Vat Exercises
1. A tax on business is a. Direct tax
b. Indirect tax c. Property taxd. None of the above
2. One of the following is not a major business internal revenue taxes in the tax code a. Value added tax
b. Excise tax
c. Income tax d. Percentage tax 3. Value added tax is a (an)
a. Indirect tax
b. Direct tax c. Progressive taxd. Regressive tax 4. In value added taxation, this is not a requirement for taxability of service?
a. In the course of business
b. Performed within or outside the Philippines c. Consideration received actually or constructively d. Supply of service is not exempt from VAT
5. Charlene is an operator of parking lots. What business tax is due on his income tax from the business?
a. Broker’s tax
b. Caterer’s tax c. Common carrier’s taxd. Value added tax
6. Mr. F is a lessor of real property and personal property (cars). The tax that he pays is a. Excise tax
b. Value added tax
c. Percentage tax d. None of the above
7. Mr. S Magler imported cigarettes from the United States for sale in the Philippines. What business taxes in the Philippines are due?
a. VAT, excise tax, other percentage tax b. VAT and excise tax
c. Other percentage tax and excise tax
d. VAT and percentage taxWhich of the following is not exempt from VAT a. Importation in their original state of agricultural and marine food products
b. Importation of passenger or cargo vessel more than 5,000 tons to be used by the importer himself as operator thereof;
c. Importation of personal and household effect belonging to residents of the Philippines returning from abroad;
d. Importation of non-food agricultural products in their original state by a primary producer.
8. One of the following transactions by a VAT registered person does not result to output vAT a. Cash sales
b. Sales on account c. Sales and leasebackd. Export sales Computation of VAT payable
9. Tsukuba Company, a VAT registered business, had the following data during the quarter;
Export sales 1,815,0
00 Domestic sales (tax included) 1,232,0
00 Purchases of goods for export 672,00
0 Purchases of goods for domestic sales 323,12
0 Purchases of supplies on domestic sales,
exclusive of tax 124,850
Assuming that the input taxes paid on purchases of goods for export are claimed as tax credit, the VAT payable by Tsukuba Company is
a. 12,895
b. 10,398 c. 177,895d. 84,895
10.In question no. 14, assuming that the input taxes attributable to export sales are being claimed as refund, the amount refundable is
a. 72,000 b. 12,895
c. 84,895 d. Zero
11.Joey, a non VAT taxpayer, purchased merchandise worth 11,200, VAT inclusive, from Willie, a VAT registered seller. The passed on VAT of 1,200 on the purchase is
a. An expense
12.Altura sold goods at an invoice value of 123,200 to Beltran on account. Beltran sold the same goods to Cantoria for 143,000 (exclusive of tax) cash. All of them are VAT registered taxpayers. The accounting entry to record the sales in the books of Beltran is
a. Cash 160,160 Sales 143,000 Output Tax (143,000 x 12%) 17,160 b. Cash 143,000 Sales 143,000 c. Cash 160,160 Sales 160,160 d. Cash 143,000 Sales 125,840 Output Tax 17,160
13.The journal entry in the purchase books of Beltran in No. 17 is
a. Purchases 110,000 Input Tax (123,200 x 3/28) 13,200 Accounts Payable 123,200 b. Purchases 96,800 Accounts Payable 96,800 c. Purchases 83,600 Input tax 13,200 Accounts Payable 96,800 d. Purchases 110,000 Accounts Payable 110,000
14.In question no. 17, assuming that Cantoria is not subject to VAT. In the sale of the goods by Beltran to
Cantoria-a. Beltran should record debit Cash 125,840
b. Beltran should record debit Cash of 143,000 in his books.
c. Cantoria should debit purchases of 125,840 and a debit Input tax of 17,160 d. Cantoria should debit Purchases of 143,000
15.Statement 1: in case tax exempt products are sold domestically to a VAT registered
person, the VAT otherwise due on such product shall be considered as Input Tax creditable against his output tax payable
Statement 2: export sales by a VAT registered person are subject to zero-rating and so he can claim and enjoy a crdit for the tax invoiced to him on his purchases. If he is not VAT registered, his export sales are exempt, but he is not entitled to tax credit for inputs. a. Both statements are true
b. False, true c. Both statements are falsed. True, false Number 21-23 are based on the following info:
Transaction 1- an agricultural food producer sells his products in their original state to a food processor who also buys packaging materials and containers from a manufacturer/ supplier
Transaction 2- the food processor transforms the food products into processed foods and sells to a wholesaler/ exporter
Transaction 3- the exporter sells the goods to foreign buyers. Transaction 4- the wholesaler delivers the merchandise to retailers
Transaction 5-the retailers sell the goods to households or ultimate consumers 16.Based on the information above, which transaction is VAT exempt?
