Solve the problem below and prepare the income tax return using BIR Form No. 1701.

The following information relate to Mr. Jev. Lim Teh for 2018 taxable year: 1. Name of taxpayer Jevi Lim Teh Address 40 San Juan, Poblacion 10, Tagum City. TIN 132-222-459 Telephone Number 644-2340 Date of birth December 14, 1971 2. Name of spouse Jella Sy Teh Occupation Housewife Address 40 Juan Luna Street, Poblacion 10, Tagum City TIN 321-445-896 Telephone Number 644-2340 Date of birth June 7, 1970 3. Compensation income of the Taxpayer Employer Jevilla Food Corporation TIN 775-231-564 Annual salary P350,000 (net of SSS, Medicare, Pag-IBIG and withholding tax) 13^th month pay P30,000 Withholding tax P18,000 4. Income of the taxpayer from business: Trade Name Tagum City Hardware TIN 330-898-767 Method of accounting Accrual system Method of deduction Itemized Data on business operation:

Sales

P3,220,000

Sales discounts and returns

20,000

Merchandise inventory, January 1

650,000

Purchases

3,450,000

Purchases returns and discounts

100,000

Merchandise inventory, December 31

1,500,000

Salaries and wages

420,000

Light and water

18,000

Depreciation

12,000

Taxes and licenses

15,000

Gasoline and oil

14,000

Maintenance of motor vehicle

8,000

Supplies

7,000

Advertising

6,000