02/13/10

First Pre-Board Examination

February 13, 2010
1. On February 12, 2010. A sold his only dog to B for P20,000. The parties agreed
that B will pay one day after the results of the May 2010 CPA Licensure
Examination are releases while A will deliver the dog on the day B pays. If the
results were released on May 25, 2010 but the dog gave birth to a puppy on May
24, 2010, which of the ff. statements are correct?
a. A is entitled to the puppy because the puppy was born before the obligation to
deliver arises
b. A is entitled to the puppy because of the principle that accessory follows the
principal
c. B is entitled to the puppy because the contract was perfected on February 12,
2010
d. A is entitled to the puppy because the puppy cannot be separated from the
mother dog yet
2. A pointed a gun and threatened to kill B if B will not sign a promissory note which
reads I promise to pay A, P100,000. Out of fear, B signed the note. It turned out
that two days earlier, As obligation to B amounting to P100,000 became due and
B demanded payment. Now, A alleges compensation. Is A correct?
a. Yes, because the promissory note is valid
b. No, because the promissory note was signed only because there is
intimidation
c. Yes, provided B will agree
d. No, because As obligation does not exist
3. A has two creditors, B and C. The obligation to B is P10,000 and to C is P12,000.
Later, with the consent of A and B, W pays B P10,000. Now W and C are the
creditors of A. Suppose A has only P12,000, which is correct?
a. C should be preferred
b. W should be preferred
c. C and W should be paid proportionately
d. A may choose whom to pay
4. In the ff. cases, the contract of sale with a right of repurchase shall be deemed an
equitable mortgage, except when
a. The vendor remains in possession of the object
b. The vendee retains a portion of the price
c. The price is inadequate
d. The parties renew the instrument after the expiration of the period to
repurchase
5. A owes B P100,000 secured by a mortgage. C, girlfriend of A, and with no interest
at all in the obligation paid B the P100,000 without the knowledge of A. Which of
the ff. course of action is allowed?
a. C can recover P100,000 from A
b. C can foreclose the mortgage
c. C is subrogated to the rights of B
d. C is a person who is interested in the fulfillment of the obligation
6. A owes B, P10M. At maturity, A conveyed to B a parcel of land worth P20M. In
turn, B indorsed and delivered to A the share of stocks of ABC Corporation worth
P10M. In this case, the transaction is
a. Barter
b. Sale
c. Dation in payment
d. Partly sale, partly barter
7. A sold his car to B on sale or return within 10 days. On the 7th day after
delivery, the car was forcibly taken by the carnappers. In this case
a. The contract of sale is terminated
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b. B must still pay the purchase price
c. A bears the loss
d. B can refuse to pay unless A delivers another car
8. In the ff. cases, the vendor is not obliged to make delivery after perfection of the
contract of sale, except
a. The vendee has not paid the price
b. No period for payment has been fixed in the contract
c. Vendee lost the right to make use of the period to pay
d. A period for the payment has been fixed in the contract
9. Statement 1- Chattel mortgage is a consensual contract and the creditor gets
possession of the thing mortgaged
Statement 2- Pledge is a consensual contract and gives a personal right
Statement 3- Real mortgage is a real contract and creates a real right if
registered with the Registry of Property
Statement 4- Antichresis is an accessory contract and gives a real right
a. Only one is true
b. Two are true
c. Three are true
d. All are true
10.Which of the ff. is not correct?
a. A movable or immovable property maybe the object of commodatum
b. The bailor in commodatum need not be the owner of the thing loaned
c. A stipulation that the bailee may make use of the fruits of the thing loaned is
valid
d. The bailor is obliged to pay for the ordinary expenses for the use and
preservation of the thing loaned
11.The ff. are obligation of the agent, except
a. In the execution of agency, the agent shall act in accordance with the
instructions of the principal
b. Shall be bound to advance necessary funds, except when principal is insolvent
c. Shall finish the business already begun on the death of the principal, should
delay entail any danger
d. In case a person declines an agency, he is bound to observe the diligence of a
good father of a family in the custody and preservation of the goods forwarded
to him by the owner until the latter should appoint an agent
12.To
a.
b.
c.
d.

