PLEASE USE THE PHILIPPINE TAX SYSTEM

For number 2 requirements

Compute the following:

Direct Cost of Services

Ordinary Deductions

ILLUSTRATION 1. Xerxes Department Store reported the following income and deductions during the period: Gross receipts (80% of revenue from commissions) P 4,000,000 Less Cost of services (90% paid and 10% accrued) 1.600.000 Gross income from operations P 2,500,000 Add Other income from operations - rentals (100% collected) 300.000 Total operating income P 2,800,000 Add: Non-operating income Gain on sale of machinery 300,000 Interest income on deposit, net 20,000 Dividend income from foreign corporation 30,000 Gain on sale of domestic stocks 60,090 Total gross income P 3,200,000 Less: Ordinary deductions (80% paid and 20% accrued) 1,500,000 Special deductions 300,000 NOLCO from prior years 200,000 Net amount P 1,200.000 Required: Compute the OSD assuming that The accounting method employed Is Xerxes la a proprietorship Xerxes Is a corporation Cash basis Accrual basis 2. Classify the following expenses of a review center business: a. Salaries of reviewers P 800,000 b. Administrative staff salaries 80.000 C. Marketing salaries and other expenses 150.000 d. Rent expense on review rooms 300,000 e. Rent on administrative offices 100,000 . Printing costs of reviewee handouts 100,000 g. Classroom & library electricity expense 30,000 h. Office utilities 40,000 i. Classroom supplies expense 5,000 J. Loss on sale of old chairs 15,000 K. Interest expense 50,000