Answers / Solutions to Problems on Percentage Taxes and VAT, Edition 2013 -2014

Vgl files, vgl files, sols to pt n vat 2013 - 2014

Problems in Chapter 13. percentage taxes sec.116 to 121.

Problem 1. Rainbow Corporation

a. Seller of Goods b. Seller of Services
Gross Sales Price 375,000 Net Sales Price 358,500
Less: Sales Returns, allowance (16,500)
Net Sales Price 358,500 Net Sales Receipts 293,000
Pt rate X 3% Pt rate X 3%
Percentage Tax Due 10,755 Percentage Tax Due 8,790

Problem 2. Filipinas Company

a. Seller of Goods b. Seller of Services
Sales Price 78,650 Gross Sales Price 83,378
Delivery Fees 1,350 Rate of collection 65%
Packaging, Handling Fees 950 Sales Receipts 54,195
Pt billed to customer 2,428 Pt rate X 3%
Gross Sales Price 83,378 Percentage Tax Due 1,625.87
Pt rate X 3%
Percentage Tax Due 2,501.34

Problem 3. Orlando Company

A, Seller of Goods
1st QTR 2nd QTR 3rd QTR 4th QTR
Gross sales Price 95,000 85,000 113,000 100,000
Less: Sales Ret., Allow. Disc. 16,500 0.00 9,000 12,000
Net Sales Price 78,500 85,000 104,000 88,000
Pt rate X 3% X 3% X 3% X 3%
Percentage Tax Due 2,355 2,550 3,120 2,640

A, Seller of Services
1st QTR 2nd QTR 3rd QTR 4th QTR
Cash Sales ? ? 54,000 63,000
Collections on credit Sales ? ? 26,000 23,000
Gross Sales Receipts 95,000 85,000 80.000 86,000
Less: Sales Ret. Allow. Disc. (16,500) 0.00 (9,000) (12,000)
Net Sales Receipts 78,500 85,000 71,000 74,000
Pt rate X 3% X 3% X 3% X 3%
Percentage Tax Due 2,355 2,550 2,130 2,220

Problem 4. Matindi Corporation

a. Seller of Goods b. Seller of Services
Cash Sales 35,000 Cash Sales 35,000
Credit Sales 62,500 Collections on credit Sales, Feb 24,000
Collections on credit sales, Mar 18,000
Gross Sales 97,500 Gross Sales Receipts 77,000
Less: Sales Ret. Allow. Disc. (3,500) Less: Sales Ret. Allow. Disc. 3,500
Net Sales 94,000 Net Sales Receipts 73,500
Pt rate X 3% Pt rate X 3%
Percentage Tax Due 2,820 Percentage Tax Due 2,205

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Problem 5. Aguila Bus Company
A, Seller of Services
[Link] 1st QTR 2nd QTR
Bus no. 010 98,600 98,600 175,800
Bus no 143 164,200 164,200 164,200
Bus no 211 197,100 197,100 197,100
Bus no 212 197,100 197,100 197,100
QTRly Gross Receipts 657,000 734,200
Pt rate X 3% X 3%
Percentage Tax due 19,710 22,026

Problem 6. Three Enterprises Company A

P. Jeepney P. Taxi
Receipts net of expenses 32,300 76,500
Comm. compensation 17,690 24,380
Oil and gas expenses 6,780 12,760
QTRly Gross Receipts 56,770 113,640
[Link] 65,700 98,600
C1. 65,700 X 3% = 1,971 PTD C2. 113,640 X 3% = 3409.20 PTD

Co. B. IAC Co. C. ISC

Passenger fees 11,875,000 7,560,000
Cargofees 6,290,000 4,050,000
QTRly Gross Receipts 18,165,000 11,610,000
Pt rate X 3% X 3%
Percentage Tax due 544,950 348,300

Problem 7-Mr. Mahusay-Operator of School Buses

2nd Q
Gross Receipts - Bus No. 1 P158,500.00
Gross Receipts - Bus No. 2 67,800.00
Total Gross Receipts P226,300.00
Multiplied by % Tax Rate X 0.03
Percentage Tax Due P6,789.00

Problem [Link]. Mcanico - Operator of Garage , (NVR)

Caring and Maintenance Fees P14,600
Tune Ups 12,500
Minor Repairs 23,700
Major Repairs 34,900
Sales of Fuels, Greases, spare parts 9,800
Collections of Prior Month-Service Sales 7,350
Total P102,850
Less: AR on SS - June 2009 (8,400)
Taxable Gross Receipts P94,450
PT rate X 3%
PTdue P2,833.50

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Vgl files, vgl files, sols to pt n vat 2013 - 2014

Problem 9. Hongkong Corp. Franchise grantee

NVRP VAT RP
Gross Billings on income as franchise grantee P765,000
Collections on billings on income not
covered by franchise P685,000
[Link]. bal. on income as franchise grantee (130,000)
Taxable Gross Receipts 635,000 685,000
PT Rate/vat rate X 0.02 X 0.12
Business Tax Due P12,700 P82,200

Problem 9. continuation VAT RP

VAT Due (Output Tax) 82,200.00
Less: Vat Credit (VC) 13,907.58
Vat Still Payable 68,292.42
P26,800 x 685,000/1,320,000 = P13,907.58 Allocated VC
685,000 + 635,000 = 1,320,000 Total Receipts

