CPAR_BLT 09.14.13

(1)

CPAR

CPA Review

Sch,c**

<lf

tlte Phrlippines

FINAL

PRE-BOARD

EXAMINATIOT{

_Saturdag

September

14,2013

10:30AM

to 12:30Noon

Business

Law

and

Taxation

l0:30AM

to

rrffincdons,Choose the BEST answer fur each of the ferliowing items. Mark only one answer for each item on the Speciat

Ansv*er $hed pnovided. _Strictly

_rssasure

_dlowd.

1.

Which one

ofthe

fotlowing

is nnt a. requtsite to rnake an

initnment

negoti.able?

a. If

addressed

to a

drawee,

he

rnust tre named

or

otherwise inclicated

therein

with

reasonable

certaintv

b.,

JI grgst sO$-af*a*pnEqudt-tjpgf,I SES!LI$g o'r qr.dgf rfi Sr.{r}..A S!-jI} s.6rf +}t! tp.E,.gf-Ky

c.

Where

the

instrument

is

payable i;o

tx*rcr,

the

payoe rrrr,ir.

!r

,iemed

or

otherwise indicated tirerein vrrrth reasonable certainty

d.

Where

the

instrument

is

parvable

to

order,

the palee

must be

nam.eC

or

otherwise indicated therein

with

reasonable certainty

2. M,

makes a negotiable promissory note payable

to

the orCer

ot'i'.

P made a special indorsement to

A. A

made a qualified indorsement to

B,

a minor. Subsequent in<.iryrsrments are

ftom

B to

C,

C to

D

and

D to

E,.

all by

speoial indorsement,

then

E

made

a qualified

indorsennent

to

F. Which

of

the following

staternents is correct?

The inriorsement made by B transfers

titls

to C, herce i3 is

llabls

as an indorser F can hoid E liable

ifM

dishonors the urstnrrnrrr:

In case

M

dishonors the instrument, F can hold alt itdroi'sers liabie except

B

The qualified indorsers

A

ancl E and miuor

B

are not liable to F

3.

His warranty extends

in

favor only of the irrme 1i;fs transferee and to no other holder

a.

Qualified

indorser

r,. Fe'r'son negoriating b-'r delivery

b.

General

indorser

nt. Person uegotiating by biank indorsement

4. which

of the fc,llov,ing sta.tenents r:e'.r"t'lidrg

tr

freffir.rri, ohares

il

_corect?

a.

Treaslly

shares are not part

of

r:su ,d ca.p,ital s:tcc"l:

b.

Treasury shares may not be d.sposed

of

at a price

lowor

thur

thv par or jssued price even

if

it

is reasonabtre and approved by the toarcl of<hrectors

c.

Treasury shares are entitled to vote

,J.

_{Treasury shares, onco disposer!}

_cf,

_entitle_the_{purchaser or transfore,e he}_{right to}_dividends

-u

_5.

Which of the

frillowing

is not a negotrabie instrurnent?

a.

'?ay

to

B

or order P1,000 in 4 equal monthly installinellts."

To:

X

Sgd.

A

b.

'?ay

fti

B or order

Pl,000

and debit rny a*eo,xrt thercafter"

To:

X

Sge{. ,1"

c-

'?ay

to the older of B

within

6 mon'ths from dete tire

sum,rf

P1,000

at

12% per annum"

To:

X

Sgd..,\

d.

"Fay to

B

or 1iearerP1,000 ons ye,ar afie r .{ate. df

rtt

paiC v,rhe*. due,

I

agree to pay collection and attorney's fees"

To:

X

'q,gd.

r\

6.

Holder

H

altered the amount

of

a n*gotiat leinote froru Fld),,{i00 to P1 1C,000 then negotiated the note to

P. As a result,

I I

i:).

d.

a.

If

P is a holder

in

due course. tie can 1eq,rdr,,

b.

If

P is not

a holder

in

ciue sourse, he qaR P10,000

o.

P

cannot require

the

maker

to

pa1.

fl.:"r ntl,,&.er;c,Ila) PJ l,J JOa

*"e,{uir*g _tlr.*_maker

_io

_pa}'only

_{the original}

_sgm

_of

l

trc,oaui,e

*t

siferalrrrt

,vhetlrer

or

not

he

is

a holder

in

due coursD

d.

l-f.P is a Lotrder for value, he can cir'[Iqm F I tii"ul)e

ficm

]i.

C

B

c

D

A

D

E is liable

& Q

E violates warranty

Transfer title but NOT liable.

Kailangan nakaspecify din kung

kailan mo siya sisimulang

(2)

i

_7.

M

issued to

p,

accommodat€d party, a nego{iabrle pr:omissory note

for

P10,000. P endorsed

it

to

A' A

to

B and B to C. Which one of the

fotlowing

is

incorrecti

M

can collect from P,

if M will

Pay C P

maydirectlypay

C

Between

M

and P,

M

is not liabte

ufuilr

P is

principally

liable

P can collect from lvI,

if

P \^rill pay C

A

is

maker and

H

is

payee

of

a

negotiabl*

promissory

note

payable

to

order.

There

is

no

valuable

consideration for the note-. B delivers the ins*:rment to C,

without

indorsement, under circumstances that

otherwise

would

have made

C

a holder

in

due course such es,

that C did uot know

of

the

absence

of

consideration. May C recover from

A?

a.

Yes, because

A's

personal defense oalnot be used agai.nst C

b.

Yes, bos.atis€ the promissory

rme

is rlsgotiable

c-

No, because

A hai

a real deferse iryhich can be used even against a holder in due course

d.

