BLT 2011 Final Pre-Board April 25

July 20, 2017 | Author: Lester Aguinaldo | Category: Board Of Directors, Taxes, Value Added Tax, Corporations, Income Tax
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04/25/11 FINAL PREBOARD EXAMINATION April 25, 2011 1. When by-laws are adopted and filed after the incorporation, which of the following is correct? a. Submitted within one (1) month after the filing of the Articles of Incorporation with the SEC b. Approved and signed by at least a majority of the incorporators c. Approved by the stockholders representing at least 2/3 of the outstanding capital stock d. Approved by the stockholders representing at least a majority of the outstanding capital stock. 2. I. A corporation commences to have a juridical personality upon the execution of the Articles of Incorporation unless a different date is set by the incorporators. II. A partnership begins from the moment of the execution of the partnership contract unless a different date is set by the partners. a. True, true

b. True, false

c. False, true

d. False, false

3. If par value shares are now treasury shares, the following rules are applicable, except one. The exception is a. They shall have no voting rights as long as they remain in the treasury b. They are not entitled to dividends c. They may gain be disposed of for a reasonable price even below par d. They are not part of subscribed stock and not considered as outstanding shares 4. Which of the following statements is correct? a. When a vacancy in the board arises, such vacancy maybe filled by the remaining directors provided they still constitute a quorum. b. The officers of a non-stock corporation maybe elected directly by the members instead of by the board of trustees c. The number of trustees in a non-stock corporation maybe five (5) but not more than fifteen (15) d. A director individually and acting as such can bind the corporation because he is an agent of the corporation. 5. May not require stockholders approval a. Declaration of stock dividend b. Management contract

c. Amendment of By-laws d. Removal of a director

6. Statement I- Unless the by-laws provides, the Chairman of the Board presides the meetings of the Board Statement II- Unless the by-laws provides, the President presides the meetings of stockholders. a. True, true

b. True, false

c. False, true

d. False, false

7. The articles of incorporation of ABC Corporation provides for 7 directors. In the monthly meetings of the board of directors held on April 8, 2010, directors B, C, D and E were present and the following resolutions were approved: A. A resolution for the purchase of a delivery truck from E Trading, a sole proprietorship owned by E. B, C, D and E voted for the resolution. B. A resolution appointing T as the new corporate secretary where B, C, D and E voted for the resolution. Which is correct? a. Both resolutions are valid and do not need stockholders approval b. Both resolutions are valid but need stockholders approval 1

04/25/11 c. Resolution A needs stockholders approval. Resolution B is valid d. Resolution A is not valid. Resolution B needs stockholders approval 8. Land Corporation is a non-stock, non-profit corporation whose articles of incorporation provide for 9 trustees. The trustees elected and their respective terms are: A, B, and C for 3 years; D, E, and F for 2 years; G, H, and I for 1 year. After one year, J, K and L were elected to replace G, H and I whose term expired, while M and N were elected to replace B and E, respectively who resigned after one year in office. What is the term of office of: L a. b. c. d.

3 3 1 2

years years year years

M

N

3 years 2 years 2 years 2 years

3 years 1 year 1 year 2 years

9. A is the listed owner of 10,000 with par value of P100/share common shares in ABC Corporation. ABC sued A for the payment of A’s indebtedness of P1M. A contends that such debt must be compensated by his shares of stocks with the plaintiff corporation. The contention of A is: a. Valid due to legal compensation b. Valid by virtue of judicial compensation c. Untenable since he is not a creditor of the corporation d. Automatically extinguished if the fair market value of the shares is P1M 10.In the partnership of A, B, C and D, D was designed as the managing partner. D’s able management prevented the firm to suffer from the economic turbulence caused by the instability of the Philippine peso. Partners A, B and C became jealous of D’s good name. As a result, D was capriciously and whimsically removed as manager without a valid cause without a valid cause. Is the removal valid? a. Yes, D’s removal is valid even without his consent b. Yes, provided it is approved by all the other partners c. No, D’s appointment is irrevocable without a just or lawful cause d. No, D can only be removed for a valid cause with vote of the partners owning the controlling interest 11.A and B entered into a universal partnership of all present property. No stipulation was made regarding future property. After the perfection of the contract, A inherited a parcel of land and B acquired a car as remuneration for services rendered. The properties acquired after the perfection of the contract belong to Land Car Land Car a. b.