Problem 10. - Franchise Grantees. PT PT VAT PT PT

a. Mla. Gas b. DZBB [Link] [Link] e. MWSS
Cash Sales 910,000 1,340,000 15,600,000 3,000,000 7,250,000
Collections on Credit Sales 212,500 537,250 1,100,000 675,000 1,350,000
Taxable Base 1,122,500 1,877,250 16,700,000 3,675,000 8,600,000
Multiplied by Tax Rates X 0.02 X 0.03 X 0.12 X 0.10 X 0.02
Business Tax Due 22,450.00 56,317.50 2,004,000 367,500.00 172,000.00

Problem 11. China Corp. A TIB B TIB

Overseas Dispatch from Phil. To USA 542,700 Taxable Base 702,200 702,200
Telewriter Exchange to Canada 174,500 Multiplied by X 1/11 X 0.10
Gross Payments 717,200 % Tax Due 63,837 70,220
Less: Payments included above-exempt 15,000
Taxable Gross Payments 702,200

Problem 12. Excellent Telephone Co. franchise holder Non-VAT Reg. Person VATPerson Vat person
TEB TIB TEB TIB
Gross Service Sales on domestic/national communication 3,680,000 3,680,000
Gross Service Sales on Overseas Communication from Phil. 2,750,000 2,750,000
Multiplied by the Collection rates X 0.55 X 0.55 X 0.65 X 65%

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 Gross Receipts on Overseas Communications from Phil. 1,512,500 1,512,500
Gross Receipts on Local Communication 2,392,000 2,392,000
Multiplied by the Tax Rates X 0.10 X 1/11 X 0.12 X 12/112
Business Taxes Due 151,250 137,500 287,040 256,286
Percentage Tax VAT vat

Problem 13. XYZ Banking Corp.

Amount PT Rate PT
Interest, Commissions,
& Discounts Earned
a. On Med. Term 3 1/2yrs 375,000 0.05 18,750
b. On Long Term-less 5 yrs 520,000 0.05 26,000
c. On Long Term-more5yrs 475,000 0.01 4,750
Rental Income from
a. Deposit safety boxes 73,000 0.07 5,110
b. Building / Offices 260,000 0.07 18,200
Net Trading Gains 395,000 0.07 27,650
Other Ordinary Income 285,000 0.07 19,950
Total Percentage Taxes Due 120,410

Problem 14. ABC Banking Corp.

AMOUNT PT Rate PT
Interest Income on loans:
a. On short term maturity 216,000 0.05 10,800
b. On medium term maturity 192,000 0.05 9,600
c. On Long-term Maturity 75,000 0.01 750
Rental Income, Lease Inc. 250,000 0.07 17,500
Net Trading Gains 165,800 0.07 11,606
Total Percentage Tax due 50,256

Problems in Chapter 14. percentage taxes sec.122 to 127.

Problem 1. Tibo Company-Resident Foreign

a. Sold through the local stock exchange b. Sold through the Initial Public Offering
Selling Price (575 x 265 shares) 152,375 Selling Price (52 x 2,600 shares) 135,200
Multiplied by % Tax Rate X 0.005 Multiplied by % Tax Rate X 0.01
Percentage Tax due 761.88 Percentage Tax due 1,352
Total Percentage Taxes Due 2,113.88

25
Problem 2. XYZ Corp.
a. Sold through the Initial Public Offering b. Sold through the Local Stock Exchange
Selling Price 385,000 Selling Price 275,000
Multiplied by % Tax Rate X 0.02 Multiplied by % Tax Rate X 0.005
Percentage Tax due 7,700 Percentage Tax due 1,375
Total Percentage Taxes Due 9,075.00

Problem 3. VIR Corp.

Amount PT Rate PT
a. Dividend Income from Stock Invest. 14,600 0.05 730
b. Interest & Commissions on Loans 58,600 0.05 2,930
c. Discount on lending activities 130,200 0.05 6,510
d. Income from rental of appliances 12,650 0.05 632.50
e. Other Gross Income 23,600 0.05 1,180
Total Percentage Taxes 11,982.50

Problem 4. Bahamas Insurance Company

NLIPrem Life Ins Prem
Gross Insurance Premium 825,000.00 960,500.00
Less: Exempt Ins. Prem. Included (0.00) (27,000.00)
Total Gross Insurance Premium 825,000.00 933,500.00
Multiplied by Collection Rates X 0.75 X 0.80
Taxable Gross Receipts 618,750.00 746,800.00
Multiplied by Tax Rate X 0.12 X 0.02
Business Taxes Due 74,250.00 14,936
VAT PT

Problem 5. Cuba Corporation-Insurance Co.

Non-Life Ins. Life Insurance
Collections on the ff: Ins. Prem.
Life/Disability Ins. Premium 270,000
Marine Insurance Premium 282,000
Health & Accident Insurance Prem. 350,000
Property Insurance Premium 165,000
Gross Receipts on Ins. Premiums 447,000 620,000
Multiplied by Tax Rates X 0.12 X 0.02
Business Taxes Due 53,640 12,400
VAT PT

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Problem 6. Mr. Honduras, not thru Agent of FICA
Non-Life Life
Insurance Policies taken directly Insurance Insurance
Fire Insurance Premium Payment 29,600
Life Insurance Premium Payment 35,000
Taxable Gross Receipts 29,600 35,000
Multiplied by % Tax Rates X 0.05 X 0.02
Percentage Taxes Paid 1,480 700

Problem 7. Lima Company – thru Agent of Foreign Ins. Co.