No,

because

C

acquires

only B's

nghts

and

A

can set

up

agarnst

B

the defense

of

absence

of

consideration

A

is

the drarvsr "of a

shak

B

is

tk

rrey.ee snd

X

is tlrri drauv-e bank.

Y

fraudulently gets

hold

of

the

check and forges the signature

of

the pay*e, ts"

Y

theo deposits

it io

C bank. C bank indorses the check

to

X,

drawee bank and collects from-said

X

dra.wee hank through

the

clearing house.

_then

Y,

forger

withdraws from C bank the proceeds of tlre clree'.k and disappears. Vrhich of the

following

is not correct?

L.

The drawer

A

has the right to reool-er'from calleoCing bank C

b.

The drawer's acoouot cannot be chargsd try the drarvee bank

c.

The payee,

B

can recover &om drawer

A

d.

The drawee bank can recover from fhe cnliecting'bank

10. The

following

statements pertain to a voting

tn$tee'

except

&.

The representative acquires legal

title

to the shares

b.

It

is good only

for

the meeting for

which

it was intended

;. ii

;.:

_t

*rufly

irr.rocable

*O

tU*

representative

may vote even

in

the

presence

of

the stocllholder

d.

The

agreement

giving the

reprresentativq

thlpower

to

vote

must be

duly

notarized and a copy

ther.eoimust be iubmiued to the SEC to be effective and enforceable

I

l.

This vacancy

in

the board

of

directors may be finled by the board

of

directors

if

the remaining directors

still

constitute a quonrm

a. b. c. d.

{.

9. Removal of a director Death

of

a director

Iacrecse in

thenturbersf

dirustffis Expiration of the term of a director

12.

M

issues a promissory note payable to P or bearer. B"hjclr of the

fotlowing

is not correct?

a.

If

indorsedUy

f

to

A

nirO

A

also indorses

it

to B, B rnay negotiate the note to C by

delivery

b.

If

indorscd by P to A and A also indors^es

ii

tri B, P is liable to A altd

B

c.

If

indorsed Uy

e

to _^A,and

A

also inelorx*s

it

to

B,

and

B

negotiates the note to C by delivery-

A

is

liahle to

B

and C

d.

If

p

negotiates the note to

A

by deliverv and.

A

indorses

it

to B,

B

may negotiate tho note

to

C by delivery

13. Which

ofthe

following

is,not correct?

&.

Where the instrument

is

negotiated ba,c,l(

to

nccessary to the h.older's

tifle

a

prior

party,

all

intervening indorsements are not

b.

lVlrere

the

instrument

is originally

1

indorsement

c.

The

indorser whose indorsement

i:

liability

on the instrument

payahle

to

order, the holder maY

not strike out

the _PaYee's struck

out

and atrl

the

indorsers are thereby

relieved from

a. b.

d.

The holdermay at anytime strike out an i*dorsernent which is not necessary to his

title

D

A

B

C

Accommodated Party - sya yung nakisuyo. On the eyes of the partues. Subsequent to accommodation, pwedeng wala syang alam sa accommodation na naganap.

(3)

-

14.

The

subscriber

of

shares even

if

not

fully

prraid

_but

rvho

is

not

delinquent

is

entitled

to

the

folfowing

rights, except

a.

Rights to receive dividends

b.

R.ight to vote in stockholders meetings

c.

Right to demand his stock certificate

d.

Rights to inspect corporate books and records.

-

_{{5' Slaiemenll}

-

_A

_{majority of}

_{the number}

_of

_directors_or_trustees_as

_fixed

in the artioles

of

incorporation

shall

constitute

a

quonrm

for

the

transaction

of

corporate business, anel every decision

of

at

least a

majority

of,the directors or trustees present at

a

meeling at which threre is a quorum shall be

valid

as a corporate act, except

for

the election

of

the offrcers rnhich shall requir"e the vote

of

a

mejority

of

all

the

mernbers of the board

Stsfqffiqt

U

-

No

pe,rsou

esfivftted

of

fiml

jgdgruent of an rltfemse pnrnisimble

by

irrprisorrrmt

fu

a

period exceeding

five

years or a

violation

of the corpormion oode committed

withinsix

_{lears prior to}the date of his electioo or appoinunen! shall

quaiiff

as a director,

fustee

or

officer

of any corporation.

a. True, true

b. True, faJse

c. False. fnre

-1. _False"_t'alse

16'

M

rnakes and ctrelisers a prornissory note

payatle to

the order

of

P.

P

indorses the note

to

A. Later,

S steals the nste and negotiates the same to

t{

by f'orging

A's

signature. Thereafter,

B

negotiates the note

to C, C to

D

and

D

to E, a holder

in

due osurse^

lttricle

of the

tbllo*ing

statements is correct?

&.

E can hold

M

and P liable because their

signat"r*

are genuine

b.

E

cannot

hold

B, C

and

D

linble

beca'*se they have

iro

pa.rticipatr.on

in

the

commission

of

the forgery

c.

E can enforce the instrurnent _{nnly ag*inst}S, the fc,rger

d

E can enfilrce the instrument against S, B" C and

D

but nc,t agaiast

ld,

P and

A

17.P,

O

and

A

are partners

in

an

impoit

and

exp:rt

irusiness. Customers desiring

to

place

an

order

for

imported artictres _{are always required}_to_{rnake a d,cp':sit}_of_{l5_9ro}_of_{the tota! cost .rf the order.}

_B,

_a_regular

customer, deposited P5,000

to

P for

his ord*r, P,

instead

of

tumin;* over

the

said

amount

to

the partnership, misappropriated

it.

As a result, (rrio _lti_irot

_cofiect

a

fI

may institute a ciaim aga.inst the parfnerstiip and a{{

th*

partners

b.

'Ihe _personal

_liability

_of_the_pafiner,:s

is jr:rint

c.

