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M2 Tax Calculation Answer Key

This document contains two examples of income tax computations. The first computes tax owed as 35,000 based on taxable income of 425,000 with no indication of being taxed at 8%. The second computes tax owed as 594,000 based on taxable income of 2,325,000 and signifies intention to be taxed at 8% rather than the standard rates. It also notes interest income from local banks and expanded foreign currency deposits are taxed at 20% and 15% respectively.

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Lara Camille Celestial
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252 views2 pages

M2 Tax Calculation Answer Key

This document contains two examples of income tax computations. The first computes tax owed as 35,000 based on taxable income of 425,000 with no indication of being taxed at 8%. The second computes tax owed as 594,000 based on taxable income of 2,325,000 and signifies intention to be taxed at 8% rather than the standard rates. It also notes interest income from local banks and expanded foreign currency deposits are taxed at 20% and 15% respectively.

Uploaded by

Lara Camille Celestial
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

SOLUTION PROBLEM 1

Did not Signify the Intention to be Taxed at 8%

A. Net Sales ( 2,500,000.00) A.


Cost of Sales ( 1,500,000.00)
Gross Income ( 1,000,000.00)
Add: Other Taxable Income ( 75,000.00)
Total ( 1,075,000.00)
Less: Allowable Business Expenses ( 650,000.00)
Taxable Income ( 425,000.00)

B. Computation of Income Tax: B.


Basic tax - on P250,000 ( -  )
Additional tax - (P425,000 - P250,000)*20% ( 35,000.00)
Income Tax Due ( 35,000.00)

C. Interest received on local bank deposit of P10,000 is subject C.


to final tax of 20%. Interest received under expanded FCDS of
P20,000 is subject to a final tax of 15%.
Signified Intention to be Taxed at 8%

Net Sales ( 2,500,000.00)


Add: Other Taxable Income ( 75,000.00)
Total ( 2,575,000.00)
Less: Allowable deduction ( 250,000.00)
Taxable Income ( 2,325,000.00)

Computation of Income Tax:


Basic tax - on P2,000,000 ( 490,000.00)
Additional tax - (P325,000 x 32%) ( 104,000.00)
Income Tax Due ( 594,000.00)

Same.

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