a. Transaction 1
b. Transaction 2 c. Transaction 3d. Transaction 4 17.Which transaction is zero rated?
a. Transaction 1
b. Transaction 2 c. Transaction 3d. Transaction 4 18.Based on the information above, the Vat are absorbed by
a. Food processor
b. Wholesaler/exporter c. Retailerd. Households/ ultimate consumer 19.Buboy a government employee, ate in one fast food chain in Dipolog City. He was issued
the following receipt;
Greenwich-Dipolog City Branch (0369) Rizal Ave. Cor Lacaya St., Dipolog City
POSO1 SN: 455686 BIR Permit No: 1776-897-67543-455 Serving # 01 ---10/27/2007 16:23 APP OR # 564567878 1 SOLO SPE ML 83.00 1 XCHANGE –LRG CK 12.00 I item (s) 93.00 VATable 83.04 VAT-exempt 0.00 12 % VAT 9.06 TOTAL DUE 93.00 CASH 500.00 CHANGE DUE 407.00
This serves as your OFFICIAL RECEIPT. Based on the receipt issued above
a. The amount of 83.04 represents the input tax of the fastfood chain b. The input tax deductible from the output tax of Buboy is 9.96 c. The total invoice price of 93 is inclusive of the 12% VAT
d. Buboy has been subjected to VAT twice; first on th 93 and second, on the 9.96 Number 25-26 are based on the ff. info;
20.The pastry shop sells cakes and pastry items to well-known hotels around the Metro Manila area. The hotels are allowed credit based on the track record of the hotels. The total
amounts received or receivable from sales by the Pastry shop in the 2nd quarter of 2008 were 224,000, including the value added tax. Seventy five percent of the sales are
normally on account. How much is the value added tax on the sales for the 2nd quarter of 2008?
a. 20,000
b. 24,000 c. 26,880d. 15,000
21.The account title to best reflect the value added tax in the preceding number is a. Sales tax payable
b. Value added tax payable
c. Input tax d. Output tax
22.Cruz, a trader, made the following transactions of goods, exclusive of VAT, during the second quarter:
Cash Sales 200,0
00
Open account sales 100,0
00 Consigned goods delivered: April 15 100,000 May 15 100,0 00 June 15 100,000 The output tax for the second quarter is-a. 40,000
b. 48,000 c. 60,000d. 36,000
28-30
Mongolia Company, a VAT registered business has the following data in its books on July, 2008:
Domestic
Sales 709,500
Sales returns 26,400
Goods shipped on consignment (net of tax): Units Unit Price
June 5 20 22,000
May 5 12 22,000
Goods withdrawn for use by the
company 38,500
Goods taken as payment to
creditor 26,950
Freight and Insurance of goods 4,675 Purchases: Raw Materials 484,0 00 Supplies 61,60 0 Capital goods 60,50 0 Salaries of employees 235,0 00
During the month, one consignee remitted cash net of 20% commission representing the payment for five units delivered on June 5.
Another consignee remitted cash of 220,000, gross of 20 % commission, representing payment for 10 units sold in July. Other than the commission, Mongolia Company gave 5 % discount/rebate to the consignee for selling ten units in a one month period.
23.The output tax in July is a. 124,450
b. 121,050
c. 161,106 d. 134,255 24.The input tax is
a. 61,078
b. 73,293 c. 65,440d. none of the above
25.The amount of VAT payable is a. 87,813
b. 69,350 c. 66,525d. 78,404.46
26.A creditable input tax allowed on one who becomes subject to VAT for the first time a. Presumptive input tax
b. transactional input tax
c. excess input tax d. total input tax
27.Isaac Company, a newly VAT registered business, has the following data in January (all amounts are inclusive of tax).
Merchandise inventory 204,0 00 Actual VAT paid on the
inventory
16,00 0 Sales, total invoice
amount
469,0 00
Purchases 57,40
0
Fifty percent (50%) of the merchandise inventory on Jnauary 1 were purchased from non-VAT registered sellers.
