TAX 1 CORP

March 18, 2018 | Author: Ren A Eleponio | Category: Dividend, Taxes, Corporate Tax, Tax Expense, Income Tax


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hursday, September 11, 20142014 Quizzers on Philippine Corporate Taxation 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 (a) (b) (c) (d) If the corporation is a domestic corporation, the taxable income is: P1,000,000 P2,000,000 P500,000 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 (a) (b) (c) (d) The income tax still due at the end of the year is: P125,000 P80,000 P270,800 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 are not subject to the improperly accumulated earnings tax (IAET).000 for a preceding year for which there is a certificate of tax credit.000 (7) Which of the following statements is wrong? (a) The quarterly income tax of a corporation for any of the first. of the following.000 P43. 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. a domestic corporation. A non-resident corporation is not subject to the MCIT The optional gross income tax (GIT) applies to domestic and resident corporations.000 P371. which had an income tax refundable of P10. except one. 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. Which is exception: A domestic corporation is subject to MCIT on gross income from within and outside the Philippines. (b) The annual income tax return of a corporation is filed.(d) The first statement is false but the second statement is true (5) (a) (b) (c) (d) The following are true. within sixty (60) days after the close of the quarter. except one. 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. and the tax due is paid. second or third quarters is filed. give rise to the presumption that a corporation is improperly accumulating profits. A resident corporation is subject to the MCIT on gross income from within the Philippines.000 P76. Identify. in its fourth year of operations in 2013. (6) Selected cumulative balances were taken from the records of Flappy Bird Corporation. Identify the exception: (a) The corporation is mere holding company (b) The corporation is an investment company . (a) (b) (c) (d) The income tax due (or refundable) at the end of the year: P321. (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. will be subject to the profit remittance tax. the branch in the Philippines is subject to a profit remittance tax on its remittance of profits to the mother company abroad.000.000.000.000. agencies or instrumentalities owned or controlled by the government shall pay the income tax as their counterpart private corporations. as applied for with the bank. 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.000.00 Minimum Corporate Income Tax 110. from the profits from which the remittance is applied for.00 Interest on Philippine currency bank deposit 50.000. regardless of the disposition of such income.00 The improperly accumulated earnings tax (IAET) is: (a) P175.(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.000.00 Capital gain on sale directly to buyer of shares 120. (a) Both statements are true (b) Both statements are false (c) First statement is true but second statement is false . the accumulated earnings for which year the Bureau of Internal Revenue (BIR) considered to be improper: Cost of Sales P 2. a domestic corporation.000 (b) P264.00 Business expenses 1. had the following selected data for 2009..300 (c) P256. (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.00 Maturing bonds in 2010 150.000.000. Statement 2: The Government Service Insurance System and the Social Security System are subject to income tax. Which of the following statements is wrong? (a) In a year. (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). or from any activity conducted for profit.00 Dividend income from domestic corporation 60.000.300 (12)A mother corporation is abroad. (b) The profit remittance tax is fifteen (15%) percent of the total amount or profit for remittance. with business in the Philippines through its branch in the Philippines. even if the profits from which the remittance was made was a prior year’s profits. Statement 2: They are subject to income tax on income of whatever kind and character from any of their properties. real or personal.00 Dividends declared and paid during the year 500.300 (d) 380. (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. Skater Boy Corporation.250.000.00 Deductions 1. what is the income tax due of Temple Run Company: (a) P75. a resident foreign corporation.000 Use the following information for question 24 through 27 In 2006.000 (b) P250.000 (b) P195.000 (b) P123.000 (c) P480.00 Cost of services 2. with Mr. Run: (a) P80.000 (b) P600.000. (17)Temple Run Company is a general professional partnership for gaming applications.000.000.000. The following data pertain to its operation in the Philippines for the years 2006 and 2007: .000..000 (c) P125. a domestic corporation.000 (23)Using the same information on question 22.