government employee at daytime and accepts clients for accounting work after office hours. At the same time, Arthur maintains a t-shirt printing shop to earn more. For the taxable year ending December 31, 2021, Arthur earned the following amounts: Taxable compensation income P 850,000 Gross receipts from accounting work 1,500,000 T-shirt printing shop Gross sales P 1,400,000 Cost of sales (800,000) Gross income P 600,000 Operating expenses (400,000) Net income P 200,000
government employee at daytime and accepts clients for accounting work after office hours. At the same time, Arthur maintains a t-shirt printing shop to earn more. For the taxable year ending December 31, 2021, Arthur earned the following amounts: Taxable compensation income P 850,000 Gross receipts from accounting work 1,500,000 T-shirt printing shop Gross sales P 1,400,000 Cost of sales (800,000) Gross income P 600,000 Operating expenses (400,000) Net income P 200,000
Chapter2: Income Tax Concepts
Section: Chapter Questions
Problem 33P
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Question
.Industrious as he is known, Arthur, a non-VAT registered citizen, works and a government employee at daytime and accepts clients for accounting work after office hours. At the same time, Arthur maintains a t-shirt printing shop to earn more. For the taxable year ending December 31, 2021, Arthur earned the following amounts:
Taxable compensation income P 850,000
Gross receipts from accounting work 1,500,000
T-shirt printing shop
Gross sales P 1,400,000
Cost of sales (800,000)
Gross income P 600,000
Operating expenses (400,000)
Net income P 200,000
Upon filing his first quarter income tax return, Arthur availed of the 8% income tax option:
Is his availment of the 8% income option correct?
Taxable compensation income P 850,000
Gross receipts from accounting work 1,500,000
T-shirt printing shop
Gross sales P 1,400,000
Cost of sales (800,000)
Gross income P 600,000
Operating expenses (400,000)
Net income P 200,000
Upon filing his first quarter income tax return, Arthur availed of the 8% income tax option:
Is his availment of the 8% income option correct?
No, because Arthur's gross receipts exceeded the threshold allowed to avail of the 8% income tax option.
No, because the 8% income tax option is available only for VAT registered taxpayers.
No, because Arthur is not a purely compensation income earner.
Yes
Assuming that the availment of the 8% income tax option is proper, how much is Arthur's income tax due?
377,000
232,000
357,000
300,000
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Publisher:
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