(9final preboard

BUSINESS LAW and TAXATION TAXATION Final Pre-Board Examination

1. M makes negotiable promissory promissory note in favor of P payable on December 25,2009 with the following sccessive sccessive in!orsement of P to ", " to #, an! # to $. %n the !e !ate, M is paying $, bt $ e&ten!s the payment p to to December 25, 2010. 'hich of the following is not correct( a. $ may still enforce the instrments against M. b. )f M becomes insolvent on December 25, 2010, P, ", an! # are !ischarge! from their obligation. c. )f the in!orsers consente! to the e&tension of time an! M becoming insolvent on December 25, 2010, the in!orsers are still liable. !. )f $ cancels the signatre of P as in!orser, P, ", #, an! the instrment are !ischarge!. 2. " isse! isse! a promis promissory sory note note to the or!e or!err of # for for P10,000 P10,000 payab payable le on "gst "gst *0,201 *0,2010 0 in paymen paymentt of + set set sol! by # to ". # faile! to !eliver the + set to " an! instea! transferre! the note to $ for vale bt withot in!orsement. 'hich of the following is correct( a. $ is !eeme! a hol!er for a vale when # transferre! the note to him b. $ becomes the hol!er in !e corse c. $ has no right to compel to # to make the proper proper in!orsement to him !. $ cannot collect from " becase of "-s !efense of lack of consi!eration *. +his is not negotiable a. ) promise to pay to the or!er of myself P10, 000signe! by ", the maker maker b. Pay Pay to the or!er of the $ommissioner of the )nternal revene P10, 000 to "#$ bank .g!. " c. ) promise to pay to or!er P10, 000. g!. "P !. Pay to the or!er of /, , an! , P10, 000. +o # g!." . /, , an!  forme!  Partnership to engage in import3e&port bsiness. +he partners agree! that the pro4t will be !ivi!e! in the following ratio ratio  /3 2067 3 3 *0 67 350 6, bt no agreement as to losses ."fter one year operatio operation, n, there was a loss of P10, 000.8ow 000.8ow will yo apporti apportion on this loss if the capital capital contrib contribtion tions s are as follows /3 P20, 0007 3P 15,0007 3P5, 000. a. "ccor!ing to their capital contribtion /3 /3 P5, 0007 3*,507 3P1, 250 b. :;ally among /,  an!  c. /3P2, 0007 3*,0007 3P5, 000 !. " thir! party may be calle! to make the !istribtion 5. ! >!ici icial al sale, sale, the mortgag mortgagor or may re!eem re!eem the prope property rty at any any time time within the term of one year from an! after the !ate of registration of the sale. econ! econ! tatement tatement = )n >!icial >!icial foreclos foreclosre re of real estate estate mortgage mortgage,, the general general rle is that the mortgagor mortgagor cannot e&ercise e&ercise his right of re!emption re!emption after his con4rmation of the sale by the cort. a. #oth statements statement s are correct b.#oth statements are wrong c. %nly the 4rst statement is correct !. %nly the secon! statement is correct ?. +his obligation is !eman!able at once a. 'ith a sspensive con!ition b. 'ith a perio! of !iem c. 'hen my means permit me to !o so !. 'hen it !epen!s on the happening of a speci4c event . +his is not a characteristic of a voi! or ine&istent contract a. +he right to raise a !efense or illegality cannot be waive! b. +he action or !efense for !eclaration of nllity or in e&istence of the contract !oes not prescribe. c. @ot a sb>ect to rati4cation !. Defense of the legality of the contract is available to thir! person s whose interest are not !irectly aAecte! B. " owns a piece of lan! an! sells it to # with a right of reprc reprchase hase within within one year year from the !ate of the sale. $an # sell the lan! he prchase! from ", to $, a thir! party( a. es provi!e! the sale is with consent of ". b. @o, # is not yet absolte owner of the lan! c. es, bt " can still re!eem re!eem the lan! from $. !. @o, becase " can still re!eem the lan! from #. 9. 'hich of the following s is correct( a. +reasry stock for less than their par or isse! vale are are consi!ere! Cwatere! stockC an! as sch is prohibite! by law. b. ri! i!ica icall an! an! natr natral al pers person ons, s, ma>o ma>orit rity y of who who are are resi resi!en !ents ts of of the the Philippines mat form a private corporation. !.@o par vale vale shares shares of stock stock cannot cannot be isse! isse! by banks, banks, trst trst companie companies, s, insranc insrance e companie companies, s, bil!in bil!ing g an! loan association associatio n an! pblic tilities. !.Membership in a non3stock corporation an! rights arising there from from are personal an! non3transferable non3transfera ble an! therefore cannot be transferre! even if provi!e! in the articles of incorporation or in the by3laws. 10. +he following are the obligations of agent, e&cept a )n the e&ection of the agency, the agent shall act in accor!ance with the instrctions of the principal b.hall is bon! to a!vance the necessary fn!s, e&cept when the principal is insolvent c. hall 4nish the bsiness alrea!y begn on the !eath of the principal shol! !elay entail !anger !.)n case a person person !eclines !eclines an agenc agency7 y7 he is bon! bon! to observ observe e the !iligen !iligence ce of a goo! goo! father father of of a famil family y in the csto!y an! preservation preservation of the goo!s forwar!e! forwar!e! to him by the owner ntil the latter shol! appoint the agent

