question archive Cure Pharmaceuticals is engaged in the business of selling drugs and medicines
Cure Pharmaceuticals is engaged in the business of selling drugs and medicines
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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.
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
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Answer
|
OUTPUT TAX BASE
|
Sale of Goods - Based on Net Sales Sale of Services - Based on Collection |
| OUTPUT TAX RATE | 12% |
| SALES TO SENIOR CITIZENS |
Exempt From Vat Subject to 20% Discount |
| Sales of medicines prescribed for diabetes, high cholesterol, and hypertension | Exempt From Vat |
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
Answer: P 2,088,000
|
Revenue Less: Sales to Senior Citizen (P400,000/20%) (Workedback Discount) Less: Sales of medicines prescribed for diabetes, high cholesterol, and hypertension Vatable Sales x Rate Output Tax |
P 20,000,000 (2,000,000) (600,000) P 17,400,000 X 12% P 2,088,000 |
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
Answer: P 600,000
BASIS: As stated in 8) Input tax credit from purchase of goods and services for the first quarter amounts to Php 600,000.
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
ANSWER: P 1,560,000
|
Revenues Cost of services Gross Income Less: Itemized Deuctions: - Operating expenses - Add: Remove entertainment, amusement, and recreational expenses amounting to Php 300,000. - Less: Threshold for entertainment, amusement, and recreational expenses (P20,000,000 X .005) Taxable Income X Rate Income Tax Due |
P 20,000,000 (12,000,000) P 8,000,000
(3,000,000) 300,000 (100,000) P 5,200,000 X 30% P 1,560,000 |
Note:
1.) Sales to Senior Citizen Discount is not Deductible Anymore, Since Sales is under Point 3) Sales are net of senior citizens discount amounting to Php 400,000.
2.) Included in the operating expenses are entertainment, amusement, and recreational expenses amounting to Php 300,000, The Limit is which .005 of Gross Sales or Revenue or P100,000
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
ASNWER: P1,440,000
|
Revenues Cost of services Gross Income Less: OSD (P8,000,000 X 40%) Taxable Income X Rate Income Tax Due |
P 20,000,000 (12,000,000) P 8,000,000 (3,200,000) P 4,800,000 X 30% P 1,440,000 |
