Question: Use the following data for the next two (2) questions Cliff is a self-employed and/or professional. He provided the following information for 2018 taxable year:
Use the following data for the next two (2) questions
Cliff is a self-employed and/or professional. He provided the following information for 2018 taxable year:
Gross sales P1,650,000
Cost of sales 500,000
Business expenses 425,000
Rental income (net) 308,750
Philippine charity sweepstakes winnings 500,000
Royalty income - books 120,000
Other royalty income - Philippines 60,000
Dividend income - domestic corporations 40,000
Interest income, BDO QC 100,000
Interest income received from a depository bank 50,000
under FCDS, Philippines
Creditable withholding tax from business income 65,000
Quarterly tax payments 82,500
1. How much is the income tax payable of Cliff?
a. P 9,500
b. P 10,500
c. P 57,500
d. P 205,000
2. How much is the income tax payable of Cliff assuming he opted to be taxed at 8% income tax rate?
a. P 9,500
b. P 10,500
c. P 57,500
d. P 205,000
Cliff is deriving compensation and business income, He provided the following information for 2018 taxable year:
Gross compensation income P600,000
Gross sales 1,650,000
Cost of sales 500,000
Business expenses 425,000
Rental income (net) 308,750
Philippine charity sweepstakes winnings 500,000
Royalty income - books 120,000
Other royalty income - Philippines 60,000
Dividend income - domestic corporations 40,000
Interest income, BDO QC 100,000
Interest income received from a depository 50,000
bank under FCDS, Philippines
Creditable withholding tax from business 65,000
income
Quarterly tax payments 82,500
1. How much is the income tax payable of Cliff assuming he opted to be taxed at 8% income tax rate?
a. P 89,500
b. P 90,500
c. P 57,500
d. P 205,000
Michael Cabarles, single, has the following income and expenses for the year 2018. He supports an eight-year-old illegitimate child.
Professional Income, net of P60.000 P 540,000
withholding tax,
Rental income (net) 47,500
Rewards as BIR informer 30,000
Wagering gains 50,000
Kickbacks received from suppliers of clients 40,000
Interest income on time deposit (net) 32,000
Dividend income from domestic corporations 75,000
Professional expenses 325,000
Household expenses, 24,000
Premium payment on health insurance 4,000
Facilitation fees paid to government agencies 15,000
1. Compute the amount of his taxable income subject to basic tax for 2018?
a. P 325,000
b. P 340,000
c. P 415,000
d. P 445,000
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