Statement I: An expense which is necessary but not ordinary, or ordinary but not necessary is deductible from gross income. Statement II: The taxpayer must signify his intention to elect the itemized deduction, otherwise, he is deemed to have chosen the optional standard deduction. A. True; True B. True; False C. False; True D. False; False
Statement I: An expense which is necessary but not ordinary, or ordinary but not necessary is deductible from gross income. Statement II: The taxpayer must signify his intention to elect the itemized deduction, otherwise, he is deemed to have chosen the optional standard deduction. A. True; True B. True; False C. False; True D. False; False
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Questions 14-24
Transcribed Image Text:20. Statement I: An expense which is necessary but not ordinary, or ordinary but not necessary is deductible from
gross income.
Statement II: The taxpayer must signify his intention to elect the itemized deduction, otherwise, he is deemed
to have chosen the optional standard deduction.
A. True; True
B. True; False
C. False; True
D. False; False
21. Statement I: Interest paid on preferred stock is deductible from gross income of the paying corporation.
Statement II: A Capital expenditure usually benefits more than one accounting period and is deductible from
gross income in the year it is paid or incurred.
A. True; True
B. True; False
C. False; True
D. False; False
22. Statement 1: The cost of leasehold improvements shall be deductible by the lessee by spreading the cost of the
improvements over the life of the improvements or the remaining term of the lease whichever period is shorter.
Statement 2: Contribution by the employer to a pension trust for past service cost is deductible in full in the
year that the employer made the contribution.
A. True; True
B. True; False
C. False; True
D. False; False
23. Beginning 1/1/2018, for individuals with purely gross compensation income, the following may not be deducted:
A. Personal exemptions
B. Additional exemptions
C. Optional standard deduction
D. Premium payments on health and/or hospitalization insurance
E. All of the above
24. Beginning 1/1/2018, for individuals with gross income from business or practice of profession, which of the
following may be deducted?
A. Optional standard deduction
B. Itemized deduction
C. Personal basic exemption
D. Additional exemption
E. Premium payments on health and/or hospitalization insurance
А. А, В, С and D
В. В, С and D
c. C, D and E and Either A or B
D. Either A or B
Transcribed Image Text:Use the following data for the next two (2) questions:
A domestic corporation organized in 2006 provided the following information:
2014
2015
2016
2017
2018
Net sales
Cost of Sales
Business Expenses
P4,000,000
2,000,000
1,900,000
P5,000,000
3,500,000
1,550,000
P6,000,000
4,200,000
1,820,000
P7,000,000
5,000,000
2,100,000
P9,000,000
5,200,000
2,300,000
14. The income tax still due for 2014 is
А. Р35,000
В. Р30,000
C. P40,000
D. P32,000
15. The income tax still due for 2018 is
A. P293,000
В. Р399,000
C. P344,000
D. P450,000
16. Examples of taxes that are deductible except
A. Occupation tax
B. Privilege tax
C. Documentary stamp tax
D. Philippine income tax
17. Non-deductible taxes, except
A. Special assessment
B. Donor's tax
C. Estate tax
D. Business tax
18. A, not happy with her present job, resigned and started her own business. The business requires her to travel
so she used her car for the purpose. Assume that A started her business on April 1 and that she uses the car
for business 70% of the time. Assuming total expenses for the year for the use of the car is P300,000, the
deductible expense is
A. P210,000
В. Р300,000
C. P225,000
D. P157,500
19. A acquired a machine at a cost of P500,000. Scrap value is P40,000 and the estimated useful life was 25 years.
After depreciating the asset for 20 years using the straight-line method, it was determine that the remaining life
is not five years. The annual depreciation from the 21* year assuming a remaining life of 10 years without scrap
is
A. P17,600
В. Р20,000
С. Р35,200
D. P13,200
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