TAX2 Reyes

CHAPTER 4 4-1. M Co., a VAT Taxpayer, had the following data, VAT not included, in each of:

Sales Purchases from VAT suppliers

1st Month

2nd Month

3rd Month

1,000,000 400,000

2,000,000 800,000

3,000,000 600,000

How much was the VAT payable for: First Month? Second Month ? End of the Quarter? SOLUTION: 1st Month Output Tax 1,000,000 x 12% 2,000,000 x 12% 6,000,000 x 12% (1M+2M+3M) LESS: Input Tax 400,000 x 12% 800,000 x 12% 1,800,000 x 12% (400k+800k+600k) Vat Payable Less: Vat Paid (72k+144k) Vat Still Due

2nd Month

3rd Month

120,000 240,000 720,000 (48,000) (96,000) 72,000

144,000

(216,000) 504,000 216,000 288,000

4-2. The following were transactions, VAT not included in each of the months indicated of a calendar quarter of a VAT taxpayer:

Sales Purchases

1st Month

2nd Month

3rd Month

1,000,000 1,200,000

1,200,000 600,000

3,000,000 800,000

How much was the VAT payable for: First Month? Second Month ? End of the Quarter? SOLUTION: 1st Month Output Tax 1,000,000 x 12%

120,000

2nd Month

3rd Month

1,200,000 x 12% 4,200,000 x 12% (1M+1.2M+2M) LESS: Input Tax 1,200,000 x 12% 600,000 x 12% 1,520,000 x 12% (1.2M+600k+800k) Vat Payable Less: Vat Paid Vat Still Due

144,000 504,000 (144,000) (72,000) (24,000)

72,000

(312,000) 192,000 (72,000) 120,000

4-3. The following were cumulative data, VAT not included, of Y Co. 1st Quarter

1st Month

2nd Month

End

Sales 3,000,000 4,000,000 5,000,000 6,000,000 Purchases 2,500,000 2,900,000 3,200,000 3,700,000 Vat paid in the first quarter was 120,000 How much was the VAT payable for: First Month? Second Month ? End of the Quarter? SOLUTION: End of 1st QTR Output Tax 3,000,000 x 12% 1,000,000 x 12% 1,000,000 x 12% 6,000,000 x 12% LESS: Input Tax 2,500,000 x 12% 400,000 x 12% 600,000 x 12% 1,520,000 x 12% Vat Payable Less: Vat Paid Vat Still Due

1st Month

2nd Month

3rd Month

360,000 120,000 120,000 720,000 300,000) (48,000) (36,000) 60,000 120,000)

72,000 (60,000)

84,000

60,000)

12,000

84,000

(444,000) 276,000 (12,000) (84,000.00) 180,000

4-4. Mr. Y is a taxpayer with a VAT and non-VAT business. He had the following data, VAT non included, in a VAT taxable period. Sales, VAT business Sales, non-VAT business Purchases of goods, from VAT suppliers, for VAT business and non-VAT business

3,000,000 2,000,000 1,000,000

What is the input tax? And the Value-added tax payable? SOLUTION: Sales (vat) 3,000,000 Sales (non-vat) 2,000,000 Total sales 5,000,000 Output tax (3M x 12%) Input Tax (1M x 12% x 3/5) Vat Payable

360,000 (72,000) 288,000

4-5. Mr. C is a taxpayer with VAT and non-VAT business. He had the following data, VAT not included, in a VAT taxable period: Sales, VAT business 2,000,000 Sales, non-VAT business 3,000,000 Purchases of goods, from VAT suppliers, for: Vat business 800,000 Non-vat Business 1,200,000 Purchases of supplies, from a VAT supplier, both for the VAT and the non-VAT business 2,000 Operating expenses (no VAT component) 900,000 What is the Value-added tax payable and the net income for the period? SOLUTION: Sales (vat) Sales (non-vat) Total sales Output tax (2M x 12%) Input Tax (800k x 12% ) 2,000 x 2/5 x 12% Vat Payable