A A

B Partnership

c. Partnership d. Partnership

B Partnership

12.Which of the following statement is false? a. Treasury shares revert to the unissued shares of the corporation and being in the treasury they don’t have the status of outstanding shares b. Shares issued without par value shall be deemed fully paid and nonassessable and the holder of such shares shall not be liable to the corporation or its creditors in respect thereto c. Redeemable shares may be redeemed regardless of the existence of unrestricted retained earnings provided such redemption would not cause insolvency or inability of the corporation to meet its debts as they mature d. When par value shares are issued above par, the premium or excess is not to be considered as part of the legal capital

2

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13.In case the members of the board of directors of a corporation still constitute a quorum, and there are vacancies who fill up such vacancies? Removal Resignation Expiration of term Increase in the number of Directors a. Stockholders Board Stockholders Board b. Board Board Stockholders Stockholders c. Stockholders Board Stockholders Stockholders d. Stockholders Stockholders Board Stockholders 14.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 W’s exclusive property in favor of H. The fair market value of the property is P1M but the selling price is only P700,000. The sale is a. Rescissible b. Voidable c. Unenforceable d. Void 15.A contract of loan is a. A consensual contract b. A real contract

c. A formal contract d. A solemn contract

16.A, husband and B, wife are legally separated. By order of the court, which decreed the legal separation. A is obliged to give a monthly support of P50,000 to B payable in advance within the first five days of the month. B owes A P50,000 by way of loan. On the other hand, A has not yet given B support of P50,000 for the preceding month and another P50,000 of the present month. All the debts are already due. Based on the foregoing, which of the following statements is incorrect? a. If B demands her support for the preceding month, A may set up compensation as regards the loan that B owes him b. If B demands her support for the current month, A may claim compensation as regards the loan that B owes him c. If A demands payment of the loan, B may set up compensation as regards her support the preceding month that A owes her d. If A demands payment of the loan, B may set up compensation as regards her support the current month that A owes her 17.On January 1, 2010, A bought a parcel of land from B who was insane. The deed of sale was duly acknowledged before a notary public. Six months after the sale, A realized that he needed a larger area on which to construct a commercial building. At about the same time, B who had been undergoing psychiatric treatment was declared of sound mind by his neurologist. Should a court action be filed today, which is correct? a. A may successfully prosecute a court action to annul the contract on the ground of B’s insanity b. B may successfully prosecute a court action to annul the contract on the ground of his insanity c. Neither A nor B may successfully prosecute a court action to annul the contract d. A may successfully prosecute a court action to annul the contract on the ground of mistake as to the area of the parcel of land 18.A delivered to B the following instrument: In payment of gambling debt, A made a promissory notes which reads: “I promise to pay to B P10,000 Sgd. A.” B indorsed the note in blank before maturity and delivered it to C for value. When due, A refused to pay and C sued B. Could C recover from B? a. No, C could not sue B because B did not write the name of C as indorsee b. No, the instrument is not negotiable and B is a mere assignor of credit 3

