X derived the following income in 2020, shade A if the income is subject to regular income tax, B if it is subject to final tax, C if it subject to capital gains tax and D if it is exempt ABusiness incomeof P400,000Compensationincome ofP200,000Interest incomefrom 5/6 lendingto clients:P150,000Interest incomefrom bankdeposits in theamount ofP25,000.Royalty incomefor the sale ofbooks where he isthe author:P120,000.

Business Income of P400000 Compensation Income of P200000 Interest Income from…

Answered: derived the following income in 2020,…

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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X derived the following income in 2020, shade A if the income is subject to regular income tax, B if it is subject to final tax, C if it subject to capital gains tax and D if it is exempt

A
Business income
of P400,000
Compensation
income of
P200,000
Interest income
from 5/6 lending
to clients:
P150,000
Interest income
from bank
deposits in the
amount of
P25,000.
Royalty income
for the sale of
books where he is
the author:
P120,000.

Definition Definition Tax imposed by the government on the "gain" or increase in the value of an asset at the time of its sale by the owner. Capital gain is computed based on the purchase price and sale price of the asset. If the sale price of the asset is more than the purchase price, there is a gain on the sale of asset. A tax is imposed on such gain in accordance with the applicable tax rates at the time of sale.

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