2,000,000 3,000,000 5,000,000 240,000 (96,000) 144,000 (96) 143,904

4-6 Mr. H, a VAT Taxpayer, had the ff. data, VAT not included, in a month: Sales, Domestic Sales, Exports Purchases of goods for both domestic and export sales Refund is desired for input taxes on goods reported:

Sales (2M+3M) COGS (800k+1.2M) Gross Profit Supplies OPEX NET INCOME

2,000,000 4,000,000 1,800,000

5,000,000.00 (2,000,000) 3,000,000 (2,000) (900,000) 2,098,000

What is the Input tax on goods sold in the domestic market? The VAT payable for the month? And the VAT payable? SOLUTION: Domestic Export Total Sales Output Tax Input Tax (1.8Mx12%) VAT PAYABLE

2,000,000 4,000,000 6,000,000 240,000 (216,000) 24,000

Export Sales Output Tax Input Tax (1.8M x 12% x 4/6) VAT REFUNDABLE

(144,000) (144,000)

Domestic Sales Output Tax (2M x 12%) Input Tax (1.8M x 12% x 2/6) Total

240,000 (72,000) 168,000

4-7. C Co. is a VAT taxpayer with a month’s data: Sales to the public, Philippines Exports to the United States Sales to the Philippine Government Purchases from VAT suppliers, at 30% of sales

1,000,000 3,000,000 1,000,000

Requirements: a. Input Taxes on sales for the month to the public? b. The input taxes on exports of the month? c. The final value-added tax of the month? d. The net value-added tax payable for the month? e. The net value-added tax refundable for the month? SOLUTION: A. Sales-Public

B. Exports (US)

Purchases-public Vat rate Input Tax payable

1,000,000 30% 300,000 12% 36,000

C. Sales to Govt .` Final Tax rate Final Tax

1,000,000 5% 50,000

D. Output Tax Input Tax Vat Payable

E. Output Tax Input Tax Vat Refundable

(108,000) (108,000)

Purchases (US) Vat rate Input Tax payable

3,000,000 30% 900,000 12% 108,000 120,000 (36,000) 84,000

CHAPTER 5 5-1. Mr A is in trading business. On june 2, 2013 he purchased an office equipment with a useful life of three years for P950,000, VAT not included. How much is the input tax? SOLUTION: 950,000 x 12%= 114,000 5-2. Mr. B, a VAT taxpayer. Purchases on February 5,2013 an office equipment for 1,500,000, VAT not included, with a useful life of ten months. How much is the input tax? SOLUTION: 1,500,000 x 12%= 180,000 5-3. C Co. is in manufacturing business. It purchased a fixed asset n July 1, 2013 with a useful life of ten years for P2,100,00, VAT not included. How much is the monthly input tax? SOLUTION: 2,100,000 x 12% x 1/60= 4,200 5-4. D Co. is a service provider. It purchased a fixed asset for P2,400,000, with a useful life of six years, VAT not included. How much is the monthly input tax? SOLUTION: 2,400,000 x 12% x 1/60=4,800 5-5. E Co. purchases in 2013 a fixed asset with a useful life of eight years, for P8,000,000 payments on which were as follows: June 2, 2013 June 2, 2014 June 2, 2015 How much is the monthly input tax? SOLUTION: 8,000,000 x 12% x 1/60=16,000

2,000,000 3,000,000 3,000,000

5-6. F Co. purchases in March 2013, fixed assets, as follows: Asset No. 1 (useful life of 5 years) 550,000 Asset No. 2 (useful life of 2 years) How much is the input tax of March 2013?

400,000

SOLUTION: (500,000 + 400,000 + 950,000) x 12% = 114,000

5-7 G Co. purchased several fixed assets in a month, as follows: Asset No. 1 (useful life of 8 years) 900,000 Asset No. 2 (useful life of 3 years) 720,000 Asset No. 3 (useful life of 10 months) 200,000 Asset No. 4 (useful life of 2 years) 400,000 How much is the input tax for the month? SOLUTION: 900,000 x 12% x 1/60 720,000 x 12% x 1/36 2,000,000 x 12% x 1/1 400,000 x 12% x 1/24 Input tax

1,800 2,400 24,000 2,000 30,200

5-8 H Co. has, in its books of accounts the following: March 1, 2013, acquistion of a fixed asset with a useful life of 6 years May 5, 2013, acquistion of a fixed asset with a useful life of 2 years May 8, 2013, acquistion of a fixed asset with a useful life of 4 years The fixed asset acquired on March 1, 2013 was retured on may 2, 2013 How much is the available input taxes for May 2013? SOLUTION: 1,500,000 x 12% x 58/60* 600,000 x 12% x 1/24 5,000,000 x 12% x 1/48 Input tax *2 months expired March 1- May 2 60-2 = 58 5-9.