04/25/11 c. Yes, provided C gives notice of dishonor to B otherwise B is discharged from liability d. Yes, the endorsement will be considered as an assignment, hence B will be liable as an assignor of the instrument 19.Using the preceding number, but the note is in payment of merchandise purchased by A from B and A failed to pay due to insolvency. Could C collect from B? a. No, C could not sue B because B did not write the name of C as indorsee b. No, the instrument is not negotiable and B is a mere assignor of credit c. Yes, provided C gives notice of dishonor to B otherwise B is discharged from liability d. Yes, the endorsement will be considered as an assignment, hence B will be liable as an assignor of credit 20.What is the effect of the loss of the prestations in an alternative obligation where the right of choice belongs to the debtor and the loss is due to his fault? A. If only one remains, the obligation still subsists, but it ceases to be alternative as it becomes a simple obligation B. If two or more objects remain, the obligation still subsists retaining its alternative character C. If none remains, the obligation is extinguished because he chose not to give anything a. A and B b. A and C c. B and C d. A, B and C 21.In payment of 10 grams of shabu, A made a promissory note which reads “I promise to pay B P10,000 Sgd. A”. B transferred the note to C, who acted in good faith. Which is correct? a. C can collect from A c. C can collect from either A or B b. B can collect from A d. C can collect from B 22.A and B are solidary debtors of C for P100,000 which is due on August 1, 2010. Thinking that the obligation is already due, A paid C P100,000 on August 1, 2009. What rights will A have on February 1, 2010? a. A can recover P50,000 reimbursement from B without interest b. A can recover P100,000 from C plus interest from August 1, 2009 to February 1, 2010 c. A can recover P50,000 reimbursement from B with interest from August 1, 2009 to February 1, 2010 d. A cannot recover yet from either B because the obligation is not yet due or C because the payment was voluntary 23.Using the preceding number, but it is already September 1, 2010, which of the following is correct? a. A can recover from C only the interest from August 1, 2009 to July 31, 2010 b. A can recover P50,000 from B plus interest from August 1, 2009 to August 1, 2010 c. A can recover P50,000 from B plus interest from August 1, 2009 to September 1, 2010 d. A can recover from C only the interest from August 1, 2009 to September 1, 2010 24.M delivers a negotiable promissory note payable to P or order. Later, P makes a special indorsement to A and A delivers the note to B. who is the holder? a. B, because he is in possession of the note b. A, because he is the indorsee c. P, because he is the payee d. No one can be considered as holder 4

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25.A issued a negotiable promissory note to the order of B for P10,000 payable in 30 days after date. Later, B endorsed the note to C. then X stole the note from C, forged the signature of C and negotiated it to D, and D to E, E to F, the holder. On maturity of the note, which of the following statements is not correct? a. F can collect from either D or E because their signature are genuine and the note is operative against them b. F can collect from A because A cannot put up forgery as his defense as his signature is genuine c. F cannot collect from C because it was C’s signature which was forged d. F cannot collect from B because B is a party prior to the forgery

26.A owes B P10,000 as gambling debt and A issued a promissory note to B to cover the debt, as follows: “I promise to pay B or order P10,000. Sgd. A” Which of the following statements is correct? a. B can collect from A because the note is negotiable b. B cannot negotiate the note because the consideration between A and B is illegal c. If B negotiates to C, a holder in due course, C can collect from A d. A is not liable because of illegal consideration 27.A, minor issued a promissory note to B as follows: “I promise to pay B or order P10,000. Sgd. A” Which of the following statements is not correct? a. b. c. d.

The promissory note is not negotiable because the maker is a minor B cannot collect from A because A is a minor If B negotiates to C, a holder in due course, C cannot collect from A If B negotiates to C, a holder for value, C cannot collect from A

28.G was appointed as guardian of M, the latter being 17 years old. Later, without authority from G, M sold G’s watch in writing to B valued at P100,000 for P70,000, suffering lesion by more than ¼ of the value, the contract is a. Rescissible b. Voidable c. Unenforceable d. Void 29.A, sells to B a Sony Colored TV for P12,000 payable in twelve equal monthly installments beginning May 5, 2010 and every 5 th day of each month thereafter. The contract provides that upon failure to pay any installment due, the whole balance become due and demandable. To secure the obligation, a chattel mortgage over the TV set was executed. When B defaulted in the 7 th and 8th installments A sued B for the payment of the whole balance of P6,000. The TV set was levied and subsequently sold at a public sale for P5,000. Can A still recover the deficiency of P1,000 from B? a. Yes, if there was stipulation to that effect b. Yes, even though there was no stipulation c. No, any stipulation allowing recovery is void d. No, if there was no stipulation to that effect 30.X, Y and Z are joint creditors of A, B, P60,000. How much can X and Y collect a. X and Y can collect P30,000 from b. X and Y can collect P40,000 from c. X and Y can collect P45,000 from d. X and Y can collect P30,000 from 5