be valid and enforceable, the ff. contracts should be in writing, except

Contract to pay interest on loan
Contact of donation of real property
Contract giving authority to an agent to sell a piece of land
Contract made consideration in marriage

13.X borrowed money from Y. X constituted a real estate mortgage over his house to
secure the loan. It was stipulated that in case X could not pay the loan on time,
the house would belong to Y. Which is correct?
a. Y shall become owner of the house upon default by X by virtue of their written
agreement
b. Y shall become owner of the house by virtue of the default by X
c. Y shall only enjoy the right of alienation over the land
d. Y shall be entitled to the right of appropriation of the land
14.The ff. are the same, except
a. Mandante and principal
b. Mandatorio and agent
c. Authority and power
d. Cause and consideration

02/13/10

15.F sold and delivered to G on February 10, 2010 a cellphone for P30,000. It was
agreed that C would pay the P30,000 at the end of the month of February and
that F shall remain the owner of the cellphone unit until the price has been fully
paid. If before the end of the month, the phone is destroyed by a fortuitous event,
which of the ff. is provided for by law?
a. F shall bear the risk of loss
b. G shall bear the risk of loss
c. They shall jointly bear the risk of loss
d. All of the above are without basis of law
16.K and Q are siblings. They remain co-owners of a parcel of land which they
inherited from their deceased parents. The land is adjoined by the lots of M in the
north and B in the south. K sold his undivided half share of the inheritance to H. In
this case, legal redemption shall be allowed in favor of
a. Q
b. M
c. B
d. All proportionately
17.X, a bride to be, rented a car from Y Car Rentals to bring her to church on
February 14, 2010, her wedding day. The car and driver assigned were nowhere to
be found on the scheduled day, Y Car Rentals incurs delay because
a. The obligation or law expressly declares
b. Time is of the essence
c. The obligor has rendered it beyond his power to perform
d. The date has been fixed by the parties
18.A, minor, sold the ring of his brother without authority. The ring has a FMV of P1M
and SP was P600,000. The contract is
a. Rescissible
b. Voidable
c. Unenforceable
d. Void
19.Using the preceding number, the remedy is
a. A can ask for annulment
b. The brother can ask for annulment
c. The buyer can ask for annulment
d. The brother can just ignore the contract
20.Spouses H and W are under the regime of absolute community of property. H,
through violence and intimidation obtained the signature of W to a contract of
sale involving Ws exclusive property in favor of H. The FMV of the property is P1M
but the SP is only P700,000. The sale is
a. Rescissible
b. Voidable
c. Unenforceable
d. Void
21.A owns a parcel of land which he sells to be with a 3 year redemption period. After
the second year, A dies leaving his children C, D, and E as his heirs. Which of the
ff. is not correct?
a. A can repurchase the whole thing, so anyone among C, D, and E may
repurchase the whole thing
b. C can redeem his 1/3 share, D his 1/3 share, and E his 1/3 share if B does not
require all of them or any one of them to redeem the whole property
c. B may demand all of the co-heirs that they may come to an agreement upon
repurchase of the whole thing sold
d. B cannot be compelled to consent to partial redemption
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22.A sold his car to B payable in ten equal monthly installments and with a mortgage
constituted on the same property. For Bs failure to pay a months installment,
which statement is correct?
a. A may foreclose the mortgage on Bs car but he has no longer the right to
recover the balance should it be sold for an amount lower than what he claims
to B
b. A may seek cancellation of the sale made to B
c. A may seek fulfillment of the obligation of B to pay the entire purchase price
d. A may seek cancellation of the sale and later on foreclose the mortgage
should he find it impossible to collect from B
23.Which of the ff. is not a ground for annulment of contract
a. Incapacity to give consent
b. Vitiated consent
c. Lesion
d. Minority
24.When the sale of the piece of land or any interest therein is through an agent, the
authority of the agent may be
a. In a public instrument
b. In a private instrument
c. Either of the two
d. Duly notarized
25.An
a.
b.
c.
d.

agency can be revoked at will in the ff. cases, except when

A bilateral contract depends upon it
The agency is on a fixed term
It is a means of fulfilling an obligation already constituted
The authority is granted to a managing partner appointed in the articles of
partnership

