- Disallowed Cost and Expenses due to Non-Withholding, P3,401,574.00 that you have not withheld the appropriate withholding tax due on several income payments enumerated hereunder. Section 34(K) of the NIRC of 1997, as amended, expressly provides that, "..any amount paid or payable which is otherwise deductible from, or taken into account in computing the gross income or for which depreciation or amortization maybe allowed under this Section, shall be allowed as a deduction only if it is shown that the tax required to be deducted and withheld therefrom has been paid to the Bureau of Internal Revenue in accordance with this Section of this Code." Hence, the aforementioned amount has been disallowed as an expense. Verification disclosed Schedule 3: Income Payments subject to Expanded Withholding Tax (EWT) Per BIR Disallowed Cost and Expenses due to Non-Withholding Form Per ITR/AFS 1601-E Rate EWT Purchase of Services/Contractors Outside Services P2,369,477.00 P P 2,369,477.0O 2% 47,389.54 Rent Rent-Cost of Services P 480,000.00 Rent-Operating Expenses 389,500.00 Subtotal P 869,500.00 869,500.00 5% 43,475.00 Professional fees P 162,597.00 162,597.00 10% 16,259.70 TOTAL 3,401,574.00 P 107,124.24

- Disallowed Cost and Expenses due to Non-Withholding, P3,401,574.00 that you have not withheld the appropriate withholding tax due on several income payments enumerated hereunder. Section 34(K) of the NIRC of 1997, as amended, expressly provides that, "..any amount paid or payable which is otherwise deductible from, or taken into account in computing the gross income or for which depreciation or amortization maybe allowed under this Section, shall be allowed as a deduction only if it is shown that the tax required to be deducted and withheld therefrom has been paid to the Bureau of Internal Revenue in accordance with this Section of this Code." Hence, the aforementioned amount has been disallowed as an expense. Verification disclosed Schedule 3: Income Payments subject to Expanded Withholding Tax (EWT) Per BIR Disallowed Cost and Expenses due to Non-Withholding Form Per ITR/AFS 1601-E Rate EWT Purchase of Services/Contractors Outside Services P2,369,477.00 P P 2,369,477.0O 2% 47,389.54 Rent Rent-Cost of Services P 480,000.00 Rent-Operating Expenses 389,500.00 Subtotal P 869,500.00 869,500.00 5% 43,475.00 Professional fees P 162,597.00 162,597.00 10% 16,259.70 TOTAL 3,401,574.00 P 107,124.24

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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