13. In 2016, King, an employee of Advanced Corporation, is indebted to Philip Corporation in the amount of P50,000. He has also a liability with Rex of P25,000. During the year, the Board of Directors of Philip Corporaton decided to condone his liability, he being a stockholder of said corporation. To be relieved of his liability, King was required by Rex to work in his restaurant for two (2) months as waiter. As a consequence, King filed his vacation leave from Advanced Corporation for the same period thereby receiving the monetized value of his leave credits in the amount of P6,000. While working as waiter in the restaurant, he received tips from the
13. In 2016, King, an employee of Advanced Corporation, is indebted to Philip Corporation in the amount of P50,000. He has also a liability with Rex of P25,000. During the year, the Board of Directors of Philip Corporaton decided to condone his liability, he being a stockholder of said corporation. To be relieved of his liability, King was required by Rex to work in his restaurant for two (2) months as waiter. As a consequence, King filed his vacation leave from Advanced Corporation for the same period thereby receiving the monetized value of his leave credits in the amount of P6,000. While working as waiter in the restaurant, he received tips from the
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter15: S Corporations
Section: Chapter Questions
Problem 2CE
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Question
Transcribed Image Text:13. In 2016, King, an employee of Advanced Corporation, is indebted to Philip
Corporation in the amount of P50,000. He has also a liability with Rex of
P25,000. During the year, the Board of. Directors of Philip Corporaton
decided to condone his liability, he being a stockholder of said corporation.
To be relieved of his liability, King was required by Rex to work in his
restaurant for two (2) months as waiter. As a consequence, King filed his
vacation leave from Advanced Corporation for the same period thereby
receiving the monetized value of his leave credits in the amount of P6,000.
While working as waiter in the restaurant, he received tips from the
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Transcribed Image Text:customers totaling to P5,000. Said amount was not accounted anymore by
Rex. How much is the taxable income of King in 2016?
a.
P 36,000
C.
30,000
b.
25,000
d.
86,000
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