C and D, joint debtors in the amount of from A, B and C? A, B, and C A, B, and C A, B, and C anyone of A, B, and C

04/25/11 31.A promissory note reads “I promise to pay to the order of B, P1,000. Sgd. A. Then B made a qualified indorsement to C. on maturity, A dishonors the instrument on the ground of total absence of consideration between him and B. After giving notice of dishonor, which of the following is not correct? a. C can collect from B, only if he is a holder in due course b. C can collect from B, even if he is not a holder in due course c. C can collect from B, regardless of whether or not he is a holder in due course d. C can enforce the instrument against A, if he is a holder in due course

32.A, B, C, D and E formed Super corporation and submitted their Articles of Incorporation to the SEC Inadvertently, through an oversight; the SEC approved the Articles and issued a certificate of incorporation. Thereafter. It was discovered that they have not completed their required period of residency in the Philippines. As a result, which of the following is not correct? a. The corporation shall be considered as a de-facto corporation and shall be allowed to function as a corporation under the color of law b. The right to exercise corporate powers , shall not be inquired into collaterally in any private suit to which the corporation maybe a party c. The Solicitor General has the right to question or contest the validity of its corporate existence through a quo-warranto proceedings d. In suit filed by F, against the corporation for breach of contract, she can alleged that the corporation has no legal personality and therefore all incorporation shall be held personally liable for damages 33.On April 1, 2010, A and B entered into a contract of partnership for the purpose of selling cow’s milk with the former as capitalist partner and the latter as industrial partner. It was agreed that A shall contribute 1,000 cows to the common fund on May 2, 2010. Upon the arrival of the designated date, A failed to deliver the contribution he promised. As a result a. B should make a demand upon A for the delivery of his contribution and its fruits to render A in default b. The contract of partnership becomes void because A failed to give his contribution to the common fund c. B can compel A to deliver his contribution and its fruits without the necessity of demand d. The contract of partnership was never perfected because there was no delivery of contribution by the partners 34.A, B and C formed a limited a partnership with A as a general partner. B as limited partner and C as an industrial partner. A and B contributed P50,000 each. The partnership failed and after disposing all in assets to pay partnership debts, there still remains a note payable in the sum of P15,000. Against whom can the creditor demand payment of the note of P15,000 a. Only A is liable to pay the P15,000 indebtedness b. A and B are liable to pay P7,500 each c. A and C are liable to pay P7,500 each d. A, B, and C are liable to pay P5,000 each 35.The following items, pertain to a contract of sale, which pertains to contract to sell? a. Ownership of the thing sold is transferred upon delivery b. Ownership of the thing is transferred to the buyer at some future time c. The risk of loss is on the buyer upon delivery d. The risk of loss is on the buyer if the price is not yet fully paid 6

04/25/11 36.A made a negotiable promissory note payable to the order of B. Later, B made a blank indorsement to C and C delivered the note to D, who likewise delivered the note to E. E made a special indorsement to F and F made a qualified indorsement to G. Which of the following is correct? a. The indorsement made by E is not necessary because the instrument was converted to bearer, hence the indorsement made F can be stricken out b. C and D are not liable because they negotiated the instrument by delivery c. If the instrument is dishonored by A, the present holder G cannot go after C and D d. B’s indorsement can be stricken out because D’s blank indorsement converted the instrument to bearer

37.A promissory note reads: “I promise to pay B or bearer P20,000. Sgd. A” B delivered the note to C. C indorsed the note to D. then Y stole the note from D and indorsed the note to E. E delivered the note to F. As a result a. b. c. d.

If A pays F in good faith, A’s obligation is extinguished F can collect from D or E F cannot be a holder in due course F can go after indorsers C and Y

38.A promissory note reads: “I promise to pay B or order P20,000. Sgd. A” B made a special indorsement to C and C made a conditional indorsement to D. If the condition is not yet fulfilled, which of the following is correct? a. b. c. d.