The partnership is bound to make gorx! the loss wherre one parhler acting

rvithi*

the scope

of

his

apparent authority receives nlonev or

proiierg

cf

a

thrd

psrson anct misapplies

it

d.

Ail

the

parhrers

_are

lrable

sc,lirftrlil;r

r,,ltl

thc

pxtlr,rsliip

for:"er;thin_

chargeable

to

the

pafine$irili

18.

A

contract lvlrere the creditor acqui:r;s tfte

right

rrt

re*eire

the

firdts

of

rn rrninovalrle of his debtor,

with

the obligntion to

apply them

to

the payment

iif

irrt;rest

it

ow.,ng" arrC tlroreafler to the

principal

of

his

credit is

a.

Anfichrssis

b.

U$lftx:t

.c.

R.adestrte;.norfgr4e d

()errr.lmorlatinn

19.

A

ptedged

his nng

to

B

for

P20,000.

A

faiie,J 1,r pay

his

obiigaE,lrr. i"i

lohl

rt

at

a

public

auction

for

Pl8,000.

Can B recover the deficiency?

a"

Yes, even

without

stipulation

r.

li'o,

even

ifthere

is stip,;Lr*i,tn

b.

Yes,

if

there is

stipulation

d

i{o,liyllesl

there is stjpr.llafion

20.

C

mortgaged

his

car

to

B

for

P?CI0,000. C failed.

to

p,r_v

hil

ctili,6ation.

B

sold rt at a

public

auction

for

P180,000. Can B recover the deflciency"l

a.

Yes, even

without

stipulation

o, No, ev*ia

if

there is stipri;gl6,n

b.

Yes,

onlv

if

there is

stipulation

tL N$, u:rless ther.e is stipulati,;n

21.

Any

director of a col'poration maybe removedrf'rr:nn

oftjse

b.v a vote

of

a.

Majority

of the mernbers

of

the board

b-

Majority

af the stockholders _Fr.esent

o.

2/3

ofthE

stockholders present

-

_d.

213

_of

trcourstanding capiml sfock

C

B

XXX

six

XX

five

Stock certificate is issued only to

fully paid shares.

D

B

A

C

A

D

(4)

22.PLand

P2 are co-owners

ofa

piece

of

lend an*i ttie-v iuulr,::d ,rnd arrthorised

A to

sell their land. tUho

will

be

liable to

A

fortlre

payment

ofhis

commission?

t.

Both

Pl

and P2

jointly

b.

Both P1 and P2 solidarily only

if stiplated

c.

BothPl

andP2 solidarily even withorrt stipulation

d.

50%

fromP1

and S0YofromP2

23.

F

appoints

A1

ar:d

A2

as his agents.

A{

anrl

A3

agreed

to

be bormd

solidarily.

Suppose

A1

performed the agency negligently which caused damaged to F,

**n

P hold

A2

liable

for

damages?

Slalennen!-l-

Yes,

if

A1 acted withitr the sirrpe of his authority

Steteseul2

_-

No,

if

Al

acted beyond. the s,;ope

*f

h"is authority

a.

Both statements are true

b.

Bo{ft st*$exrreuts afe false

c.

Only Statement 1 is true

d.

Only Statement 2 is true

24.

A

sold

his

piano

to

B

for

Php200,000 payable

ilr

inste^tlmrent.

A

chattel mortgage was constituted on the pianci.

il

defaulted

in

two

installment payments.

A

clef,rranded payment

of

the unpaid obligation amounting

to

Php

120,000 and a

writ of

attachment was issued and the piano was sold

for

Php

100,000. Can

A

still

recover the deficieney?

Statement

I

_-

No, the foreoloswe

ofthe

piamo extinprrishes

B's

obligation

S{atgent

3

_-

Yes,

if

stipulated that in casc of foreclosure the buyer

will

pay any deficiency

a.

Both statements are true

b.

Eodr statements are false

c.

Only

Statement

I

is true

d.

Only

Statement 2 is tnre

25. Which of tlie follorr*,ng instrufirents:s negotiahle?

a.

'?ay

to the order of

A

or B the s,rrm

rif,P1*0,000."

Sgd. C and

D

b.

"I

promise to pay to the order

oI

A cr B ths surn of

P100,000".

Sgd. C and

D

c.

'?ay

to

B

or order the sum of Plii0,Ctt0 30 days after

sight".

Sgd.

A

d.

"We promise to pay

A

and B the suni

cf'P100,000".

Sgd. C and

D

26. Deleof,rs personap is an element of a

prfirership

wh,ic.h. me&ns

a. Right to choose his partners

b. Con{idence and trust in his partners c" Obligation to remain loyal to his partrers

d.

ilistribution

of profits among the partrrers 27. When real property is contributed to the partrlersh,p

a.

A

real oon.tract is perfected b.

A written

in*strument is required

c.

A

public instrument complete

with

inventory is required

d.

A

partner can make important alteration

if

beriefir:ial to tlre partnership 28. In a parlnership, the

liability

of the partners shall be joirirt and solidary

L Oblig,atiors in favor of

partnership suppliers by virtue of sales contract

U.

Ohligatioras

in

fb'vor

of

a

partnership

client for

retum

of

deposits misappropriated

by

one

of

the partners

-

m.

Obligations in favor

of

a pedesfiian

hit

by tho

rl*hveiy

van driven

by

one

of

the porhrers in the course

of partnership business a.

i

and

III

b.

I{

and

lII

c.

I

arul

II

d.

I,

Ii

and

Itr

C

A

B

A

C

B

SALE by installment => RECTO law.