Total Insurance Premium Collectible from the Insured 857,000
Non-Life Ins, Life Insurance
Fire Insurance (857000 x 40% x 90%) 308,520
Marine [Link]. (857000x25%x70%) 149,975
[Link]. (857000x15%x80%) 102,840
Life Ins. Prem. (857000x20%x60%) 102,840
Total Gross Receipts 561,335 102,840
Multiplied by PT Rate X 0.4% X 0.2%
Percentage Tax Due 22,453 2,057

Problem 8. Persons liable to Amusement Taxes

Amount Rate Bus. Taxes
San Lazaro Race Track 14,690,000 0.30 4,407,000
E.B. Billiard Center 588,000 0.12 70,560
Virgilio Disco Club 818,000 0.18 147,240
PBA Basketball 22,095,000 0.15 3,314,250
Movie Theater/Cinema 4,900,000 0.12 588,000
Music Museum 595,000 0.12 71,400
Letters (b), (e), & (f) are subject to VAT.

Problem 9. VGL Corp.-Night Club April May June

Entrance Fees 350,000 450,000 500,000
Table Charges 210,000 320,000 440,000
Corkage Fees on Drinks & Foods 150,000 165,000 195,000
Entertainment Fees 430,000 390,000 615,000
Sales of Foods & Drinks 762,000 935,000 820,000
Collections on Credit Sales(F/D) 215,000 75,600 65,800
Total Gross Receipts 2,117,000 2,335,600 2,635,800
Multiplied by % Tax Rate 0.18 0.18 0.18
Percentage Tax Due 381,060 420,408 474,444

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Problem 10. Mr. Masuerti - winnings on his racing activities
A. Owner of Horses Prizes Won PT Rate PT
Bombastic (net of % tax) 100,000.00 0.10 10,000.00
Fantastic (before % tax) 250,000.00 0.10 25,000.00
Introvoys (after % tax) 66,666.67 0.10 6,666.67
Streetboys gross of%tax) 175,000.00 0.10 17,500.00
Total 591,667 0.10 59,166.67
B. Winnings/Prizes on Bets Double Place
Gross Dividend-after cost, before tax 45,600
Gross Winnings-net of 2500cost,[Link] 30,200
Multiplied by % Tax Rates 0.04 0.10
Percentage Taxes Due 1,824.00 3,020.00

Problem 11. Resident bettor in horse races

Winning B E T S
WIN PLACE Forecast DOUBLE Quinella
Gross Winnings, before cost & tax 1,600.00 7,500.00 7,200.00 4,200.00 6,300.00
Less: Cost of Winning Tickets 100.00 150.00 800.00 120.00 360.00
Gross Winnings, after cost, before tax 1,500.00 7,350.00 6,400.00 4,080.00 5,940.00
Multiplied by % Tax Rates 0.10 0.10 0.04 0.04 0.04
Percentage Taxes Due 150.00 735.00 256.00 163.20 237.60 1,541.80
(15x2) (18x2)x17
(20 x 80) x250 (40x4)x45 (12 x 350) 5
1,600.00 7,500.00 7,200.00 4,200.00 6,300.00

Problems in Chapter 15. percentage tax credits

Problem 1. Cupids Cocktail Lounge

Show and Corkage Charges collected 215,600

Sales of Foods/Beverages 450,000
Multiplied by collection rate 0.85
Cash Receipts on Foods/Beverages 382,500
Sales of Liqours, wines 760,000
Multiplied by collection rate 0.90
Cash Receipts on Liqours, Wines 684,000
Gross Receipts 1,282,1000
Multiplied by Percentage Tax Rate X 0.18
Percentage Tax Due 230,778
Less: Tax Credit 15,400
Percentage Tax Still Payable 215,378

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Problem 2. Galaxy Store - Seller of Goods NVRP

Cash Sales of Goods 36,700

Credit Sales of Goods 19,600
Other Charges on Sales, billed to customers 760
Gross Sales 57,060
Less: Sales Returns, Allowances, Discounts 1,450
Net Sales 55,610
Multiplied by % Tax Rate X 0.03
Percentage Tax Due 1,668.30
Less: Tax Credit 850.00
Percentage Tax Still Payable 818.30

Problem 3. Neptune Enterprises - Seller of Goods - NVRP

Purchase Price of Goods Sold 28,000

Gross Profit Rate based on Cost X 0.80
Gross Profit from Sales 22,400
Add: Purchased Price of Goods Sold 28,000
Gross Sales Price of Goods Sold (28,000 x 180%) 50,400
Percentage Tax passed on to customers 1,395
Gross Sales Price 51,795
Less: Sales Returns & Discounts 3,900
Net Sales Price 47,895
Multiplied by % Tax Rate X 0.03
Percentage Tax Due 1,436.85
Less: Tax Credit
% Tax Paid on Original Return (25,000 x 0.03) 750
Percentage Tax Withheld by customers 750 1,500
Percentage Tax Still Payable (Refundable) (63.15)

ANSWERS TO REVIEW MATERIALS ON OTHER PERCENAGE TAXES, chapter15

THEORIES PROBLEMS

A1 A A9 B B1 C B9 C
A2 B A10 A B2 A B10 C
A3 A A11 D B3 A B11 C
A4 A A12 A B4 A B12 A
A5 C A13 D B5 C B13 A
A6 C A14 C B6 A B14 A
A7 A A15 B B7 B B15 D - 100,400
A8 D B8 B B16 D -290,400

