ReSA - THE REVIEW SCHOOL OF ACCOUNTANCY
CPA Review Batch 48 October 2024 CPALE 06 October 2024 8 – 11 AM
TAXATION FINAL PRE-BOARD EXAMINATION
INSTRUCTIONS: Select the correct answer for each of the questions. Mark only one
answer for each item by shading the box corresponding to the letter of your choice on
the answer sheet provided. STRICTLY NO ERASURES ALLOWED. Use pencil no. 2 only.
1. Tax laws, being imposition of burden, are construed:
a. strictly against the taxpayer.
b. strictly against the government.
c. by filing a case before a regular court.
d. by strict adherence to opinions of tax expert.
2. Which of the following is not expressly provided for in the Constitution?
a. Prohibition against direct double taxation
b. Uniformity of taxation
c. Regressive system of taxation
d. Non-imprisonment for non-payment of poll tax
3. These are part and parcel of the power of taxation and originate from the very
nature of taxation.
a. Inherent limitations
b. Constitutional limitations
c. Basic principles of sound tax system
d. None of the choices
4. The proceeds of the tax must be used for the support of the State or for some
recognized objects of government or directly promote the welfare of the
community.
a. The tax imposed should be for public purpose.
b. There should be no improper delegation of the taxing power.
c. The power to tax is limited to the territorial jurisdiction of the
taxing government.
d. Exemption of government entities from taxation.
5. The principle of separation of powers ordains that each of the three branches of
the government has exclusive cognizance of and is supreme in matters falling
within its own constitutionally allocated sphere.
a. The tax imposed should be for public purpose.
b. There should be no improper delegation of the taxing power.
c. The power to tax is limited to the territorial jurisdiction of the
taxing government.
d. Exemption of government entities from taxation.
6. First statement: A violation of inherent limitations can amount to taking of
property without due process of law.
Second statement: Any tax law contravening any of the inherent limitations of
taxation, in effect, will likewise be unconstitutional.
a. Both statements are correct
b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct
7. Which of the following cases constitute an objectionable double taxation?
a. A license fee and a tax imposed on the same business or occupation
for selling the same articles
b. A tax imposed both on the occupation of fishing and fishpond operation
c. Persons engaged in leasing or selling real property are subject to
income tax on their income and their sales are subject to VAT
d. A tax of 1% is imposed for banks reserve deficiency while penalty of
1/2 of 1% a day is also imposed as consequence of such reserve
deficiency
8. Which of the following is not a basic principle of a sound taxation system?
a. It should be capable of being effectively enforced.
b. It must be a progressive tax.
c. It must be sufficient to meet government expenditures and other public
needs.
d. It should be exercised to promote public welfare.
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TAXATION
ReSA Batch 48 – October 2024 CPALE Batch
06 October 2024 8:00 AM to 11:00 AM TAX Final Pre-Board Exam
9. Except for the provision in Section 222, internal revenue taxes shall be assessed
within how many years after the last day prescribed by law for the filing of the
return?
a. Five (5) years c. Three (3) years
b. Four (4) years d. Two (2) years
10. A decedent dies on January 1, 2022. The estate tax return is filed on September
1, 2022. When is the last day to make a valid assessment?
a. January 1, 2025 c. January 1, 2026
b. September 1, 2025 d. September 1, 2026
11. Where a taxpayer who seasonably challenged the assessment was able to file a
written request for reinvestigation on March 31, 2022, he shall submit all
supporting documents to the protest not later than:
a. April 15, 2022 c. May 30, 2022
b. April 30, 2022 d. June 15, 2022
12. Where the Commissioner of Internal Revenue (CIR) has failed to render a decision
on the protest within the prescribed 180-day period for him to decide, what is
the remedy available to the taxpayer?
A. He may file a Petition for Review before the Court of Tax Appeals in Division
within 30 days after the lapse of the 180-day period for the CIR to decide.
