Reference no: EM133170307
Question - Cure Pharmaceuticals is engaged in the business of selling drugs and medicines. The following data were made available for the first quarter of 2019:
Revenues Php 20,000,000
Cost of services 12,000,000
Operating expenses 3,000,000
Receivables: December 31, 2018 400,000
Receivables: March 31, 2019 300,000
In addition, the following information was provided:
1) All sales for the first quarter were cash and credit card sales.
2) All sales made to senior citizens are cash sales.
3) Sales are net of senior citizens discount amounting to Php 400,000.
4) Receivables at the beginning and ending of first quarter are outstanding receivables from credit card companies.
5) The amounts of receivables are VAT inclusive.
6) Sales are inclusive of sales of medicines prescribed for diabetes, high cholesterol, and hypertension to non-senior citizens amounting to Php 600,000.
7) Included in the operating expenses are entertainment, amusement, and recreational expenses amounting to Php 300,000.
8) Input tax credit from purchase of goods and services for the first quarter amounts to Php 600,000.
Required -
1. How much is the output tax due for the first quarter of 2019?
a. Php 2,088,000
b. Php 2,136,000
c. Php 2,076,000
d. Php 2,160,000
2. How much is the deductible creditable input tax for the first quarter of 2019?
a. Php 600,000
b. Php 517,920
c. Php 522,000
d. Php 533,333
3. How much is the income tax due for the first quarter of 2019, assuming itemized deduction was used?
a. Php 1,529,850
b. Php 1,500,000
c. Php 1,559,400
d. Php 1,560,000
4. How much is the income tax due for the first quarter of 2019, assuming OSD was used?
a. Php 3,600,000
b. Php 1,422,000
c. Php 1,522,000
d. Php 1,512,000