Reference no: EM132825476
Questions -
Q1. A taxpayer under the cash basis had the following expenditures:
Acquisition of office equipment at the middle of the year (5 year useful life) P200,000
Payment of employee salaries 40,000
Payment for office utilities expenses 60,000
How much is claimable as deductible business expense for the year?
Q2. The following relates to a taxpayer's warehouse:
Cost P2,000,000
Accumulated depreciation 600,000
Residual value 200,000
Current fair market value 2,500,000
Remaining useful life 12 years
Compute the deductible depreciation expense.
Q3. The following relates to a taxpayer:
Interest expense P400,000
Interest income-time deposit 100,000
Compute the deductible interest expense.
Q4. The following relates to a taxpayer:
Interest expense P400,000
Interest income-promissory notes 100,000
Compute the deductible interest expense.
Q5. The taxpayer has the following losses:
Net operating loss carry over-last year P200,000
Net capital loss-current 80,000
Net capital loss-last year 70,000
Ordinary loss 50,000
Taxable income before losses 400,000
Compute the total deductible losses in the current year.
Q6. An individual income taxpayer reported the following:
Capital loss-current year P50,000
Capital gain-current year 200,000
Net capital loss-last year 70,000
Compute the total capital loss deductible against capital gain in the current year.
Q7. Supposed the income taxpayer in the preceding problem is a corporation, compute the deductible capital loss against capital gain.
8. Mr. B made contributions to the following in 2018:
Street beggars P50,000
Barrio fiestas 60,000
Various cancer patients 40,000
Takusa, an accredited non-profit organization 100,000
Compute the deductible contribution expense.
Q9. Friend Company declared a property dividend with book value of P1,000,000, fair value of P1,200,000. The total dividends withheld on the dividends were P60,000. Compute the total deductible expense.
Q10. A taxpayer with net sales of P2,000,000 and cost of sales of P1,800,000 incurred P15,000 for entertainment, amusement and recreation expenses (EAR). Compute the allowable deduction for EAR expenses.