(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.000. Temple: (a) P80.000 (c) P18.000 (b) P250. is engaged in architectural design services.000. Run as partners and equally participating in the income and expenses. The following are pertinent data: Gross receipts P 5.000 (c) P125.500.000 (c) P480.00 The Gross Income Tax of Candy Crush assuming it is a trading business: (a) P375. what is the net taxable income of Mr.00 The Optional Corporate Income Tax or Gross Income Tax of Zombie Tsunami is: (a) P345.000 (d) P -0(20)Using the information on question 17.000 (d) P125.000 (d) P125.000 (c) P682.000 (c) P60.000 (d) P -0(19)Using the information on question 17. the Optional Corporate Income Tax of Candy Crush assuming it is a service business: (a) P375. a domestic corporation has the following data in 2013: Gross Sales P 4.000.000 (d) P -0- (18)Using the information on question 17.00 Sales discounts 250. 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 (22)Candy Crush Inc..000.000. what is the net taxable income of Mr.000.00 Sales returns and allowances 200.000 (d) P -0(21)Zombie Tsunami Corp.000 (b) P600. Temple and Mr.00 Cost of Sales 1.000 (b) P410.00 Business Expenses 1.500 (d) P750. was on its sixth year of operation. the following except one. are added to that year’s taxable income. the following. .000 (c) P14.000 (b) P12.000 (b) P12. (b) Firms which were registered with BIR in 1994 and earlier years shall be covered by the MCIT beginning January 1.000 (d) P15.000 (25)The income tax due for 2006 (a) P6.(24)The regular corporate income tax for 2006 is: (a) P6.000 (b) P12. (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.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.000 (c) P14.000 (c) P14. 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.000 (27)The normal corporate income tax for 2007: (a) P6.000 (d) P15.000 (d) P15. 1998.000 (b) P12. the taxable year in which business operations commenced shall be the year in which the domestic corporation registered with the BIR.000 (d) P15. except one. 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.000 (26)The minimum corporate income tax for 2007: (a) P6.000 (c) P14. (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.(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. 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. show the following calendar years: 2011: Gross Income P 3.000..000.000.000.00 Expenses 3.000 (b) P150. a domestic corporation.000. net of 5% withholding tax 475.00 How much is the improperly accumulated earnings tax in 2012? (a) P70. The following data on income taxes during the years 2004 to 2011 were made available.000.000 .000 (d) P -0- (41)Income tax payable for 2005 (a) P130.000 (c) P32. 1st to 3rd quarter 50.00 Less: Expenses 2.000 (d) P-0- (42)Income tax payable for 2009 (a) P60.000 (b) P150. was registered with the BIR in 1997.000 (b) P50.00 2012: Gross Income 5.00 Other income Rent.000 (44)Income tax payable for 2011 (a) P150. a domestic corporation.500. net 80.000 (d) P-0- (43)Income tax payable for 2010 (a) P8.000 (c) P20.000.500 (b) P83.900 (d) P103.900 Use the following information for questions 40 to 44 “Cut the rope” Corporation.00 Additional information: Dividends paid 1.000 (c) P105.000 The journal entry for in 2013 to record Income Tax is: (a) Income Tax Expense P 50.000 (b) P40.000. (40)Income tax payable for 2004 (a) P25.(39)The records of DOTA Inc. a closely-held corporation.00 Inter-corporate dividends 500.000 (c) P101.000 MCIT P12.000.000 Income Tax Payable P 50.000 (c) P118.000.000.000.000.000 (c) P75.00 Tax payments.00 Interest on money market. has the following income taxes computation for the year 2013 as follows: Year 2013: RCIT P50.000 (b) P100.500.000 (d) P -0(d) P -0- (45)Bubble Blast Company.00 Net Income 500. regardless of the month.000.000 P1.00 P 1.000 P P P 12.00 (a) (b) (c) (d) If the corporation is a domestic corporation.(b) Deferred Charges – MCIT Income Tax Payable (c) Income Tax Expense Deferred Charges – MCIT Income Tax Payable (d) Income Tax Expense Deferred Charges – MCIT Income Tax Payable P 12.000.000.00 . in its third year of operations.000.000.000.000 50.00 1. had the following data: Gross Income. Philippines Gross Income.00 Gross Income.000. foreign 1. the taxable income is: P1. Philippines Less: Expenses. is completed. 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.000.000 Answer: (d) Gross Income. Philippines P 2. 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. foreign P 1.000 P2.000.000 12.00 Expenses. foreign 500.000.000.000.000.000.00 Expenses.000 P 62.000 38.000.000.000 P500. Philippines 1.000 50.00 P 2.000 (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.000.000 12.500. 