Mr. JMLH is a partner of AMBS & Co.

, a general professional partnership, and owns 25%

interest. The gross receipts of AMBS & Co. amounted to ₱10,000,000.00 for taxable year 2018.
The recorded cost of service and operating expenses of AMBS & Co. were ₱2,750,000.00 and
₱1,500,000.00, respectively.
1. If AMBS & Co. availed of the OSD, compute the deductions, net income and tax due, if
any; compute also the income tax liability of partner Mr. JMLH.
Ms. GEAL is a partner of CCF & Co., a general professional partnership, and owns 25%
interest. The gross receipts of CCF & Co. amounted to ₱10,000,000.00 for taxable year 2018.
The recorded cost of service and operating expenses of CCF & Co. were ₱2,750,000.00 and
₱1,500,000.00, respectively.
2. Compute the Net Income of CCF & Co. ; Compute also the income tax liability of partner
Ms. GEAL.
ABC Corporation has the following data in 2016:
Gross income, Philippines P975,000.00
Expenses, Philippines 750,000.00
Gross income, abroad 770,000.00
Expenses, abroad 630,000.00
Interest on bank 25,000.00
deposits
3. Compute for the taxable income and income tax due if the corporation is:
a. Domestic corporation
b. Resident foreign corporation

The EA University, a stock corporation, a private educational institution recognized by CHED, is

in tenth year of its operations. It had the following data for 2015.
Tuition fees received P200.000,000.00
Miscellaneous fees received 1,000,000.00
Gross income from the book store and tenants in the ground floor of 950,000.00
the university building, net of 5% withholding tax
Expenses 100,000,000.00
Expenditure for building a library with an estimated useful life of 50 20,000,000.00
years

4. How much is the income tax still due from the institution if the expenditure for the library
is treated as an outright deduction?

5. How much is the income tax still due from the institution if the expenditure for the library
is treated as a capital expenditure?

ACE University is a private educational institution. The following are the financial data for its
fiscal year ending June 30, 2016:
Tuition fees 12,800,000
Miscellaneous fees 1,800,000
Interest on bank deposits 12,300
Rent income on school facilities 350,000
Salary and bonuses of personnel 7,500,000
Other operating expenses 3,500,000
 Repayment of loan 400,000
Quarterly income tax paid for 3 quarters 48,000
A building was constructed on April 2016 at a cost of Php2,000,000.00 with a depreciable life of
50 years.

6. Assuming the cost of construction is treated as an expense, the income tax payable by
the school for 2016 is:

7. Income tax payable if the cost of building construction is capitalized:

DEF Corporation which started its operation in the year 2000 has the following records in 2017:
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Gross income 1,054,580 788,266 838,194 1,235,885
Expenses 845,983 638,938 746,933 1,094,637
Dividends-domestic corporation 105,000 - 105,000 -
Interest-peso bank deposit 15,000 25,000 10,750 5,850
Creditable tax withheld 84,983 57,526 36,985 17,983
Rent income, gross of 5% 300,000 300,000 440,000 450,000.00
withholding tax
The company had an excess payment of P15,000 in 2016 from which it had decided to claim as
tax credit.

8. Compute for the income tax payable for the :

a. 1st quarter
b. 2nd quarter
c. 3rd quarter
d. At the end of the year

A domestic corporation, in its fourth year of operations had the following data for the year:

Net sales P 2,000,000.00

Capital gain on direct sale at P500,000 to a buyer of shares of 200,000.00
a domestic corporation
Capital gain on sale thru a real estate broker of land and 1,000,000.00
building outside the Philippines for P5,000,000
Dividend from a domestic corporation 50,000.00
Interest on bank deposits 40,000.00
Cost of sales 600,000.00
Quarterly income tax paid 190,000.00
Operating expenses 500,000

9. Compute for the income tax still due at the end of the year.

A domestic corporation had the following data in five years:

Normal income tax 32,000.00
Year 4
Minimum corporate income tax 65,000.00
Normal income tax 8,000.00
Year 5
Minimum corporate income tax 2,000.00
Year 6 Normal income tax 10,000.00
 Minimum corporate income tax 30,000.00
Normal income tax 22,000.00
Year 7
Minimum corporate income tax 20,000.00
Normal income tax 50,000.00
Year 8
Minimum corporate income tax 20,000.00

10. The income tax for Year 8 (before credit for any quarterly income tax payments) is:

XYZ Corporation has the following data:

2015 2016
Sales 1,700,000 2,300,000
Cost of sales 1,050,000 1,425,000
Operating expenses 615,000 480,000

11. The income tax payable in 2015:

12. Income tax payable in 2016:

Formula – Per RMC No. 35-2011

Taxable income for the year
xx
Add:
a) Income subject to final tax xx
b) NOLCO xx
c) Income exempt from income tax xx
d) Income excluded from gross income xx xx
xx
Less:
Income tax paid xx
Dividends declared/paid xx xx
Total xx
Add: Retained earnings from prior years xx
Accumulated earnings xx
Less: Amount that may be retained (100% of paid-up capital) xx
Improperly Accumulated Taxable Income (IATI) xx

JKL Corporation, a closely held corporation, reveals the following data:

2015: Gross income 3,400,000
Expenses 3,800,000
2016: Gross income 3,960,000
Expenses 3,100,000
Royalty 340,000
Dividends payable 56,000
13. The income tax payable in 2016:

14. How much is the improperly accumulated taxable income in 2016?

15. How much is the improperly accumulated earnings tax in 2016?