FABM2 - LESSON REINFORCEMENT: VAT AND PERCENTAGE TAX

FABM2 - LESSON REINFORCEMENT: VAT AND PERCENTAGE TAX

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HOW MUCH IS THE PERCENTAGE TAX PAYABLE IF THE GROSS SALES IS P1,500,000, SALES RETURNS IS P150,000, AND SALES DISCOUNT IS P200,000 AND THE ENTITY ELECTED THE 3% QUARTERLY PERCENTAGE TAX?

IN SOLVING FOR THE QUARTERLY PERCENTAGE TAX, THE FORMULA IS:

GROSS SALES/RECEIPTS X 3%

THE SALES DISCOUNT, RETURNS, AND OTHER ITEMS WILL BE USED HOWEVER IN GETTING THE INCOME TAX DUE.

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HOW MUCH IS THE PERCENTAGE TAX PAYABLE IF THE GROSS SALES IS P2,500,000, SALES RETURNS IS P150,000, AND SALES DISCOUNT IS P200,000 AND THE ENTITY ELECTED THE 8% ANNUAL PERCENTAGE TAX?

TO GET THE 8% PERCENTAGE TAX, THE FORMULA IS:

(GROSS SALES/RECEIPTS - P250,000) X 8%

COPY THE FOLLOWING INFORMATION

assume that the business opted to use the 3% quarterly percentage tax.

SALES - P1,800,000

SALES DISCOUNTS - P150,000

COST OF SALES - P700,000

OPERATING EXPENSES - P200,000

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How much is the percentage tax?

SOLUTION:

PERCENTAGE TAX = P1,800,000 X 3%

PERCENTAGE TAX = P54,000

PERCENTAGE TAX = GROSS SALES X 3%

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How much is the taxable income?

In getting the Taxable Income the formula is same as getting the Net Income which was discussed during Income Statement Discussion

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Using the regular income tax, how much is the income tax due?

A VAT-Registered business is preparing for his Monthly VAT Returns.

Here are the important details

-Sales - P4,500,000

-Sales Returns and Allowances - P500,000

-Cost of Sales - P3,600,000

-Operating Expenses - P50,000

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If the Business transactions are all VAT Inclusive, how much is the VAT Output?

(In getting the VAT, use the Net Sales)

*Round off to 2 decimal places.

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If the Business transactions are all VAT Inclusive, how much is the VAT Input?

*Round off to 2 decimal places.

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Using the VAT Output and VAT Input from the preceding questions, how much is the VAT Payable?

Answers:

VAT Output = P428,571.43

VAT Input = P385,714.29

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If the Business transactions are all VAT Exclusive, how much is the VAT Output?

(In getting the VAT, use the Net Sales)

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If the Business transactions are all VAT Exclusive, how much is the VAT Input?

*Round off to 2 decimal places.

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Using the VAT Output and VAT Input from the preceding questions, how much is the VAT Payable?

Answers:

VAT Output = P480,000

VAT Input = P432,000