If If If If

A A A A

dishonors the note, D can collect from B or C pays D, A’s obligation is extinguished pays, A becomes liable if D fails to fulfil the obligation dishonors the note D can collect from B but not from C

39.S sold his car to B on instalments and a chattel mortgage was constituted on the car. B defaulted in two instalment payments. S foreclosed the chattel mortgage and sold the car at a public auction. If there is deficiency, can S recover the deficiency? a. Yes, even without stipulation c. No, even if there is stipulation b. Yes, if there is stipulation d. No, unless there is stipulation 40.B borrowed P100,000 from S secured by a pledge on B’s diamond ring. The debt is payable in instalment. When B defaulted in 2 installment payments, S foreclosed the pledge and sold the diamond ring at a public auction. If there is excess, who is entitled to the excess? a. B, even without stipulation c. B unless there is stipulation b. S, only if there is stipulation d. S, even without stipulation 41.Which of the following is taxable on income from within and without the Philippines? a. Justin Bigger, a Canadian citizen who stayed in the Philippines for 181 days b. Taylor Sweep, an American citizen, married to Dan Lloyd Cruz. She had been living in manila since 1999 c. Dan Delacruz, a native of Milan, Italy, now a naturalized Filipino citizen and living in Quezon City since 2000 7

04/25/11 d. Dingdan Dantes, a Filipino citizen born in Sampaloc Manila but working as overseas contract worker in Malaga, Spain 42.Which of the following is taxable only on estate from within the Philippines? a. Manny Pasyal, a Filipino overseas contract worker residing in Saudi Arabia b. Antonio Barreta, a Mexican, married to a Filipina and living in Manila since 2005 c. Yao Ming Soo, a Taiwanese, now a naturalized Filipino citizen and living in Makati since 2002 d. Oscar dela Hoy, an American professional boxer residing in USA

43.The gross receipts of A, a lessor from his residential units for the year, show: Monthly Rent/Unit No. of Units Total Php 10,000 20 Php 2,400,000 Php 12,000 10 1,440,000 Php 14,000 6 840,000 Php 16,000 10 1,920,000 The output VAT is a. Php 792,000

b. Php 504,000

c. Php 230,400

d. Php 318,400

44.ABC the corporation a vat-registered enterprise has the following sales for the month: Sale to private entities

Php 2,000,000

Sale of exempt goods

1,000,000

Sale to the government

1,000,000

Total sales for the month

Php 4,000,000

The following input taxes were passed on by its vat suppliers: Input tax on taxable goods

Php 80,000

Input tax on sale to the exempt goods

20,000

Input tax on sale to the government

40,000

Input tax on depreciable capital goods not directly attributable to any specific activity (monthly amortization for 60 months) 160,000 The vat due for the month is a. Php 80,000

b. Php 160,000

c. Php 40,000

d. Php 0

45.Using the preceding number, the amount not available for input tax credit but may be recognized as cost or expense is a. Php 140,000 b. Php 70,000 c. Php 60,000 d. Php 80, 000 46.The export sales amounting to Php 2,000,000 of a non-vat enterprise is a. Exempt form vat c. Subject to 12% vat b. Subject to 0% vat d. Subject to percentage tax

8

04/25/11 47.Proceeds of life insurance where a third person other than the executor, or administrator or the decedent is the beneficiary is a. Part of gross income whether revocable or irrevocable b. Not part of gross income whether revocable or irrevocable c. Part of gross estate whether revocable or irrevocable d. Not part of gross estate whether revocable or irrevocable 48.Date assessment was received