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 SOLUTION TO PROBLEMS ON VALUE ADDED TAX CHAPTER 18

Problem [Link] units, SOS, YEAR 2013

A. If residential dwelling units

1 2,500,000 PT X 0.03 75,000
2 1,500,000 PT X 0.03 45,000
3 1,800,000 PT X 0.03 54,000
4 1,400,000 PT X 0.03 42,000

B. If Non-residential dwelling units

1 2,500,000 VAT X 0.12 300,000
2 1,500,000 PT X 0.03 45,000
3 1,800,000 PT X 0.03 54, 000
4 1,400,000 PT X 0.03 42,000

Problem 2. Non-Vat Registered Seller of Goods

NVRP NVRP
Sales Price of Goods to Vat Reg. Customers 35,600 0.00
Sales Price of Goods to Non-Vat Reg. Cust. 27,600 0.00
Sales Price of Goods to Non-merchant cust. 22,400 22,400
Gross Sales 85,600 22,400
Multiplied by tax rate X 0.03 X 12 / 112
Business Tax Due 2,568 2,400
Total Business tax 4,968
Add: PTD 22,400 X 3% = 672 + 4,968 =
5,640 TOTAL BUSINESS TAXES

Problem 3. LGV Enterprises a) Weekly Vat

1st Week Amount Rate Output Tax Input Tax Payable
a. Gross Purchase Price of Mdse 500,000 0.12 60,000
b. Purchase Price of Supplies 60,000 0.12 7,200
c. Invoice Price of Goods Sold 1,120,000 12 / 112 120,000
Total 120,000 67,200 52,800

2nd Week
d. Gross Purchase Price of Goods 720,000 12 / 112 77,142.86
e. Invoice Price of Goods Sold 1,300,000 0.12 156,000
156,000 77,142.86 78,857.14

3rd Week
f. Cost Price of Services Purchased 150,000 0.12 18,000
g. Sales of Merchandise 448,000 12 / 112 48,000
h. Invoice Price of Goods Purchased 840,000 12 / 112 90,000
48,000 108,000 (60,000)

4th Week
i. Sales Price of Merchandise 2,100,000
Less: Sales Returns, Allow,Disc. 160,000

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 Net Sales Price 1,940,000 0.12 232,800
k. Purchase Price of Goods 896,000
Less: Purchase Ret. Allow. Disc. 56,000
Net Purchase Price 840,000 0.12 100,800
232,800 100,800 132,000

b. Monthly 556,800 353,142.86 203,657.14

Problem 4. Jamaica Corp. Seller of Services VRP

Cash Sales 193,760 Gross Purchase Price of Capital Goods/Mat. 96,320
Collection on Credit Sales 140,000 Less: Purchase Returns of Goods & Mat. 31,360
Deposit for future contract of Services 25,000 Net Purchase Price of Capital Goods & Mat. 64,960
Sales- rentals 34,800 Multiplied by VAT Rate X 0.12
Sales Price of used/old office assets 3,248 Value Added Tax (Input TAX0 7,795.20
Gross Receipts 396,808
Multiplied by VAT rate X 0.12
Value Added Tax (Output Tax) 47,616.96
Less: Vat Credit (Input Tax) 7,795.20
VAT Still Payable 39,821.76

Problem 5. Panama Trading Co,. VRP

April May June
Sales Price of Goods 195,000 210,000 730,000
Less: Sales Returns, Allow, Disc. 0.00 23,400 40,900
Net Sales Price of Goods 195,000 186,600 689,100
Multiplied by VAT Rate 0.12 0.12 0.12
Value Added Tax (Output Tax) 23,4000 22,392 82,692
Less: Vat Credits
Input Taxes 8,088 11,880 25,920
Vat Paid Prior Months of Qtr 25,824
Total VAT Credits 8,088 11,880 51,744
VAT Still Payable 15,312 10,512 30,948

C1. 15,312 + 10,512= 25,824

April May June

Purchase Price of Supplies 71,000 65,000 186,000
Purchase Price of Services 15,000 34,000 61,000
Total 86,000 99,000 247,000
Less: Purchase Ret. Disc. 18,600 0.00 31,000
Net Purchase Price 67,400 99,000 216,000
Multiplied by VAT Rate 0.12 0.12 0.12

Input Tax 8,088 11,880 25,920

Note: The amounts on the last month of each calendar or
fiscal quarter shall be on a cumulative amounts.

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Problem 6. Venezuela Company - VRP, Fiscal quarter
Feb. March F. M. April
Sales Price of Goods(Vat
Inclusive) 320,000 475,000 1,190,000
Less: Sales Returns, Allow, Disc. 15,000 19,600 55,600
Net Sales Price of Goods 305,000 455,400 1,134,400
Multiplied by VAT Rate X 12 / 112 X 12 / 112 X 12 / 112
Value Added Tax (Output Tax) 32,678.57 48,792.86 121,542.86
Less: Vat Credits
Input Taxes 22,272 19,860 69,852
Vat Paid Prior Months of
Qtr 39,339.43
Total VAT Credits 22,272 19,860 109,191.43
VAT Still Payable 10,406.57 28,932.86 12,351.43

Feb. March F. M. April

Purchases (VAT Exclusive) 198,000 176,000 619,000
Less: Purchase, Ret. Disc. 12,400 10,500 36,900
Net Purchase Price 185,600 165,500 582,100
Multiplied by Tax Rate X 0.12 X 0.12 X 0.12
Input Taxes 22,272 19,860 69,852

