CPAR’ CPA Review School of the Philippines FIRST PRE-BOA\ axatton) RD EXAMINATION Saturday, February 10, 2018 Instructions: Choose the BE: 8:00 AM to 10:00 AM e the BES the Special pees for each of the following items. Mark only one answer for each item on eet provided. Strictly no erasure allowed. 1. Interest ineome of a dom: , is subject to a 75% h . Bs ve aa withholding tax ¢. 20% final withholding tax inal withholding tax d. 30% income tax based on its net taxable income estic commercial bank derived from a peso Joan to a domestic corporation in 2017 swine ote following statements is wrong? le power of taxation maybe ext od nv ic Pa 1ybe exercised by the government, its political subdivistor . The money contributed as tax becomes part of the public funds c. The power of the State to tax is subject to constitutiénal limitations d. Generally, there is no limit on the amount of tax that maybe imposed ns and public 3. Ais the cost accountant of a domestic corporation. In 2017, he was promoted to chief accountant, Later, he fait market value of Php 700,000 and paid bought a new car worth Php1.5M and he traded his old car with the difference of Php 800,000 to the seller. His old car was donated by his father who bought the car 2 years ago at a price of Php 600,000, His father paid the corresponding donor's tax. Which of the following is incorrect? ‘a. The cost basis of the old car to A is Php 600,000 b. The old caris a capital asset c. The capital gain subject to income tax is Pap 100,000 - d. The father of A is not required to report the capital gain as part of his taxable income 4, A bought a parcel of land in Manila in 1980 at a price of Php 2M, In 2017, the land which remained dle had aaeeee tat value of Php 12M. B offered to buy the land for Php 12M. The Assessor of Manila had re accessed the property at Php10M in 2017. If sold the land to B subject to the condition as stated in the Deed ate that the buyer shall assure the capital gains tax thereon, which of the following statements is correct? a. The capital gain tax due on the transaction is computed at 6% of the selling price of Php 12M tL The cepital gains tax return should be fled within 30 days from the date ofthe sale and shall pay the tax due as he files the return cc. The capital gains tax due on the transaction i 4. Ais liable to pay real property tax on the land based on the re-assesse 's computed at 6% of the re-assessed value of Php 10M d value in 2017. 5. A final tax shall be imposed upon the cash and/or property dividends actually or constructively received by an individual from a. Domestic corporation b. Regional operating headquarters of multinational companies ¢. Share of an individual in the distributeble net income of a partnership 4. Insurance or mutual fund companies a. a,b,candd b.a,bandc c.abandd d.aandb 6. Which of the following statements is correct? . .d hospitals shall pay a tax of 10% on their taxable income if the a, Proprietary educational institutions anc gross income from unrelated trade, business or other activity is less than 50% ofits total gross income b. Govemment-owned or controlied corporations, agencies or instrurmentalities shall pay a tax upon their taxable income as are imposed upon corporations or associations engaged in a similar business, industry or activity ¢. Dividends received by a domestic cosporation from another corporation shall not be subject to tax d. Any income of non-residents, whether individuals or corporaiions, from transactions with depository banks under the expanded foreign currency deposit system shall be exempt from income tax7. Which of the following is not correct? a. Any excess of the minimum corporate income tax over the normal income tax shall be carried forward and credited against the normal income tax for the three (3) immediately succeeding taxable year. b. The Secretary of Finance is authorized to suspend the imposition of the minimum corporate income tax on corporations which suffers losses on account of prolonged labor dispute or because of force majeure, or because of legitimate business losses. ¢. A minimum corporate income tax of 2% of the gross income is imposed on taxable corporations beginning on the 4" taxable year immediately following the year in which such corporation was incorporated. 