March 8, 2011

Date petition for reconsideration was filed with BIR

March 18, 2011

Date filling of document to support the petition

April 8, 2011

Date of decision of denial of the petition was received

April 28, 2011

The last day to appeal to the CTA is a. May 8, 2011

b. May 18, 2011

c. March 8, 2012

49.Using the preceding numbers: Second request for reconsideration was filed with the BIR 2011

d. May 28, 2012 May

7,

Date decision of denial of second request for reconsideration was received June 2, 2011 The last day to appeal to the CTA is a. July 2, 2011

b. June 2, 2011

c. June 23, 2011

50.Using the preceding numbers: Second request for reconsideration was filed with the BIR 2011

d. June 21, 2011 May

7,

Date revised assessment was received June 2, 2011 The last day to appeal to the CTA is a. July 2, 2011

b. June 7, 2011

c. June 23, 2011

d. June 21, 2011

51.A cash dividend of P100,000 received by a taxpayer in 2011 from a foreign corporation whose income from Philippines sources is 40% of its total income is Statement 1 - Partly taxable if he is a resident citizen Statement 2 - Partly taxable if he is a non-resident citizen a. Both statement are true b. Both statement are false 52.Using a. b. c. d.

c. Only statement 1 is true d. Only statement 2 is true

the above data, which of the following is correct? The cash dividend is Exempt from income tax if he is a resident citizen Partly taxable if he is a resident alien Taxable in full if he is a non-resident alien Exempt form income tax if he is a non-resident citizen

53.Which of the following statement is correct? a. The monetized value of unutilized vacation leave credits of ten (10) days or more which were paid to the employee during the year are not subject to income tax and to withholding tax b. The salary of an employee on vacation or on sick leave, which are paid not withstanding his absence from work constitute compensation income c. Any amount is required by law to be deducted by the employer from the compensation of an employee excluding the withheld tax is considered as part of the employee’s compensation 9

04/25/11 d. If living quarters or meal are furnished to an employee for the convenience of the employer, the value thereof should be included as part of compensation income 54.The following are the requirements to exempt retirement pay due to old age from income tax, except: a. The retiree must be a senior citizen b. The retirement program is approved by the BIR c. The retirement pay should have been availed of for the first time d. The retiree should have been employed for at least 10 years 55.Mr. A files his ITR for 2007 on April 1, 2008 and paid the tax due thereon of P100,000. The BIR made an assessment on April 15, 2011 which shows that the correct income tax due should have been P150,000 requiring payment on or before July 15, 32011. The assessment was received by Mr. A on June 1, 2011. Mr. A can a. Ignore the assessment because June 1, 2011 is beyond 3 years form April 1, 2008 b. Ignore the assessment because June 1, 2011 is beyond 3 years form April 15. 2011 c. Appeal to the CTA within 30 days from June 1, 2011 d. Dispute the assessment with the CIR within 30 days from June 1, 2011 56.A filed his income tax return for calendar year 2010 on March 20, 2011. When is the last day for the BIR to collect, assuming A did not pay the tax due upon filing? a. March 20, 2014 b. April 15, 2014 c. April 15, 2016 d. March 20, 2015 57.Using the above data, assuming A files his income tax return on April 20, 2011 and the return is not fraudulent , when is the last day for the BIR to make an assessment? a. April 20, 2014 b. April 15, 2016 c. March 10, 2018 d. April 15, 2016 58.Using the data above, if the BIR issued a deficiency income tax on March 10, 2013, when is the last day for the BIR to collect? a. March 10, 2016 b. April 15, 2016 c. March 10, 2018 d. April 15, 2016 59.Which of the following statement is not true? a. Only compulsory heirs will inherit in case of intestate succession b. The sharing of heirs in testamentary succession must satisfy the rules of legitime c. A compulsory heir can demand more than his legitime in case of testamentary succession d. There can be disinheritance of a compulsory heir 60.A vat-registered taxpayer acquired the following depreciable assets during the month: Equipment included

