The Boss of Zesto Corporation asked you to prepare their VAT return and provided you with the following information pertaining to its 2^nd quarter operation, (the amounts are VAT exclusive, unless otherwise provided)  

Sale of canned fruits, VAT inclusive	P5,824,000
Sales Returns	100,000
Sales Discounts	200,000
Export sale of canned fruits	1,200,000
Sale of raw fruits	600,000
Sale of canned fruits to the government	200,000
Purchases of raw fruits	1,200,000
Packaging materials	300,000
Importation of capital equipment in the month of May	3,000,000
Sugar and other agricultural food products	400,000
Annual rental paid at the beginning of the year	1,200,000
Salaries of factory workers	900,000

• 50% of the sales discount pertains to discounts granted to customers who paid within 10 days following the 2/10, n/30 credit terms of the Company; the other 50% pertains to trade discounts granted at the time of sale.

• All sales returns and discounts pertain to the sale of canned fruits (not including sales to government)

• The equipment has a useful life of 6 years

1. How much is the VAT payable?
A. 525,600      
B. 575,600      
C. 550,600    
D. 500,000

2. How much is input VAT on Purchases?
A. 400,000      
B. 412,000      
C. 422,000
D. 432,000

3. How much is the input VAT on Exempt Sales?
A. 7,000
B. 7,100          
C. 7,200
D. 7,300

4. How much is the Output VAT?
A. 612,000
B. 624,000
C. 636,000    
D. 648,000

Answer rating: 100% (QA)

Answer 1 Option C is correct 550600 VAT payable is also called output VAT and is found on invoices y... View the full answer