4. The Secretary of Finance is authorized to promulgate, upon recommendation of the CIR the necessary tules and regulations that shall define the terms and conditions under which he may suspend the imposition of the minimum corporate income tax in a meritorious case. 8. In 2016, a final withholding tax at the rate of 15% is imposed on the amount of cash and/or property dividends received by non-resident foreign corporation from a domestic corporation provided that the country in which the non-resident foreign corporation is domiciled, shall allow a credit against the tax due from the non-resident foreign corporation taxes deemed to have been paid in the Philippines equivalent to a 15% b.20% 6.17% 4.18% 9. There shall be a prima facie evidence of a purpose to avoid the tax upon its members or stockholders if the corporations is/are a. Publicly held corporations ¢. Insurance companies b. Holding or investment companies _d. Banks and other non-bank financial intermediaries 10. The following organizations shall not be taxed in respect to income received by them as such, except a. Non-stock and non-profit educational institution b. Government educational institution ©. Non-profit hospitals d. Cemetery company owned and operated exclusively for the benefit of its members 11. Statement 1 — All prizes and awards granted to athletes in local and international sports competitions and tournaments whether held in the Philippines or abroad and sanctioned by their national sports associations are exclusions from gross ineome. : tatement 2 ~ Income derived by the government from the exercise of any essential governmental function accruing to the Government of the Philippines orto any political subdivisions thereof are exclusion from gross income. a. Both statements are correct c. Only Stotement 1 is correct b. Both statements are not correct’ —_d, Cnly Statement Z is correct 12. A resident alien received a prize of P40,000 from SM Department Store. Which of the following statements 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 P30,0Q0 is subject to 20% final tax b. The whole amount is part of taxable income ¢. The whole amount of P40,000 shall be subject to 20% final tax 4. The first P10,000 shall be exempt from tax, the remaining P30,000 is subject to 20% final tax 13. A domestic proprietary educational institution improved its library facilities by adding a new wing to its old library building. The capital outlay on library improvement, for income tex purposes, may be ‘a. Deducied in full at the time of completion of the improvement b. Capitalized or expensed outright at the option of the schoo! owner ¢. Capitalized and depreciated over the estimated lite of the improvement 4. Capitalized or expensed outright at the opticn of the government ident alien subject to the basic tax (schedular)? ¢, Interest income from Philippine lotto winnings 4. Share in the net income of ordinary partnership 14. Which of the following items is an income of a res ‘a. Dividend received from a domestic corporation b. Prizes from USA lotto ubject 10 [ne basic tax (sohedular) ; Ye employees. Compensation for personal injuries or sickness 4, Proceeds of life insurance 15. This income is part of taxable income s ‘a. Fringe benefits given to rank and fi ». b. Fringe benefits given to managerial employees ;y,. Acting on the informati market value of Pagng. on iver by a, PAM pe ial witless Seized and confiscated. smuggled goods with a fait “PREM —e.P800,000° P100,00 ee ,000 1 Morjetary " Y value is subject to fringe benefits tax | Th tax Is imposed on the 1 abl Par ofthe asak non income of the employees | ‘mployer and withheld at source | | 18. A general professional ear eal Partnership and its partners are subj : is i ts partners are subject to the following miles, exce; The eenftal professional partnership is not subject to incom aa ea partners shall oa anes be liable for income tax only in theit separate or individual capacities Partner shall rey port as ‘ome hi d. The share of the panner Satu Gee ae ‘his distributive share in the partnership net income 1 subject to a creditable withholding tax of 10% A cash dividend o " : Philos ete ae eae ‘a taxpayer in 2016 from a foreign corporation whose income from ‘a ‘ome is Statement ~ Partly taxable if he is a resident citizen ‘Statement 2 Partly taxable i he is a non-resident alien 2 Beta ‘statements are true ¢. Only Statement 1 is true . Both statements are false d. Only Statement 2 is true 20. Using the aboye data, which of the following is correct? The cash dividend is a. Exempt from income tax if he is a resident citizen b. Partly takable if he is a resident alien c. Taxable jin full if he isa non-resident citizen 4. Exempt from income tax if he is @ non-resident alien i 21. The following, except one are the basic principles of a sound tax system. The exception is i ‘a. Itshould be capable of being effectively enforced \ b. It should consider the taxpayers’ ability to pay : c. Itis leviéd by the tawmaking body of the state ‘ d._ The sources of revenue must be sufficient to meet government expenditures and other public needs 22. The power to fax