CHAPT-8 DEDUCT FROM GROSS INCOME

CHAPT-8 DEDUCT FROM GROSS INCOME - 51 INCOME TAXATION 5TH...

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SUGGESTED ANSWERS Chapter 8: Deductions from Gross Income CHAPTER 8 DEDUCTIONS FROM GROSS INCOME Problem  8  – 1  DEDUCTIBLE OR NONDEDUCTIBLE FROM GROSS  INCOME 1.  Deductible 11.  Nondeductible 2.  Nondeductible 12.  Deductible 3.  Nondeductible 13.  Deductible 4.  Deductible,  in lieu  of tax  credit  (Sec.  34C3,  NIRC) 14.  Deductible 5.  Deductible 15.  Nondeductible 6.  Nondeductible 16.  Nondeductible 7.  Nondeductible 17.  Nondeductible 8.  Deductible 18.  Deductible 9.  Deductible 19.  Deductible 10.  Nondeductible 20.  Deductible Problem  8  – 2   TRUE OR FALSE 1. True 2. True 3. False  – Business  expenses  related  to business  income  outside  the  Philippines  is   deductible  also. 4. False  – Business  expense  is deductible  from  gross  income. 5. True 6. True   7. True  – Once  OSD  is opted,  no  capital  loss  could  be  deducted  from  capital  gain. 8. False  – Some  business  expenses  are  nondeductible  or subject  to limit. 9. False  – Income  outside  the  Philippines  by a NRC is not  taxable  in  the  Philippines,  hence,   no  allowable  deduction  is allowed. 10. True 11. False  – Compensation  income  is not  subject  to OSD. 12. False  – NOLCO  is not  an  itemized  deduction. 13. True  – Amortized  over  the  term  of the  lease 14. False  – ½  of 1% 15. False  – 33% 16. False  – Double  –declining  method 17. True 18. True Problem  8  – 3   Problem  8  – 4   Problem  8  – 5 Problem  8  – 6   1.  B 1.  C 1.  A 1.  A 2.  No choice,  OSD=40% 2.  A 2.  A 2.  C 3.  D 3.  D 3.  C 3.  A 4.  D 4.  A 4.  C 4.  C 5.  D 5.  B 5.  A 5.  C 6.  C 6.  B 6.  D 6.  C 7.  B 7.  A 7.  C 7.  B 8.  D 8.  A 8.  A 8.  C 9.  B  9.  D 9.  B 9.  C 10.  C 10.  A 10.  C 10.  C 11.  C 11.  D 12.  D 12.  B 13.  C 51
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SUGGESTED ANSWERS Chapter 8: Deductions from Gross Income Problem  8  – 7   C Expensed   Capitalized   Change  of motor  of air  condition P60,000 Repainting  of building P10,000 Expansion  of store 50,000 Cleaning  of computers 9,000 Repair  of furniture     1,000               . P20,000 P110,000 Problem  8  – 8   A Salaries  net  of tax P100,000 Withholding  tax       5,000 Deductible  business  expense P105,000 Problem  8  – 9   A General  rule:  No personal  or business  expense  is deductible  from  compensation  income. Problem  8  – 10 D Depreciation  expense  (P1,000,000  x 40%)/25 P16,000 Loss  of business  equipment    38,000 Deductible  expense P54,000 Problem  8  – 11 D 1. A No personal  or business  expense  is deductible.
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This note was uploaded on 01/03/2012 for the course ACC 284 taught by Professor Sevton during the Spring '11 term at Abraham Baldwin Agricultural College.

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CHAPT-8 DEDUCT FROM GROSS INCOME - 51 INCOME TAXATION 5TH...

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