62. How much is the total EXCLUSIONS FROM GROSS INCOME?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Consider the following in answering the questions below:

Nicanor, a forty-four-year-old loveless, is employed by ABC Corp. for the past thirty (30) years. Below are the compensation and other benefits he received from the company the year 2021.

13th Month Pay              100,000

De Minimis benefits         30,000 

Statutory contributions (SSS, PHIC, etc)  20,000

Basic Salary per month       100,000

Monthly Representation Allowance     50,000

Monthly Transportation Allowance      50,000

Cost of Living Allowance            50,000

Fixed Housing Allowance          50,000

Commission        100,000

Profit-Sharing       100,000

Hazard Pay             50,000

Overtime Pay         100,000

 

In 2022, ABC Corp. suffered serious business reverses. The Company, to temper losses, offered retirement or separation benefits to employees.

62. How much is the total EXCLUSIONS FROM GROSS INCOME?

A. Php 150,000

B. Php 140,000

C. Php 110,000

D. Php 90,000

63. How much is the total TAXABLE COMPENSATION?

A. Php 1,750,000

B. Php 1,760,000

C. Php 1,770,000

D. Php 1,780,000

64. If Nicanor will avail the retirement benefits under the Company's retirement plan effective January 1, 2022? The possible tax exposure if Nicanor will receive Php 1,000,000 is?

A. Php 0

B. Php 175,000

C. Php 180,000

D. Php 190,000

65. Assuming ABC Corp. has no retirement plan and Nicanor availed of the offer of retirement benefit in the amount of Php 1,000,000 as proposed by the Company, the possible tax exposure is?

A. Php 0

B. Php 175,000

C. Php 180,000

D. Php 190,000

66. If Nicanor will be forced to resign because of the losses, the possible tax exposure on the separation pay

is?

A. Php 0

B. Php 175,000

C, Php 180,000

D. Php 190,000

67. If Nicanor is a septuagenarian, the possible tax exposure on the retirement pay assuming ABC Corp. has no retirement plan is? Php 1,000,000

A. Php 190,000

B. Php 175,000

C. Php 180,000

D. Php 0

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