B. He may await the decision of the CIR and if adverse, he may file a Petition
for Review before the Court of Tax Appeals in Division within 30 days from
receipt thereof.
a. Either A. or B. c. A only
b. Both A. and B. d. B only
13. What is the technical term for a tax assessment made by an authorized Revenue
Officer (RO) without the benefit of complete or partial audit, in light of the
RO’s belief that the assessment and collection of a deficiency tax will be
jeopardized by delay caused by the taxpayer’s failure to comply with audit and
investigation requirements to present his books of accounts and/or pertinent
records, or substantiate all or any of the deductions, exemptions or credits
claimed in his return?
a. Jeopardy assessment
b. Arbitrary assessment based on presumption
c. Assessment issued on or after January 1, 1998 where demand notice
allegedly failed to comply with formalities prescribed in the Tax
Code
d. Assessment made based on “Best Evidence Obtainable Rule”
14. For cases involving financial incapacity, which of the following is not subject
to 10% compromise rate based on the basic assessed tax?
a. Taxpayer is an individual whose sole source of income is from
employment, and whose monthly salary is P10,500 or less, if single,
and P21,000 or less, if married
b. Taxpayer is an individual without any source of income
c. Taxpayer has a zero net worth or negative net worth
d. Taxpayer is suffering from surplus or earning deficit resulting in
impairment in the original capital by at least 50%
15. The following are instances when penalties and/or interest imposed on the
taxpayer may be abated or cancelled on the ground that the imposition thereof
is unjust and excessive, except when the:
a. filing of the return or payment of the tax is made at the wrong venue.
b. taxpayer’s mistake in payment of his tax is due to erroneous written
official advice of a revenue officer.
c. assessment is brought about or a result of the taxpayer’s non-
compliance with the law due to a difficult interpretation of the said
law.
d. taxpayer is declared insolvent or bankrupt.
16. Within what period shall the owner of the property sold redeem the levied
property?
a. Within one (1) year from the date of sale
b. Within two (2) years from the date of sale
c. Within three (3) year from the date of sale
d. Within five (5) years from the date of sale
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TAXATION
ReSA Batch 48 – October 2024 CPALE Batch
06 October 2024 8:00 AM to 11:00 AM TAX Final Pre-Board Exam
17. Foreign nationals or non-Filipino citizens, regardless of their residency, term
and class of working or employment permit or visa, who are employed and assigned
in the Philippines by an Offshore Gaming Licensee (OGL) or its Accredited
Service Provider shall have Taxpayer Identification Number (TIN) and shall be
subject to a:
a. final withholding tax of 25% on their gross income.
b. creditable withholding tax of 25% on their gross income.
c. final withholding tax of 20% on their gross income.
d. creditable withholding tax of 10% on their gross income.
18. A nonresident alien individual who shall come to the Philippines and stay
therein for an aggregate period of more than 180 days during the calendar year
shall be deemed a “nonresident alien doing in the Philippines”:
a. regardless of whether or not he is actually engaged in business in
the Philippines.
b. only when he is actually engaged in business in the Philippines.
c. when his income does not come from the performance of personal
services in the Philippines.
d. when he comes to the Philippines for a definite purpose which in its
nature would require an extended stay and to that end makes his home
temporarily in the Philippines, although it may be his intention at
all times to return to his domicile abroad.
19. Which one of the following is not a source of income tax laws?
a. Income tax regulations
b. Administrative rulings and opinions
c. Judicial decisions
d. Opinions of tax experts and authors
20. Which is of the following is not a requisite for an individual taxpayer to
qualify to substituted filing of income tax return?
a. Pure compensation income earner
b. One employer in the Philippines
c. Withholding tax is correct
d. Gross compensation income does not exceed P60,000
SITUATIONAL
The results of operation of Yummy Convenient Store, not VAT-registered sole
proprietorship, owned by Ms. Pearl Garcia, for the first three (3) quarters of 2023
are as follows:
Gross income Deductions
First quarter P300,000 P150,000
Second quarter 350,000 200,000
Third quarter 250,000 150,000
21. How much is taxable income for the third quarter assuming Ms. Brando is married
and has five (5) qualified dependent children?
a. P400,000 c. P250,000
b. P336,000 d. P100,000
22. Assuming Ms. Garcia indicated in her first quarter return that she will avail
of the 8% tax rate, how much is the taxable income?
