School of Business and Economics

Department of Accountancy

University of San Carlos

P. del Rosario St., Cebu City, 6000

ASSIGNMENT NO. 1 - Chapter 5 Final Income Taxation

In partial fulfillment of the requirements

Of the subject

AC 2202
INCOME TAXATION

Submitted by:
BORROMEO, FRANCIS
IMPERIAL, GERALDINE
SARCENA, IHRA MARIELLE
MEDIDA, ANTON JOSHUA
PONGASE, ELAIZA JAYNE
BS Accountancy 2 - Group 7

Submitted to:
ATTY. MARK ANTONY ROSAL
AC 22O2 Instructor
Multiple Choice - Problems 1
1. A. I, II, III and IV

The income from treasury notes, certificates of deposits, and investment certificates are
taxable as income.

2. D. ₱16,000
Deposit ₱ 2,000,000
Rate of Interest x 8%
Total 160,000
Day-time deposit x 180/360
Total 80,000
Tax Rate x 20%
Total ₱ 16,000
3. C. ₱20,000
Interest (₱2,000,000 8%x 180/360) ₱ 80,000
Multiply by: Final Tax Rate 25%
Final Tax ₱ 20,000
4. A. ₱10,500
Interest (₱42,000 /80%) ₱ 52,500
Multiply by: Final Tax Rate 20%
Final Tax ₱ 10,500
5. A. ₱0

6. C. ₱45,000
Deposit (₱2,000,000 x10%) ₱ 52,500
Day-time deposit x 4.5
Multiply by: Tax Rate 5%
Total ₱ 45,000

7. C. ₱20,000
Interest (₱80,000 /80%) ₱ 100,000
Multiply by: Final Tax Rate 20%
Final Tax ₱ 20,000
8. A. ₱100,000

9. D. 30,000 P1,000,000 x 10% x 30% = P30,000

10. B. P10,000
Interest income (1,000,000 x 10% x 6/12) 50,000
Final tax rate 20%
Final tax withheld on pre-termination ₱10,000

11. B. P5,000 Interest income (1,000,000/4 x 10%) 25,000

 Final tax rate 20%
Final tax ₱5,000

12. A. P0
13. A. $0 Non-resident depositors are exempted from final tax on interest income on
foreign currency deposit

14. B. $6,000 Taxable interest income (1,000,000 x 8%) 50% 40,000

Final tax rate 15%
Final tax $6,000

15. A. $0 Non-resident depositors are exempted from final tax on interest income on
foreign currency deposit
16. D. P675,000 Interest income (1,000,000 x 10%) 100,000
Final tax rate 15%
Final tax in foreign currency $15,000
Exchange rate per $ P45
Final tax withheld P675,000

Multiple Choice - Problems 2

1. B. 11,111
= 100,000 / 90% = 111,111 x 10%

2. C. 6,937.50
= 46,250 X 15%

3. B. 6,937.50

4. C. 60,000
100% - 40% = 60%
= 1,000,000 x 60% x 10%
5. D. 0

6. A. 24,000
= 120,000 x 20%

7. B. 8,000
= 200,000 x 40% = 80,000 x 10%

8. D. 0

9. B. 10,000
= 200,000 x 50% x 10%

10. D. 0
Corp – received dividend income from SPV – domestic corporation – exempt- intercompany
dividends

11. D. 0
12. D. 0

13. C. 40,000
= 1,000,000 x 40% x 10%

14. A. 200,000
=800,000/80% x 20%

15. B. 640,000
= 8,000,000 x 10% x 80%

Multiple Choice - Problems 3

1. B. 100,000
= 500,000 x 20%

2. B. 4,420
Singing 12,000 x 20% = 2400
Dancing 10100 x 20% = 2020 =4420
3. D. 2200
Singing (exempted because of 10k threshold)
Dancing 11000 x 20% = 2200
4.d. 10 000 000
50,000,000 x 20% = 10,000,000
5.B. 10,000
50,000 x 20% = 10,000
6.D. Subject to Reg tax

7. D. 900,000
20,000,000 x 10% 2,000,000
Cash limit 1,000,000
Less: 10% withholding tax 100,000
Tax informer’s reward, Net amount 900,000
8. A. 0
Since the informant is a public official and the information was in possession of BIR.

9.C. 37, 500

₱ 1,000,000 x 8.75% = ₱ 87,500/ 70% = ₱125,000 x 30% = ₱37,500
10. C. March 10, 2021

Solution: This is because any amount of tax withheld has to be remitted on or before the
20th of the following month. In this case, the withheld tax is for the month of February 2021 thus
the deadline will be the 10th day of March 2021.

11. D. ₱128,000
Due date: March 10, 2021 - 20%

Interest (90,000 x 20% per annum x10 days’ delay /360) = ₱500
Surcharge ( 25% x 90,000) = ₱22,500
Compromise Penalty: ₱15,000

Total Amount of Taxes due including penalties = Surcharge + Interest + Compromise

90,000+500+ 22,500 + 15,000 = ₱128,000

12. C. ₱ 64,000

Interest Payment = ₱1,200,000 x 20% final tax rate = ₱240,000

Surcharge = ₱240,000 x 25% = ₱60,000
Interest = ₱240,000 x 20% per annum x 30 days’ delay/360 days = ₱ 4,000

Total Surcharge and Interest Penalty due = Surcharge + Interest

₱ 60,000 + ₱4,000 = ₱ 64,000