1. As part of its employee benefits plan, Omega Corporation acquired a piece of residential lot worth P2M for its Chief Executive Officer and constructed upon it a house at a cost P4M. Ownership of the house and lot was turned over to the CEO upon completion of the construction. 40% of the value of the house and lot will be deducted from the director's salary over a period of 5 years. Compute the fringe benefit tax.

a. 3,230,769

b. 1,938,462

c. 1,292,307

d. 161,538

2. Vergo Company acquired a motor vehicle for P1,000,000 for the use of one of its on-call employees. Compute the monetary value of fringe benefits subject to tax.

a. 1,000,000

b. 500,000

c. 200,000

d. 100,000

e. Zero

3. On July 1, 2020, ABC Corporation invested in the stocks of XYZ foreign corporation, by acquiring 10,000 shares at P12/share. On December 20, 2020, XYZ declared a 20% stock dividend payable on January 15, 2021. On January 2, 2021, ABC Corporation sold 10,000 shares for P13/share. Compute the net capital gain to be included in regular income.

a. 30,000

b. 15,000

c. 10,000

d. Zero

4. The company provides for an allowance for bad debts equivalent to 3% of total receivables. Receivables balance is P2,000,000. The allowance for bad debts has a balance of P45,000 and P50,000 at the start and end of the year, respectively. P30,000 of previous accounts were actually found to be worthless and were written off. What is the deduction for bad debts for taxation purposes?

a. 15,000

b. 25,000

c. 30,000

d. 35,000

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1 Answer c 1292307 Fringe Benefit Tax Total Value of House and Lot 40 Rate of Fringe Benefit Tax Tot... View the full answer