Performance standards:Accomplish the BIR (Bureau of Internal Revenue) formsMELCS: Explain the procedure in the computation of gross taxable income and tax due.Mr. Sabado need to pay his tax. You are an agent hired by Mr. Sabado to compute his taxable income andtax due. The BIR agent will check and evaluate based on accuracy of the information prepared.Instructions:From the given information below compute the total taxable income and total income tax due on eachscenario.Mr. Sabado, Production Manager of M.A.R Corp., earned annual compensation in 2020 of P2,333,000, exclusive the 13h month and other benefits in the amount of P250,000 but net ofmandatory contributions to SSS and Philhealth. Aside from employment income, he owns aconvenience store, with gross sales of P3,555,000. His cost of sales and operating expenses areP1,500,000 and 800,000, respectively, and with non-operating income of P250,000.а.Mr. Sabado signified his intention to be taxed at 8% income tax rate on his income.b. Mr. Sabado did not opt for 8% income tax.

Gross taxable income refers to the total income earned by an individual or entity from various…

Answered: a. Mr. Sabado signified his intention…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A purely self-employed individual’s gross sales/receipts and other non-operating income do not exceed the VAT threshold. If he failed to signify his intention to avail of the 8% income tax rate on his first quarter return, he will pay: Group of answer choices Income tax on based on graduated income tax rates only. Income tax on gross sales/receipts excluding non-operating income in excess of P250,000 in lieu of graduated tax rates and percentage tax under Section 116. Income tax based on graduated income tax rates and percentage tax under Section 116 if not-Vat registered. Percentage tax under Section 116 only in lieu of income tax.
3. Fess receives wages totaling $75,700 and has net earnings from self-employment amounting to $61,300. In determining her taxable self-employment income for the OASDI tax, how much of her net self-employment earnings must Fess count?
Amy is a single taxpayer. Her income tax liability in the prior year was $3,803. Amy earns $50,000 of income ratably during the current year and her tax liability is $4,315. In order to avoid penalty, Amy's smallest amount of required annual withholding and estimated payments is: a.$4,747 b.$4,315 c.$3,423 d.$3,884 ( Incorrect) e.$3,803
Chuck, a single taxpayer, earns $79,800 in taxable income and $15,900 in interest from an investment in City of Heflin bonds. (Use the U.S. tax rate schedule.) W Required: a. If Chuck earns an additional $40,000 of taxable income, what is his marginal tax rate on this income? b. What is his marginal rate if, instead, he had $40,000 of additional deductions? Note: For all requirements, do not round intermediate calculations. Round percentage answers to 2 decimal places. a. Marginal tax rate b. Marginal tax rate % %
n each of the following cases, discuss how the taxpayers might respond to a tax rate increase in a manner consistent with the income effect. a. Mr. Edwards earns $32,000 a year as an employee, and Mrs. Edwards doesn’t work.b. Mr. Frank earns $22,000 a year as an employee, and Mrs. Frank earns $10,000 a year as a self-employed worker.c. Mr. George earns $22,000 a year as an employee, and Mrs. George earns $10,000 a year as an employee.
Amy is a single taxpayer. Her income tax liability in the prior year was $5,178. Amy earns $50,000 of income ratably during the current year and her tax liability is $4,372. In order to avoid penalty, Amy’s smallest amount of required annual withholding and estimated payments is: a. $4,372 b. $3,935 c. $5,178 d. $4,660 e. $5,696
Problem 14-08 (Static) [LO 14-5] Mr. Olaf earned an $89.000 salary, and Mrs. Olaf earned a $40,330 salary. The couple had no other income and can't itemize deductions. Assume the taxable year is 2021. Use Individual Tax Rate Schedules and Standard Deduction Table Required: a. Compute their combined tax if they choose to file separate returns. b. Compute their tax if they file a joint return. Complete this question by entering your answers in the tabs below. 4 Required A Required B Compute their combined tax if they choose to file separate returns. (Round your intermediate calculations and final answers to the nearest whole dollar amount.) Mr. Olaf's Tax Mrs. Olaf's Tax Combined tax S s S Answer is complete but not entirely correct. Amount 12,880 X 3.200 10,089 Required 8 >
Chuck, a single taxpayer, earns $78,400 in taxable income and $13,800 in interest from an investment in City of Heflin bonds. A. If Chuck earns an additional $40,000 of taxable income, what is his marginal tax rate on this income? B. What is his marginal rate if, instead, he had $40,000 of additional deductions?
Chuck, a single taxpayer, earns $76,400 in taxable income and $11,500 in Interest from an Investment in City of Heflin bonds. (Use the U.S. tax rate schedule.) Required: a. If Chuck earns an additional $40,000 of taxable income, what is his marginal tax rate on this income? b. What is his marginal rate if, Instead, he had $40,000 of additional deductions? Note: For all requirements, do not round Intermediate calculations. Round percentage answers to 2 decimal places. a. Marginal tax rate b. Marginal tax rate %6
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a. Mr. Sabado signified his intention to be taxed at 8% income tax rate on his income. b. Mr. Sabado did not opt for 8% income tax.