De La Salle University
Right or Wrong
1.Items of expenses allowable as deduction from business income in 1701 ITR are the same items of expenses that are allowable from business income in 1702 ITR.
2. General co. parnership is taxed the same manner as regular corporation.
3. General professional partnerhips that are generating income exclusively from exercise of common profession of paartners is exempt from income tax.
4. General professional partnerhips is liable to withhold expanded withholding tax on its payment of distributable share to the partners in the partnership.
5. In general, govt owned and controlled corporations are subject to Philippine income tax unless specifically exempted under the Tax Code.
Define inflation. Assume that you live in a simple economy in which only three goods are produced and traded: fish, fruit, and meat. Suppose that on January l, 2010, fish sold for $2.50 per pound, meat was $3.00 per pound, and fruit was $1.50 per pound. At the end of the year, you discover that the catch was low and that fish prices had increased to $5.00 per pound, but fruit prices stayed at $1.50 and meat prices had actually fallen to $2.00. Can you say what happened to the overall price level? How might you a measure of the change in the price level? What additional information might you need to construct your measure?
1. For calendar year January to December 2020, A duly accredited private educational institution with valid accrediation reported net taxable income in its 1702 amounting to P1,000,000. If its total assets is less than P100,000, 000, its income tax due in 1702 is
2. For calendar year January to December 2020, A private educational institution with no Valid accreditation reported net taxable income in its 1702 amounting to P1,000,000. If its total assets is less than P100,000, 000, its income tax due in 1702 is
3. For calendar year January to December 2020, A duly accredited private not for profit hospital reported net taxable income in its 1702 amounting to P1,000,000, P550,000 of which are from unrelated businesses. If its total assets is less than P100,000, 000, its income tax due in 1702 is
4. In the general professional partnership of X and Y, P1,500,000 net income from professional fee after itemized expenses was reported for 2020. Their profit sharing is 2/3 and 1/3 to X and Y respectively.
5. In the general professional partnership of X and Y, P1,500,000 net income from professional fee after itemized expenses was reported for 2020. Their profit sharing is 2/3 and 1/3 to X and Y respectively.
QUESTION 2 [15 Marks]
The market value of the assets of a corporation is currently $290.0 million but the owners wish to only use as collateral a value that will result in an interest rate of about 10%. The firm has on issue a debt outstanding that has a par value of $35.0 million and a due date of exactly five years. No intermediate interest payments are required. The risk-free (continuous) rate is 3.25% and the standard deviation of returns of the firm’s assets is 60%.
What is the value of the assets required by the debt holders to permit a fair interest rate of approximately10% (your answer should ensure that the fair interest rate is in the range of >9% and <11%)?
State any simplifying assumptions made in your calculations.
Under Section 79 of the Internal Revenue Code, if a 60-year-old employee is provided with $180,000 of group term insurance, what would be the employee’s annual taxable income on this insurance?
A. $1,425.60 B. $1,029.60 C. $85.80 D. $66.00 20.
Which of the following statements concerning benefit limitations imposed on group life insurance plans is correct?
A. Most states limit the amount of coverage that can be provided to an employee under an individual employer group. B. Some states limit the amount of coverage that can be provided to dependents. C. All states limit the amount of life insurance coverage that may be provided for dependents. D. All states limit the amount of group life insurance an employer can provide for an employee.
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Aphrodite Co has a year-end of 31 December and operates a factory which makes computer chips for mobile phones.
It purchased a machine on 1 July 20X3 for $80,000 which had a useful life of ten years and is depreciated on the
straight-line basis, time apportioned in the years of acquisition and disposal.
The machine was revalued to $81,000 on 1 July 20X4.
There was no change to its useful life at that date.
A fire at the factory on 1 October 20X6 damaged the machine leaving it with a lower operating capacity.
The accountant considers that Aphrodite Co will need to recognize an impairment loss in relation to this damage.
The accountant has ascertained the following information at 1 October 20X6:
(1) The carrying amount of the machine is $60,750.
(2) An equivalent new machine would cost $90,000.
(3) The machine could be sold in its current condition for a gross amount of $45,000. Dismantling costs would amount
(4) In its current condition, the machine could operate for three more years which gives it a value in use figure of
Calculate the total impairment loss associated with Aphrodite Co machine at 1 October 20x9
Although you are meant to present your thesis project in one month, your sister is getting married in Spain at the same time. You would like to change the dates of your presentation.
Write a letter to your professor. In your letter:
Explain the situation
Remind the professor of your academic achievements to date.
Ask for a different date to present your thesis.