26.The vendor de retro shall be entitled to redeem the object of sale within
a. Four years if no period is agreed upon
b. 30 days from notice of intention to repurchase
c. 10 years if there is a period stipulated
d. The period agreed upon
27.Which of the ff. is a common requisite of the remedies of possessory lien and
stoppage in transit
a. Unreasonable delay in payment of the price
b. Goods are in transit
c. Object must be in vendors possession
d. Insolvency of the buyer
28.A was obliged to pay B P1M on December 31, 2010. A paid B on December 31,
2009 believing that the obligation was already due and demandable. How much
may A recover from B on March 31, 2011?
a. Nothing
b. Legal interest for one year and 3 mos.
c. P1M plus legal interest for one year
d. Legal interest for one year
29.X and Y gave their consent in a contract of sale involving a property in Quezon
City. In the mind of X, he is supposed to buy a Manila property which is also the
same property in the mind of Y as vendor. In this case, the proper remedy to cure
the mistake is
a. Annulment
b. Rescission
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c. Reformation
d. Ratification

30.One of the ff. vices of consent result to consent under duress

a. Mistake
b. Fraud
c. Undue influence
d. Intimidation
31.The ff. contracts are qualified for reformation, except
a. Onerous
b. Gratuitous
c. Renumeratory
d. Consensual
32.Statement 1- An offer becomes ineffective upon the death, civil interdiction,
insanity, and insolvency of the offerer after the offerees conveyance of
acceptance
Statement 2- Consent is manifested by the meeting of the minds of the offer
and the acceptance upon the object and cause of the contract
a. Both are in accordance with the rule of law
b. Statement 1 is in accordance with the rule of law but statement 2 is against
the provisions of law
c. Both are violative of the provisions of law
d. Answer not given
33.X, Y, and Z are Ws sons. Upon death of W, the three sons found a last will and
testament in the cabinet of W. The will showed disposition of a 30- hectare land,
the only asset of W at the time of his death in favor of the ff: X-5 hectares; Y- 10
hectares; Z- 15 hectares. X felt discriminated with his share of only 5 hectares.
Which is correct?
a. Reformation of the instrument in order to correct the disparity in the disposal
of the property
b. Annulment of the instrument is the proper remedy to correct the mistake
c. Rescission is the proper remedy to correct the damage on the part of X
d. The law does not allow any remedy in this case
34.W sustained serious head injury while silently reviewing inside a library at the
ground floor of the university, resulting from a wild baseball throw by X to Y
during a practice game. Both players were found negligent in the performance of
their respective play. Which is correct?
a. X and Y are liable jointly and severally
b. X and Y are liable jointly
c. X and Y have no liability
d. Only X is liable
35.A obtained and interest free loan of P50,000 from B evidenced by a promissory
note payable six months after date. At maturity, A called B by phone to ask for an
extension of one month and offer to pay 20% interest on the loan. Enticed by the
20% interest, B agreed to the extension of maturity. Which is correct?
a. The interest is a demandable interest by virtue of an agreement
b. The interest is unenforceable
c. The loan is valid but interest is void
d. The loan and interest are both demandable
36.A promised to deliver to B 100 sacks of palay from the formers 2010 summer
harvest. A failed to deliver what was promised due to floods which destroyed
crops before harvest season. Is the obligation extinguished?
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a.
b.
c.
d.

No, generic thing does not perish

No, A can still raise the same future crops
Yes, the generic thing is delimited
Yes, the contract is void due to non-existing object at the time of perfection

