FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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1. John reports the following business transactions:
Gross sales - P850,000
Sales discounts - 25,000
Cost of sales - 250,000
Operating expenses - 190,000
Interest income on bank deposits- BPI - 10,000
John also earned a total compensation of P410.020, from a part-time
employment of which, P105,000 is excluded from taxation .
Compute the taxable income of John which is subject to regular income tax:
a. P680,000
b. P690,000
c. P705,000
d. P870,000
2. The negligence of AC, driver of a certain bus company, resulted in the death of JP's wife, physical injuries to JP that prevented him from working for a month, and the total wreck of JP's brand new car which he had bought for P400.000. In the action for damages filed by JP against the bus company, the court awarded the following:
• P30,000 for JP's injuries consisting mainly in the loss of his right hand;
• P45,000 for JP's loss of one month salary:
• P25,000 for the death of his wife:
• P100,000 moral damages on account of the death of JP's wife; and
• P800,000 for the loss of JP's car.
How much is excluded from gross income?
a Zero
b. P155,000
c. P555,000
d. P955,000
3. Z Corporation leased out its commercial space to C. Per agreement, C shall pay a monthly rental of P150,000 payable every 1st day of the month. Upon signing of the agreement, C shall deposit an equivalent of 3-month rental to Z to settle any unpaid obligations of the lessee upon termination of the lease. In addition, C shall also deposit an advance 2-month rental to be applied after the 1st month. The parties signed the agreement on May 1, 2021.
Compute the gross income of Z upon signing of the agreement:
a. P150,000
b. P450,000
c. P900,000
d. Answer not given
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