H.

COMPUTATION OF INCOME TAX DUE FROM COMPENSATION

Problem I.

During the current year, a Cornick Bawang, an employee had salaries and other income from
employment of P180, 000. He had no income from business and from other sources. He is married and
has the following dependents: his wife, grandfather, sister and her two children. He spent P7, 500 for
health and hospitalization insurance premiums. Compute the taxable income and income tax due.

Compute the taxable income and income tax due.

Problem II.

A married couple, with eight qualified dependent children, gave us their data in the year:

Compensation Income of husband. P 180,000.00

Compensation Income of wife 170,000.00
Business Income of husband 870,000.00
Business Income of wife 320,000.00
Other Income 40,000.00
Business Expenses of husband 640,000.00
Business Expenses of wife 190,000.00
Other Business Expenses 75,000.00
Health Hospitalization Insurance payments 3,800.00

Determine the taxable net income and income tax due for each of the spouses.

Problem III

A special employee (resident Filipino) of an Offshore Banking Unit in the Philippines provided us his
financial data for the current taxable year 2016 as follows:

a. Regular salary, monthly P150,000.00

b. Overtime pay in the year 135,000.00
c. Royalty income from the Philippines 69,000.00
d. One legitimate child dependent
e. HHIP paid 3,600.00

Compute the taxable base and the income tax due on the compensation.
 Problem IV.
Compute for the gross compensation and tax due. Put a check mark on the the items you included in the
computation of gross compensation income.

Miss Regina Smith, a resident alien, single and which her father as dependent had the following data for
the current year 2016:

Basic salary/overtime pay (net of P3.150 withholding tax) 45,000

13th month pay 27,500
Subsistence (Meals) allowances 8,250
Christmas bonus and other Incentive pay from employment 16,500
Refund of life insurance premium 1,900
Allowances received 1,800
Cash gift from friend on account of her birthday 10,800
Properties received as inheritance from her deceased mother 180,000
Cash dividend from a domestic corporation 7,300
Property dividend from a non-resident foreian corp. 5,200
Directors fees received 38,000
Sales price lot in Quezon City, held as capital asset: cost price 120,000