Pure Self-Employment
Chapter1: Federal Income Taxation—an Overview
Section: Chapter Questions
Problem 67IIP
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Transcribed Image Text:Pure Self-Employment
Ms. Abrial is the owner of Bebe Party Favors store. She also works as a party nost. "
2018 her store's gross sales amounted to P1,200,000 while her gross receipts as party
host amounted to P450,000. She has signified her intention to be taxed at 8% income
tax rate in her first quarter income tax return. What is Ms. Abrial's income tax liability
for 2018?
Assume that Ms. Abrial (above) failed to signify her intention to be taxed at 8% income
tax rate on gross sales/receipts in her first quarter income tax return. Cost of sales
incurred in 2018 amounted to P850,000 while operating expenses P380,000. Compute
for Ms. Abrial's income tax due for 2018.
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