a. P900,000 c. P250,000
b. P650,000 d. Zero
23. When shall the third quarter return be filed to avoid penalties and interests?
a. May 15, 2024 c. November 15, 2024
b. August 15, 2024 d. April 15, 2025
24. Which of the following income is not from a related trade, business or activity
of a domestic proprietary educational institution?
a. Income from the hospital where medical graduates are trained for
residency
b. Income from the canteen situated within the school campus
c. Income from bookstore situated within the school campus
d. Income from lease of available office spaces in one of the school
buildings
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TAXATION
ReSA Batch 48 – October 2024 CPALE Batch
06 October 2024 8:00 AM to 11:00 AM TAX Final Pre-Board Exam
25. On May 1, 2022, Soriano Corporation invested P500,000 in Manuel Corporation
common shares. The shares were declared worthless on March 15, 2023. For income
tax purposes, how shall Soriano Corporation recognize the worthless shares?
a. Capital loss of P500,000 c. Ordinary loss of P500,000
b. Capital loss of P250,000 d. Not treated as loss
26. Which one of the following is not an essential of an acceptable accounting
method?
a. There should be distinction between revenue and capital expenditures.
b. Expenses to restore property or prolong its useful life should be
added to the property account or charged against depreciation.
c. In all cases in which production, purchase or sale of merchandise is
an income producing factor, inventories at the beginning and at the
end of the accounting period should be considered.
d. The accounting method should adhere strictly to generally accepted
accounting principles.
27. Under Republic Act No. 11976 (Ease of Paying Tax Act), the repeal of Section 34
(K) which is an additional requirement for deductibility of certain payments
applies to:
a. micro and small taxpayers only.
b. medium and large taxpayers only.
c. large taxpayers only.
d. all taxpayer regardless of the classification.
SITUATIONAL
The taxable income before income tax of Sweet Bel Corporation for the year 2023 was
P1,500,000 inclusive of refunds and bad debt recoveries. During the year, the
corporation received the following refund of taxes paid in previous years and recoveries
of accounts written off, all of which were credited to miscellaneous income:
Refund of percentage tax P20,000
Refund of income tax 50,000
Bad debt recovered (allowed as deduction) 30,000
Bad debt recovered (disallowed as deduction) 15,000
28. How much would be the income tax payable of the corporation for the year 2023
assuming it is a domestic corporation and its total assets do not exceed
P100,000,000?
a. P358,750 c. P287,000
b. P346,250 d. None of the choices
29. How much would be the income tax payable of the corporation for the year 2023
assuming it is a domestic corporation and its total assets exceed P100,000,000?
a. P358,750 c. P387,000
b. P346,250 d. None of the choices
30. How much would be the income tax payable of the corporation for the year 2023
assuming it is a resident foreign corporation and its total assets do not exceed
P100,000,000?
a. P358,750 c. P387,000
b. P346,250 d. None of the choices
31. The estate of a decedent left a gross estate valued at P150,000 consisting of
car, shares of stock and land. The administrator inquired from you whether or
not a notice of death and an estate tax return would be filed. He also told you
that he knew from his basic tax background that a net estate of P200,000 would
be exempt from estate tax. What would you tell the administrator?
a. File notice of death and no estate tax return
b. File notice of death and estate tax return
c. Do not file notice of death but must file an estate tax return
d. Do not file notice of death and estate tax return
32. The gross estate of this decedent shall include all properties situated in the
Philippines only.
a. Resident citizen
b. Resident alien
c. Non-resident citizen
d. Non-resident alien
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TAXATION
ReSA Batch 48 – October 2024 CPALE Batch
06 October 2024 8:00 AM to 11:00 AM TAX Final Pre-Board Exam
33. Mr. Faustino Santos, testator, appointed Mr. Generoso Cruz as the executor of
the estate. Mr. Santos was a citizen of Argentina and a resident of Los Angeles
City. He was in Manila visiting his son when he died. Among the properties he
left behind was a Mercedes sports car in Argentina and several investment in
stock in a domestic corporation in the Philippines. The executor asked you
whether or not the car and the bank deposits in the USA will still have to be
declared as part of the Philippine gross estate of Faustino Santos. Argentina
does not impose transfer taxes of any kind. What answer will you give him?
