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FINAL PRE-BOARD EXAMINATION Sunday, April 19, 2015 Business Law and
Taxation 04:00PM to 06:00PM
Choose the BEST answer for each of the following items. Mark only one answer
for each item on the Special
Answer Sheet provided, Strictly no erasure allowed.
1. Dividends on shares of stocks can only be declared out of unrestricted
retained earnings of the corporation.
Answer 1 - True, dividends whether cash or stock can be validly declared only
out of unrestricted retained earnings. Answer 2 - False, during the receivership,
the assets and properties of the corporation are being gathered for conversion
into cash in preparation for distribution to creditors
a. Both answers are correct c. Only answer 1 is correct b. Both answers are not
correct d. Only answer 2 is correct
For Nos. 2 - 11. A, through insidious words and machinations made B to sign a
promissory note which reads "I promise to pay A or order P10,000. Sgd B. Then
A negotiated the note to C by qualified indorsement and C to D by blank
indorsement then D to E by delivery, then E to Falso by delivery then F to G by
special indorsement, then G to H by qualified indorsement, then H to I by
facultative indorsement where H waived the notice of dishonor, then I to J by
conditional indorsement, then J to k by restrictive indorsement.
... If the promissory note is in the hands of A, which of the following is correct?
The promissory note is not valid, but A can collect from B because it is
negotiable The promissory note is negotiable and valid hence A can collect from
B The promissory note is negotiable but not valid hence A cannot collect from B
The promissory note is valid and negotiable but A cannot collect from B
2
- F, G and Hare not liable to I if I knows that the note was previously dishonored
If I is a holder in due course, all indorsers are liable to him I can collect from E
and E can collect from H If I presents the note for payment and A again
dishonors, I should notify all the indorsers to make them liable to him
Using the preceding number, but I negotiates the note to G by special indorsement,
which of the following is
not correct? - -
, a. The negotiation to G is not allowed because G is an intervening party
b. G can collect from E but not from H if A will not pay c. G can collect from F but not from I if A
will not pay d. G can collect from A even if G is not a holder in due course
d. Upon fulfillment of the condition, I becomes a holder and I can demand payment from
A if I is a
holder in due course
34. May a stock certificate be issued before full payment? Statement 1- No, in
case of stock with par value Statement 2-Yes, in case of stock without par value
a. True, true b. True, false c. False, true d. False, false
35. Which of the following corporate acts will not require the approval of the
stockholders or of the members
of the private corporation?
a. To amend the by-laws b. To increase the capital stock c. To invest corporate funds in
another corporation or business d. To elect the officers of the corporation
36. Delectus personae is an element of a partnership which means
a. Right to choose his partners c. Obligation to remain loyal to his partners b. Confidence
and trust in his partners d. Distribution of profits among the partners
37. When a real property is contributed to the partnership
a. A real contract is perfected b. A written instrument is required c. A public instrument
complete with inventory is required d. A partner can make important alteration if
beneficial to the partnership
38. A, B, C and D are general partners contributing P20,000, P30,000,
P50,000 and industry respectively. At
the time of liquidation, the partnership is indebted to Y for P50,000, to partner A
for P30,000 and to partner
B for P20,000. If the assets of the partnership amount only to P20,000, which of
the following is correct?
a. Y can collect P20,000 from the partnership and from partners A, B and C at
P10,000 each b. After exhausting the assets of the partnership amounting to
P20,000, Y can collect from partners A, B, : C and D at P7,500 each c. Y can
collect P20,000 from the partnership and P30,000 from either partners A or B or
C or D d. If Y succeeds in collecting the P30,000 from the separate properties of
the partners concerned,
partners A, B and C will be required to make additional contribution
39. A is the listed owner of 10,000 shares with par value of P100/share in ABC
Corporation. ABC sued A for
the payment of A's indebtedness of P1M. A contends that such debt must be compensated by his
shares of stocks with the plaintiff corporation. The contention of A is
a. Valid due to legal compensation b. Valid by virtue of judicial compensation c.
Untéñá5te since he is not a creditor of the corporation d. Automatically extinguished if
the fair market value of the shares is P1M
40. In the partnership of A, B, C and D, D was designated as the managing
partner. D's able management
41.
42.
43.
prevented the firm to suffer from the economic turbulence caused by the
instability of the Philippine peso.
Partners A, B and C became jealous of D's good name. As a result, D was
capriciously and whimsically
removed as manager without a valid cause. Is the removal valid?
a. Yes, D's removal is valid even without his consent b. Yes, provided it is approved by
all the other partners c. No, D's appointment is irrevocable without a just or lawful cause
d. No, D can only be removed for a valid cause with vote of the partners owning the
controlling interest
The importation of the following is exempt from VAT, except
a grapes, apples and oranges c. race horse, fighting cocks and Zoo
animals b. poultry and livestock drice, corn and coffee beans
The importation of the following is subject to WAT, except
a vegetables, cows and shrimps c. . shells, corals and tobacco b. logs, woods
and abaca d. cotton, orchids and bamboos
ABC Transport Corporation has land, sea and air transport operations. To
improve its services, which of the following importation is subject to vat?
a. 20 units of airconditioned buses - b. 12 units of life-saving, safety and
rescue equipment for shipping transport operation c. 10 airplanes d. 5
ships
A, a vat taxpayer made a Php 100,000 sales to the government invoiced at Php
112,000 inclusive of output
vat. A purchased the same for Php 90,000, net of Php 10,800 input vat. The
government effected payment, net of the 5% final vat. The entry to record the sale to the
government is
a. Cash Php 107,000 Standard Input Tax 5,000
Sales Php 100,000 Output Tax 12,000
b. Cash Php 100,000 Standard Input Tax 5,000 Output Tax 7,000
Sales Php 100,000 Output Tax 12,000
c. Cash Php 100,000 Standard Input Tax 5,000
Sales Php 100,000 Output Tax 5,000
d. Cash Php 106400 Standard Input Tax 5,600
Sales Php 100,000 Output Tax 12,000
45. Using the above information, the actual input vat that will be charged to
cost or expense is
46.