LOAN with installment => Chattel

contractual

damages

(5)

29. Acorporatiotr is cirtferent ilicrn a pm.rtnership in -that ttre fonner is a. An

artificial

berng

b. Created by operation

of law

c. A business organization

d. Organized for

profit

30. A

bought

from

B

a

car at a

price

of

P2M, FOB factory.

A

paid

PIM

as

down

payment and

the

balance

within

one month

from

delivery. The car was picked up by

A

upon payment

of

the down payment on

April

24,201Q. On

May

10, 2010,

B

ieamed of

A's

insolvency. In this case,

B

shall be entitled to

a. Remedy of possessory

lien

b. Remedy

*f

resale

c. Remedy

of

stoppage

intransit

d. Remedy of rescission

31. The principle of "caveat emptor" or let the buyer beware

will

not apply

in

a-

Sheriffs

sale

b. Sales of animals

in

pairs c.

Auction

sales

d. Sales of livestock as condemned

32.

A, B

and

C

are partners"

A

died togsther

with

other _Fssengers

of Flight

123

of

Air

Port.

In

spite

of A's

deatlU

which

is kno*.n to B,

B still

transacted business

with

the

firm's

previous creditor,

Y,

on a matter

not

related to winding up.

y

thought all the time that the

f,rm

had not yet been dissolved because he did not read the notice of dissolution

publiihed

in the newspapers. In this case, the partnership is

a.

No

longer liable

toy

since the

transactionitrr

dissolution is not oonnected

with

winding-up

b.

Still

liable to

Y

since he is a previous creditor

c.

Still

liable to

Y

since the transaction is

within

the 3-year liquidation period d.

No

longer liable to

Y

since

B

can no longer bind the

firm

due to the death of

A

-

_33.

_A

_and

_B

_entered

_into

_a

_{contact of}

partnership

for

the purpose

of

operating a car repair shop.

A

promtryd

_!o

contribute P500,000 on

April

2q,ZOW.

B

as industrial partner,

wilfmanage

the business. On

April

24,2A14,

A

did not effect confiibution. Thus

a.

A

is

in

delay

ifB

makes a demand b.

A

is a debtor in default

c.

B

shali be

entitledto

damages

d. The partrership is dissolved due to lack of crbject

34. Ais

the

listed owner

of

10,000

with

par value

of

Pl00/share common shares

in ABC

Corporation

AB9

sued

A

for

the pavment of

A's

indebtedness of

FlM.

A

contends that such debt must be compensated by his shares of stocks with the

plaintiff

corporation. The contention of

A

is

a.

Valid

due to legal compensation

b.

Valid

by virtue ofjudiciatr compensation

c. Unte,lrable since he is not a creditor of the corporation

d. Automatically exinguished

if

the

fair

market value of the shares is

PIM

35.

A

gave

B

p50,0C0

for

the purchase

of

a

TV

set

in

behalf of the former,

with

the obligation

of

returning the

amognt

if

the

TV

set was not

bouglit

u'ithin

a week.

A

did

not buy the item but did

not

return the amount'

An

estafa case was

filed

by

A

against B. B pleaded

A to

drop the case.

In returr! B

issued a promissory note

in

favor of

A

for the amount involved. Is the promissory note valid?

a

No, the consideration of the note is the

stiffling

of the crime of estafa b. No, the consideration of the nofe is

unlawful

c. Yes,

if

the note is negotiable because

ofmutual

consent d. Yes, the note is in considerition of a pre-existing debt

B

D

B

A

B

C

D

Partnership is created by agreement/

consensual NOT by operation of law.

Possesory lien - right to retain possession of

goods until FULL payment.

Insolvent na nga sya. Hindi na yun mababayaran ng

buo.

(6)

36.

A

and

B

efl,tsred

into

a

universal prrtnership

of ali

present property.

No

stipulation lYas rnade regarding

futue

properl.y

After

the

perftction of

the

contract,

A

inherited a parcel

of

land and

B

acquired a car as

r"1n*.rutloo io.

services rindered. The properties aoquired after the perfection of the

confact

belong

to

Land

Car

AB

A

PartnershiP

Parrrership

B

Partnership

vacancies, who

will

fill

up such vacancies?

Board

Stockholders

Board

Stockholders

Board

Removal

Besisnation

Exniration

of

term

Stostlmlders

Board

Stockholders

Incrpase

in

the

number

otDirectors

Board Stockholders Stockholders Stockholders a. b. o. d.

37. Which of the

following

statements is thlse?

a;

Treasury strarei revert to the unissued shares

of

the corporation and being

in

the treasury they

don't

have the status of outstanding shares

b.

Shares issued without

p*

uui-u" shall be deemed

futly

paid and non assessable and the holder

of

such shares shall not be liable to the corporation or its creditors in respect thereto

c.

Redeemable shares may be redeemed regardless

of

the

existence

of

unrestrioted retained earnings

provided

such

redempion would

not

cause insolvency

or inability

of

the

corporation

to

meet its

debts as they mature

d.

When pa,

oal.r.

shares are issued above par, the premium or excess is

notto

be considered as part

of

the legal capital

3g.

In

case

the

members

of

the board

of

directors

of a

corporation

still

constitute

a

quorum, and there are

Ot b. c. d. Stockholders Stockholders

39.A,BandCorganizedABCandCo, limited,alimitedpartnership\irithAasaggnSrylpartner,Basalimited

partner, and

C

as

an industriat

partner, contributing'P200,000, P200,000

and industry

respectively. Th€

pu.tn"rrtip

failed and after dispoiing

all

ix

assets to puy partnership debts, there

still

remains a note payable

in the sum ofP30,000. Against whom canthe creditor demand payment?