a. The car in Argentina and the stock investment in the Philippines have
to be declared as part of the Philippine gross estate because the
decedent was a resident at the time of his death and, as such,
properties wherever situated are included in the gross estate.
b. The car in Argentina and the stock investments in the Philippines
need not be declared as part of the Philippine gross estate because
Mr. Santos was a non-resident alien decedent.
c. The car in Argentina and the stock investments in the Philippines
have to be declared as part of the Philippine gross estate only when
the decedent specified in his will and testament that such properties
must form part of his gross estate.
d. The car in Argentina and the stock investments in the Philippines
need not be declared as part of the Philippine gross estate because
Argentina does not impose transfer tax of any kind and therefore the
rule of reciprocity applies on the stock investments.
34. Which of the following properties constitutes the common property of the husband
and the wife under absolute community of properties?
a. Apartment house inherited by husband during the marriage
b. Income received during the marriage from the apartment house
inherited by the husband during the marriage
c. Jewelry inherited by wife during the marriage
d. Car donated to the wife before marriage
35. Which of the following properties constitutes the common property of the husband
and the wife under conjugal partnership of gains?
a. Apartment house inherited by husband during the marriage
b. Income received during the marriage from the apartment house
inherited by the husband during the marriage
c. Jewelry inherited by wife during the marriage
d. Car donated to the wife before marriage
36. Which of the following properties shall be included in the gross estate of a
decedent?
a. Proceeds of life insurance policy on the life of the decedent payable
to his youngest daughter.
b. Transmission of the inheritance from the decedent to the fiduciary
heir
c. Both a. and b.
d. Neither a. nor b.
37. When is the donation completed?
a. The moment the donor knows of the acceptance by the donee
b. The moment the thing donated is delivered, either actually or
constructively, to the donee
c. Upon payment of the donor’s tax
d. Upon execution of the deed of donation
SITUATIONAL
On August 1, 2024, Daisy who resides in Quezon City donated a piece of land situated
in Marikina City to her brother-in-law who resides in Valenzuela City. Her brother-
in-law made known his acceptance of the donated property on August 15, 2024. The Deed
of Donation was delivered to the brother-in-law on October 22, 2024. The assessed value
and zonal value of the land were P2,000,000 and P1,000,000 respectively. The land had
an unpaid mortgage of P200,000, which was not assumed by the donee and an unpaid realty
tax of P10,000 which was also not assumed by the donee. Earlier in the same calendar
year, another donation was made by Daisy to her son who graduated with latin honors a
car valued at P850,000.
38. How much is the total net gift subject to tax?
a. P2,850,000 c. P2,000,000
b. P2,600,000 d. P1,750,000
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TAXATION
ReSA Batch 48 – October 2024 CPALE Batch
06 October 2024 8:00 AM to 11:00 AM TAX Final Pre-Board Exam
39. How much is the tax due and payable?
a. P171,000 c. P120,000
b. P156,000 d. P81,000
40. When shall the donor’s tax return be filed?
a. August 31, 2024 c. September 15, 2024
b. September 14, 2024 d. November 21, 2024
41. Where shall the donor’s tax return be filed and the tax be paid?
a. Authorized agent bank in Quezon City
b. Revenue District Office through the Revenue Collection Officer in
Valenzuela City
c. Authorized tax software provider in Marikina City
d. Any of the authorized bank, Revenue Collection Officer or authorized
tax software provider
42. Assuming the donor’s tax return was filed and the tax paid on December 21, 2024
due to willful neglect, how much shall be the total surcharge and interest, if
any?
a. P87,060 c. P61,200
b. P79,560 d. P42,060
43. First statement: An importation of goods by a non-profit charitable
organization shall not be subject to the value-added tax.