is not without limitations. Such limitations may be constitutional (expressly found in the | constitution of implied in its provisions) or inherent (restrict the power although they are not embodied in. * the constitution). Which of the following is an inherent limitation? ‘No imprisonment for non-payment of a poll tax. Equal protection of the laws. | Exemption from taxation of government entities. Exemption of religious, charitable, nd educational entities, non-profit cemeteries, and churches from property taxation. ao ge 23. This income is subject to basic tax 2. Compensation for personal injuries or sickness b. Salaries or emoluments received during a leave of absence c. Winnings from PCSO and Philippine lotto 4. Fringe benefits given to managerial employees 24, Bank A deposited money with Bank B which earns interest that is subjected to the 20% final withholding tax. Bank A cepttime, Bank A is subjected to the 5% gross receipts tax on its interest income on loan transactions. Which statement below incorrectly describes the transactions? a. There ig double taxation because two taxes ~ income tox ‘and gross receipts tax are imposed on the merest Incomes deseribed above, and double taxation is prohibited under the 1987 Constitution b. There isino double taxation because the first is income tax while the second is business 0% 2 erere eine double taxation because the income tax is on the interest income of Bank A on deposits with Bank B (passive income) while the gross receipts tax is on the interest income received by Bank A from loans to its debtor ~ customers (active income) 4. Income tax on interest income of deposits of Bank A is a direct loan transaction is an indirect tax. tax while GRT on interest income on ! 325. Which of the following statements is not cortect? a. Incase of doubs, statutes levying taxes are construed strictly against the government her b. The construction of a statute made by his predecessor is not binding upon the successor, if thereafter he becomes satisfied that a different construction should be given | ; 1 will be & The reversal of a ruling shall not generally be given retroactive application, if said reversal will yrejudicial to the taxpayer { an 7 4. a memorandum Girealer promulgated by the CIR that imposes penalty for violations of certain rulgs need not be published in a newspaper of general circulation or official gazette because it has the fo and effect of law. 1 \ 26, Which statement below expresses the lifeblood theory? | i a, The assessed taxes must be enforced by the government | ml b. ‘The underlying basis of taxation is government necessity, for without taxation, a government can neither ‘exists nor endure i Taxation is an arbitrary method of exaction by those who are in the seat of power a: d. The power of taxation is an inherent power of the sovercign to impose burdens upon subjects and objects “within its jurisdiction for the purpose of raising revenues” H 27. Which statement is wrong? a. The power of taxation maybe exercised by the government, its political subdivisions and public utilities b. Generally, there is no limit on the amount of tax that may be imposed. The money contributed as tax becomes part of the public fund i 4. The power of tax is subject to certain constitutional limitations. ' 28. Interest income of a domestic commercial bank derived ftom a peso loan to a domestic corporation in aol 0 is subject to | a. The 30% income tax based on its net taxable income b. The 20% final withholding tax ¢. The 7.5% final withholding tax 4. 10% final withtiolding tax Php IM therefrom. The gain is a, Taxable at 30% regular corporate income tax based on net taxable income b. Taxable at 5% / 10% capital gains tax based on net capital gain ©. Taxable at 4 of 1% stock transaction tax based on the gross selling price or fair market value, Whichever is higher ' i d. Exempt from income tax 29. A dealer in securities sold unlisted shares of stocks of a domestic corporation in 2017 and derived a gain i" 30. An individual, who is a real estate dealer, sold a residential lot in Quezon City ata gain of Php 100,000 (selling price of Php 900,000 and cost of Php 800,000), The sale is subject to income tax as follows a, 6% capital gains tex on the gain b. 6% capital gain tax on the gross selling price or fair market value, whichever is higher ©. Ordinary income tax at the graduated rates of 5% to 32% of net taxable income d, 30% income tax on net taxable income : 31. During the audit conducted by the BIR official, it was found that the rental income claimed by the corporation was not subjected to expanded withholding tax. Accordingly, the claimed rental expense a. Is deductible from the gross income of the