11." boght a car from #, a minor , for P100,000.%ne week later, " !iscovere! that # was a minor at the time of sale so he 4le! a complaint in cort to annl the sale. 'ill the action prosper( a. es, # being a minor is anticipate! to enter into contract !.@o, the right to annl the sale is given to # c. es, # cannot 4le the action to annl the sale becase he is minor !.@o, nless there is lesion of more than  of the vale of the property 12. D mortgage! his 103hectare parcel of lan! to secre his loan amonting to P00, 000.00 payable on or before Eanary *1, 2010.%n Eanary 10, 2010, D pai! P200, 000.00 to his cre!itor. $an he vali!ly ask for the release of 506 of the mortgage! property( a .es, becase real mortgage is separable from the property b. es, becase real mortgage is only a limitation on ownership c. @o, becase real mortgage bin!s the property an! the thir! persons, if registere! !. @o, becase real mortgage is in!ivisible 1*. " is athoriFe! by P to sell ten G10H cell phones for P5, 000.00 each at 106 commission. " sol! the cell phones to # on cre!it for a price of P?, 000.00 each .P !i! not ratify the sale on cre!it .8ow mch can P imme!iately as a payment from "( a.P 50,000.00 b. P 50,000.00 less 106 c. P ?0,000.00 !. P ?0,000.00 less 10 6 1. 'hich of the following statements is not correct( a. +he seller nee! not to be the owner of the thing sol! at the time of the perfection of the contract b. %wnership of the thing sol! is transferre! pon its actal or constrctive or ;asi3!elivery c. $ontract of sale throgh letter or telegram is !eeme! perfecte! only when the acceptance by the byer has been receive! by the seller !. +he seller of the thing shall be liable for the violation of the warranty against hi!!en !efects if he is aware of the sais !efect at the time of the perfection of the contract 15. +his shall take place when the ven!or reserves the right to reprchase the thing sol!   a.Policitation b.$onventional re!emption c. :;itable mortgage !. Iegal re!emption 1?. +he right of the cre!itor to e&ercise all the rights of his !ebtor to satisfy his claim, e&cept rights which are inherent an! personal on the part of the !ebtor a. "ction sbrogatoria b."ction re!hibitoria c. "ccion paliana !. "ccion ;anti minoris 1.)n 2005, at age 1?, " sol! his lan! to # for PM payable at P1M in 200?,P1M in 200 , P1M in 200B an! P1M in 2009.)n 2010, " wants to annl the contract on the gron! of minority .'ill his action prosper( a. @o, " is allowe! to ask for annlment of the contract only within  years from the perfection of the contract b.es, " has  years conte! from the time he becomes of legal age to ask for annlment of the contract c. @o, the acceptance of the installment payments amonte! to rati4cation of the sale !. es, provi!e! " was then acting in goo! faith when he sol! the property 1B. " owes # P500 an! a secrity, " ple!ge his !iamon! ring .Iater " borrowe! again P200. "s a reslt a .# has a right to retain the thing ntil the P00 is pai! b.# has right to retain the thing ntil the P 500 is pai! c. " has a right to !eman! that thing be !eposite! with the thir! person !. # has the right to se the thing ple!ge! 19. / entere! into a written contract with  for the sale of his car at the price of P 210,000.00.bse;ently < tol! / that the prchase price is very low as it can comman! a price of his car to P250, 000.00 ./ wante! to increase! the prchase price of his car to P250, 000.00.+his cannot be !one by / of what principle of contract( a. oining lan! owner is intereste! in bying the share which " sol! to . 'hich of the following is correct( a. # can re!eem what " has sol! to  if  alrea!y owns a rral lan! b. # can re!eem what " has sol! to  even if  !oes not own any rral lan! c. "s an a!>oining lan! owner $ has a sperior right to re!eem what " sol! to  !. $ can re!eem what " sol! to  whether or not  alrea!y owns a rral lan! 2. " sells to # her car for P*00, 000 on a sale or retrn within 10 !ays after !elivery. %n 5 th !ay after !elivery, the car was lost throgh fortitos event. 'ho bears the loss( a. " n!er the principle of res perit !ominoC b. # an! he mst pay the prchase price c. #oth " an! # >ointly !. @o one becase the loss was !e to fortitos event 2B. : owns a piece of property an! sells it to  with a right to reprchase within  years from the !ate of  sale. )f  sells the property to +, which of the following is not correct( a. +he sale is vali! becase things sb>ect to a resoltory con!ition maybe the ob>ect of a contract sale b. : can still e&ercise her right of re!emption against + c. +he sale is voi! becase it is a con!itional sale !. +he ac;ires the property bt sb>ect to the right of conventional re!emption. 29. )f a partner assigns his interest in the partnership to his personal cre!itor the assignee ac;ires the right to a. Deman! an acconting partnership aAair b. )nspect the books an! recor!s of the partnership c. Jeceive the partner3assignor-s share of the pro4ts !. )nterfere in the management of the partnership *0. :very corporation whose charter e&pires by its own limitation, or annlle! by forfeitre or otherwise, or whose corporate e&istence for other prposes is terminate! in any other manner shall nevertheless be contine! as a bo!y corporate for * years after the time when it wol! have been !issolve! for the prpose of the following, e&cept a. Prosecting an! !efen!ing sits by or against it an! enabling it to settle an! close its aAairs b. +o !ispose an! convey its property c. +o !istribte its assets !. $ontining the bsiness for which it was establishe! *1. D-s obligation is to !eliver a nokia cell phone worth P10, 000.00 on Eanary 15, 2010. " week before the matrity !ate, D was or!ere! by his sperior to go to $eb to confer with the company-s client. ince D has no time to by the cell phone, he oAere! to give $ the amont of P10, 000 so that $ can by the cell phone .$ accepte! the oAer. +he obligation of D to $ in this case is e&tingishe! by a. @ovation b. $ession c. Dation in payment !. $ompensation *2. imilarity between real estate mortgage an! antichresis a. +he property is !elivere! to the cre!itor b. +he sb>ect matter is a real property c. +he cre!itor ac;ires the right to receive the frits of the property !. +he cre!itor is oblige! to pay the ta&es an! charges pon the estate