Estimated Useful Life

Acquisition

Cost,

1

8 years

P800,000

2

5 years

P400,000

3

3 years

P300,000

The creditable input tax for the month is: a. P180,000

b. P3,400

c.P2,800 10

d. P3,000

vat

not

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61.The gross estate of A includes P80,000 receivable which is duly notarized from debtor B whose records shows: a. Assets P100,000 b. Indebtedness to: i. Government by way of taxes 40,000 ii. A 80,000 iii. Other creditors 20,000 The deductible claims against insolvent person is a. P80,000

b. P29,285

c. P48,000

d. P32,000

62.Which of the following is subject to vat? a. Sale of passenger or cargo vessels and aircraft for domestic or international transport operations b. Sale of agricultural and marine food products in their original state c. Sales by agricultural cooperatives duly registered with the Cooperative Development Authority d. Sale of fuel, goods and supplies by person engaged in international shipping or air transport operations 63.A cash dividend of P100,000 received by a taxpayer in 2010 from a domestic corporation whose income from Philippines source 40% or its total income is a. Partly taxable if he is a resident alien b. Exempt from final tax if he is a non-resident citizen c. Partly taxable if he is a resident citizen d. Taxable in full if he is a non-resident citizen 64.A resident citizen received a prize of P40,000. Which of the following statement is correct in connection with the imposition of final tax on the prize? a. The first P10,000 is part of taxable income while, the remaining P30,000 is subject to 20% final tax b. The whole amount is part of taxable income c. The whole amount of P40,000 shall be subject to 20% final tax d. The first P10,00 shall be exempt from tax, the remaining P30,000 is subject to 20% final tax 65.A sold his residential lot, a capital asset for P2,000,000. The said lot was acquired in 2000 at a cost of P1,700,00. The fair market value of the property as determined by the BIR is P2,200,000 but the fair market value as shown in the schedule of values of the City Assessors is P1,950,000. The entire proceeds were utilized for the acquisition of A’s principal residence. The final tax due is a. P120,000 b. P132,000 c. P117,000 d. P0 66.Using the above data, but only P1,600,000 was utilized for the acquisition of A’s residence, the final tax due is a. P24,000 b. P26,400 c. P120,000 d. P132,000 67.For vat purpose, the following transaction shall be “deemed sale”, except a. Transfer, use or consumption in the course of business of goods or properties originally intended for sale or for use in the course of business b. Property dividends which constitute stock in trade or properties primarily held for sale or lease declared out of retained earnings c. Distribution or transfer of goods to creditors in payment of debt or obligation d. Consignment of goods if actual sale is not made within 60 days following the date such goods were consigned 68.Which of the following is not a power vested in the Bureau of Interval Revenue? 11

04/25/11 a. The assessment and collection of all national internal revenue taxes, fees and charges b. The enforcement of all forfeitures, penalties and fines c. The granting of tax exemption and other tax incentives to taxpayer d. The execution of judgement in all cases decided in its favor by the Court of Tax Appeal and the ordinary courts 69.Statement 1 – Born of a poor family in 1963, A worked his way through college. After working for 20 years, A decided to retire in 2011 and avail of the benefits under a very reasonable retirement plan maintained by his employers for those who have rendered continuous service for at least 20 years. A received P1M as retirement benefits. Statement 2 – Mrs. B, wife of a deceased employee received financial benefits voluntarily voted upon by the Board of Directors of the employer company in recognition of her husband’s long,loyal and dedicated service and primarily to help her meet financial needs. a. b. c. d.

Both statement are subject to income tax Both statement are exempt from income tax Only statement 1 is a taxable income Only statement 2 is a taxable income

70.Income derived by a depository bank under expanded foreign currency deposit system foreign currency transaction with local with local commercial bank, including branches of foreign banks that maybe authorized by the Bangko Sentral ng pilipinas, shall be subject to a final tax on such income at a. 7.5% b. 10% c. 15% d. 20%