37.D is obliged to give E, at Es option, his Rolex watch, or his Cross ballpen or his
diamond ring. The diamond ring was forcibly taken by a robber and the watch by
a snatcher. After D lost the watch, and the ring, the ballpen likewise could not be
located despite diligent efforts of to find the same. D could no longer remember
where he kept the pen. Hence, D failed to deliver any of the three items he
promised. Is the obligation of D to E extinguished?
a. No, E can demand the value of anyone of the three items since he has the
right of choice
b. No, E can demand the value of the last thing lost
c. Yes, fortuitous loss extinguishes all alternative obligations
d. Yes, nothing remains practicable
38.X Company bought out a competitor, Y, with a stipulation that Y should thereafter
not engaged in any business in the Philippines without the consent of X Company
a. The stipulation is not valid because the parties as a rule have no absolute
freedom to stipulate terms and conditions in a contract
b. The stipulation is not valid because this is against public policy
c. The stipulation is valid because it was mutually agreed upon
d. The stipulation if ratified is valid
39.A promissory note reads I promise to pay B, P100,000 on July 30, 2010. Sgd A. B
transferred the note to C. Later, X stole it and transferred the note to Y who
received the note in good faith. On maturity date, Y presented the note to A and
demanded payment. A paid the note in good faith. In this case
a. As obligation is extinguished
b. C cannot collect from A
c. As obligation is not extinguished
d. C can recover only either from X or Y
40.A bought a residential house and lot from B Realty for P2M giving a downpayment
of P200,000 and promising to pay the balance of P1.8M in 15 years in monthly
installments of P10,000. After paying 72 installments, A defaulted in the payment
of subsequent installments. Despite the grace period given, he was not able to
make any further payments. Accordingly, B realty cancelled the sale. How much
surrender value is A entitled to receive?
a. P552,000
b. P396,000
c. P462,000
d. P506,000
41.A, a resident alien had the ff. in 2009:
Gross income, Philippines
Business connected expenses
1,200,000
Dividends received:
-from domestic corporation (net)
60% of its income came from Philippine source
90,000
40% of its income came from Philippine source
72,000
-from resident foreign corporation (gross)
60% of its income came from Philippine source
50,000
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P2,000,000

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40% of its income came from Philippine source
40,000
As net taxable income is
a. P800,000
b. P780,000
c. P796,000
d. P750,000
42.Using the data above, the final withholding taxes on the dividends amount to
a. P16,200
b. P25,200
c. P18,000
d. P26,000
43.The theory which best justifies the necessity of taxation is
a. Support and protection theory
b. Benefits received theory
c. Life blood theory
d. Reciprocity theory
44.In which of the ff. instances involving a capital asset may a taxpayer include his
income as part of gross income subject to basic tax at his option?
a. When it involves a gain from sale of shares of stock, not traded in the stock
exchange and the gain does not exceed P100,000
b. When it involves a gain from sale of shares of stock, traded in stock exchange
c. When the sale involves a real property and the selling prices is higher than its
FMV
d. When a real property is sold to the government or any of its political
subdivision
45.Which of the ff. are elements of impact if taxation?
I- Levy
II- Imposition
III- Assessment
Collection
a. I and II
b. I, II, and III
c. III and IV
d. I, II, III, and IV

IV-

46.Which of the ff. are elements of impact if taxation?

I- Levy
II- Assessment
III- Collection
a. I only
b. I and II
c. II and III
d. III only
47.Which of the ff. statements are correct?
a. The power of taxation must first be expressly granted, either by law or by the
constitution for the State to validly exercise it
b. The power of taxation and police power may be exercised simultaneously
c. The Philippine Govt may subject the land where embassies of foreign govts
are located to real estate taxes
d. GOCCs are exempted from taxes because it would be impractical for the govt
to be taxing itself
48.The ff. data on net income (loss), bad debt, write off and recovery show:
2009
Case A
Case B
Case C
Net income (loss) before write off
P80,000
P40,000
(P20,000)
Bad debt written off and allowed as deduction
50,000
50,000
50,000
Net income (loss) after write off
P30,000
(P10,000)
(P70,000)
2010
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Subsequent recovery
The taxable recovery is
Case A
Case B
a.
P40,000
P30,000
P20,000
b.
P40,000
P30,000
0
c.
P40,000
P20,000
0
d.
P40,000
P10,000
0

P40,000

P30,000

P20,000

Case C

49.Which of the ff. is correct?