10,406.57 + 28,932.86 = 39,339.43

Problem 7. XYZ Company & MNO Corporation

XYZ Co., SOG
Invoice Price of Merchandise - VAT inclusive
Sold to MNO Corp. 135,200
Sold to Other Customers 330,000
Gross Sales 465,200
Mulitplied by tax rate X 12 / 112
Output Tax 49,842.86
Less: VAT Credits
Purchase Price of Goods-Vat Exclusive
Merchandise 75,000
Office Furniture 25,000
Service from VRP 21,000
Total 121,000
Multiplied by Tax Rate X 0.12
Input Tax 14,520
Actual Input Tax on Inventory 17,600
Total VAT Credits 32,120.00
VAT Still Payable 17,722.86

Locom of MI 12/31/12 P296,000 X 2% = P5,920 TIT

But claim actual IT on MI P17,600

32
 MNO Corporation, SOG
Invoice Price of Merchandise-VAT inclusive
Sales to Customers-net of sales returns 397,500
Consignment Sales 75,000
Mdse on consignment unsold 61-90 days 66,000
Gross Sales 538,500
Multiplied by tax rate X 12 / 112
Output Tax 57,696.43
Less: VAT Credits
Purchase Price of Merchandise
Mdse purchase from XYZ Co. 135,200
Multiplied by tax rate X 12 / 112
Input Tax 14,485.71
Mdse purchase from VRP 265,000
Multiplied by tax rate X 0.12
Input Tax 31,800
Total Input Taxes 46,285.71
VAT Still Payable 11,410.72

C!. 412,000 – 14,500 = 397,500

Problem 8. Granada Corp. Seller of Goods VRP

Output Tax 43,028.57 C1. 245,000 x 112% = 274,400
Less: VAT Credits 31,600.00 C2. 274,400 + 160,000 = 434,400
VAT Still Payable 11,428.57 C3. 434,400 - 32,800 = 401,600
C4. 401,600 x 12/112 = 43,028.57
C6. 27,600 + 2,400 + 1,600=31,600

C5. 230,000 x 12% = 27,600

Problem 9. Guyana Company - VRP

Output Tax 36,000 C1. 336000 x 12/112 = 36,000
Less: VAT Credits 27,780 C2. 145,000 x 12% = 17,400
VAT Still Payable 8,220 C3. 26,880 x 12/112 = 2,880
C4. 17,400 + 2,880 + 7,500= 27,780

Problem 10. Surinam Corp. VRP, please

modify the wrong problem data and
requirements shown after these solutions:

Solutions to Case A. mark up based on gross

purchase price
Output Tax 52,128.00 C1. 89,600 x 12/112 = 9,600 IT
Less: VAT Credits 32,000.00 C2. 125,000 x 12% = 15,000 IT
VAT Still Payable 20,128.00 C3 (89,600 - 9,600) = 80,000 x 180% = 144,000 x 12% = 17,280 OT
C4. 125,000 x 220% = 275,000 x 12% = 33,000 OT
GPP IS 100%, MU IS 80%, GSP IS 180% C5. 15,400 x 12% = 1,848 OT
C6. 17,280 + 33000 + 1848 = 52,128 OT
C7. 9600 + 15000 + 7400 = 32,000 VC

33
 Solutions to Case B. mark up based on
gross sales price
Output Tax 66,848 C1. 89,600 x 12/112 = 9,600 IT
Less: VAT Credits 32,000 C2. 125,000 x 12% = 15,000 IT
VAT Still Payable 34,848 C3 (89,600 – 9,600) = 80,000 / 30% = 266,667 X 12% = 32,000 OT
C4. 125,000 x 220% = 275,000 x 12% = 33,000 OT
GPP IS 30%, MU IS 70%, GSP IS 100% C5. 15,400 x 12% = 1,848 OT
C6. 32,000 + 33000 + 1848 = 66,848 OT
C7. 9600 + 15000 + 7400 = 32,000 VC

Problem10. Surinam Corp. VRP,SOG.

Please modify the problem data and requirements as follows:

Surinam Corporation, a vat registered person provided us its business information in a quarter in year
2013 as follows:
Invoice price of local goods bought P89,600
Landed cost of imported goods P125,00
Gross selling price of imported goods with 120% margin based on landed cost
Output tax paid for the first two months of the said quarter P7,400
The owner took home for his family use some items of imported goods worth P15,400

Required: Compute for the output tax, vat credit and vat payable for each of the following
cases/situations:
Case a. Gross selling price of locally purchased goods with 80% mark up based on gross purchase price
Case b. Gross selling price of locally purchased goods with 70% mark up based on gross sales price

Problem 11. Various Business Establishments

If silent, Collection Cash
Merchants generally Gross Sales Rates Receipts
Dealer of Securities SOS-12%Vat 291,500 85%. 247,775 X 12/112= 26,547
Lending Investor SOS-12%Vat 175,900 0.70 123,130 X 12% = 14,776
Bank SOS- PT 1,074,150 0.65 698,198 X 7% = 48,874
Finance Company SOS-12%Vat 150,860 0.75 113,145 X 12/112 = 12,123
Broker SOS-12%Vat 132,500 0.90 119,250 X 12% = 19,310
Restaurant / Caterer SOS-12%Vat 415,000 0.95 394,250 X 12/112 = 42,241
Hotel, Motel, Resort SOS-12%Vat 1,250,000 0.60 750,000 X 12% = 90,000
Based on Dealer/Distributor of Goods SOG-12%Vat 356,400 N.A. 356,400 X 12/112 = 38,186
Gross Sales Producer/Manufacturer of Articles SOG-12%Vat 1,792,600 N.A. 1,792,600 X 12% = 215,112
Contractor SOS-12%Vat 165,000 0.85 140,250 X 12/112 = 15,027
Life Insurance Company SOS-5% PT 845,000 0.75 633,750v X 2% = 12675
Beauty Salon / Hair Spa SOS-12%Vat 132,000 0.80 105,600 X 12/112 = 11,314
Operator of Taxis/Buses SOS-3% PT 345,800 0.95 328,510 X 3% = 9,855