71.Due to an uncertainly whether or not a new tax law is applicable to printing companies, ABC printers submitted a legal query to the BIR on that issue. The BIR issued a ruling that printing companies are not covered by the new law. Relying on this ruling, ABC printers did not pay the said tax. Subsequently however, the BIR reversed the ruling and issued a new one stating that the tax covers printing companies. Could the BIR assess ABC printers for back taxes corresponding to the years before the new ruling? a. Yes, because the taxation is the rule and exemption is the exception b. Yes, because the taxes are the lifeblood of the government c. No, the BIR is not allowed to reverse its ruling d. No, reversal of a ruling shall not be given a retroactive application if it will be prejudicial to the taxpayer 72.XYZ corporation filed its income tax return and paid the tax due for calendar year 2008 showing a tax liability of P175,000. However, upon audit, it was discovered that its income tax return was false or fraudulent because it did not report other taxable income. Per investigation the correct income tax due is P350,000. The corporation was duly informed of this finding through preliminary assessment notice. Failing to protest on time against the preliminary assessment notice, a formal letter of demand and assessment notice was issued on May 31, 2010 calling for payment of the deficiency income tax on or before July 15, 2010. The amount due on July 15, 2010 is a. P306,250 b. P437,500 c. P240,625 d. P612,500 73.Which of the following are elements of impact of taxation? I. Levy II. Imposition III. Assessment IV. Collection a. I and II b. I, II and III c. III and IV d. I, II, III and IV

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04/25/11 74.In 2010 ABC Corporation paid for the annual rental of a residential house used by its general manager amounting to P544,000. The entry to record the benefit is a. Fringe Benefits Expense Fringe Benefits Tax Expense Cash b. Fringe Benefits Expense Fringe Benefits Tax Expense Cash c. Fringe Benefits Expense Fringe Benefits Tax Expense Cash d. Fringe Benefits Expense Fringe Benefits Tax Expense Cash

P544,000 256,000 P800,000 P544,000 128,000 P672,000 P272,000 128,000 P400,000 P272,000 256,000 P528,000

75.Which of the following statement on fringe benefits is correct? a. Not part of the taxable income of the employees b. Part of the taxable income of the employees c. The monetary value is subject to fringe benefits tax d. Maybe given to employees regardless whether managerial supervisor or rank and file

76.Consider the following statement A. A special assessment is an enforced proportional contribution from the owner of land especially or peculiarly benefited by public improvement B. The power of eminent domain maybe exercised even by private individual while the power of taxation and police power maybe exercised only by the government C. Unlike tax, debt draws interest, if stipulated D. The police power, power of taxation and power of eminent domain being fundamental power of the state maybe exercised by the government even without any constitutional grant a. A and B are correct c. B and D are correct b. Only C is not correct d. All are correct 77.Requiring a license for the right to engage in business to earn income is an exercise of a. Taxation power c. Police power b. Power of eminent domain d. People power 78.ABC Corp. concluded its eight year of operation. Its fiscal year ended June 30, 2009. The net income from July 1, 2008 to June 30, 2009 amounted P1M. The gross income for the same period is P20M. The income tax due for the taxable period is a. P350,000 b.P310,000 c. P260,000 d. P285,000 79.Using the above data, but the ninth year of operation from July 1, 2009 to June 30, 2010 shows a new income of P1.2M and gross income of P15M. The tax due for the period is a. P360,000 b. P310,000 c. P260,000 d. P285,000 80.Interest income earned by a resident alien from outside the Philippines is 13

04/25/11 a. Subject to scheduler tax b. Not subject to income tax partly

c. Subject to final tax d. Partly subject to scheduler and Subject to final tax

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04/25/11 ANSWERS: (April 25, 2011) 1. D 21.D 2. C 22.B 3. D 23.A 4. B 24.D 5. C 25.B 6. C 26.C 7. C 27.A 8. B 28.C 9. C 29.B 10.A 30.A 11.B 31.A 12.A 32.D 13.C 33.C 14.D 34.C 15.B 35.B 16.B 36.C 17.B 37.A 18.D 38.B 19.B 39.C 20.A 40.D 81. 82. 83. 84. 85. 86. 87. 88.

41.C 42.D 43.C 44.A 45.B 46.A 47.B 48.D 49.C 50.A 51.B 52.D 53.B 54.A 55.D 56.B 57.A 58.C 59.C 60.B 89. 90. 91. 92. 93. 94. 95. 96. 97.

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61.D 62.D 63.D 64.C 65.B 66.D 67.A 68.C 69.C 70.B 71.A 72.A 73.B 74.B 75.D 76.C 77.C 78.D 79.D 80.B

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