L. b_ c. d.

AE

P30,000

P0

P15,000

P0

P10,000

P15,000

C

PO P15,000 P10,000 PO

40. Which of the

following

is not correct?

a.

A

partnership begins

from

the otherwise stipulated

moment

of

the

execution

of

the

articles

of

partnership, unlEss

it

is

b.

Persons

who are prohibited from

gving

each

other

any donation

or

advantage cannot enter into

universal partnership

c.

A

particular partneiship

has

for

its

object

detemrinate

&ings, their

use

or

fruits,

or

a

specific

undertaking or the exercise of,a profession or vocation

d.

Articles

of-universal

partn"r*ttip

entered

into without

specifications

of

its

nature,

only

constitutes a universal partnership of

profits

41.

A

insured his

life

for PIOM. In case

A

dies, the proceeds of the

life

insurance shall be:

&.

Excluded frona gross,estate

if

the beneficiary is the estate, executor or administrator whether revocable or irre.vocable

Part

of

gross income

if

the beneficiary is a

third

person and the designation is revocable

part of ihe gross estate

if

the beneficiary is a

third

person and the designatio:r is irrevooable

Excluded

fro*

grosr income whether Lreneficiary is revocable or irrevocable b. c. d.

A

C

A

D

___

Nakalagay yung name nung limited partner

sa company name e. So sa mata ng 3rd

party, general partner sya unless may

kapangalan syang general partner.

(7)

year 2009 based on its records as

follows:

a. Net income from business

b. Dividends actually or constructively paid

c. Income tax paid for the year d. Income subjoced to 209'i, final +a:l e. Income exempt from tax

f.

Income excluded

from

gross incorne g. Net operating loss (2008)

The ta:r on improperly accumulated earnings is a. P81,500

b. P71,500 c. P80,000 d. P70,000

{3. Real property

with

a cost of p300,000 and a

fhir

market

value

atlhetime

of death of P1,000,000, but subject

to a mortgage of P200,000

a. Shall be in the taxable net estate at F800,000

b.

shall

be in the gross estate *ttfoe decedent equity of F800,000 c. Shall be in the gro$s estate at P300,000

d. shall be in the gross estate at the owner's equitv of

PI0c,000

44.

A

acquired his residential land

iri

2000 at a cost of P1,000,00s. He sold the properry on January 1, 2009

with

a

fair

market value

of

pS,000,000

for

a consideration

of

P4.000,000.

Within

18 mon'ths' he purchased his new principal residene* at a. c*g"t

cf

P7,000,000. How unti..":t i:: the' ca.;'itri ga:n"

t*x?

a. P300,000 b. P240,000 c. P75,000 d. P0

45. Using the same data, exoept that

A

acquired his new principal residence at a cost of P3,00,000, how muoh is the capital gains tax?

a. P300,000 b. P240,000 c. P75,000 d. P0

46. One of the

following

is not correct

a. The estate must be valued at the time of ctreatti of the decedent

b.

Real estate situated

in

foreign

countries

will

be

included

in

the

gross estate

of

a

resident alien

deeedent

c. The Commissioner shall have the authority

to

grant,

in

meritorious cases, a reasonable oxtension not exceeding 6 mnnths

ior

filing

the estate tax reiurn

d. Vanishing deduction is subject to

limitatiori

lZ.

ytz,a

domestic corporation was determined

to

be

improperly

accumulating rts earnings

for

tho

taxable

P

1,000,000 i 50.000 :70,CI00 gi;,gli0 5U,000 10,000 100,000

47. Mabuhay Corporation organized in 2002 has the follov*ing data: a&gs

Sales

P1,700,0$0

Cost of

sales

1,050,00S

Operating

expenses

615,00C The income tax payable in 2008 is

a. P13,000 b. P5,250 c. P10,500 d.P12,250 ?009

t

r.369.t}0r,, 1,425,0C0 480,000

D

A

C

A

1 month lang extension ng FILING!

pero may tax credit sya..

see

#44

yung resident land sold is NOT his principal residence..

5M x 6% =300

before tax

+ - - + (net of FT na 'to) + + = 700 x 10% = 70

(8)

48. Using the above data, the income ta"x payable by Mabuhav Corp<nation

in

2009 is a.

Pl18,500

b. Pl10,750

c.P117,750

d. P108,000

49.

A

filed

his

income

tax

retum

for

the calendar year 2007 on }v{arch 20,20A:8. When is the last day

for

the

BIR

to collect assuming

A

did not pay the tax dur"

ugrn

frling?

a. March 20,2011

b.

April

15,20ll

.

c.

April

15,2013

d. March

20,2013

50.

Using the

above data, assuming

A

frled his

inconne

tax

return on

April

20,

2008 and

the

retum is

not fraudulent, when is the last day for the

BIR

to rnake an assessment?

a.

April20,20ll

b.

April

l5,20ll

c.

April20,2Al3

d.

April

15,2Al3

51. Using the above data,

if

the

BIR

issued a deficieircy income tax assessment on

March

10, 2010, when is the last day for the BIR to collect?

a

March

10,2013

b.

Apil

15,2A13

c. tvfarch 10,2015

d.

April

15,2015

52. One of the

following

is not

within

the powers of the Cc,nrnissioner of hrternal Revenue

a.

Compromise

the

payment

of

intcrnal

revenue

ta:r

on the

ground

of

taxpayer's financial

incapacity

b. Compromise the pa3ment

of

intr":rnatr revefiue tax on the ground that there is reasonable doubt

as to the

validity

of the assessnnent

c. Compromise

criminal

violation

if

already

filsd

in oourt and those

involving

fraud

-

d. Abate

or

cancel a

tax

liability

on

*he ground that the cost

of

collection

is

greater than that

of

the

tur

to be collected

53. The export sale of a vat registered enterprise is a. Exempt from the vat

b. Subject to the 0o/o

vat

c. Subject to

the

l2a/o

vat

d. Subject to percentage

tax

54.