00 Dividend from a domestic corporation 50. in its fourth year of operations.000.00 P 1 (2) One of the following statements is not correct.000.000.000.000 Taxable Income for the year 900.000 received by a domestic corporation is subject to a final tax of twenty percent (20%) Answer: (d) (3) A domestic corporation.000 P80.000.000 (4) Statement 1: The minimum corporate income tax of a trading or manufacturing concern is based on gross profit from sales.00 (a) (b) (c) (d) The income tax still due at the end of the year is: P125.000. (a) (b) (c) (d) Both statements are true Both statements are false The first statement is true but the second statement is false The first statement is false but the second statement is true .000 P270.800 P220. Statement 2: The minimum corporate income tax of a service concern is based on net revenues or receipts less direct costs of services. (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.000.000.Less: Expenses. (d) Prizes exceeding P10.000 Gross Profit from sales 1.400.500.00 500.000. Which is it? (a) For domestic corporations.800 Answer: (b) Net sales P 2.00 Operating Expenses 500. foreign Taxable Income .000.000 RCIT P 270.000.000.000 MCIT P 28.000 Whichever is higher on RCIT or MCIT Less Income taxes paid 190.000 Less: Cost of sales 600.00 Cost of sales 600.000 Less: Operating Expenses 500.000 to a buyer of shares of a domestic corporation 200. 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.000.000. had the following data for the year: Net sales P 2.00 Interest on bank deposit 40.00 Capital gain on direct sale at P500.00 Quarterly corporate income tax paid 190.000 1.000 Income tax due P 80.000.00 500.00 Capital gain on sale thru a real estate broker of land and building outside Philippines for P5. A resident corporation is subject to the MCIT on gross income from within the Philippines.(5) (a) (b) (c) (d) Answer: (a) The following are true. had the following selected data for 2009. are not subject to the improperly accumulated earnings tax (IAET).00 .000 (c) P43.000 for a preceding year for which there is a certificate of tax credit.000 (d) P76. of the following.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. a domestic corporation. except one. A non-resident corporation is not subject to the MCIT The optional gross income tax (GIT) applies to domestic and resident corporations. 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. except one. 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. The income tax due (or refundable) at the end of the year: (a) P321.000. 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. in its fourth year of operations in 2013.000. (b) The annual income tax return of a corporation is filed.000. which had an income tax refundable of P10. the accumulated earnings for which year the Bureau of Internal Revenue (BIR) considered to be improper: Cost of sales P 2. Identify.. second or third quarters is filed.000 Answer: (c) P43.000 (b) P371. a domestic corporation. Which is exception: A domestic corporation is subject to MCIT on gross income from within and outside the Philippines. give rise to the presumption that a corporation is improperly accumulating profits. within sixty (60) days after the close of the quarter. and the tax due is paid. 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. Answer: (d) (6) Selected cumulative balances were taken from the records of Flappy Bird Corporation.00 Minimum Corporate Income Tax 110. 00 Capital gain on sale directly to buyer of shares 120.00 Interest on Philippine currency bank deposit 50. (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) . Which of the following statements is wrong? (a) In a year. 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: (c) (15)Corporations exempt from income tax are enumerated under Section 30 of the National Internal Revenue Code.000. from the profits from which the remittance is applied for.000.00 The improperly accumulated earnings tax (IAET) is: (a) P175. 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.300 (d) 380.300 [page 2-21 quizzer on tax] (12)A mother corporation is abroad. (b) The profit remittance tax is fifteen (15%) percent of the total amount or profit for remittance.000.00 Dividends declared and paid during the year 500.00 Maturing bonds in 2010 150. real or personal. the branch in the Philippines is subject to a profit remittance tax on its remittance of profits to the mother company abroad.300 (c) P256.000. agencies or instrumentalities owned or controlled by the government shall pay the income tax as their counterpart private corporations.000 (b) P264. with business in the Philippines through its branch in the Philippines. Statement 2: The Government Service Insurance System and the Social Security System are subject to income tax.000. even if the profits from which the remittance was made was a prior year’s profits. Statement 2: They are subject to income tax on income of whatever kind and character from any of their properties.000. as applied for with the bank.300 Answer: (c) P256. or from any activity conducted for profit. 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.000. (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). (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.Business expenses 1. will be subject to the profit remittance tax.00 Dividend income from domestic corporation 60. 