In preparing the Annual Income Tax Return of Nicanor, the following information were culled from his accounting records: Gross sales Php 1,500,000 Cost of sales Php 500,000 Gross Profit Php 1,000,000 Operating expenses: Depreciation Php 100,000 Rent Expense Php 100,000 Repairs and Maintenance Php 100,000 Salaries and wages Php 100,000 Utilities Expense Php 100,000 Other income: Cash Prizes Php 100,000 Dividends from ABC Corp. Php 100,000 Interest income from bank deposits Php 100,000 Rental income Php 1,000,000 In addition, you learned that Nicanor intends to sell a residential house and lot which he inherited from his father and 1,000 shares of stocks in a domestic corporation which were sold by her mother to him in the amount of Php 1 Million. He provided you the information the following: Real property classified as capital asset: Zonal value of lot Php 5 Million Assessors fair value of lot Php 4 Million Assessors fair value of house Php 5 Million Appraisers value Php 12 Million Fair market value at time of his fathers death Php 8 Million Shares of stocks not listed in stock exchange: Audited Financial Statements of the company disclosed the following: Balance Sheet: Asset - Php 5 Million Liability Php 3 Million Stockholders Equity Php 2 Million Income Statement: Revenue Php 2 Million Cost and Expense Php 1 Million Net Income Php 1 Million Additional information: Outstanding shares of stocks is 10,000 Compute the taxable income.

Group of answer choices

Php 1,600,000

Php 2,500,000

Php 1,800,000

Php 1,500,000