What is the correct income tax due of Nicanor for the taxable year 2021?

 information were culled from his accounting records:

Gross sales - Php 2,500,000

Cost of sales - Php 1,000,000

Salaries and wages - Php 100,000

Rent Expense - Php 100,000

Depreciation - Php 100,000

Utilities Expense - Php 100,000

Repairs and Maintenance - Php 100,000

Other income:

Rental income - Php 1,000,000

Interest income from bank deposits in Bank of the Pelepens - Php 100,000

Dividends from ABC Corp., a DC - Php 100,000

Cash Prizes - Php 100,000

The duly filed 1^st quarterly income tax return indicated that Nicanor opted 8% taxation.

In addition, he provided you the following information on other assets which he disposed of during the year:

Real property classified as capital asset:

Consideration indicated in the Deed of Absolute Sale (DOAS) - Php 20 Million

Zonal value of lot - Php 10 Million

Assessor's fair value of lot - Php 5 Million

Assessor's fair value of house - Php 5 Million

Appraiser's value - Php 25 Million

Shares of stocks not listed in stock exchange:

Selling price of shares of stocks - Php 2,000,000

Price of shares of stocks when he purchased the same last year - Php 1,000,000

Audited Financial Statements of the company disclosed the following:

Balance Sheet: Asset - Php 10 Million

Liability - Php 7 Million

Stockholders' Equity - Php 3 Million

Income Statement: Revenue - Php 5 Million

Cost and Expense - Php 3 Million

Net Income - Php 2 Million

Additional information: Outstanding shares of stocks is 10,000 and cost to transfer shares to new buyer is Php 100,000.

Answer rating: 100% (QA)

To compute Nicanors income tax due for the taxable year 2021 lets break down the steps 1 Compute Gro... View the full answer