corporation, despite non-withholding of income tax by the corporation Is deductible from the gross incotne of the corporation, provided that the 5% expanded withholding tax is paid by the corporation during the audit ¢. Is not deductible from the gross income of the corporation due to non-withholding of tax d. Is dedyctible, if it can be shown that the lessor has correctly reported the rental income in his tax retum b. 32. A resident Filipino citizen (not a dealer in securities) sold shares of stock of a domestic corporation that are listed and traded in the Philippine Stock Exchange a. The sale is exempt from income tax but subject to the “4 of 1% stock transaction tax ‘b. The sale is subject to income tax computed at the graduated income tax rates of 5% to 32% on net taxable income i c. The sale is subject to the stock transaction tax and income tax NX 4. The sale is both exempt from the stock transaction tax and income tax 4 | | | | |33. The interest expense of a domesti equip ‘Omestic corporation on a bank Joan in connection with the purchase ofa production at fe a aa a ea Bross income of the borrower ~ corporation in il wn the gross income of the borrower ~ corporation during the year or it may be capitalized g, RBSTof cost ofthe equipment : * pene only for a period of five years from date of purchase ctible only of the taxpayer uses the cash method of accounting 34. Which i / ee 1s correct? A non-stock, non-profit charitable association that sells its idle agricultural a Not required to file an income tax return, nor pay income tax on the transaction to the BIR, provided the by, Ribs proceeds are invested in another real estate during the year Required to pay the 6% capital gain tax on the gross selling price or fair market value, whichever is igher a Mandated to pay the 30% regular corporate income tax on the gain from sale Requined to withhold the applicable expanded withholding tax rate on the transaction and remit the same to the BIR, 35. Although the power of taxation is basically legislative in character itis not the function of Congress to a. Fix with certainty the amount of taxes. Identify who should collect the tax b. Collect the tax levied under the law d. Determine who should be subject to the tax 36. What is the rule on the taxability of income that a government educational institution derives from its school related operations? Such income is a. Subject to 10% tax on its net taxable income as if it is a proprietary educational institution b. Exempt front income taxation if it is actually, directly and exclusively used for educational purposes ¢. Subject to the ordinary income tax rates with respect to income derived from educational activities d. Exempt from income taxation in the same manner as government owned and controlled corporations 37. ABC Corporation wes dissolved and liquidating dividends ‘ere declared and paid to the stockholders. What tax consequence follows? : ABC Corporation should deduct a final tex of 105 from the dividends a b. The stockholders should deciare their gain from their investment and pay income tax at the ordinary rates ©. The dividends are exempt from tax d. ABC Corporation should withhold a 10% creditable withholding tax 38. MGC Corporation secured an income tax holiday for 5 years as a pioneer industry. On the fourth year of the tax holiday, MGC Corporation declared and paid cash dividends to its stockholders, all of whom are individuals. Are the dividends taxable? a. The dividends are taxable; the tax exemption of MGC Corporation does not extend to its stockholders b. The dividends are tax exempt because of MGC Corporation’s income tex holiday c. The dividends are taxable if they exceed 50% of MGC Corporation’s retained eamings d. The dividends are exempt if paid before the end of MGC corporation fiscal year. 39, Mr. Alas sells shoes in Makati through a retail store. He pays the VAT on his gross sales to the BIR and the ‘municipal license ta. based on the same gross saies to the City of Makati, He comes to you for advice because he thinks he is being subjected to double taxation. What advice will you give? Yes, there is double taxation and it is oppressive ‘The City of Makati does not have this power ‘Yes, there is double taxation and shis is illegal in the Philippines Double taxation is ellowed where one tax is Imposed by the national government and the other by the local governseent poor40. Congress passed a sin tax law that increased the tax rates on cigarettes by 1,000%. The law was thought to be sufficient to drive many cigarette companies out of business and was questioned in court by a cigarette company that would go out of business because it would not be able to pay the increased tax. The