a. A Filipino who stayed in USA for more than 180 days is a non-resident citizen
b. An American who stayed in the Philippines for more than 180 days is a
resident alien engaged in business in the Philippines
c. A Filipino who stayed in the Philippines for more than 180 days is a resident
citizen
d. An American who stayed in the Philippines for an aggregated period of 180
days during the calendar year is a resident alien engaged in business in the
Philippines
50.A sold his residential land, a capital asset for P 2,000,000. It was acquired in 1990
at a cost of P2,000,000. The fair market value of the land as determined by the
BIR is P2,200,000 but the FMV shown in the schedule of values of City Assessor is
P1,950,000. The entire proceeds were utilized for the acquisition of As principal
residence. The final tax due is
a. P120,000
b. P132,000
c. P117,000
d. P0
51.Using the above data, but only P1,600,000 was utilized for the acquisition of As
principal residence. The final tax due is
a. P24,000
b. P26,400
c. P120,000
d. P132,000
52.A, married, with 4 qualified dependent children, died on January 2, 2009. He left
an estate with a FMV of P20M. The estates appointed administrator is B. The
records of the estate show:
2009
2010
Gross Income
P5,000,000
P6,000,000
Deductible expenses
3,200,000
4,300,000
Distribution to the heirs:
From the estate
1,000,000
600,000
From the income of the estate
500,000
500,000
The net taxable income of the estate in 2009 is
a. P280,000
b. P1,280,000
c. P1,150,000
d. P150,000
53.The net taxable income of the estate in 2010 is
a. P580,000
b. P1,180,000
c. P1,050,000
d. P450,000
54.A resident citizen received a raffle prize of P40,000 from NBA while watching a
basketball game between the LA Lakers and Boston Celtics in LA, California, USA.
Which of the ff. statements is correct?
a. The whole amount of P40,000 is part of his taxable income
b. The first P10,000 is part of his taxable income while the remaining P30,000 is
subject to 20% final tax
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c. The whole amount of P40,000 shall be subject to 20% final tax
d. The first P10,000 shall be exempt from tax while the remaining P30,000 is
subject to 20% final tax
55.AB and Co., with A and B as partners and sharing profits and losses in the ratio of
55:45, respectively in a business partnership. The ff. data on income and
expenses for 2010 show:
Gross income
P750,000
Expenses
200,000
Dividend received from a domestic corp.
20,000
Bank interest income, PNB (net)
80,000
The final taxes withheld on the respective share of A and B in the 2010
partnership income are
A
B
a. P21,175
P17,325
b.
26,675
21,825
c.
25,025
20,475
d.
25,116.z50
20,587.50
56.Acting on the information given by A, the government seized and confiscated
smuggled goods with a FMV of P15M. As reward will be
a. P1.5M which is part of his taxable income
b. P1.5M which is subject to 10% final tax
c. P1M which is exempt from tax
d. P1M which is subject to 10% final tax
57.Statement 1- For calendar year 2009, an individual taxpayer may claim either
the itemized deduction or optional standard deduction of 40% of net
sales/receipts
Statement 2- For calendar year 2009, a corporation may claim either the
itemized deduction or optional standard deduction of 40% of gross income
a. True, true
b. False, false
c. False, true
d. True, false
58.A cash dividend of P100,000 received by a taxpayer in 2010 from a domestic
corporation whose income from Philippine source is 40% of its total income is
a. Taxable in full if he is a non-resident alien
b. Partly taxable if he is a resident citizen
c. Taxable in full if it is a domestic corporation
d. Exempt from tax if it is a non-resident foreign corporation
59.In 2009, A Enterprises paid for the annual rental of a residential house used by its
general manager amounting to P340,000. The fringe benefit tax is
a. P160,000
b. P145,714
c. P80,000
d. P72,857
60.A, stockholder of ABC Corporation, is indebted to ABC Corporation amounting to
P25,000. At the end of the taxable year, he received a notion that the corporation
cancelled his indebtedness. As a result
a. A received a gift, and therefore the P25,000 is exempt from income tax
b. A received P25,000 as income and therefore part of his taxable income
c. A is exempt from income tax but the corporation should pay donors tax
d. A received P25,000 as dividend and therefore subject to final tax
61.A, reported the following for the year 2009:
Gross Income
5,000,000
Cost of Sales
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P
3,000,000