The VAT payable by Isaac Company is a. 30,100
b. 28,100 c. 3,960d. 4,950
28.An owner of heavy equipment is engaged in equipment rental. It used to be VAT exempt because its annual receipts never exceeded 1,500,000. On January 2, 2008 it decided to register under the VAT system. The following data were from the first quarter ending March 31, 2008.
Rental from heavy equipment of 12%
VAT 336,000
Purchases of supplies (February) gross
of VAT 112,000
Subject to VAT Jan 1, 2008 50,40 0
Not subject to VAT 60,00
0 VAT paid on the inventory of supplies,
Jan 1, 2008 5,400
The VAT payable for the quarter ending March 2008 is-a. 12,171
b. 33,792 c. 18,600d. 22,992
29.Statement 1: Transport of passengers and cargo by domestic air or sea vessels from the Philippines to a foreign country is subject to VAT at a rate of 0 %.
Statement 2: transport of passengers and cargo by domestic air or sea vessels from Mindanao to Luzon and Visayas, vice versa, is subject to VAT at a rate of 12%.
a. true, false
b. false, true c. false, falsed. true, true 30.Beth had the following receipts during the month (exclusive of tax):
passen ger Cargo Jeepney 1 20,000 Jeepney 2 30,000 Bus 15,000 8,500 Sea vessel 1,500,0 00 800,0 00 Cessna plane for
hire
800,00 0
560,0 00 The output tax during the period is a. 164,220
b. 441,000 c. 283,800d. 440,220
31.Inside Job Security Agency is engaged in the selling of security services to various clients. During the month of December, it billed on of its clients of the following
Monthly salary 6,00 0 13 th month pay 6,000 Agency fee at 15 % 1,800 SSS/Philhealth 300 Leave with pay 450 T o t a l 14,5
50
Based on the following data, how much is the Output VAT payable of Inside Job Security Agency
a. 1,746.00 b. 1,558.93
c. 1,440.00 d. 1,478.57
32.Bonnevie is a real estate dealer. During the month of November 2008, he sold three (3) lots under the following terms:
Lot 1 Lot 2 Lot 3 Selling price 250,0 00 200,000 300,000 Cost 150,0 00 130,000 175,000 Gain/loss 100,0 00 70,000 125,000 Terms: Downpayment, Nov 5 25,00 0 50,00 0 40,00 0 Dec 5 25,00 0 20,00 0 20,00 0 Jan to Dec 2009 200,0 00 130,000 240,000
The VAT in November is a. 26,500
b. 31,800 c. 34,800d. 90,000
33.Based on the information given in no. 37, the VAT for the month of December is a. 5,400
b. 4,500 c. 10,000d. None
34.Dimagiba Construction Company entered into a contract with the government to construct an edifice for a total contract price of 25,000,000. During the month, the government paid 10,000,000 of which it withheld 5 % final withholding tax. How much is the VAT payable by the company on the government contract?
a. 150,000 b. 850,000
c. 0
d. 1,000,000 35.Which of the following statements is not correct?
a. transitional input tax is 2% of the value of the inventory or the actual VAT paid, whichever is higher
b. amounts received from services performed by an individual pursuant to an employee-employer relationship are exempt from VAT
c. export sales by VAT registered persons are not subject to VAT
d. Export sales by persons who are not VAT registered are VAT exempt 36.Transaction by a VAT registered taxpayer which is not subject to VAT:
a. Foreign currency denominated sale b. export sale
c. transaction deemed sale
d. sale of service rendered in foreign countries.
37.Statement 1: There is a VAT in an importation by an importer-merchant even if he does not intend to sell the imported article.
