PROBLEM 2

The following are the items in the income statement of Domestic Corporation for the year 2019:

Sales - P1,000,000

Cost of sales - P500,000

Interest income from bank deposit, Philippines - P40,000

Yield from deposit substitute, Philippines - P80,000

Interest income received from depository bank under EFCDS, Philippines - P60,000

Interest income from bank deposit, USA - P400,000

Interest on trade notes receivable, Philippines - P30,000

Royalties, Philippines - P70,000

Royalties, USA - P300,000

Cash dividend received from domestic corporation - P150,000

Prize and winnings, Philippines - P400,000

Required:

1. How much was total exempted/excluded from gross income?

2. How much was the total gross income to be subjected to corporate income tax?