Second statement: In the case of importation, the importer is not the one liable
for the VAT but the person who shall buy the imported goods.
a. Both statements are correct c. Only the first statement is correct
b. Both statements are incorrect d. Only the second statement is correct
44. Under EOPT Act, in the case of sales in the amount of One thousand pesos (P1,000)
or more where the sale or transfer is made to a VAT-registered person, which of
the following information is no longer required to be shown in the invoice?
a. name of the purchaser, customer or client
b. address of the purchaser, customer or client
c. TIN of the purchaser, customer or client
d. business style of the purchaser, customer or client
45. Beginning January 1, 2024, which of the following sale of real property is no
longer exempted from VAT?
a. sale of real properties not primarily held for sale to customers or
held for lease in the ordinary course of trade or business
b. sale of real property utilized for socialized housing as defined
by Republic Act No. 7279
c. sale of house and lot, and other residential dwellings with selling
price of not more than P3,199,200
d. sale of real property utilized for low-cost housing as defined by
Republic Act No. 7279
46. First statement: For VAT purposes, a taxable person is any person liable to
pay the VAT, referring to registered only in accordance with the Tax Code.
Second statement: The status of a “VAT-registered person” as a VAT-registered
person shall continue until the cancellation of such registration.
a. Both statements are correct
b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct
47. Value-Added Tax is:
a. a specific tax. c. a local tax.
b. an indirect tax. d. a progressive tax.
48. Any input tax on the purchases or importation of goods in the course of trade
or business shall be creditable against the output tax if:
I - evidenced by an ordinary invoice.
II - issued by a person required to register under the VAT system.
a. I and II are correct c. Only I is correct
b. I are II incorrect d. Only II is correct
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TAXATION
ReSA Batch 48 – October 2024 CPALE Batch
06 October 2024 8:00 AM to 11:00 AM TAX Final Pre-Board Exam
49. A seller of goods is not VAT-registered. His annual gross sales amount to
P3,500,000. To what business tax is he liable?
a. 3% tax on VAT-exempt persons
b. 12% value-added tax
c. 3% common carrier’s tax
d. Not subject to any percentage tax
50. A domestic carrier by land transporting passenger had a gross sales for the
year exceeding the VAT threshold of P3,000,000. To what business tax shall it
be subject?
a. 3% percentage tax on VAT-exempt person
b. 3% common carriers tax
c. 12% VAT
d. None of the choices
51. Basically, excise tax is directly levied upon whom upon removal of the taxable
goods from its place of production or from the customs custody?
a. The manufacturer or importer of the excisable goods
b. The person in custody of the excisable goods
c. The buyer of the excisable goods
d. The ultimate user of the excisable goods
SITUATIONAL
Anya Company is a holder of franchise. Aside from its receipts from the use of
franchise, it also leases its auditorium and theatre. In the first quarter of 2023,
its gross receipts derived from the business covered by the law granting the franchise
amount to P2,000,000. The gross receipts from the lease of its auditorium and theater
amount to P1,800,000.
52. Assuming Anya Company is franchise grantee selling electricity, how much is the
franchise tax due for the quarter?
a. None c. P 84,000
b. P60,000 d. P336,000
53. Assuming Anya Company is a franchise grantee of gas utilities, how much is the
franchise tax on gross receipts derived from the business covered by the law
granting the franchise?
a. P84,000 c. P56,000
b. P60,000 d. P40,000
54. Assuming Anya Company is a franchise grantee of radio and TV broadcasting whose
annual gross receipts of the preceding year do not exceed P10,000,000, how much
is the franchise tax on gross receipts derived from the business covered by the
law granting the franchise?
a. P84,000 c. P56,000
b. P60,000 d. P40,000
55. Which of the following excisable products is subject ad valorem excise tax?
a. Cigarettes Packed by Hand
b. Cigarettes Packed by Machine
c. Petroleum products
d. Non-essential services
56. To improve her abdomen Ms. CJ decided to undergo procedure and sought the
services of ABSolute, a clinic operated outside the hospital and owned by Manuel
Medical Group, Inc. ABSolute charged Ms. CJ the amount of P50,000 (inclusive of
12% VAT but exclusive of 5% excise tax) for the service rendered.