A filed

his

ITR for

2012

ot

April

15, 2013 and wiltr pay his

tax

liability in

installment. The return shows an

income

tax

clue

of

P100,000 and income

tax

$rithh;ld of

P60,000.

If

A

pays

the

2"d

installment

only

on October

75,2013,the

amountto be paid (exciudirry compromise penalty) is

a. P26,000 b. P35,000 d. P37,500

55. Using the above data, the amount due on

April

15. 2013 is

a

P20,000 b. P40,000 c. P0 d. Refund of P10,000

C

B

A

C

B

C

50

50 -60

-10

= -10 => 0

=40 + 40x25% + 50x20% x 6/12 = 55

(9)

56. Which of the

following

statements is not correct?

a.

When a compulsory heir

is

given

by

will

iess than his legitime, the provisions

of

the

witl

should be

modified in such a way that he

will

receive his legitime

b'

The

CIR

_{may examine the bank deposit}_ofa decedent for the purpose of tletermining his gross estatc even

if

the estate did not request f,or a compromise on the ground of financial

io*prcity

c.

The P500,000 standard deduction

for

medical extrrnses

for

estate tax purposes is a legal mechanism

to further exempt the less privileged _{estate and heirs}from tax burden

d.

The sharing of heirs in testamentary succession must

satisff

the rules on legitime

57.

A

stookbroker remified P11,250

to

the

tsIR

representing collecdon

of

tax withhetd from

clients. The peso

volume of his stock transactions from which the tax was withheld is

a.P93,750

b, P112,500

c.P225,000

d. P2250,000

58.

A

vat taxpayer has the

following

data

for

a partioular quar&er cluring the current year: Sale

of

shares

of

stock:

'

_Held

as inventory Held as investment Cost of the shares sold:

Held as inventory

Held as investrnent (thru local stock exchange) The stock transaction tax is

a. P0 b. P1,500 c. P2,500 d. P7,500

59.

A

race track bettor won on the

fotlowing

bets:

On double, a bet of P200 and dividend of p200 per p20 ricket

On winner take all, a bet of P500 and a dividen'J of Ftr 000 per P50

ticket

On forecast,

abet ofP1,000

and dividend of

pl00

perF20 ticket

The total percentage tax due from the winnings is

a.P682

b.

Pl,Ig2

c. P1,280 d.

Pl,530

60. In a hansfer

in

conternplation of death revocable trensfer ancl. transfer under a general power

of

appointment, there are rules to observe to detenaine rvhat amourit to inch,rcie in lIrc grois estate, which is not

a rule to observe?

a.

If

the transfer was in the nature of a bora

firie

saie for an adequate and

full

consideration

in

money or money's worth, no value shall bo rncluded in the gro,ss estate

b.

If

_{there was no consideration received on fhe f;ansfe,r}as ln rlonatic,n inter-vivos, the value

to

include in the gross estate shall be the tair markel value of the properfy at the time of transfer

c'

Ifthe

_{consideration received on the transfer}_{vras less}than adequa-re and

full,

tbe value to include

in the gross estate shall be the excess of tiie

fair

rcarlce;t v,alue of the property at the time

of

decedent's death over the consideration re,;eive(I

d.

If

there was no consideration received

or

the lransrbr ns

iu

clonatiori rnortis causa, the value

to

include in the gross estate shall be the

thir

market

ralue

of,the prr,rperty at the time

ofthe

,

decedent's

death

1

61. For proceeds of

life

insuranoe not to constitute part nf

tii*

gross esiat;:

a.

Must have been taken out by the Cee*dent upcr: his

li{e

b.

Must have designated the estate of the rl*cecisnt as irrevocabl,* beneficiary

c.

Must have designated a

third

persoil as. the decedent's elie()utcr cr administrator as the irrevocable benefioiary

d.

Must have designated a

thinl

persorl other

tlun

the e;tato, the des:dent's executor or administrator as irrevocable treuefrci ar17

P 1,000,000 500,000 300,000 600,000

C

D

C

B

D

(10)

62. Which of the

following

statements is false?

a.

Donations can be made to conceiveci and unborn children

b.

The first

Pl00,000

donation is exempted &om donor,s

tax

c.

Juridical _{persons can also make donations}

d.

Husband and

wife

can make moderate donations to each other on account

of family

celebration 63. Which of the

following

is subject to

VAT?

a,

knportatio-n

of

personal

_or

household

_{effects belonging}

_to

_the

_residents

_of

_the

philippines

returning

from

abroad and non-resident

citizen

coning

to

resettle

in

the

philippines

where such goods were subjected to customs duties

b.

Importationof

passenger

_or

_cargo

_vess*l

_{and aircrafts,}

_including

_{engine, equipment and}_spare parts thereof

for

_{domestic or international transport operation}

c.

Importation

of

fuel,

goods

and

supplies

by

persons engaged

in

international

shipping

or

air

transport operations

d.

Sale

of

_leal

property

_{not primarily held}

_for

_sale

_to

_customers

_{or held}

_for

_lease

_in

_the

_ordinary

course ofbusiness

64. Which of the

following

is exempt

fiom VAT?

a.

Sa.le

of

passenger

or

cargo vessels and

aircraft, including

engine, equipment and spare parts thereof

for

domestic or intemationa.l transport operations

b.

Sale of _{professional instruments and}_impleurenti_{wearing apparel, domestic animals and personal}

household effect

c.

Sale

of fuel,

goods and supplies

by

perscns engaged

in

international shipping

or

air

transport

operations

d.