Problem 12. Toronto Enterprises

Output Tax 100,200.00 C1. 750,000 + 85,000 = 835,000 x 12% = 100,200 OT

Less: VAT Credits 53,841.57 C2. 835,000 + 341,200 = 1,176,200
VAT Still Payable 46,358.43 C3. 835,000 / 1,176,200 x 39,500 = 28,041.57
C4. 25,800 + 28,041.57 = 53,841.57 IT

34
 Problem 13. Excellent Manufacturing Co.
C1. 546,785 x 12% = 65,614.20 OT
Output Tax 65,614.20 C2. 33,450 x 12 / 112 = 3,583.93 IT
Less: VAT Credits 12,015.22 C3. 97,800 x 4% = 3,912 Presumptive Input Tax
VAT Still Payable 53,598.98 C4. 25,875 x 12% = 3,105 IT
C5. 13,200 x 12 / 112 = 1,414.29 IT
C6. 3,583.93 + 3,912 + 3,105 + 1,414.29 = 12,015.22
Note. Fish is a marine food product, not an agricultural food product, hence no PIT

SOLUTION TO PROBLEMS IN VALUE ADDED TAX CHAPTER 19

Problem 1. Chicago Import & Export Co.

Cost Price of Jewelries from USA 165,000.00 Sales Price of Imported Goods 275,000.00
Ins. Prem. & Freight Cost 46,000.00 Multiplied by tax rate X 12/112
Dutiable Value 211,000.00 Output Tax 29,464.29
Custom Duties (35% of DV) 73,850.00 Less: VAT Credits
Other Import Charges(30% of CP) 49,500.00 VAT on Imported Goods 40,122.00
Landed Cost 334,350.00 Vat on Local Goods 17,500.00
Multiplied by tax rate X 0.12 Total VAT Credits 57,622.00
Vat on Imported Goods 40,122.00 Excess VAT Credits (28,157.71)
C1, 211,000 x 35% = 73,850
C2. 165,000 x 30% = 49,500

Problem 2. NVRP, Dealer of Toys

Dutiable Value 158,000.00

Other Import Charges &
Expenses 17,600.00
Custom Duty (75% of DV) 118,500.00
Landed Cost 294,100.00
Multiplied by tax rate X 0.12
Input tax on importation 35,292.00
Sales Price of local toys 48,900.00
Sales Price of imported toys 96,400.00
Gross Sales 145,300.00
Multiplied by tax rate X 0.03
Percentage Tax 4,359.00
Total Business Taxes Due 39,651.00

Problem 3. Australia Mfg. Co. _VRP

Invoice Price of Imported Goods 900,000 (15000 x 60)

Transportation Charges on Imported Goods 42,000 (700 x 60)
Insurance Premium on Imported Goods 30,000 (500 x 60)
Dutiable Value 972,000
Custom Duties 35,000
Other Import Chages & Expenses 87,200

35
Landed Cost 1,094,200
Multiplied by tax rate X 0.12
VAT on Imported Goods 131,304
C1. 500 + 25800 + 6700 + 35000 + 7500 + 1500 + 2600 + 7600= 87200

Problem 4. Canada Enterprises

Sales of Imported Goods 463,000.00

Multiplied by tax rate 0.12
Output Tax 55,560.00
Less: VAT Credits
Dutiable Value 158,000.00
Custom Duties (65% of DV) 102,700.00
Legal Charges within BoC 35,000.00
Landed Cost 295,700.00
Input Vat on LC at 12 % 35,484.00
I T on purchases(65,000 x 12/112) 6,964.28 42,448.28
Value Added Tax still payable 13,111.72

Problem 5. Virginia Corporation - VRP

Output Tax 29,366.87 CP of Imported Goods 20,000
Less: VAT Credits 29,970.00 [Link] & Freight
VAT Payable (EVC) (60313) (20,000 x 35%) 7,000
Dutiable Value 27,000
CP of Local Mdse 84,600 Custom Duties
Multiplied by tax rate X 0.12 (65% of DV) 17,550
Input Tax -Local 10,152 Other Import Charges(30% X DV) 8,100
Input Tax - Imported 6,318 Landed Cost 52,650
13,500 Multiplied by tax rate X 0.12
Total Input Taxes/VC 29,970 VAT on Importation 6,318
C1. 165,000 x 12 / 112 = 17,678.57 OT C2. 52,650 X 185% = 97,402.50 GSP OF IG
C3. 97,402.50 X 12% = 11,688.30 OT C4. 11,688.30 + 17,678.5 = 29,366.87 TOT
C2. 52,650 X 1

SOLUTION TO PROBLEMS IN VALUE ADDED TAX CHAPTER 20

Problem 1. Spain Corporation

Taxable Sales 600,000
Multiplied by tax rate X 0.12
Output Tax 72,000
Less: VAT Credits 55,400
VAT Still Payable 16,600