02/13/10
Salaries of employees, net of P100,000 withholding tax and
P50,000 SSS, Medicare and Pag-ibig premiums contributions
800,000
Fringe benefits given to rank and file employees
300,000
Fringe benefits given to managerial employees
136,000
Representation and entertainment expenses (all business connected)
100,000
Rent expense
120,000
Donation to religious charitable institutions
500,000
The amount that A will report as net income before exemptions
a. P2,894,000
b. P2,997,000
c. P3,054,600
d. P3,051,000

62.A sold a personal property held as capital asset he acquired 9 years ago with an
acquisition cost of P150,000 for P270,000. The payment shall be made in the ff.
terms. Cash down payment of P40,000 and additional P10,000 at the end of the
year of sale. The property sold has been mortgaged for P160,000 which is
assumed by the buyer. The buyer issued a note payable for the balance which is
to be paid equally in two years following the year of sale. The contract price is
a. P270,000
b. P110,000
c. P120,000
d. P130,000
63.The taxable profit for the year is
a. P120,000
b. P60,000
c. P30,000
d. P15,000
64.A Marketing incurred the ff. expenses in relation to its business during the taxable
year:
Provision for bad debts
P15,000
R and D cost, treated as deferred expense
500,000
Contributions during the year:
To the govt for priority programs in sports
50,000
To the govt for public purposes
10,000
To accredited NGOs, whose total admin expenses are 25% 100,000
To the Catholic Church for charitable purposes
6,000
Additional information:
a. Allowance for doubtful accounts per aging of AR revealed a beg. and ending
balances of P20,000 and P30,000, respectively
b. Accumulated depreciation on machine at the beg. and end of the year
amounted to P100,000 and P110,000, respectively
c. During the year, the firm sold a machine with a cost and AD of P300,000 and
P30,000, respectively
d. Taxable income before contributions amounted to P300,000
e. The R and D cost was incurred in the preceding year but the benefit was
received during the taxable year
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If A Marketing is a sole proprietorship, the allowable deductions for contributions
are:
a.
b.
c.
d.

P80,000
P166,000
P90,000
P30,000

65.Furthermore, the amount of deduction of gross income including contributions is

a. P233,000
b. P225,000
c. P175,000
d. P200,000
66.The ff., except one are the basic principles of a sound tax system.
a. It should be capable of being effectively enforced
b. It should consider the taxpayers ability to pay
c. It is generally payable in money
d. The sources of revenue must be sufficient to meet government expenditures
and other public needs
67.Interest income earned by a resident citizen from outside the Philippines is
a. Subject to schedular tax
b. Not subject to income tax
c. Subject to final tax
d. Partly subject to schedular tax and partly subject to final tax
68.Which of the ff. statements is not correct?
a. The govt automatically possesses the power to collect taxes from its
inhabitants
b. The govt can enforce contribution upon its citizens only when the Constitution
grants it
c. Taxation power exist inseparably with the State
d. The State has the supreme power to command and enforce contribution from
the people within its jurisdiction
69.In a loan agreement between BSP (as borrower) and private international bulks
(as lenders), it is stipulated that all payments of interest by the BSP to the lenders
shall be made free and clear from all Philippines taxes which maybe imposes
thereon. Is stipulation valid?
a. Yes, based on international comity
b. Yes, based on the doctrine of non-taxability of the government
c. No, violative of the inherent limitations
d. No, violative of the constitutional limitations
70.Losses from wash sales of stock or securities shall not be deductible except
a. The taxpayer is a dealer of securities or stock and made in the course of
business of such dealer
b. The shares of stock sold and then reacquired or repurchased are identical
stock certificates
c. The shares of stock sold and then reacquired within a period beginning thirty
days before the date of such sale or disposition
d. The shares of stock sold and then reacquired within a period ending thirty days
before the date of such sale or disposition
71.Taxation is an inherent power because
a. It is the lifeblood of the government
b. It is about the protection and benefit theory
c. It co-exist with existence of the state
d. It is exercised for the general welfare of the people
72.A tax is invalid in all of the ff., except
a. Theory of taxation and its purposes are disregarded
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b. Basis of taxation is not recognized
c. Inherent and constitutional limitations are not observed
d. It results to double taxation
73.Which of the ff. statements constitute tax avoidance?
a. Deliberate failure of a taxpayer to pay the taxes due to the govt
b. Connotes fraud through the use of pretenses and forbidden devices to lessen
or defeat taxes
c. Punishable by law
d. Maybe contrary to the intent of the legislature but nevertheless do not violate
the law
74.Why is tax credit allowed to be availed of by certain taxpayers?
a. To provide incentives, thus inducing these taxpayers to report their income
from abroad
b. In compliance with commitment to intl agreement
c. To provide relief from the burden of taxation
d. Because it will result to double taxation
75.In our jurisdiction, which of the ff. statements maybe erroneous?
a. Taxes are pecuniary in nature
b. Taxes are enforced charges and contributions
c. Taxes are imposed on persons and property within the territorial jurisdiction of
a State
d. Taxes are levied and collected by the legislative branch of the government