How much is the excise tax?
a. P2,500.00 c. P2,232.14
b. P2,380.95 d. P2,136.75
57. Which of the following statements is/are correct?
I - An instrument, document or paper which is required by law to be stamped
and which has been signed, issued, accepted or transferred without being
duly stamped, shall not be recorded.
II - An instrument, document or paper or any copy thereof or any record of
transfer of the same which is required by law to be stamped shall not
be admitted or used in evidence in any court until the requisite stamp
or stamps are affixed thereto and cancelled.
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TAXATION
ReSA Batch 48 – October 2024 CPALE Batch
06 October 2024 8:00 AM to 11:00 AM TAX Final Pre-Board Exam
III - Notary public or other office authorized to administer oaths may add
his jurat or acknowledgment to any document subject to documentary stamp
tax provided the parties promised under oath to affix the proper
documentary stamps on the documents requiring such documentary stamp
tax.
a. I, II and III c. I and III only
b. I and II only d. I only
58. In lieu of filing documentary stamp tax return, the tax may be paid through:
I - purchase and actual affixture of DST
II - by imprinting the stamps through on-line electronic DST imprinting
machine” on certain class of taxpayers prescribed by rules and
regulations to be promulgated by the Secretary of Finance, upon
recommendation of the Commissioner.
a. Either I or II c. II only
b. Neither I not II d. I only
59. The following fundamental principles shall govern the exercise of the taxing
and other revenue-raising powers of local government units.
I - Taxation shall be uniform in each local government unit.
II - Each local government unit shall, as far as practicable, evolve a
progressive system of taxation.
a. I and II c. I only
b. Neither I nor II d. II only
60. One of the following is a local tax.
a. Community development tax
b. Amusement tax on boxing exhibitions
c. Percentage tax on domestic carriers
d. Franchise tax on gas and water utilities
61. A residential land is located in Metro Manila. Its fair market value is
P5,000,000.
How much is the basic real property tax, if any using 20% assessment level and
2% tax rate?
a. P120,000 c. P20,000
b. P100,000 d. None of the choices
62. An agricultural machinery located in the province has fair market value of
P2,000,000.
How much is the basic real property tax, excluding Special Educational Fund
(SEF) using 40% assessment level and 1% tax rate?
a. P28,000 c. P8,000
b. P20,000 d. None of the choices
63. Who of the following shall qualify as senior citizen for Philippine income tax
purposes?
a. Non-resident Filipino citizen, 60 years old
b. Filipino citizen with dual citizenship, 60 years old, less 6 months
residency in the Philippines
c. Resident alien, 65 years old
d. None of the choices
64. All establishments, supplying certain goods and services for the exclusive use
and enjoyment or availment of senior citizen who is also a PWD shall give a
discount of:
a. 20% c. 40%
b. 30% d. 50%
65. Which of the following taxpayers can avail of Special Corporate Income Tax (SCIT)?
I - Export enterprise
II - Domestic market enterprise with a minimum investment capital of
P500,000,000
III - Domestic market enterprise under Strategic Investment Priority Plan
engaged in activities that are classified critical
a. I, II and III c. I and III
b. I and II d. I only
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TAXATION
ReSA Batch 48 – October 2024 CPALE Batch
06 October 2024 8:00 AM to 11:00 AM TAX Final Pre-Board Exam
66. Which of the following RBE shall be allowed to claim Enhanced Deductions (ED)?
I - Export enterprise
II - Domestic market enterprise with a minimum investment capital of
P500,000,000
III - Domestic market enterprise under Strategic Investment Priority Plan
engaged in activities that are classified critical
a. I, II and III c. I and III
b. I and II d. I only
67. One of the following is not qualified to register as Barangay Micro Business
Enterprise (BMBE).
a. Bakery with total assets not exceeding P3,000,000
b. Motor shop with total assets not exceeding P3,000,000
c. A CPA practitioner with total assets not exceeding P3,000,000
d. Farm producing agricultural products with total assets not exceeding
P3,000,000
68. Effective July 1, 2020, Special Corporate Income Tax (SCIT) is 5% based on gross
income earned, in lieu of all national and local taxes and the sharing of the 5%
is:
I - National Government – 1%
II - Local government – 4%
a. I and II are correct c. Only I is correct
b. I and II are incorrect d. Only II is correct
69. Registered Business Enterprises (RBEs) are entitled to:
a. VAT exemption on importation
b. VAT zero-rating on local purchases
c. Both a. and b.
d. Neither a. nor b.