C1. 700,000 / 1,000,000 x 34,000 = 23,800

C2. 23,800 + 26,000 + 5,600 = 55,400 Vat Credits

36
Problem 2. Various Merchants
a. GC b. GA c. GC d. PC
Gross Payments 165,000 242,000 695,000 125,000
Whholding VAT Pay .rate X 0.05 X 0.05 X 0.05 X 0.12
Whholding Vat Payments 8,250 12,100 34,750 15,000
Net Cash Payment 156,750 229,900 660,250 110,000

Problem 3. France Corporation

Quarters C1. 910,500 + 12,400 = 922,900
1st 2nd 3rd 4th C2. 31,500 +527,800 + 96,200 = 655,500
Output Tax 780,400 826,700 693,500 934,900
Less: Vat Credits 614,300 922,900 655,500 640,700
Vat Payable 166,100 (96,200) 38,000 294,200

Problem 4. Texas Corporation

Months in 3rd quarter (not 2nd quarter)
July August J. A. Sept.
Output Tax 96,000 57,000 304,000
Less: Vat Credits 75,000 95,000 258,000
Vat Payable 21,000 (38,000. 46,000

The amounts for Sept. Is cumulative. (inclusive of July, Aug, Sept.)

C1. 237,000 + 21,000 = 258,000 Vat Credits

Problem 5. Boston Corporation

October November O. N. December
Output Tax 60,000 95,000 267,000
Less: Vat Credits 101,000 123,000 280,000
Excess Vat Credits (41,000. (28,000 (13,000)

The amounts for Dec. Is cumulative (inclusive of October,

November and December.)
C1. 87,000 + 14,000 = 101,000 Vat Credit
C2. 41,000 + 82,000 = 123,000 Vat Credit
C3. 60,000 + 95,000 + 112,000 = 267,000 Output Tax
C4. 87,000 + 82,000 + 97,000 + 14,000 = 280,000 Vat Credits

Problem 6. Paris Enterprise

Output Tax on Actual Sales 349,000
Output Tax on Transaction Deemed Sales 75,000
Output Tax 424,000
Less: VAT Credits
Input Taxes on purchases of:
Merchandise 60,000
Raw Materials 40,000
Capital Goods 26,000
Supplies 19,000
Services 31,000

37
 Real Property 65,000
Total 241,000
Excess Input Tax in Previous Qtr 72,000
Output Tax paid in the last two mos. 94,000
Withholding VAT Payments 3,600
Vat paid in Original vat return 35,900
Total VAT Credits 482,400
Excess VAT Credits (58,400)

Problem 7. Germany Company

Output Tax on Sales of Mdse 53,000.00

Less: VAT Credits
Input Tax on Purchase of Mdse 14,200.00
Input Tax paid on Inventories 21,300.00
Presumptive Input VAT 6,500.00
Total VAT Credits 42,000.00
VAT Payable 11,000.00

C1. 285,000 x 2% = 5,700 vs. 21,300 (get higher)

ANSWERS TO MCQ REVIEW MATERIALS ON VALUE ADDED TAX

SET A. THEORIES SET B. PROBLEMS

ALL
A1. A,B, C A17. D B1. B B17. C B33. C
A2. D A18. B B2. B B18. A B34. A
A3. B A19. A B3. C B19. A B35. A
A4. B A20. C B.4 B B20. D B36. A
A5. B A21. B B5. NO DATA B21. D B37. C
A6. C A22. A B6. A B22. D B38. A
A7. B A23. D B7. A B23. D B39. D
A8. B A24. B B8. C B24. D B40. B
A9. A A25. A B9. A B25. D B41. D
A10. D vat A26. D B10. D B26. B B42. D
A11. D A27. D B11. B B27. A B43. D
A12. C A28. C B12. D B28. B B44. D
A13. B A29. D B13. B B29. A D
A14. C A30. A B14. A B30. D B45. D 820,000
A15. D, A31. B B15. D B31. C
A16. B A32. B B16. A B32. B

38
 Answers, Solutions to Questions and Problems
in Chapter 21: Excise Taxes

MULTIPLE – Choice Questions

1. B 2. B 3. C 4. C 5. A 6. C 7. B 8. C 9. A
10. 11. D 12. A 13. B 14. A 15. A 16. F,F, 17. A 18. D
D NGA
P20/PL
Problem 01. Santol Company

1. Coal,Coke, 25,600 mt X P 10.00 = P256,000

2 a. Natural Gas, P1,650,000 amv X P 2% = P33,000
2b. Imported from abroad P2,750,000 Value X 2% = P55,000
3a. Copper P2,450,000 amv X 2% = P49,000
3b. Gold, P5,760,000 amv X 2% = P115,200
3c. Chromite, P1,420,000 amv X 2% = P28,400
4. Indigenous Petroleum, P3,490,000 fimp X 3% = P104,700

Prob. 02. Duhat Corporation

1a. Car, P4,500,000 + P125,000 = P4,625,000 gsp
On P2,100,000 tax is P512,000 plus (P2,525,000 X 60 % = P1,515,000) =
P 2,027,000
1b. Automobile, P1,250,000 + P35,000 = P1,285,000 gsp
On P1,100,000 tax is P112,000 plu8s (P185,000 X 40% = P74,000) =
P186,000 X 4 units = P744,000
1c. Motorm Vehicle, P590,000 X 2% = P11,800 X 3 units = P35,400

Prob. 03. Durian Incorporated

1. Jewelry,Precious stones, P1,256,000 wsp X 20% = P251,200
2. Perfumes,Toilet Water, P786,900 X 20% = P157,380
3. Yatch, P3,540,000 X 20% = P708,000