76.In 2009, A domestic corporation declared and paid dividends to its stockholders
as follows
a. To B, a resident citizen
P100,000
b. To C, a non-resident citizen
P100,000
c. To D, a resident alien
P100,000
d. To E, a NRAETB
P100,000
e. To F, a NRANETB
P100,000
f. To G, a domestic corporation
P100,000
g. To H, a resident foreign corporation
P100,000
h. To I, a non-resident foreign corporation
P100,000
How much final tax shall be withheld by the corporation?
a.
b.
c.
d.

P80,000
P90,000
P85,000
P95,000

77.The records of a domestic corporation which commenced operation in 2004 show:

2008
2009
2010
Gross Income
P10M
P12M
P14M
Allowable deductions
9.5M
12.2M
12.8M
Net income (loss)
P.5M
(P.2M)
P1.2M
The income tax payable for 2010 is
a. P360,000
b. P275,000
c. P35,000
d. P95,000
78.The records of A, a Filipino citizen shows the ff. for 2009:
12

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January 1 to June 30

July 1 to

December 30
Phil

USA

Phil

USA

Gross income
P2M
P1M
P1.8M
P2.2M
Allowable deductions
1.2M
.6M
1.2M
1.2M
Net income
P.8M
P.4M
P.6M
P1M
If A is a resident who left the Philippines in July 2009 to reside in USA
permanently, his taxable income before personal exemption is
a. P1.8M
b. P1.4M
c. P2.8M
d. P2.4M
79.Using the above data, assume instead that A is a non-resident who returned in
July 1, 2009 to permanently reside in the Philippines, his taxable income before
personal exemption is
a. P1.8M
b. P1.4M
c. P2.8M
d. P2.4M

80.Universal College Inc., a proprietary educational institution, is now on its 10 th year

of existence. For the year 2009, its records showed that aside from TFs, it
earned/incurred the ff.:
Gross income-bookstore and canteen, both operated by Universal
P360,000
Rent income- commercial spaces on the ground floor of the school
Building, net of withholding tax
912,000
Allowable expenses, excluding depn of new building
2,640,000
Cost of new school building (completed and occupied on July 1, 2009;
Estimated life is 10 years)
5,000,000
If the school remitted P335,000 to the BIR for its income tax liability for the
taxable year 2009, and it chose to depreciate the new school building over its life
instead of deducting the whole cost in 2009, its receipts and TFs amounted to.
a. P2,766,875
b. P5,650,000
c. P5,760,000
d. P5,400,000

13

02/13/10

ANSWERS: (February 13, 2010)

1. B
2. A
3. C
4. C
5. A
6. B
7. C
8. D
9. A
10.D
11.B
12.B
13.C
14.C
15.A
16.A
17.B
18.C
19.D
20.D
21.

22.A
23.C
24.C
25.C
26.B
27.A
28.D
29.D
30.C
31.D
32.B
33.D
34.D
35.A
36.C
37.C
38.A
39.B
40.C
41.D
42.

43.B
44.C
45.C
46.D
47.B
48.C
49.B
50.C
51.D
52.B
53.D
54.C
55.B
56.A
57.B
58.D
59.A
60.A
61.C
62.D
63.

14

64.D
65.C
66.C
67.A
68.B
69.C
70.A
71.B
72.D
73.A
74.C
75.D
76.D
77.C
78.D
79.B
80.C
81.A
82.D
83.D

84.