cigarette company is Wrong because taxes are lifeblood of the government ‘Wrong because the law recognized that the power to tax is the power to destroy Correct because no government can deprive a person of his livelihood Correct because Congress, in this case, exceeded its power to tax aeoe 41. In 2010, Mr. Platon sent his sister Helen $1,000 via a telegraphic transfer through the Bank of PL. The bank's remittance clerk made a mistake and credited Helen with $1,000,000 which she promptly withdrew. The bank demanded the return of the mistakenly credited excess, but Helen refused. The BIR entered the picture and investigated Helen. Would the BIR be correct if it determines that Helen earned taxable income under these facts? a. No, she had no income because she has no right to the mistakenly credited funds. b. Yes, income is income regardless of the source ¢. No, it was not her fault that the funds in excess of $1,000 were credited to her d. No, the funds in excess of $1,000 were in effect donated to her. 42. The municipality of San Isidro passed an ordinance imposing a tax on installation managers. At the time, there ‘was only one installation manager in the municipality, thus, only he would be liable for the tax. Is the law constitutional? a. It is unconstitutional because it clearly discriminates against this person b. Itis unconstitutional for lack of legal basis €. Itis constitutional as it applies to all persons in that class . It is constitutional because the power to tax is the power to destroy. 43, Aleta sued Boboy for breach of promise to marry. Boboy lost the case and duly paid the court's award that included, among others, Php 100,000 as moral damages for the mental anguish Aleta suffered. Did Aleta earn a taxable income? a, She had a taxable income of Php 100,000 since income is income from whatever source b. She had no taxable income because it was a donation ©. She had taxable income since she made a profit 4d. She had no taxable income since moral damages are compensatory 44, PRT Corporation purchased a residential house and lot with a swimming pool in an upscale subdivision and required the company president to stay there without paying rent, it reasoned out that the company president must maintain a certain image and be able to entertain guests at the house to promote the company’s business. The company president declared that because they are childless, he and his wife could very well live in a smaller house. Was there a taxable fringe benefit? a. There was no taxable fringe benefit since it was for the convenience of the employer and was necessary for its business. b. There was a taxable fringe benefit since the stay at che house was for free c. There was a taxable fringe benefit because the house was very luxurious d, There was no taxable fringe benefit because the company president was only required to stay there and did not demand free housing 45, Mr. A was preparing his income tax return and had sore doubt on whether a commission he earned should be declared for the current year or for the succeeding year. He sought the opinion of his lawyer. who advised hhim to report the commission in the succeeding year. He heeded his lawyer's advice and’reported the commission in the succeeding year. The lawyer's advice turned out to be wrong. In Mr. A's petition against the BIR assessment, the court ruled against Mr. 8. I Mr. A guilty of fraud? ‘. Mr. A is not guilty of fraud as he simply followed the advice of his lawyer BL Mr A is guilty of fraud; he deliberately dig not report the coremission in the current year when he should have done so cc. Mr. A’s lawyer should pa d. Mr. Ais guilty for failing to const! ce. y the tax for giving the wrong adv It his accountant »46. In which of the following in; = en it-involves a pair s does not evens Ta aes sale of shares of stock, not traded in the stock exchange and the gain b. When it inv When the si When a rez Olves a gain from, "om sale of shares of stock, traded in the invohesaseisnecte . traded in the stock exchange a and the selling price is higher than its fair market value al E Property is sold to the government ot any of its political subdivision ae g are elements of impact of taxation? Tee Ee Imposition IN. Assessment IV. Collection b.L Mand tit ©. Ml and 1V 1, U, I and IV 48. wate of the aspects of taxation is (ate) administrative in nature? pen IL. Assessment NL Cotection @ Tonly b. Land IL ¢. Wand I 4.1 only 49. Which of the following statements is correct? & The power of taxation must fits be expressly granted, either by law orby the constitution forthe State to validly exercise it b. The power of taxation and police power may be exercised simultaneously © The Philippine govemment