Statement 2: a person who is exempt from VAT may register under the VAT system a. false, false
b. false, true c. true, false d. true, true
38.-- VAT is imposed on goods brought into the Philippines, whether for use in business or not -- In the case of goods imported into the Philippines by a VAT exempt person which are subsequently sold to taxable persons, the latter shall be considered the importer thereof and shall be liable for VAT due on such importation
a. true, true b. false, false c. false, true d. true,false
39.Celebrado, VAT registered taxpayer, has the following data on importation in 2008: For
sale Own use Invoice cost (Exchange rate $1:Php 46) $
5,650 $ 850 Custom duties 12% 10% Freight 20,00 0 4,000 Insurance 28,00 0 4,250
Other charges before release from custom
house 7,000 2,500
Facilitation fee 10,00
0 5,000
Freight from custom house to warehouse (net of VAT)
12,00 0
1,200
Assuming the custom duties are determined on the basis of the quantity of volume of the goods, the VAT on the importation is
a. 31,260
b. 37,285 c. 47,981.76d. 44,742
40.In no. 44, how much is the VAT payable if the imported goods for sale were sold for 665,000 (inclusive of tax) 10 days after its delivery to the
warehouse-a. 28,279.44
41.Robin P., imported a car from the USA for his personal use. Total landed cost is Php 250,000 (about $5,000) including custom duties of Php 50,000. VAT payable is a. 25,000
b. 30,000 c. 10,000
d. none, because importation is for personal use.
42.Lavadena Construction Corporation, is a VAT registered general construction company. Its data for the quarter are revealed below:
Contract
1- Residential house
Contract Price 1,200,000 Php Collection during the
month 616,000 Php Contract 2- Warehouse Contract Price 1,000,000 Php Percentage of completion 70%
Collection during the
month 220,080
Importation of construction equipments from Japan: Invoice cost, Japan (1$:
Php 44)
$7,500 Value per Bureau of
customs
Php 340,000
Customs duties 35,000
Freight and insurance 17,000 Purchases of materials:
From VAT registered
persons 226,240
From non-VAT registered
persons 126,500
Revenue from rent of equipment to another contractor: 17,920.
Assuming the custom duties were based on the quantity of the goods imported, the VAT due on the importation
is-a. 46,860 b. 52,260 c. 45,840 d. 46,050
43.The VAT payable by Lavadena Company during the quarter is a. 21,420
b. 19,200 c. 6,450 d. 20,400
44.Bata, a VAT registered person had the following data: Price actually paid for the period
Price actually paid for the goods bought from Japan P 600,00 0 Related insurance premiums and freight from Japan 100,00
0 Custom duties amount to 40% of dutiable amount
Other import charges and expenses amount to 120% of custom duties
The VAT on importation is a. 82,560
b. 145,920 c. 135,360
d. 157,920
45.Patogrok Company contracted with Sapotize Construction Corporation to Construct the former’s building where only the labor will be supplied by the latter. The data on the construction (inclusive of tax) during the month are as follows:
Progress billings by Sapotize Company P600,000 Payment to Sapotize Company 504,000 Purchase of materials by Patogrok Co. 442,400 Which of he following is false?
a. construction in progress is not depreciated until the asset is placed in service.
b. for purposes of claiming input tax, as a purchase of service, the value of which shall be determined based on the progress billings.
c. the input tax credit on the labor contracted shall be recognized on the month the payment was made based on the progress billings
d. once the input tax has already been claimed while the construction is still in progress, no additional input tax can be claimed upon completion of the asset when it has been reclassified as a depreciable capital asset and depreciated.
46.Aileen, a Japanese residing in the Philippines bought garments from Cua Corporation, a domestic corporation, and exported the same to Japan. Total value of export is 100,000. VAT (output tax) due on the transaction is
a. 10,000 b. 5,000
c. none, because 0% applies
d. none, because the sale is exempt from VAT
47.Offspring Corporation is a VAT registered dealer of appliances. The following data are for the month of October:
Sales, total invoice value P5,800,0 00
Purchases, net of input taxes 2,820,00 0
Sales return 200,000
Purchases return, net of input tax 300,000 Deferred input taxes (carried over from
third quarter
9,500
The VAT payable for the month of Oct by company is a. 320,000
b. 285,500 c. 80,000d. 288,100
48.The following are the data of City Appliances Marketing Company for October, 2008: Sales upto Oct 15, total invoice
value
P266,0 00 Purchases upto Oct 15, net of
input taxes 215,000
Additional info:
On October 16, 2008, City Appliances company retired from its business and the inventory valued at 190,000, net of input taxes, was taken and transferred to New City Appliances Company. There is deferred input taxes from the third quarter of P3,500. How much is the total value added taxes due and payable by City Appliances Marketing Company in its operations in October and its retirement from business?