70. The VAT treatments on the sale, transfer, or disposition of the previously VAT-
exempt imported capital equipment, raw materials, spare parts, or accessories
if the purchaser is a registered export enterprise, regardless of location, the
transaction is:
a. subject to VAT at zero-rate; provided that the same shall be directly
and exclusively used in the registered project or activity of the
registered export enterprise.
b. subject to VAT at 12%; provided that the same shall be directly and
exclusively used in the registered project or activity of the
registered export enterprise.
c. subject to VAT exemption; provided that the same shall be directly
and exclusively used in the registered project or activity of the
registered export enterprise.
d. subject to VAT at zero-rate; whether or not the same shall be directly
and exclusively used in the registered project or activity of the
registered export enterprise.
TAXATION TABLE OF SPECIFICATIONS
Weight in Number of
TOPICS Percentage items
1.0 Principles of Taxation 11.43% 8
2.0 Tax Remedies 11.43% 8
3.0 Income Taxation 20.00% 14
4.0 Transfer Taxes 17.14% 12
5.0 Business Taxes 17.14% 12
6.0 Excise Tax 2.85% 2
7.0 Documentary Stamp Tax 2.85% 2
8.0 Taxation Under Local Government Code 5.73% 4
9.0 Preferential Taxation 11.43% 8
Total 100.00% 70
- END of EXAMINATION –
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TAXATION
ReSA Batch 48 – October 2024 CPALE Batch
06 October 2024 8:00 AM to 11:00 AM TAX Final Pre-Board Exam
ANSWERS & SOLUTIONS/CLARIFICATIONS
1 B 26 D 51 A
2 A 27 D 52 A
3 A 28 C 53 D
4 A 29 A 54 B
5 B 30 A 55 D
6 A 31 C 56 C
7 B 32 D 57 B
8 D 33 D 58 A
9 C 34 D 59 A
10 C 35 B 60 A
11 C 36 C 61 C
12 A 37 B 62 C
13 A 38 B 63 D
14 D 39 C 64 A
15 D 40 D 65 D
16 A 41 D 66 A
17 A 42 C 67 BONUS
18 A 43 B 68 B
19 D 44 D 69 C
20 D 45 D 70 A
21 A 46 D
22 B 47 B
23 C 48 B
24 D 49 B
25 A 50 B
6. A - Reference: Tax Law and Jurisprudence, Third Edition, Justice Jose Vitug and Justice Ernesto D.
Acosta citing Pepsi Cola vs. Municipality of Tanauan, 69 SCRA 460 pages 4 and 5
13. A - Reference: Section 3. 1 (a), Revenue Regulations No. 30-2002
14. D - Reference: Section 4, Revenue Regulations No. 30-2002
15. D - Reference: Section 2, Revenue Regulations No. 13-2001
16. A - Reference: Section 214, NIRC, as amended
21. A
Gross income P250,000
Less: Deductions 150,000
Taxable income this quarter 100,000
Add: Taxable income, previous quarters (150,000 + 150,000) 300,000
Taxable income to date P400,000
22. B
Gross income, third quarter P250,000
Add: Gross income, previous quarters 650,000
Total P900,000
Less: Amount allowed as deduction 250,000
Taxable income P650,000
25. A
If shares of stock become worthless during the taxable year and are capital assets, the
loss shall be considered as a loss from the sale or exchange of capital assets on the
last day of such taxable year.
This is a long-term capital loss and since it involves an corporate taxpayer, 100% shall
be recognized as capital loss.
Page 10 of 12 0915-2303213 resacpareview@[Link]
TAXATION
ReSA Batch 48 – October 2024 CPALE Batch
06 October 2024 8:00 AM to 11:00 AM TAX Final Pre-Board Exam
26. D
For Taxation purposes keeping books under cash basis is acceptable.