**. 'hich of the following statements is false( a. P in writing appoints " as his agent to sell his parcel of lan! for P 0,000." sol! it orally to /.+he contract of " an! / is vali! b. # wrote ", his sister, to sell his parcel of lan!. +he lan! was prchase! by /, bt " !i! not forwar! the money to #. # now wants to recover the parcel of lan! .# can recover becase the athority of  is not in special power of attorney. c. P orally appoints  as his agent to sell his lan! for P0, 000. " sol! it to / in writing. +he sale by " to / is not vali!. !. P orally appointe! " to sell a hose on a parcel of lan! belonging to /. " sol! it to # orally. +he contracts by P an! ", an! " an! # are vali! *. 'hich of the following is tre an! correct regar!ing the contract of agency( a. +he contract entere! into by a sb3agent appointe! !espite the prohibition of the principal may be rati4e! by the principal. b. "n agent can appoint a sb3agent only when he is athoriFe! to !o so by the principal. c. )f the co3owner s /, , an!  appointe! " as their agent for the sale of the property owne! by them, sai! appointment can be revoke! by / alone. !. 'hen several agents ha! been appointe! by the principal, the liability of the agents to the principal shall be soli!ary. *5. 'hich of the following statements is not correct( a. +he sale of the thing ple!ge shall e&tingish the principal obligation, whether or not the procee!s of the sale are e;al to the amont of the principal obligation, interest an! e&penses in a proper case b. )f the procee!s of the sale of the thing ple!ge are more than the obligation, the !ebtor shall not be entitle! to e&cess nless it is otherwise agree!. c. )f the procee!s of the sale of the thing ple!ge are more than the obligation, the !ebtor shall not be entitle! to recover the !e4ciency, nless it is otherwise agree!. !. "t the pblic action, the ple!gor or owner may bi! an! he shall have a better right if he col! oAer the same terms as the highest bi!!er *?. " resi!ent citiFen !ie! on eptember *, 200? ."n a!ministrator was appointe! on eptember 15, 200? +he inventory taking of the !ece!ent-s properties was complete! on %ctober 10,200? .'hen shol! the estate ta& retrn be 4le!( a. @ovember *, 200? b. December 10, 200? c. March *.200 !. March 15, 200 *. )n !etermining the net estate of the !ece!ent, which of the following statements is $%JJ:$+( a. "ll !ece!ents are allowe! to !e!ct e&penses an! charges from their gross estate. b. De!ction for property previosly ta&e! is not allowe! when the !ece!ent is a non3resi!ent alien. c. hares of stocks being intangible property shall be incl!e! in the !ece!ent-s gross estate whenever sitate!. !. %nly flly pai! fneral, e&penses are !e!ctible to the e&tent of 56 of the total gross estate bt not e&cee!ing P200, 000 *B. %ne of the following is not an important factor when compting the ta&able net gifts an! the gift ta& payable a. Jesi!ence of the !onor b. $itiFenship of the !onor c. #loo! relationship between the !onor an! the !one !. +he economic stats of the !one *9. /, the garantor3corporation owns 06 of the capital stock of , !ebtor3corporation. / assmes the original loan of , with a portion of the loan assme! by / to be late on con!one! an! converte! into pai!3in srpls of  G withot the correspon!ing issance of a!!itional sharesHan! then se! to wipe ot its accmlate! losses. 'hat is the ta& conse;ence of this transaction( a. +he con!onation of !ebt is sb>ect to !onor-s ta& becase the con!one! portion of the original loan represents forgiveness of !ebt where the !ebtor !i! not ren!er service in favor of the cre!itor. b. +he con!onation of !ebt is not sb>ect to !onor-s ta& becase the con!one! portion of the original loan represents a!!itional capital contribtion. c. $on!onation of !ebt is sb>ect to capital gains ta&. !. +he transfer involve! tangible personal property, hence, not sb>ect to !onor-s ta&. 0. +ransfers in contemplation of !eath ma!e !ring the lifetime of the transferor shall be sb>ect to a. +he !onor-s ta& b. :state ta& c. @either !onor-s ta& nor estate ta& !. #oth !onor-s ta& an! estate ta& 1. %ne of the following ta&es ha! been replace! by "+. a. "!vance sales ta& b. +a& on life insrance premims c. $ommon carrier-s ta& on transport of passengers !. ect to other percentage ta&es. a. Proprietor of cockpits b. Domestic common carrier transporting passengers c. $losely hel! corporation initially oAering its shares to the pblic !. "gricltral cooperative selling its pro!ce in processe! form 5. %ne of the following is @%+ re;ire! to withhol! percentage ta&es. a. #reas, oKces an! instrmentalities of the government b. Novernment3owne! or controlle! corporations c. Prchaser3payor of goo!s in the corse of bsiness, which is sb>ect to *6 percentage ta& n!er ec.11? !. Prchaser3payor of goo!s not in the corse of bsiness, which is sb>ect to *6 percentage ta& n!er ec.1? ?.