a. 22,500 b. 22,000
c. 6,350 d. 25,350 54-55
Gabriel Panga Auto Repair Shop, VAT registered, had the following data in its books during the period:
From Auto repair 85,6 20
From washing and greasing 45,4
25 Reimbursement by customer on payments made to VAT machine shops 4,35
0 Payments received for lubricants, oils and fluid provided by the shop to cars undergoing repair 5,78 0 Disbursements: Electric bill 3,55 0 Water bill 2,38 0 Salaries of employees 15,0 00
Payments made to machine shops, non VAT 4,35
0
Purchase of lubricants, oils and fluids 3,00
0
Purchase of capital goods (life-10 years) 24,0
00 49.The output tax amount
to-a. 16,419
b. 16,941 c. 14,660d. 15,126
50.The VAT payable is a. 9,404
b. 12,753 c. 9,459d. 6,979
51.Taxpayers who became VAT registered persons upon exceeding the minimum turn-over of 1.5million in any 12-month period, or who voluntarily register even if their turnover does not exceed 1.5 million shall be entitled to a transitional input tax on the inventory on hand as of the effectivity of their VAT registration on the following, except:
a. Supplies for use in the course of taxpayer’s trade or business b. Goods which have been manufactured by the taxpayer
c. Goods in process for sale
d. Capital goods being used in the operation of the business 57 to 60
Sumilco, a manufacturer of refined sugar, became subject to VAT effective December 1, 2008. During the month, the following are its data:
Refined sugar withdrawn from refinery,
inclusive of VAT 924,000
Purchases
Supplies from VAT registered suppliers 38,50 0 Packaging materials, VAT inclusive 27,06
0
Sugar cane from planters 350,0
00
Water bill 12,00
0 Salaries of officials and employees 150,0
00 Inventory per balance sheet, Dec 1, 2008
Packaging materials 17,87
5 Supplies purchased from VAT registered
persons 14,850
Supplies purchased from non VAT
52.The presumptive input tax is-a. 35,000
b. 5,250 c. 13,860d. 14,000
53.The transitional input tax is a. 3,506.25
b. 2,975 c. 654.50d. 2,998.00
54.The total creditable input taxes is a. 24,530.54
b. 13,828.00 c. 92,935.00d. 22,935.00 55.The VAT payable is
a. 61,065.00 b. 70,172.00
c. 74,469.46 d. 69,815.00
56.An importer wishes to withdraw its importation from the Bureau of Customs. The imported goods were subjected to a 10% customs duty in the amount of 12,500 and to other
charges in the amount of 9,500. The value added tax due is a. 12,500
b. 17,640
c. 13,364 d. 14,700
57.Kaka is a contractor. She entered into a contract o March 1, 2008 which was completed on March 31, 2008. She received the total value of the contract amounting to 550,000 on March 31, 2007. Kaka spent for the materials used in the contract which she acquired from the VAT registered suppliers costing 150,000. All amounts are exclusive of VAT.
The VAT payable by KAKA for the month of March is a. 15,000
b. 40,000 c. 48,000d. 59,500
58.Archie, a newly VAT registered taxpayer is a lessor of poles to telephone and cable companies. During the month of January 2008, Archie had the following receipts from customers:
Security deposit from customer C 110,0 00 Ret income in January from various
customers 88,000
Prepaid rentals received from customer C
(feb to June) 132,000
Loan to Archie from customer B 82,50 0
During the month, a portion of the security deposit for the faithful compliance by customer C of its obligations to the lessor was applied to rental for January in the amount of 11,000. At the beginning of the year, Archie had 252,000 worth of inventory of supplies and materials for use in the business. VAT paid on the beginning inventory is 3,500. The output tax of Archie in January is
a. 24,750
b. 21,000 c. 28,500d. 39,500
59.In no. 63, the input tax on Archie is a. 5,040
b. None c. 21,000 d. 4,160
60.Marinda is a VAT registered grocery owner and sugar dealer. She submitted lists of inventory as of December 31, 2007 to the Revenue District Officer as follows: Grocery items, total value 325,000
Raw cane sugar, total value 255,000
In January 2008, she had the following sales and purchases Sales Purchas
es Grocery (total invoice
Sugar (excluding VAT) 480,00
0 420,000
The VAT due for January, 2008 is a. 35,675.00
b. 42,045.54 c. 41,675.31 d. 6,675.26
67-68
Goodbooks Educational supply, VAT registered, is engaged in the business of selling books, school supplies and gift items. The following are the record of its purchases and sales during the month of October (inclusive of tax):
Sale of school supplies 560,0
00
Sale of books 200,0
00
Sale of gift items 336,0
00 Purchases of school supplies and gift items 406,0