000 (b) P250.000 (d) P -0Answer: (c) (21)Zombie Tsunami Corp.500.000 Answer: (b) (24)In 2006. Run as partners and equally participating in the income and expenses. Run: (a) P80.000 (b) P123.00 The Optional Corporate Income Tax or Gross Income Tax of Zombie Tsunami is: (a) P345.000 (b) P12.000 Answer: (c) P682.000 (c) P14.000 .. Temple and Mr.000 (c) P125.000 (b) P600.000 (c) P18.000. what is the net taxable income of Mr.000 (c) P480.000.000 (c) P60.000.000 (b) P600.000. 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. with Mr. the Optional Corporate Income Tax of Candy Crush assuming it is a service business: (a) P375.000 (c) P125. a domestic corporation has the following data in 2013: Gross Sales P 4. The following are pertinent data: Gross receipts P 5.00 Business Expenses 1. Temple: (a) P80.000.000.500 (d) P750. Skater Boy Corporation.000 Answer: (a) (23)Using the same information on question 22. what is the income tax due of Temple Run Company: (a) P75.000 (d) P -0Answer: (d) Zero (18)Using the information on question 17.000 (d) P125.000 (c) P480. a domestic corporation. 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) P6.250.(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.00 The Gross Income Tax of Candy Crush assuming it is a trading business: (a) P375..000 (d) P -0Answer: (d) Zero (19)Using the information on question 17. Answer: (a) (17)Temple Run Company is a general professional partnership for gaming applications.00 Cost of services 2.00 Sales returns and allowances 200.000. what is the net taxable income of Mr.00 Cost of Sales 1.000.000.500 (22)Candy Crush Inc. a resident foreign corporation.000 (b) P410. is engaged in architectural design services.000.000 (d) P -0Answer: (c) (20)Using the information on question 17.000 (d) P125.000.00 Deductions 1.00 Sales discounts 250.000 (b) P195.000 (b) P250. was on its sixth year of operation.000 (c) P682.000. 1998.000 (c) P14. (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. . are reduced from that year’s taxable income after appropriately adding certain items.000 (d) P15. (b) Firms which were registered with BIR in 1994 and earlier years shall be covered by the MCIT beginning January 1.000 Answer: (b) (26)The minimum corporate income tax for 2007: (a) P6. 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.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.000 (c) P14.000 (b) P12. are added to that year’s taxable income. the following except one. 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. (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. except one. (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.000 (b) P12.000 Answer: (a) (25)The income tax due for 2006 (a) P6.(d) P15. the taxable year in which business operations commenced shall be the year in which the domestic corporation registered with the BIR.000 Answer: (c) (27)The normal corporate income tax for 2007: (a) P6.000 (b) P12.000 (d) P15.000 (d) P15.000 (c) P14. the following. 000..000.500.000.000.000. Answer: (b) (39)The records of DOTA Inc.000.000. net of 5% withholding tax 475.000.000. net 80.00 Interest on money market. show the following calendar years: 2011: Gross Income P 3. a closely-held corporation.00 .00 Less: Expenses 2.00 Net Income 500.00 2012: Gross Income 5.00 Expenses 3. 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.00 Other income Rent.(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.000. (40)Income tax payable for 2004 (a) P25.000 Use the following information for questions 40 to 44 “Cut the rope” Corporation.000 (c) P105.000 MCIT P12. a domestic corporation.000 The journal entry for in 2013 to record Income Tax is: (a) Income Tax Expense P 50.000.000 Income Tax Payable P 50.000 (b) P100.900 Answer: (b) P83.000 (d) P -0Answer: (b) (41)Income tax payable for 2005 (a) P130.000 (c) P101.000 (d) P-0Answer: (b) (42)Income tax payable for 2009 (a) P60.900 (d) P103.500 (b) P83.00 How much is the improperly accumulated earnings tax in 2012? (a) P70.000 (c) Income Tax Expense P 50.000 (b) P150.00 Tax payments.000 (b) P50.000 (d) P-0Answer: (d) (43)Income tax payable for 2010 (a) P8.000 (d) P -0Answer: (b) (44)Income tax payable for 2011 (a) P150.000 (b) P150.500. a domestic corporation. 1st to 3rd quarter 50.000 Deferred Charges – MCIT 12.000 (c) P20. was registered with the BIR in 1997.000.000 (c) P32.000 (d) Income Tax Expense P 50.000 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 .000 Income Tax Payable 38.000 (b) P40.000.000 (d) P -0Answer: (b) (45)Bubble Blast Company.000 Income Tax Payable P 62.000 (b) Deferred Charges – MCIT P 12. has the following income taxes computation for the year 2013 as follows: Year 2013: RCIT P50.000 Income Tax Payable P 12.Inter-corporate dividends 500. The following data on income taxes during the years 2004 to 2011 were made available.000 Deferred Charges – MCIT 12.000 (c) P118.00 Additional information: Dividends paid 1.000 (c) P75. regardless of the month. 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.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. 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) . is completed.
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