1. A cooperative transacting business only with its members is on its third-year operation. It reserves 40% of its operating income in compliance with the new CDA regulation. During the year, it reported a total operating income of P3,200,000 inclusive of P2,00,000 income from related activities.
Compute the deductible amount of transfers to reserve against gross income.
2. In 2019, Mr. A, a practicing lawyer, adopted a public elementary school and contributed P500,000 for the acquisition of computer equipment and software. Mr. A had an operating income of P950,000 before this contribution expense. Assuming the "Adopt-a-School Program" is an investment priority program of the government in 2019,
Compute Mr. A's additional contribution expense
3. ABC Corp employs three senior citizens as regular employees. Two of them are receiving the minimum wage which is within the poverty level. Total minimum wages paid to these senior citizen employees during the year were P128,000. One of the senior citizen employees is a director of the company who was paid P870,000 compensation during the year.
Compute the deductible additional compensation expense.
4. Atty. K is a practicing lawyer in the remote provinces of Mindanao. During the year he provided 280 actual hours for pro-bono services inclusive of the 60-hour mandatory legal aid services to indigent clients. These services would have been billed P1,200 per hour if rendered to paying clients. Atty K has a P1,400,000 gross income during the exclusive of P30,000 interest on his savings deposit.
Compute the special deduction for the free legal services.
5. An employer hired two senior citizens during the year as temporary replacements for its two staffs who were on leave. Both senior citizens were paid salaries not in excess of the poverty level. Mr. A, substituted for an employee who went on one-year sabbatical leave.
Mr. A received a total of P172,000 during the year.
Ms. A substituted for an employee who filed for maternity leave for 3 months. Ms. A received a total of P32,000 during the year.
Compute the total deductible additional compensation expense.
6. An individual taxpayer, reported P1,200,000 net income after the following:
P600,000 Cost of sales
P300,000 Administrative expense
P400,000 Selling expenses
Compute the optional standard deductions.
7. ABC Corporation reported the following data in 2020:
P1,000,000 Sales
P650,000 Cost of sales
P60,000 Gain on sale of equipment
P40,000 Interest income from bank deposits
P400,000 Deductible expenses
P200,000 Non-deductible expenses
Compute the optional standard deduction.
8. A grantor irrevocably designated in trust a real property in favor of a beneficiary. Under the trust indenture. 25% of the trust gross income shall be distributed to the beneficiary. The trustee shall be paid 5% of the gross income as management fee. During the year, the trust collected P890,000 rent income, net of 10% creditable withholding taxes. The trust recorded P350,000 in expenses.
Compute the deductible amount of income distribution to the fund.
9. ABC Corporation employs purely women. It installed a lactation station at a total cost of P300,000 and secured a "Working Mother-Baby-Friendly Certificate" from the Department of Health.
Compute the additional deduction under the Rooming-in and Breastfeeding Practices Act.
10. ABC Jewelers is a qualified jewelry enterprise registered with the Board of Investments. In order to modernize its jewelry making business, it instituted an in-house training program and hired external experts to train its employees. The program was duly approved by TESDA. The program cost P400,000 during the year.
What is the deductible amount of additional training expense?