Prob. 04. Sampaloc Distillers

1. Rum, 47,500 pl X P20.00 = P950,00 ST + AVT if any(15% of NRP)
2. Whisky, 23,850 pl X P20.00 = P477,000 ST + AVT if Any (15% of NRP)
3a. DS, Gin, 35,900 pl X P20.00 = P718,000 + P195 X 15% = P29.25 per bottle = P
3b. DS,Gin, 21,450 pl X P20.00 = P429,000 + P490 X 15% = P73.50 per bottle = P
3c. DS, Gin, 32,675 pl X P20.00 = P653,500 + P825 X 15% = P123.75 per bottle = P
No given nos of bottles produced

Prob. 05. Kasoy PetroCorporation

1. Lubricating Oil, 325,600 l. X P 4.50 = P 1,465,200
2. Wax, Petrolatum, 69,750 k. X P 3.50 = P 244,125
3. Leaded Premium Gasoline, 725,600 l. X P 5.35 = P 3,881,960
4. Unleaded Premium Gasoline, 396,750 l. X P 4.35 = P 1,725,862.50
5. AviationTurbo Jet Fuel, 273,500 l. X P 3.67 = P 1,003,745
6. Kerosene, 345,750 l. X P 0.00 = P 0.00 or exempt,perRA.9337
7. Bunker Fuel Oil, 421,650 l. P0.00 or exempt

39
 Prob. 06. Dalandan WineryCorporation
1. SW, Champagne, 4,120 l X P250 = P1,030,000
2. SW, Champagne, 2,465 l X P700 = P1,725,500
3. Still Wines, 3,580 l X P30 = P107,400
4. Still Wines, 1,950 l X P60 = P117,000
5. Fortified Wine, 2,750 l X 30% ap = 825 proof liters X P20 = P16,500
Plus AVT if any

Prob. 07. Suha Tobacco Company

1. Other TP, Twisted by hands, 246,500 k X P 1,75 = P431,375
2. Other TP, prepared by machine 392,600 k X P 1.75 = P687,050
3. Fine-Cut, short, refuse, scrap TP, 127,450 k X P1.75 = P223,037.50
4. Other TP,for Chewing, 146,800 k X P 1.50 = P220,200

Prob. 08. Bayabas Liquor Company

1. Beer, 3,200 l X P15 = P48,000
2. Ales, 4,950 l X P15 = P74,250
3. Porter, 1,785 l X P15 = P26,775

Prob. 09. Lanzones Petro Chemical

1. Grease, 154,900 kilos X P 4.50 = P 697,050
2. Processed Gas, 275,400 liters X P0.05 = P 13,770
3. Denatured Alcohol for motive power, 162,500 l X P0.05 = P8,125
4. Naptha, regular gasoline, 273,800 l X P4.35 = P1,191,030
5. Diesel Fuel Oil, exempt or at 0.00 % tax rate
6. Liquified Petroleum Gas, Exempt P0.00 or at 0.00% tax rate
7. Asphalt, 795,600 k X P0.56 = P 445,536

Prob. 10. Melon TobaccoCorp.

1. Cigar, 697,450 cigars X P50.00 sp per cigar = P34,872,500 X 20% = P6,974,500
Plus AVT of 697,450X P5.00 = P34,872,500
2a. Cigarettes packed by hands, 275,850 pk X P25= P6,896,250
2b. Cigarettes packed by machines, 275,850 pk X P12 = P3,310,200
2c. Cigarettes packed by machines 275,850 pk X P12 = P3,310,200
2d. Cigarettes packed by machines 275,850 pk X P12 = P3,310,200

40
 Answers, Solutions to Questions and Problems
in Chapter 22: Community Taxes

Prob. 01. Makisig

C1. BCT is P5.00 + ACT of P1,370 = P1,375
C2. P1,370,350 / P1,000 = 1,370 X P1.00 = P1,370
C3. 412,600 + 897,750 + 60,000 = P1,370,350

Pr0b. 02. XYZ

C1. BCT is P500 + ACT of P2,736.68 = P3,236.68
C2. P6,841,700 / P5,000 = 1,368 X P2.00 = P2,736.68
C3. 1,200,000 + 12,350 + 4,350 5,625,000 = P6,841,700

Prob. 03. Ralph, Vilma

C1. BCT is P10.00 + ACT of P4,075 = P4,085
C2. P4,075,450 / P1,000 = 4,075 X P1.00 = P4,075
C3. 375,450 + 3,500,000 + 200,000 = P4,075,450

Prob. 04. ABC

C1. BCT is P500 + ACT of P1,110 = P1,610
C2. P2,777,200 / P5,000 = 555. X P2.00 = P1,110
C3. 3,780,000 – 1,956,000 = 1,824,000 + 36,450 + 41,750 + 875,000 = P2,777,200

Prob. 05. Inhabitant

1. If individual
C1. BCT is P5.00 + ACT of P 3,308 = P 3,313
C2. P 3,308,150 / P 1,000 = 3,308 X P 1.00 = P 3,308
C3. 2,500,000 + 675,450 + 132,700 = P 3,308,150

2. If corporation
C1. BCT is P500 + ACT of P3,248 = P3,748
C2. P8,120,300 / P5,000 = 1,624 X P2.00 = P3,248
C3. 2,500,000 + 5,475,000 + 132,500 + 12,600 = P8,120,300

Prob. 06. Resident partnership

C1. BCT is P500 + ACT of P3,260 = P3,760
C2. P8,150,000 / P5,000 = 1,630 X P2.00 = P3,260
C3. 3,650,000 + 4,500,000 = P 8,150,000

41