" single in!ivi!al ta&payer with no !epen!ents who is a pre compensation can !e!ct the following from his gross compensation income. a. #asic personal e&emption, a!!itional e&emption, health an!Oor hospitaliFation insrance premim pai! b. #asic personal e&emption, a!!itional e&emption, health an!Oor hospitaliFation insrance premim pai! c. #asic personal e&emption only !. @one of the choices

income

earner

. 'hich of the following ta&payers is not allowe! to claim ta& cre!it for foreign income ta& incrre!( a. Jesi!ent citiFens b. Domestic corporations c. #ene4ciaries of estates an! trsts !. @on3resi!ent citiFens B. " 4re occrre! in the $ity of Dmagete an! by reason of which of stock of plywoo! of a lmber company was locate! .+he lmber company faile! to recor! sch loss in its book of acconts. 'as the loss   !e!ctible( a. es, the loss was !e!ctible becase it was case! by 4re b.es, the loss was !e!ctible becase it wol! be correct to assme that the lmber company reporte! within 5 !ays after it was sstaine! c. @o, the loss was not !e!ctible becase the con!ct of the ta&payer in not charging oA its book of acconts its loss prove! that the allege! loss ha! not been sAere!. !. @o, the loss was case! by carelessness 9. %ne of the following in!ivi!als is not sb>ect to income ta& in the Philippines. a ."n "merican engineer who makes the Philippines his resi!ence becase of the natre of his work b. " Eapanese visiting professor who occasionally teaches at one of the lea!ing niversities in the Philippines, an! stays here for an aggregate of 1B5 !ays c. " +aiwanese singer who performs in one of the hotels in the Philippines for one G1H week, an! then leaves after he is throgh with his performances ! " ect to fringe bene4t ta&( a. alary of the hosehol! help of a spervisor pai! by the ta&payer-s employer b. +ition of a manager pai! by his employer

c. alary of a manager pai! his employer ! Jent e&pense of the hose where a spervisor lives pai! by his employer ?. $. berita has three G*H wives n!er his tribal cstoms an! practices. 8e has a total of G?H ;ali4e! !epen!ent chil!ren from his three G*H wives. 8e is entitle! to a basic personal e&emption an! a!!itional e&emption of  

#asic personal e&emption a. P 50,000 b. P 50,000 c. P 150,000 !. @one

"!!itional e&emption P 100,000 P 150,000 P 150,000 @one

?5. +he amont of the informer-s rewar! shall be e;ivalent to a. +en percent G106H of the amont recovere! or one million peso GP1, 000,000H per case whichever is lower. b. +en percent G106H of the amont recovere! or one million peso GP1, 000,000H per case whichever is higher c.