may subject the lane where embassies of foreign governments are located to real estate taxes Government owned and controlled corporations are exempted from texes because it would be impractical for the government to be taxing itself 2. A Filipino who stayed in USA for mote than 180 days is a non-resident citizen b. An American who stayed in the Philippines for more than 180 days is a resident alien who is engaged in business in the Philippines ©. A Filipino who stayed in the Philippines for moré than 180 days is a resident citizen 4. An American who stayed in the Philippines for an aggregate'period of 183 days during the calendar year is a non-resident alien engaged in business in the Philippines 50, Which of the following is correct? 51. A sold his residential land, a capital asset for P2,000,000. It was acquired in 1990 at a cost of P1,5000,000. The fair market value as determined by the BIR is P2,200,000 but the fair market value shown in the schedule of values of City Assessor 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 ¢. PI17,000 PO 52. Using the above data, but only P1.600.000 was utilized for the acquisition of A’s principal residence, the final tax due is a, P24,000 b. P26,400 ¢, P120,c00 4. P132,000 53. In 2009, A Enterprises paid for the ennual rental ofa residential house used by its general manager amounting to P340,000. The fringe benefit tax is a. P160,000 6, P145,714 ©. P8G,000 4. P72,857 $4. A, a stockholder of ABC Corporation, is indebted to ABC Corporation amounting to P25,000, At the end of the taxable year, he received a notice that the corporation cancelled his indebtedness. As a result a. A received a gift, and therefore the P25,000 is exempt from income tax b. A received P25,000 as income and therefore pact of his taxable income + ¢. Ais exempt from income tax but the corporation should pay donor's tax 4. A received P25,000 as dividend and therefore subject to final tax 55. Which of the following statements is not correct? a. The government automaticaliy possesses the power to collect taxes from its inhabitants b.The government can enfcrce contribvition upon its citizens oniy when the Constitution grants it ¢.Taxation power exist inseparably wiih the Srate The State has the supreme power to com.rend and enforce contribution from the people within its jutisdiction56. In a loan agreement between BSP (as borrower) and private intemational banks (as lenders), it is stipulated that all payments of interest by the BSP to the lenders shall be made free and clear from all Philippine taxes which maybe imposed thereon. Is the stipulation valid? a. Yes, based on international comity b.Yes, based on the doctrine of non-taxability of the government €.No, violative of the inherent limitations No, violative of the constitutional limitations 57. Losses from wash sales of stock or securities shall not be deductible except a.The taxpayer is a dealer of securities or stock and made in the course of business of such dealer b.The shares of stock sold and then reacquired or repurchased are identical stock or securities €.The shares of stock sold and then reacquired within a period beginning thirty days before the date of such sale or disposition 4-The shares of stock sold and then reacquired within a period ending thirty days after such sale or disposition 58. Taxation is an inherent power because | a.ltis the lifeblood of the government bit is about the protection and benefit theory c.lt co-exist with the existence of the state dilt is exercised for the general welfare of the people 59. A tax is invalid in all of the following, except a. Theory of taxation and its purpose are disregarded b.Basis of taxation is not recognized c.Inherent and constitutional limitations are not observed dit results to double taxation 60. Which of the following statements constitute tax avoidance? a.Deliberate failure of a taxpayer to pay the taxes due to tlte government b.Connotes fraud through the use of pretenses and forbidden devices to lessen or defeat taxes ¢.Punishable by law d.Maybe contrary to the intent of the legislature but nevertheless do not violate the law 61. In our jurisdiction, which of the following statements maybe erroneous? a. Taxes are pecuniary in nature b. Taxes are enforced charges and contributions ¢. Taxes are imposed on persons and property within the territorial jurisdiction of a State d. Taxes are levied and collected by the legistatve branch of the government 62. The principle which requires that taxation laws and its and free from several interpretations is jiementing rules and regulations should be clear a. Fiscal adequacy ©. Ability to pay b. Theoretical justice 4. Adrainisizative feasibility 63. The point on which