174,000 3,000 1,250 178,250

1,500,000 600,000 500,000

I Co. is having its factory building constructed by building contractor. Progress billings paid under the construction were: In the month of July 2013 2,000,000 In the month of August 2013 3,000,000 How much is the input tax of July and August 2013? SOLUTION: July (2M x 12%) August (3M x 12%)

240,000 360,000

5-10. Mr. J. was a nonVAT taxpayer in 2012. He registered for and became a VAT taxpayer beginning January 1, 2013. On December 31, 2012, he had the following data on600,000 his business: Inventory purchased from VAT taxpayers 600,000 Supplies purchased from VAT taxpayers 100,000 Fixed asset purchased from VAT taxpayers 1,100,000 What are the Transitional input Tax for inventory, supplies and fixed asset? SOLUTION: Inventory (600k x 12%) Supplies (100k x 12%)

72,000 12,000

*USUALLY UNDER 12% IS HIGHER 5-11. Mr. K started his business in 2012 as a non-VAT taxpayer. For 2012 his sales amounted to 2,500,000 and he registerd as a VAT taxpayer for 2013. On December 31, 2012, he had the ff: Inventory of goods for sale (purchased from VA supplier, VAT not included) Cost Net Realizable Value Supplies purchased from VAT suppliers, VAT not included

140,000 100,000 5,000

For January 2013 he had ( VAT not included): Sales Purchases from VAT suppliers

500,000 160,000

What is the Transitional Input tax and the VAT for January 2013?

Output tax (500k x 12%)

60,000.00

Input tax (160k x 12%) Transitional input tax

(19,200.00)

SOLUTION: Transitional input tax: Inventories 140,000 x 12% 100,000 x 2%

(17,400.00)

 16,800 2,000

Vat payable

23,400.00

Supplies 5,000 x 12%  600 5,000 x 2% 100 5-12. A VAT taxpayer had the following data on sales and purchases of a month, a value-added tax not included: Sales, exports 4,000,000 Purchases from VAT taxpayers What Valued added tax refundable

1,200,000

SOLUTION: 1,200,000 x 12%= 144,000 5-13. Mr. L is a VAT taxpayer. In the month of April 2013, he had the ff data on sales/purchases, value added tax not included, and income tax due for 2012: Sales, exports 2,000,00 Purchases from VAT taxpayers

800,000

Income tax due for 2012 160,000 The vat refundable/ income tax payable if input taxes attributable to export sales are taken as credit against other internal revenue taxes? SOLUTION: Income tax due Vat refund ( 800k x 12%) Still Due

160,000 96,000 64,000

5-14 M Co. is in the business of exporting goods produced in the Philippines. He had the ff data in a VAT taxable period: Sales, exports 10,000,000 Purchases from VAT suppliers

3,000,000

Purchases from non-VAT suppliers 500,000 Output taxes for the period? Input taxes for the period? Tax refundable or creditable against internal revenue taxes? SOLUTION: 3,000,000 x 12% = 360,000

5-15. Mr. M made a sale to a senior citizen of goods on which VAT exemption is provided in the senior citizen law. The goods are sold to the general public, VAT included at P2,280 How much should the sale to the Senior Citizen be? SOLUTION: 2,280/ 12% 2,035.71 x 80%

160.71 1,628.57

5-16 Sale of food and soft drinks to the senior citizen were: For food

150

For Soft drinks A Senior Citizen had a 20% discount. What and how much, were shown in the sales invoice? SOLUTION: 180/ 112% 160.71 x 80%

30

160.71 128.57