

Expenses, unrelated activities 3,000,000

Dividend income from a domestic corporation 100,000

Quarterly income tax paid for the first three quarters 500,000

Compute Income Tax Payable:

Gross Income Related Activities P5,000,000

Expenses Related Activities 2,000,000

Gross income unrelated Activities 5,000,000

Expenses, unrelated Activities 3,000,000

Rent Income (P2,000,000/95%) 2,105,263.16

Total Gross Income per ITR P 17,105,263.16

Less: Dividend income from a domestic corporation 100,000

 Quarterly income tax paid for the first three quarters500,000

600,000 600,000

Net Taxable Income P 16,505,263.16

Multiplied by a special tax rate 10%

Income Tax Due P

1,650,526.316

Less: Credible withholding tax on rent (P2,105,263.16-P2,000,000) 105,263.16

Income tax Payable P 1,545,263.156

2. Advanced Learning Institute, an educational institution, provided the following data for the
current taxable year:

Income from Tuition fees P3,500,000

School Miscellaneous Fees 1,500,000

Dividend Income:

Domestic Corporation 2,000,000

Foreign Corporation 2,000,000

Rent Income (Net of 5% withholding tax)(1,900,000/95%) 2,000,000

Operating expenses 4,000,000

Compute tax payable of School.

Income From Tuition Fees P3,500,000

School Miscellaneous fees 1,500,000

Dividend Income From Foreign Corporation 2,000,000

Rent Income (P 1,900,000/95%) 2,000,000

Total Gross Income P 9,000,000

Less: Operating Expenses 4,000,000

Net Taxable Income P 5,000,000

Multiplied by Special Tax rate: 10%

Income Tax Due P500,000

Less: Credible withholding tax on rent (P2,000,000-P1,900,000) 100,000

Income Tax Payable P400,000

3. Norte De University, a proprietary educational institution, has the following selected

information for the taxable year 2018:

Tuition Fees P12,800,000

Miscellaneous Fee 1, 800,000

Interest on Bank Deposits 12,300

Rent Income 350,000

Salaries and Bonuses, all personnel 7,500,000

Other operating expenses 3,500,000

Quarterly Income Tax Payments 48,000

An additional school building and finished on April 1,2018 at the cost of P2,000,000 with an
depreciable life of 50 years.

A. Compute the income tax payable assuming the University opted to claim the cost of
transaction as an outright expense.

Tuition Fees P12,800,000

Miscellaneous Fee 1, 800,000

Rent Income 350,000

Total Gross Income P14,950,000

Less: Salaries and Bonuses, all personnel 7,500,000

Other operating expenses 3,500,000

Cost of new building 2,000,000

P13,000,000

Net Taxable Income: P 1,950,000

Multiplied by Special Tax rate:

10%

Income Tax Due

P195,000

Less: Quarterly Income Tax Payments

48,000

Income Tax Payable P147,000

B. Compute the income tax payable assuming the University opted to capitalize the cost of
building construction.

Tuition Fees P12,800,000

Miscellaneous Fees 1,800,000

Rent Income 350,000

Total Gross Income P14,950,000

Less: Salaries and Bonuses, all personnel 7,500,000

Other operating expenses 3,500,000

Dep'n (2.5M/50x9/12) 30,000

P11,030,000
Net Taxable Income P3,920,000

Multiplied by Special Tax rate:

10%

Income Tax Due

P392,000

Less: Quarterly Income Tax Payments 48,000

Income Tax Payable P344,000

4. A non-Profit domestic hospital has the following data during the year 2018.

Gross Income from hospital operation

P2,000,000

Operating expenses (excluding depreciation for the new hospital building

500,000

Rent Income for commercial space, hospital ground floor, net of 5% withholding taxes
190,000

Interest on Bank Deposit, net 20% withholding tax 40,000

Dividend Income from a domestic corporation
100,000

An additional hospital building was built and finished on June 30,2018 at the cost of
P4,000,000 with an depreciable life of 25 years.

A. Compute the income tax still due and payable 2018.

Gross Income from hospital operation P2,000,000

Rent Income (190,000/95%) 200,000

Total Gross Income P2,200,000

Less: Operating Expenses 500,000

Depreciation expense (4,000,000/25x6/12) 80,000

P580,000
Net Taxable Income P1,620,000

Multiplied by Special Tax rate: 10%

Income Tax Due P162,000

Less: Credible withholding tax on rent (P200,000-P190,000) 10,000

Income Tax Payable P152,000

B. Assume the hospital was organized for profit, compute the income tax still due and
payable 2018.

Gross Income from hospital operation P2,000,000

Rent Income (190,000/95%) 200,000

Interest on Bank Deposit (40,000/80%) 50,000

Dividend Income from a domestic corporation 100,000

Total Gross Income P2,350,000

Less: Operating Expenses 500,000

Depreciation expense (4,000,000/25x6/12) 80,000

P580,000
Net Taxable Income P1,770,000

Multiplied by Special Tax rate:

10%

Income Tax Due

P177,000

Less: Credible withholding tax on rent (P200,000-P190,000)

10,000

Income Tax Payable

P167,000

5. Pacific Airlines, an international carrier, showed the following gross receipts for 2018.
 Point of Origin Destination Gross Receipts
Philippines United States Of America P8,000,000
United States Of America United Kingdom 4,000,000
United States Of America Philippines 3,750,000
United Kingdom Philippines 2,100,000

Additional information:

 Forty percent (40%) of the shipments from the Philippines to the United states were
later shipped to the United Kingdom.
 Twenty-five percent (25%) of all its revenues were from the transport of cargoes and
goods.

Compute the income tax payable 2018.

Gross Philippines to United States of America P8,000,000

Gross United States of America to United Kingdom 4,000,000

Gross United States of America to Philippines 3,750,000

Gross United States of America to Philippines 2,100,000

Gross Revenue P17,850,000

Multiplied by 2 1/2%

Income Tax Payable P446,250

The Philippines to United States of America is computed by getting the price of a Gross receipts
direct flight P8,000,000 X 2,5% is equal to = P200,000

the taxable year in The Final Income Tax Payable are P200,000
6. China Airlines Inc, a resident foreign corporation, has the following data for the taxable
year 2018

Passengers airfare from china to the Philippines P1,800,000

Passengers airfare from Philippines to the China 1,500,000
Airfare for cargoes from China to the Philippines 700,000
Airfare for cargoes from Philippines to China 1,300,000

Compute the income tax payable.

Passengers airfare from china to the Philippines P1,800,000

Passengers airfare from Philippines to the China 1,500,000

Airfare for cargoes from China to the Philippines 700,000

Airfare for cargoes from Philippines to China 1,300,000

Gross Revenue P5,300,000

Multiply by 2.5%

Income Tax Payable P132,500

The Passenger Airfare From China to the Philippines is computed by getting the price of a Gross
receipts direct flight P1,800,000 X 2,5% is equal to = P45,000

The taxable year in The Final Income Tax Payable are P45,000
7. Y Corporation, a family closed corporation, had the following selected data for 201A, the
accumulated earnings for which year the ABIR considered to be improper.

Non-taxable gain on life insurance of Y Co.'s president

P900,000

Income tax due 201A 780,000

Quarterly income tax paid 580,000

Dividend declared and paid during the year

440,000

Reserve for maturing bonds in 201B 300,000

Tax exempt dividend income from resident corporation 200,000

Net-operating loss-carry over (NOLCO) deducted 100,000

Capital gain on direct sale to the buyer of shares of another domestic corporation, net of final
tax 85,000

Interest income on peso deposit, net of final tax 16,000

Compute the amount of improperly accumulated earnings tax (IAET).

Taxable income (P780,000/30%) P2,600,000

Add: Non-taxable gain on life insurance P900,000

Tax exempt dividend income from

resident corporation 200,000

Quarterly income tax paid 580,000

Interest Income on peso deposit,

net of final tax 16,000 P1,696,000

Total P4,296,000

Less: Income tax due P780,000

Dividend declared and paid during the year 440,000

Reserved for maturing bonds in 201B 300,000

Net-operating loss-carry over (NOLCO) deducted 100,000

Capital gain on direct sale to the buyer

of shares of another domestic corporation,

net of final tax (P 85,000 x 15%) 12,750

P1,632,750

Improperly Accumulated earnings P2,663,250

Multiplied by IAET rate 10%

Improperly Accumulated Earnings Tax P266,325

8.A Closely- held corporation, deemed committed unreasonably accumulating its income,
shows the following data:

Paid-up Capital P10,000,000

Accumulated Earnings-unrestricted 8,000,000
Accumulated Earnings-restricted 2,000,000
Income tax per annual income tax return 300,000
Income tax for the first three quarters 240,000
Final tax on Passive income at 20% 60,000
Capital gains tax at 15% 45,000

Compute the amount of improperly accumulated earnings tax (IAET)

Paid-up Capital P10,000,000

Add: Accumulated Earnings-restricted 2,000,000

Income tax per annual income tax return 300,000

 Income tax for the first three quarters 240,000 P2,540,000

Total P12,540,000

Less: Accumulated Earnings unrestricted 8,000,000

Final tax on Passive Income at (20%) 300,000

Capital gain tax at 15% (P45,000 x 15%) 6,750 P8,306,750

Improperly Accumulated earnings P4,233,250

Multiplied by IAET rate 10%

Improperly Accumulated Earnings Tax P423,325