Reference: Section 167, Revenue Regulations No. 2
28. C
Taxable income before income tax P1,500,000
Add (Deduct):
Refund of income tax (50,000)
Bad debt recovered (disallowed as deduction) (15,000)
Adjusted taxable income 1,435,000
Tax rate 20%
Income tax payable P 287,000
29. A
Taxable income before income tax P1,500,000
Add (Deduct):
Refund of income tax (50,000)
Bad debt recovered (disallowed as deduction) (15,000)
Adjusted taxable income 1,435,000
Tax rate 25%
Income tax payable P 358,750
30. A
Taxable income before income tax P1,500,000
Add (Deduct):
Refund of income tax (50,000)
Bad debt recovered (disallowed as deduction) (15,000)
Adjusted taxable income 1,435,000
Tax rate 25%
Income tax payable P 358,750
38. B ; 39. C
27 Total gifts in this return P 2,000,000
33 Total deductions -
34 Total net gifts in this return 2,000,000
35 Add: Total prior net gifts during the calendar year 850,000
36 Total net gifts 2,850,000
37 Less: Exempt gift 250,000
38 Total net gifts subject to tax 2,600,000
15 Applicable donor’s tax rate 6%
16 Total donor’s tax due and payable P 156,000
Less: 17A Payments for prior gifts during the
calendar year (850,000 – 250,000 x 6%) 36,000
18 Tax payable P 120,000
42. C
Surcharge (120,000 x 50%) P60,000
Interest on delinquency (120,000 x 12% x 1/12) 1,200
Total surcharge and interest P61,200
46. D
For VAT purposes, a taxable person is any person liable to pay the VAT, whether registered
or registrable (required to register) in accordance with the Tax Code.
52. A
Franchise grantees of electricity are not subject to franchise tax but to VAT or 3%
percentage tax on VAT-Exempt Persons as the case may be.
53. D
Franchise tax (2,000,000 x 2% = P40,000)
Page 11 of 12 0915-2303213 resacpareview@[Link]
TAXATION
ReSA Batch 48 – October 2024 CPALE Batch
06 October 2024 8:00 AM to 11:00 AM TAX Final Pre-Board Exam
54. B
Franchise tax (2,000,000 x 3% = P60,000)
56.C
Gross receipts, net of VAT (50,000/1.12) P44,642.85
Tax rate 5%
Excise tax P 2,232.14
61. C
Fair market value P5,000,000
Multiplied by assessment level 20%
Assessed Value 1,000,000
Tax rate 2%
Basic real property tax P 20,000
62. C
Fair market value P2,000,000
Multiplied by assessment level 40%
Assessed Value 800,000
Tax rate 1%
Basic real property tax P 8,000
63. D
Senior citizen or elderly refers to any Filipino who is a resident of the Philippines, and who
is 60 years old and above.
It may apply to senior citizens with “dual citizenship” status provided they prove their
Filipino citizenship and have at least 6 months residency in the Philippines.
64. A
A senior citizen who is also a PWD can claim only one discount.
65. D
Taxpayers allowed SCIT:
a. Export enterprise
b. Domestic market enterprise with a minimum investment capital of P500,000,000
(VETOED)
c. Domestic market enterprise under Strategic Investment Priority Plan engaged in
activities that are classified critical (VETOED)
[Link]
One of the following is NOT qualified to register as Barangay Micro Business Enterprise (BMBE).
BMBE refers to any business entity or enterprise engaged in the production, processing or
manufacturing of products or commodities, including agro-processing, trading and services,
whose total assets including those arising from loans but exclusive of the land on which the
particular business entity's office, plant and equipment are situated, shall not be more than
Three Million Pesos (P3,000,000.00).
“Services" shall exclude those rendered by any one, who is duly licensed by the government
after having passed a government licensure examination, in connection with the
exercise of one's profession.
68. B
Sharing of the 5% SCIT:
a. National Government – 3%
b. Local Government – 2% directly remitted by the registered business enterprise to
the local government unit (LGU)
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