Importation by persons who are not rrat registered

65' C, vat-registered person, imported machines to be usecl

in

the Phflippines as follows:

Machines

Purchase

Fric*

purpose

I

Ptr00,0,{!0

personal _use 2 J 200,cl00 300,000 Business use For sale

The

_{importations-were subjected}

_to

_5Q%_excise

_tax

_hased

_on

_purchase

_{price. Machine}

₃

was

sold for

P1,000,000 (net of vat).

How

much is the vat paid on impcrtation?

a.

Pl08,000

b. P90,000 c. P54,000 d. P36,000

56. _{Using the above data, the vat payable is} a. P12,000

b. P30,000 c.

Pl06,000

d. P94,000 ltems 67 to 78

],Nagpala

a good looking

Filipino

19 years old, single, high school graduate from a remote province, brought his

i0

year

old

mother went

to

lv{anila

in

2Al2

to

try

tt

*ir iuck

here.-

He

applied, and was 'hirud, as a janr:tor

in

vlapagpala Corporation.

As

soou as he was

hird

he eilrolled in the

Collegi of

Accountancy.

Foi

the year

zol1,

rc earned and incurredthe

following:

Salaries, net

of

SSS, phitHealth contributions, _and

Union dues of p8,000, and withhotding

ta>r

ofPl0,000

p162,000

13e

month pay and Christmas

bonus

_25,000

Tuition

fee, board and lodging, and othe.r

living

expenses

60,000

Money sent to his grandparents in the

prov"ince

40,000

B

A

(11)

67 . P. Nagpala's inoome tax payable (refundable) firr the caxirble year 20 I 2 is:

a.

P4,900

b.

P6,900

c.

P10,500

d.

P8,900

In

2013, p. Nagpala's good looks and his being anrbitious and

hardworking

caught the attention

of

ldakiri,

the company president's

daughter.

On February tr4

of

that year,

lv{akiri

treated P. Nagpala

to

snacks.

She put a

tablet

inhis

drinks

whichlnade

P. Nagpala very rnuch attracted to

her.

They went out often since then, and on March 31, they got married because

Makiri

was already one m.onth pregnant.

For their wedding,

Makiri's

father gave them the

following:

a. Cash of P500,000 and $100,000,

whichthey

im'ested as

foilows:

a.

They deposited P300,000 in a long-term trust .fund.

b.

They deposited P200,000 in a ctrrrent account'

c.

They deposited the $100,000 in a hank zuthorized by the BSP to operate as an FCDU.

b.

P. Nagpala's prornotion

_-

P. Nagpala was promoted, &om

janitor

to accounting department staff'.

c.

Mapagpala Corporation shares

of stock

worth PeM'

In December, P. Nagpala and tv{akiri counted the trXe."lsings tJrey received during the year: a. The

first

baby, born on November

30,2{}13:

A

h;bv

boy!

b. Their reoeipts/expenses:

,E*II_@a

Makid

Compensation income, net

of

SSS/PhilHealth, Pag-Ibig contributions of P10,000 and withholding

tax

ofP18,300

n)1,704

t,xtr month pay and midyear

bonur:

36,000

Rice

subsidy

18,000

Medical benefit

forP.

Napala

i0,000

Uniformlclothing

allowance

5,000

Laundry

allowance

3,000

Rental value

ofthe

house and

lot

v,ittur, the company compound used by thtl couple

as residence. They are required

to

reside therein so that P. Nagpaiii rvould he available to the company

anltime

Yield

from the long-term trust fund, net Interest, current account, net

Interest, dollar account net

Couple 225,A04 P 180,000

38250

6,40Q i03,600 Dividend income, net

Income from practice of profession, net Expenses, practice of profession

P540,000 200,000 68. On ac.count of donation by reason of marriage, the

fath:r

of

ldakiri

a. Canclairn a derluction of Php 10,000 from the gifts rnade to P.Nagpala and

Makiri

b. Can clnirn a deduction

of

Fhp 20,000

flom

the gifts made to P.ltlagpala and

Makiri

c.

Shall

fite

the donor's tax return

within

30 <lays after the

gift

is made and the

tax

due thereon shall be paid atthe tirne

of

filing

d. Is not subject to donor's tax on the first Php 10t0,000 of his gross gifts to Makiri

69. Final taxes remitted by the couple's payors for their

h*ome

totaled:

a.

?44,562

b.

P19.562

c.

P35,000

d.

P31,550 1I

D

C

Dividend income: 225/90% x 10% = 25

Interest: 6.4/80% x 20% = 1.6

FCDU: 103.6/92.5% x 7.5% = 8.4

(12)

70.Income tal(

still

due from

tle

couple for the taxable year 3013: P29,450

P9,950

P9,650 P23,540

lrr-2017, P. Nagpala passed the CPA Licensure

Examination.

E{e was promoted as the Accounting Manager

in

the company's Accounting Department.

lvlakiri

stopped rvorking

to

have more

time for

her husband and three

(3)

children (three more wpre

born

from

2014

to

2017,

butthe

youngest died at the age

of

3 months

in

2017

wtrile the eldest lives

with

Makiri's

parents)

The year was a

lucky

year

(financially)

for

the

couple.

They were able

to

buy a 2-storey commercial building.

A

book

about'Makiriis

Code" written by

Makiri

was pubtrished and becarne a bestseller. They were able to sell

one-half

of

their

interest

in

the corporation

to

a

friend

at

a

gain

of

P300,000 (SP is

Php

l'3M)'

At

year-end, they computed their financial blessings:

a.

R"ental income

_-net

of withholding tax

(Expenses

_-

building rental husiness

*

F200,000)

b.

Royalty income from the book, nei

c.