Independent Appraisal
Php 10,000,000 Php 12,000,000 8,000,000 7,000,000 6,000,000
3,900,000
Each share of stock of ABC Corporation has a par value of Php 1,000. Mrs. A
purchased the shares at Php 1,200/share. ABC Corporation has 20,000 shares
outstanding. The shares of stock shall be included in Mrs.
As gross estate at
53. A filed his ITR for 2014 on April 15, 2015 and will pay his tax liability in
installment. The return shows an income tax due of P100,000 and income
tax withheld of P60,000. If A pays the 2" installment only on October 15,
2015, the amount to be paid (excluding compromise penalty) is a. P26,000
b. P35,000 c. P55,000 d P37.500
54. A, a VAT registered person had the following data for Apríl 2015 (vat not
included):
a. Export sale offeeds for animals
i. For human consumption P 1,500,000 ii. For race horses and fighting cocks
500,000 b. Domestic sale offeeds for animals
í. For human consumption 750,000 ii. For race horses and fighting cocks 250,000
c. input tax which cannot be directly attributed to
any of the above sales 100,000 The output tax for April is
a P30,000 b, P90,000 c. P60,000 di. P120,000
55. Using the above data, the vat still due (excess input tax) is
a, (P45,000) b. (P20,000) c (Ꮲ70,000) d. P5,000
56. A, a VAT registered taxpayer made the following acquisition of capital
goods from VAT registered
suppliers (net of vat) during the quarter;
Date Cost Estimated Life July 2 P1,500,000 8 years O 500,000 2 years
August 5 400,000 3 years 20 500,000 4 years September 10 500,000 4 years
15 600,000 6 years The July 2 acquisition was retired in September. The
input tax for July is
a. P4,275 b. Р5,500 c. P63,000 d. P240,000
57. Using the above data, the input tax for August is
a. P2,583 b. P8,083 c. P108,000 d. P113,500
58. Using the data in number 57, the input tax for September is -
a, P2,450 b. P132,000 c. P178,950 d. P231450
59. Which of the following is subject to wat?
Sale of passenger or cargo vessels and aircraft for domestic or
international transport operations Sale of agricultural and marine food
products in their original state Sales by agricultural cooperatives duly
registered with the Cooperative Development Authority
Sale of fuel, goods and supplies by persons engaged in international
shipping or air transport operations
60. The following are exempt from vat, except
a. Services subject to percentage tax b. Lease of residential units with a monthly rental not
exceeding P12,800 c. Export sales d. Services of banks and other non-banks financial
intermediaries
6. As income tax liability for 2014 was P75,000. She filed the return and paid the
total amount due but not with the proper internal revenue district office on July
15, 2015. The amount payable (ignoring compromise
penalty) is
a. P97,500 b. P112,500 c. P 16,250 d. P135,000
65. ABC Corporation did not file its annual income tax return for the
calendar year 2014 on its due date, that is April 15, 2015. On May 15,
2015, the corporation advised the BIR that its income tax due for the
said year amounts to Pt,000,000 but, however, due to its adverse
financial condition at the moment, it will be unable to pay the entire
amount, inclusive of the delinquency penalties. Hence, on May 15,
2015, it made a partial payment of P400,000. The total amount due as
of May 15, 2015 is (ignoring compromise penalty)
a. Pł,266667 b. P1,160,000 c. P760,000 d. P1516,667
67. Using the receding number, if the corporation fails to pay the tax due by
June 15, 2015, how much will the
corporation pay on July 15, 2015
а. Р895,796 b. P1,044,908 c. P785,548 d. P978,711
68. Which of the following is subject to VAT
a. Sale of residential lot valued at P2,000,000 b. Saie of residential house
and lot valued at P2,500,000 c. Lease of residential units with a monthly
rental per unit of P12,000 where the aggregate rentals
received during the year was P2,500,000 d. Lease of residential units
with a monthly rental per unit of P15,000 where the aggregate rentals
received during the year is P1,800,000
69. Which of the following is not considered as transaction deemed sale?
a. Transfer, use or consumption not in the ordinary course of business of
goods or properties originally
intended for sale of for use in the course of business b. Distribution or
transfer to shareholders or investors as share in the profits of the vat-registered
person or to creditors in payment of debt c. Consignment of goods if
actual sale is not made within 60 days following the date such goods were
- consigned d. Retirement from or cessation of business, with respect
to capital goods existing as of such retirement
or cessation
70. The gross receipts of A, a lessor, from his residential units for the year,
show.
Monthly rent/unit No. of units Totał
P12,800 10 Pl,536,000 P10,000 10 P1,200,000 P14,000 8 P1,344,000 PᎥ6,000 8 P1,536,000
The output vat is