X derived the following income in 2020, choose 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 ACCapital gain onthe sale of stocksdirectly to buyer:P30,000.Ordinary gain onsale of old officefurniture in theamount ofP10,000.Dividend incomefrom stocks ofSan MiguelCorporation:P60,000.Proceedsreceived from thelife insurance ofhis deceasedfather:P1,000,000

Capital Gain on the Sale of stocks directly to Buyer : p 30000 Ordinary gain on sale of old…

Answered: X 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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Question

X derived the following income in 2020, choose 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
C
Capital gain on
the sale of stocks
directly to buyer:
P30,000.
Ordinary gain on
sale of old office
furniture in the
amount of
P10,000.
Dividend income
from stocks of
San Miguel
Corporation:
P60,000.
Proceeds
received from the
life insurance of
his deceased
father:
P1,000,000

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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