A

brand new car, purchased by the fiompany

for

P. Nagpala (the car was registered in the name

of

a.

b. c. d.

P. Nagpala) - purchase cost...

d.

Otherbenefits glven by the company to P. Nagpala: Groceries for the

family

Salary inerease, P20,000 per month

P

684,000

450,000

I

1,088,000 40,800 240,000

Tuition

fee, shouldered by the ccmpanv when F. Nagpala attended a computer crash course to learn about

the software being used in the company's

accounting

dePartrrent

30,000

For the taxable year 2A17,

71.P.Napala

may claim personal exempticns (basric and additional) of:

a.

P150,000

b.

P125,000

c.

P100,000

d.

P75,000

72.

Makiri's

taxable income is: P210,000

P192,000 P310,000 P460,000

73.

The final tanes on the couple's passive income and capital gain

for

2017 totaled'.

P

75,000

P

50,000

P

56.500

P

62,500

74.The fringe benefit tax withheld by the compar.y pertaining to the benefits given to P. Naglala

dwing

the year totaled:

P531,200 P545,317 P289,317 Y215,204

ln

November 2018,

while

the

couple were

talking

about haviug another

child,

P. Nagpala suffered

a

cardiac arrest and died

3

days after,

withoot

uoy last

will

and testanlent.

By

year-end, the estate

tax

was paid and the -estate _{was distributed}

_{to his}

_legal

_heiri.

_Makiri

_{rvent braok}_tro

_the

_practice

_of

_her

profession and continued

operating the commercial

building

L, b. c. d. a. b. c. d. a. b. c. d.

A

B

A

B

100 x 5%

+ 200 x 10%

+ 450 / 90% x 10%

(13)

75.If

anincome tax return is to be

flled

fcrr the 2018 inconoe of P. Nagpala, how nnuch personal and additional

exempions maybe claimed?

a

Php 20,OOO

b. Php 125,000 c. Php 75,000 d. Php 100,000

Later in Novemb

er

Z}l9,Makiri

married P. Nansalo. the best frie,nit

of

F. Nagpala. Unfortunately, the marriage

did not last long when

Makiri

died

in

January

2,202!,

one riay after

giving birth

to their

fust

child.

Makiri left

the

following:

a.

Property owned before marriage

b.

Income of property

in

(a.)

c.

Property acquired during marriage:

1. By

gratuitnus

title

2. By

onerous

title

d.

Income of

properg'in:

c-1

CA

e.

Proceeds

of

life

insurance where the

beneficiary is:

1.

Her mother

_-

revocable

2.

Her son

_-

irrevocable

f.

Receip

of proeeeds

of

insuranc€ on

property owned before the marriage

which were destroyed by

fire

on March 31,,2021

FMV:March

31,2021

Insuance recovery

g.

The property acquired during

marriage

_-

by gratrritous

title

were acquired thru inheritance:

FMV

(time of

inheritance),4

Y,

years ago

FMV

(time

of

inheritance),

I

y*ear

ago Deductions clairned by the estate:

Mel$i

Php 2,01t0,000 500,CI00 1,900.00c 4.0c10,000 300,C11,]0 8CC,0(!0 I.200.000 8C0,000 7,2i1s,000 1,S00,000

P.Xatlsglg

Fhp 3,000,000 750,000 2,200,000 . 2,000,000 150,000 200,000 2,800,000 2.500,000 2,400,000 1,8")0,0G0

a.

Funeral

exprlses

_$A%

was cov?red by a

m*raorid

plarr)

b.

Unpaid mortgage on preperty acquired duinig n:ar"riage h], rrnernus fitle:

l.

By lvlakiri

(used as

famiiy

hona,l)

2.

By P.Nansalo (used as rest hou"se)

c.

Claims against the estate 76. The exclusive property of

Makiri

is

a. Php 4,700,000 b. Php 2,200,000 c. Php 1,900,000 d. Php 3,400,000

77.Tlnle gross estate

ofMakiri

is a. Php 16,650,000 b. Php 16,750,000 c. Php 15,850,000 d. Php 15,950,000 Php 250,000 800,000 200,000 100,000

D

A

B

GE din

'to..

not living with yung eldest child

(14)

78. The vanishing deduction is a. Php 321,313

b. Php 317,015 c. Php 318,089 d. Php 331,891

79.T\e

net ta:rable estate is

a. Php 7,407,985 b. Php 7,403,687 c. Php 7,393,109

d.Php

7,4A6,911

'80.

_{Sales during the year:}

Subject

to:

l2o/o 0o/o Exempt

Total

B

Php 1,000,000 900,000 2.100.000 Php

4,0fi),0fi1

The

End!

A

Php

900,000 1,000,000 4,100-000 Php

6,0fi),fi)0

C

Php

950,000 950,000 3.100.000 Php

5,0fi),0fi)

D

Php 1,000,000 1,000,000 1.000.000 Php

3,0fi),0fi)

Who iVare srrbject to

VAT?

A,

B, C

andD

B

andC

Only

D

A,BandC

SCHEDULAR INCOME

TAX

RATES

_{-IIIIDIVIDUALSI}

a.

b. c. d.

Not over 10,000 5o/o

Over PI0,000 but not over P30,000 P 5 oo

; ioor;;r

ae

exces::er

Over P30,000 but not over P70,000 P2,soo

_irldffir

" ."*.

*o

Over P70,000 but not over P140,000 P8,soo

iiilffit

_""

**:'

"'"

Over P140,000 but not over P250,000 PYz,soai

_r1',ffif

*

"*"'

"""

Over P250,000 but not over P500,000 P5o,ooo

#rrffi.'T"

**

Over P500,000 Pt2s,ooo

#ffif

-e

excess over