The following are compensation for personal services paid or incurred by Faye

Corporation for the year ended December 31, 20A1:

1. Faye paid Mr. El Nido salaries of P6,000,000 during the year. He is a major stockholder of Faye and he is also its president. Presidents of corporations with similar business, similar size and volume of business as Faye receive an average salary of P4,500,000. The entire salaries were subjected to withholding tax on compensation.

2. Faye paid monthly salary of P10,000 to the son of Mr. El Nido for 12 months. His son was still studying and he did not render any service to Faye. The salaries were not subjected to withholding tax since the amount paid was equivalent to the minimum wade

3. On January 1, 20A1, Faye hired Mr. El Nido as its Vice President for Marketing. As agreed, his monthly salary was P400,000. He received 13 months salaries during the year. In addition, he was also entitled to a bonus equivalent to 5% of the company's profit. However, only 3% of the net profit was

paid during 20A1. No additional bonus will be paid. Faye's net profit during the year amounted to

P20,000,000. The salaries and bonuses were properly subjected to withholding tax.

1. Faye granted its employees free goods with fair market value of P4,000 per employee during the year as Christmas gifts. The total fair market value of goods granted amounted to P2,000,000. These were not subjected to withholding tax.

2. Faye granted its employees who were affected by typhoon free clothes with fair market value of P5,000 per employee. The total fair market value of clothes granted amount to P5,000,000. These were subjected to withholding tax.

3. Faye paid separation pay of P3,500,000 to certain redundant employees during the year. These were not subjected to withholding tax.

4. Faye paid back wages to certain employees who were terminated in 20A0 amounting to P4,000,000.

Although these pertain to services rendered by the employees in 20A0, the amount of back wages was only determined and fixed in 20A1. These were properly subjected to withholding tax.

REQUIRED:

1. Determine the total deductible expense for the year ended December 31, 20A1.