00
Purchases of books 176,0
00 Purchase of computer used in taxable and exempt
transactions 21,112
61.The creditable input tax on the purchase of computer is a. 2,400.20
b. 1,920.50 c. 26,400.65d. 1,809.60
62.The VAT payable is a. 50,690.40 b. 34,100.50
c. 36,500.00 d. 43,280.25
63.Tala company had the following data for the 1st quarter of 2008 (VAT exclusive)
Taxable sales 600,0
00
Exempted sales 300,0
00
Zero rated sales 100,0
00 Input tax which cannot be directly attributed to any of
the above sales
50,00 0 The VAT payable for the quarter is
a. 42,000
b. 37,000 c. 32,000d. 22,000
64.Combined Company operates a VAT business and a non VAT business during the month, its books revealed the following record of sales and purchases
Sales (VAT business) 600,0 00 Sales (non-VAT business) 200,0
00 Purchases (VAT business) 401,5
00 Purchases (non VAT business) 80,00
0 Purchases (VAT and non VAT
businesses 64,000
The VAT payable by Company is a. 7,660
65.Excel company operates two lines of business. Business A is subject to VAT, while Business B is not. Data for the month are as follows:
Sales-VAT business, Sales-VAT included 560,0
00
Non-VAT business 100,0
00
Purchases-Merchandise, VAT business, VAT included 154,0 00 Merchandise, non VAT business, VAT included 67,10
0 Capital goods, VAT business, VAT included 34,77
6 Capital goods, non VAT business, VAT included 27,50
0 Capital goods, for use in both business, VAT
included
56,00 0 Rent of store, VAT business, VAT included 14,56
0 Rent of warehouse, VAT & non-VAT business,
VAT excluded 6,200
Freight of goods, (VAT and non VAT business),
VAT included 2,576
Telephone bills, VAT and non-VAT, VAT included 1,624 The input tax on Business A
is-a. 27,281
b. 23,747 c. 23,267d. 18,875
66.In no. 71, the VAT payable by Excel company is-a. 19,035
b. 20,733 c. 20,253d. 32,219
73-75
Mildred enterprises, a VAT registered trader had the following data during the last quarter of the year: Purchas es Sales October 627,20 0 392,0 00 Novemb er 599,200 862,400 Decemb er 959,616 789,600
All of the amounts indicated above are VAT inclusive.
67.The amount of VAT payable by Mildred for the month of October is a. 25,200
b. 16,500 c. 2,000d. None
68.The VAT payable for the month of November is a. 203,500
b. 28,200
c. 3,000 d. None 69.The VAT payable/(excess) tax for the last quarter is
a. (18,216)
b. 18,216 c. 60,900d. none
The books of accounts of Franklin Corporation, VAT registered , revealed the following data in 2007:
Deferred input taxes,
June 2007 6,200 Sales: July 620,0 00 August 430,0 00 September 540,0 00 Purchases: July 508,0 00 August 432,0 00 September 314,5 00 70.VAT payable for July is
a. 13,440
b. 7,240 c. 11,200d. 5,000
71.The VAT payable for August is a. (6,440)
b. (240) c. Noned. 7,000
72.The VAT payable for September is a. 26,580
b. 27,060
c. 20,860 d. 34,090 73.Felicisima had the following data:
Case 1 Case 2
Sales, net of VAT 1,900,0
00 1,800,000 Purchases of goods for sale,
exclusive of VAT 1,260,000 1,600,000 Purchases of machines (VAT not
included) 1,440,000 900,000
Machine life 6 years 3 years
The amounts of VAT payable/excess tax are as follows:
(a) (b) (c) (d)
Case
1 54,000 73,920 73,920 None Case
2 (84,000) (84,000) 20,000 none 74.Lavinia had the following data in July:
Sales of goods (excluding VAT) 2,540,0 00 Purchases of goods (net of VAT) 1,450,0
00 Purchases of capital goods (invoice amount)
Machine 1 (useful life of 6 years) 974,40 0 Machine 2 (useful life of 3 years) 67,200 The VAT payable in July is
a. 120,860
81 to 82
The following data (net of tax) of Christine company are as follows: 1st quarter
Sales 700,00
0
Purchases 500,00
0
Purchase of machinery (Feb) 1,500,0 00 Unutilized input tax as of end of
1st quarter 40,000 2nd quarter Sales 1,500,0 00 purchases 200,00 0
75.For the first quarter, Angel Company will result to a/an-a. VAT payable of 72,000
b. Excess tax of 22,000 c. Excess tax of 196,000d. VAT payabe of 22,000 76.The VAT payable for the 2nd quarter
is-a. 156,000
b. 134,000 c. 125,000d. None
77.The data during the second quarter:
Output Tax 35,0 00 Input Tax 19,0 00 VAT paid: April 3,00 0 May 4,50 0 Excess input tax, 1st
quarter 2,400
The VAT payable (or excess tax to be carried over) is a. 6,100
b. 16,000
c. 8,500 d. None
78.A new businessman consulted you relative to the filing of tax return and payment of his business tax. The business is VAT registered although he is expecting to earn an annual gross receipts ranging from 900,000 to 1,200,000 only. These are his questions:
1. what business tax should be paid by him?
