QUIZZER: VALUE-ADDED TAX
1. Mr. Rando, a VAT taxpayer, made a sale at P100,000, value-added tax not included, of goods
that he bought at P3,000 from a Non-Vat taxpayer. How much is the VAT payable?
Answer: 100k X 12% = 12,000
2. Assuming the same information in No.1 except that the goods bought at P3,000 was made from
a VAT taxpayer. How much is the VAT payable?
Answer: 100k X 12% = 12,000
Less: 3k X 12% = 360
Net(VAT payable) = 11,640
JE: To record the Vat with input and output vat
Debit: Output Vat. 12,000
Credit: Input Vat. 360
Credit: Vat payable. 11,640
JE: To record the sales with output vat
Debit: Cash. 112, 000
Credit: Sales. 100,000
Credit: Output Vat. 12, 000
3. Mr. T had the following data for his transactions during the month:
Gross sales P200,00
Sales Returns and Allowances 20,000
Sales Discounts 1,200
Gross Purchases 100,000
Purchase Returns and Allowances 10,000
Purchase Discounts 500
Compute for the value-added tax payable.
Solution:
For sales: Gross Sales 200,000
Less: sales returns and allowances. 20,000
Sales discounts. 1,200
Net sales. 178,800 X 12% /112% = 19, 157.14
For Purchases:
Gross purchases. 100,000
Less: Purchase Discounts. 500
Purchase Returns and Allowances. 10,000
Net purchases. 89,500 X 12% /112% = 9, 589.29
Vat payable(19, 157.14 - 9, 589.29). 9, 567.25
4. Mr. Red is a VAT trader, selling goods purchased from VAT suppliers. He had the following
transactions for the month, value-added tax not included:
March 2 Purchases on account P 42,000
March 3 Purchase returns and allowances 1,700
March 5 Sales on account 100,000
March 6 Purchase discount 300
March 7 Sales returns and allowances 10,000
March 15 Sales discount 1,800
How much is the value-added tax for the month?
Solutions:
For sales(Input Vat):. Sales on Account. 100,000
Sales returns and allowances. 10,000
Sales discount. 1,800
Net sales. 88,200 X 12% = 10, 584
For Purchases(Output Vat): Purchase on Account. 42, 000
Purchase Returns and Allowances. 1,700
Purchase Discounts. 300
Net purchase. 40,000 X 12% = 4,800
Vat payable: Input Vat - output vat = 10, 584 - 4, 800 = 5, 784
5. During the month, Mr. Sy had the following transactions:
3/2 Purchase of goods for sale from I Co.,
VAT taxpayer, vat not included P 300,000
3/4 Purchase of goods for sale from Mr. J,
A non-vat taxpayer 200,000
3/10 Purchase of supplies from Mr. K, VAT
Taxpayer, vat not included 50,000
3/15 Purchase of services from Mr. L,
Vat taxpayer, vat not included 60,000
3/17 Purchase of office equipment from M co.
Vat taxpayer, vat not included 40,000
3/19 Purchase of land for use in business,
From vat taxpayer, vat not included 500,000
3/20 sales, vat not included 1,500,000
3/31 Payment of rent to O Co., vat taxpayer
Vat not included 50,000
Compute for the value-added tax payable of Mr. Sy.
Solution:
For sales ( Input Vat): 1, 500, 000 X 12% =180,000
For Purchases (Output): Date 3/2. 300,000 X 12% = 36,000
3/4. 200,000(not included: not vat)
3/10. 50,000 X 12% =6,000
3/15. 60,000 X 12% =7,200
3/17. 40,000 X 12% =4,800
3/19. 500,000 X 12% =60,000
Net purchases:. 114, 000
For rent payments: 50,ooo X 12% = 6,000
Vat payable: input vat - (output vat + payment rent)= 180,000-(114,000+6,000)
=60,000
6. Compute the value-added tax due of a sale of real property in installment by a real estate dealer
under the following data:
Consideration in the deed of sale P 1,800,000
Zonal value 2,000,000
FMV, City Assessor 1,700,000
Payments on the consideration:
July 1, 2020 225,000
December 1, 2020 225,000
July 1, 2021 1,350,000
Solution:
Zonal value: 2,000,000 X 12% /112% =214,285.71
For July 1: 225,ooo X 12% /112% =24,107.14
For Dec 1: 225,000 X 12% /112% =24,107.14
Tax due for the year 2020: 48,214.28
For July 1: 1,350,000 X 12% /112% =144,642.86 (Vat for the year 2021)
Total vat payable: 214,285.71 - (48,214.28+144,642.86) = 21,428.57
7. Mr. B is a real estate dealer. He sold a piece of land in installments. Data were as follows:
Installment selling price, vat not included P 4,000,000
Zonal value 2,000,000
Fair Market Value 5,000,000
Terms of payment:
May 2, 2020 1,000,000
May 2, 2021 3,000,000
He made payments to a VAT taxpayer for expenses incurred, VAT not included, as follows:
May 2, 2020 P 20,000
May 2, 2021 60,000
How much is the output tax, Input tax, and VAT payable for each installment payment?
Solution:
Input vat:
Selling price 4,000,000 X 12% =480,000
Checking:
May 2, 2020 1,000,000 X 12% =120,000
May 2, 2021 3,000,000 X 12% =360,000
Total Input Vat:. 480,000
Output vat:
Total payments. 80,000 X 12% =9,600
Checking:
May 2, 2020. 20,000 X 12% =2,400
May 2, 2021. 60,000 X 12% =7,200
Total output vat:. 9,600
Fair market value vat: 5,000,000 X 12% /112% =535,714.29
Vat payable: Input vat - Output vat
480,000 - 9,600 =470,400
Less: Fair market value vat: 535, 714.29
Net vat payable: 64,774.29