a tax burden finally rests or settles down is a, Nature of taxation . Impact of taxation b. Theory of taxation 4, Incidence of taxation 64. Which is not a desired construction of tax laws a. Tax laws are civil in nature, not political 4 Js are special laws and prevail over geaeral laws ‘ ee of doubt it is construed most strongly against the Government and liberally in favor of the ¢. In 5 taxpayer 4. Tax laws are prospective, not retrospective because taxes are burdens bae to the extent of the a Policies taken out by the di a. Part of the gross income if the bene p, Mmdths designation is revocable » Part of gross income if the benefi Tegardless of whether the designati 65, Proceeds of life i administrator Under mount receivable by the estate of the deceased, his executor ¢ ecedent upon his ownllife shall be 7 ficiary designated is the estate, the executor or the administrat iciary designated is the dle the executor or the administrate ©. Not pat of prot ion is revocable or irrevocable i a aa Bross income if the beneficiary is not the estate, the executorjor the administrator Ot Part of gross income whether thelbeneficiary is the estate, the execulbr or administrator or a thir Person regardless of whether the designation is revocable or irrevocable | 66. The tax exem; o . | i : ‘xemption of properties used by diplomats or heads of states in the exercise of sovereign powers ani diplomatic functions is a. Inherent limitation ' . Legal limitation b. Constitutional limitation d, Territorial jurisdiction ' 67. A exchanged a parcel of land with a FMV of P200,000, with B Corporation for P50,000 cash and 1,500 Common shares of the corporation with a fair market value of P100/share. The land had a cost of P140,000, After the exchange, A owns 51% of the total voting power of B Corporation's issued and outstanding shares, How much taxable gain should A recognize on this transaction? : | a. PS0,000! b. P40,000 ¢. P60,000 4. PO | 68. One of the following may not be deducted from gross compensation income of a resident citizen a. SSS premium contributions ¢. Health and/or hospitalization insurance premiums . Pag-ibig premiums contributions _d. Basic personal exemption i 69. The inherent power of the sovereign state to legislate for the protection of the health, welfare and morals ° the community is \ | a. Power of eminent domain ©. Police power ' : b. Power bf taxation d. People Power ' 70. D Co. took twp life insurance policies on the life of its Executive Vice-President, Mrs. E. In one policy, th Pp policy, beneficiary is {he corporation and the other, designates Mr. F, the EVP’s husband, as revocable beneficiary The insurance premiums paid by D Co. is ! a. Deductible, only in so far as the first policy is concerned b. Deductible for both policies c. Not deductible for both policies 4. Deductible in so far as the second policy is concerned ‘The End!2.6 BA 15.0 2A 9A 168 3¢ 100 7.8 4¢ MA inc 58 ic 19.8 68 130 2A 76 8 WA MANAGEMENT SERVICES. 2D 8D 5.c 2¢ 98 IA 30 102A 17.0 40 Cc BB 5c mc 196 6C 18D 20.8 72C 10 2A TAXATION 10 BA 1A 2A 98 16.0 3c 060C | 7.0 48 ILA 180 5c 12C 19.0 6D 138 20.8 a REGULATORY FRAMEWORK FOR rr 28 9A 168 3.8 1A 17. 4B 11B (188 5c 120. 19.4 68 BC 2.C 7A 188 QA CPAR FIRST PREBOARD FINANCIAL ACCOUNTING AND REPORT LA ke OC 28 98 68 3D 100 «A 4C¢ 1c | 18.0 SC BC 19. 68 13¢ 2A nC We dB AUDITING THEORY pao) BD 15. 20 2A 168 ac 108 wc 4c mA a8e SA RA 19.0 BA 33.¢ 20 70 m0 UC ADVANCED FINANCIAL ACCOUNTING AND REPORTING 22, dD wc 6. 23.8 30.A 37, 24.0 | ALA 8, 2.0 aC 39. 2A 33,0, WA 3c AL 2A 3A a2, RA C36 2c © 30.C 37. 26 3B. 3.8 320 39. 2D 3A a0, 27.8 BAC aL, C350 a2, Re 20 36 22.0 © 30.0 37, 2A BLA 38, 2.8 328 39. 2%C 33. C0. 27.8 BAA aL 280 38.0 a2 2A 2D 36 2c | 30.C 37. 24.C 0 ALB 8B, 2.€ 9 32C 8, 2B 33.8 40. 2A 3D 28.0 35,8 A. 22.C = 29.A + 36, 23.8 30C 37, 2A BL 38. 25.0 32 A 39. 26.8. 33.8 40, 2A 3B AL, 2A 35,8 a2. BUSINESS TRANSACTION 22.8 «= 2.C 3% 23.8 30.C 37, 24.8 3B 8. C9 32D 88. %.C 06 BA 40. 27.0 MD At 2A 35.8 42 preone pearorad no@ean ponrere ° oe ooree ° orone@oo 43.8 4a 45,0 46.8 a7.c 48. 49.¢ Besaaes ponang> 43.0 48. A 45, A 46.0 47.8 48.C 49. B 50. A SLA 52. 53.8 54. 0 5s. C 56. ¢ 50, A 51.0 52.8 53.8 54. D 55.8 56.0 50. A. si 8 52. ¢ 53.0 54.0 55.¢ 56. C 50.0 51.c 52.€ 53. ¢ 54.8 55. ¢ 56. ¢ 50. 0 SLB 52.0 53.¢ 54.0 55. B 56. 0 SLA 52.€ 593. 54. A 55. MAY2018 57D 6B SBA 65. 59.A 66.C 60.C | 67. 61.8 | 68D BA 69.8 63.0 70.8 57.0 OC SBA 65.8 59.4 66.0 60.8 67.6 61.8 68. 20 OA 63.0 70.0 57.8 GAA SRA 65.8 59.C 6A 60.C 67.8 SLA BA 2B 62. B.C 70.8 57.8 64C SBA 65.C 59.D 66.0 60.8 67.0 sc | 8. 2D A 68 OA S.A 64.0 58C | -65.D 59.D 66. A. 60.0 67a 6d | 68c 20 6c 6.0 700 57.8 4B 58.C 65.6 59.8 66.0 6O.A 67M 61.8 68.0 62.C 69.8 70. D