PROBLEM 32

A resident citizen taxpayer is married, had gross profit from sales of goods of P500,000, business expenses of P400,000, and cost of goods sold of P300,000 in the year 2019.

a. Adopting the itemized deduction in the year, compute the taxable net income.

b. Adopting the Optional Standard Deduction, compute the taxable net income.

PROBLEM 33

The following data were taken from the records of a resident citizen, married but legally separated and a self-employed person in 2019:

Gross Sales of merchandise P975,000

Sales Returns, Allowances & Discounts 16,300

Cost of goods purchased and sold 412,725

Actual Value of Fringe Benefit to employees

(exempt from final and basic income tax) 60,000

Other Business Expense 262,950

Net Operating Loss in 2018 45,000

Interest expense paid on personal/non business debts P56,300

Rental Income received (only 60% of which is still as unearned) 62,500

Grossed up Monetary Value of Fringe Benefits to managerial

and supervisory employees (subject to final income tax) 125,000

Interest income on bank deposits in Phil. 27,500

Royalty income received from books written 123,650

Compute the following:

a. Gross Income subject to Basic Tax

b. Total Deductible Business Expense

c. Taxable Net Income

d. Income Tax Due