2. when is the deadline for filing the tax return for the month of May?
3. when is the deadline for the payment of the business tax for the month of June (or second quarter)?
Which of the following choices would be the correct advice? Questions
1 2 3
a
. VAT June20 July25 b
. VAT June25 July25 c
. NonVAT June20 July25 d
85-86
The City Government of Inga has the following purchases for the month of August 2009 from VAT suppliers of goods and/or services:
Purchase of goods from Sina store an merchandise (inclusive of VAT) 11,200 Purchase of services from Daman Services, Inc 56,000 79.The amount payable to Sina after withholding taxes of VAT and income tax is
a. 11,200
b. 10,600 c. 9,400d. 10,500
80.The amount payable to Daman Services Inc. after withholding taxes of VAT and income tax is
a. 56,000
b. 50,000 c. 52,500d. 53,500
VAT Exercises True or false
1. A VAT registered person who issues a VAT invoice for a VAT exempt sale but fails to display on the invoice the term VAT Exempt shall be subject to VAT on that sale. 2. The input tax of a VAT purchaser is the output tax of the VAT seller
3. Services rendered to persons engaged in International shipping or air transport operations are subject to 12% VAT.
4. The excess of output VAT over the input VAT is a current asset of the taxpayer
5. The input VAT on purchase of capital goods valued at 2,000,000 shall be spread over 60 months ,or the life of the asset, whichever is shorter, subject to 70% cap.
6. Persons engaged in sale of services may also be allowed to claim tax credit on presumptive input tax.
7. Gross receipts on services rendered by all franchise grantees are subject to franchise tax.
8. . 9. .
10.A physician is not subject to VAT because in exercising his professional services he is not engaging himself in business.
11.There is no creditable input tax on sales to government or any of its political
subdivisions, instrumentalities or agencies, including government-owned or controlled corporations.
12.If the invoice price is inclusive of VAT, the amount given is multiplied by 3/28 to get the VAT component thereon.
13.A taxpayer who operates a VAT and a non-VAT business cannot claim input tax credit on purchases of goods to be used in his VAT business.
14.Any input tax attributable to zero-rated sales by a VAT –registered person may at his option be refunded or applied for a tax credit certificate which may be used in the payment of internal revenue taxes.
15.Banks and other banking institutions are subject to VAT.
16.Importation of goods are subject to VAT even if the intention of the importer is to use the imported goods for personal purposes.
17.The gross receipts derived from exercise of a profession and from other lines of vatable business shall be combined for purposes of determining the threshold of 1,500,000 18.The account Output Tax must appear in the current liability section of the balance
sheet.
19. Lease of copyright on taxation books are subject to VAT.
20.Input tax, being a tax, is an expense on the part of purchaser and is deductible from gross income for purposes of computing the net income.
21.VAT is a regressive tax.
22.System loss on electricity that are being charged by electric cooperatives to consumers are subject to 12% VAT.
23.Printing of invoices and receipts (including delivery receipts) requires the approval of BIR
24.Purchases and sales are recorded in the books of non-VAT taxpayer at an amount which is net of input/output taxes
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