Income taxation c4 exam qs and
as with definitive solutions 2025.
T/F. Both active income and passive income do not require direct participation of
the taxpayer in earning the income. - Answer F
T/F. There are three types of gross income for taxation purposes. - Answer T
T/F. The three tax schemes are mutually inclusive in coverage. - Answer F
T/F. Regular income tax generally covers active income and capital gains. - Answer
T
Lancelot is a dealer of household appliances. He reported the following in 2019
and 2020:
2019. 2020
Installment sales P500,000; P800,000
Cost of installment sales 250,000; 440,000
Collections. 300,000; 600,000
,Lance's 2020 collection is inclusive of P100,000 accounts from 2019.
Using the installment method, compute Lancelot's gross income subject to
income tax in 2020.
A. P360,000
B. P320,000
C. P250,000
D. P275,000 - Answer D
Lancelot is a dealer of household appliances. He reported the following in 2019
and 2020:
2019. 2020
Installment sales P500,000; P800,000
Cost of installment sales 250,000; 440,000
Collections. 300,000; 600,000
Lance's 2020 collection is inclusive of P100,000 accounts from 2019.
Using the accrual basis of accounting, compute Lancelot's gross income subject to
income tax in 2020.
,A. P360,000
B. P320,000
C. P275,000
D. P250,000 - Answer A
Merville is a dealer in real properties. Merville requires 20% downpayment, and
the balance is payable over 36 monthly installments starting on the last day of the
month following the month of sale. Merville sold properties in 2019 and 2020
with the terms as follows:
+ house and lot no. 1 was sold for P1,350,000 on November 11, 2019.
+ house and lot no. 2 was sold for P1,800,000 on July 5, 2020.
Both parties were sold at a gross profit rate of 40% based on the selling price.
Compute Merville's gross income subject to income tax in 2019 and 2020,
respectively.
A. P120,000; P720,000
B. P120,000; P864,000
C. P540,000; P864,000 - Answer B
, In 2020, Mr. Marangley, a dealer of car, disposed a brand new sports utility
vehicle (SUV) which costs P800,000 for P1,200,000, inclusive o under the
following terms:
July 1, 2020 - as down payment. P100,000
Monthly installment thereafter. 50,000
Mr. Marangley will choose whichever favourable permissible income reporting
method for him.
How much gross income is to e reported in 2020?
A. P400,000
B. P250,000
C. P116,667
D. P108,219 - Answer C
In 2020, Mr. Marangley, a dealer of car, disposed a brand new sports utility
vehicle (SUV) which costs P800,000 for P1,200,000, inclusive o under the
following terms:
as with definitive solutions 2025.
T/F. Both active income and passive income do not require direct participation of
the taxpayer in earning the income. - Answer F
T/F. There are three types of gross income for taxation purposes. - Answer T
T/F. The three tax schemes are mutually inclusive in coverage. - Answer F
T/F. Regular income tax generally covers active income and capital gains. - Answer
T
Lancelot is a dealer of household appliances. He reported the following in 2019
and 2020:
2019. 2020
Installment sales P500,000; P800,000
Cost of installment sales 250,000; 440,000
Collections. 300,000; 600,000
,Lance's 2020 collection is inclusive of P100,000 accounts from 2019.
Using the installment method, compute Lancelot's gross income subject to
income tax in 2020.
A. P360,000
B. P320,000
C. P250,000
D. P275,000 - Answer D
Lancelot is a dealer of household appliances. He reported the following in 2019
and 2020:
2019. 2020
Installment sales P500,000; P800,000
Cost of installment sales 250,000; 440,000
Collections. 300,000; 600,000
Lance's 2020 collection is inclusive of P100,000 accounts from 2019.
Using the accrual basis of accounting, compute Lancelot's gross income subject to
income tax in 2020.
,A. P360,000
B. P320,000
C. P275,000
D. P250,000 - Answer A
Merville is a dealer in real properties. Merville requires 20% downpayment, and
the balance is payable over 36 monthly installments starting on the last day of the
month following the month of sale. Merville sold properties in 2019 and 2020
with the terms as follows:
+ house and lot no. 1 was sold for P1,350,000 on November 11, 2019.
+ house and lot no. 2 was sold for P1,800,000 on July 5, 2020.
Both parties were sold at a gross profit rate of 40% based on the selling price.
Compute Merville's gross income subject to income tax in 2019 and 2020,
respectively.
A. P120,000; P720,000
B. P120,000; P864,000
C. P540,000; P864,000 - Answer B
, In 2020, Mr. Marangley, a dealer of car, disposed a brand new sports utility
vehicle (SUV) which costs P800,000 for P1,200,000, inclusive o under the
following terms:
July 1, 2020 - as down payment. P100,000
Monthly installment thereafter. 50,000
Mr. Marangley will choose whichever favourable permissible income reporting
method for him.
How much gross income is to e reported in 2020?
A. P400,000
B. P250,000
C. P116,667
D. P108,219 - Answer C
In 2020, Mr. Marangley, a dealer of car, disposed a brand new sports utility
vehicle (SUV) which costs P800,000 for P1,200,000, inclusive o under the
following terms:
