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Business Law and Taxation

Final Pre-board Examination

Batch 18 (October 200!

1" The buyer acquires a real right to the fruits of the thing sold.

a" From the time the obligation to deliver the thing arises

b" From the perfection of the contract of salec" From the deli#er$ thereo%

d" From payment of the price

2" A buyer may sue the seller for breach of warranty against hidden defects of things

a" Within 40 days from delivery of the thing sold

b" &ithin ' months %rom deli#er$ o% the thin sold

c" Within 1 year from delivery of the things sold

d" Within 4 years from discovery of the fraud

)" is indebted to ! in the amount of "#00$000 and delivers to ! his diamond ring by way of pledge. %f

sells the same diamond ring to T$ when will T acquire ownership of the same&

a" From the time the sale is perfected between and T

b" From the time T pays the price to

c" From the time * consents to the sale between + and T

d" From the time T obtains actual possession of the diamond ring

," %n a partnership$ the partners share in the profits

a" 'qually

b" According to capital contribution

c" ccordin to the contract

d" (ustly and equitably

." This )ind of agent merely ma)es the principal and the third person meet and when they arrive at an

agreement or contract becomes entitled to compensation.

a" Bro/er

b" !ommission agent

c" Factor

d" Attorney at law

'" The following are advantages of no*par value share of stoc). Which is the e+ception&

a" ,o*par value shares allow fle+ibility in price.

b" The stoc)holders of no*par value shares are relieved of personal liability for unpaid stoc)

subscription

c" t allows the issue o% stoc/s in exchane o% roert$"

d" ,o*par value shares afford a possible remedy of relief from the evil of over*capitali-ation

and stoc) watering.

" ! appointed to sell the former/s car for "#00$000. sold the car to " for "#00$000 but acted in

her own name. After delivery$ " inspected the car and she found hidden defects in the car. !an " file

an action against ! even when acted in her own name&

a" ,o$ under caveat emptor let the buyer beware.

b" 3es4 because this is a contract in#ol#in roert$ belonin to the rincial"c" ,o$ because acted in her own name not of the principal.

d" 2es$ because the contract of sale is already perfected.

8" A bill of e+change to which no document is attached when presentment for payment or acceptance is

made.

a" Trade acceptance

b" 3an) acceptancec" *lean bill o% exchane

d" ocumentary bill of e+change

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" The distinction between a pro+y and a voting trust is that in a voting trust

a" The trustee had no legal title to the shares of the transferring stoc)holder.

b" 5nless coupled with interest$ is revocable at any time.

c" s not limited to an$ articular meetin"

d" toc) certificate is not cancelled.

10" A and 3 entered into a universal partnership of all present property. The common property of thepartnership shall be

a" All the properties which belonged to each of the partners at the time of the constitution of

the partnership

b" All the properties which shall belong to each of the partners after the constitution of the

partnership

c" ll the roerties which beloned to each o% the artners at the time o% the

constitution o% the artnershi as well as the ro%its which the$ ma$ ac5uire

therewith

d" All the properties which belonged to each of the partners at the time of the constitution ofthe partnership as well as the properties which each may acquire thereafter

11" " appointed A his agent for the purpose of selling his car for "600$000 with 107 commission. A sold

the same car to T for "800$000. 9ow much should A pay to "&

a" "600$000 only

b" ":40$000 or minus already the 107 commission

c" P8004000

d" ";#0$000 or minus already the 107 commission

12" Which of the following instruments is negotiable&

a" 67ood to ose dela Pa9 or order4 P204000: (;d" Pedro *ura!

b" % hereby authori-e you to pay (ose dela "a- or order$ "#0$000 ay #?.

1)" tatement 1. Where the business of the partnership is in imminent danger of being lost$ an industrialpartner who refuses to give an additional contribution agreed upon can be compelled to sell his

interests to the others.

tatement #. A partner appointed as manager in the Articles of "artnership can be removed with or

without cause.

a" 3oth statements are true

b" Both statements are %alse

c" tatement 1 is true$ but tatement # is false

d" tatement 1 is false$ but tatement # is true

1," toc) corporations are prohibited from retaining surplus profits in e+cess of one hundred percent of

their paid*in capital stoc) in this casea" When @ustified$ by definite corporate e+pansion pro@ects or programs approved by the

board directors

b" &hen there is ension lan as areed in the *ollecti#e Barainin reement

c" When the corporations is prohibited under any loan agreement with any financial

institution or creditor$ whether local or foreign$ from declaring dividends without its

consent

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d" When it can be clearly shown that such retention is necessary under special

circumstances obtaining in the corporation$ such as providing preserves for probable

contingencies

1." The following are the rights of an unpaid seller$ e+cept

a" A right of lien over the thing sold while he is still in possession

b" %n case of insolvency on the part of the buyer$ the right of stoppage in transitc" ight to resell the things sold

d" acapagal 3oulevard for the price of ";:$000

per square meter on condition that if the price is not paid on a particular date$ the sale will be

considered automatically cancelled. En the particular date agreed upon$ 3 did not pay $ but 3 never

as)ed for a @udicial cancellation nor made a notarial act of rescission. %n this case

a" The sale is cancelled as per agreement.

b" can validly refuse any subsequent offer to pay by 3.c" B can still a$ ; the rice"

d" 3 cannot anymore pay the price simply because the sale is cancelled due to his failure to

pay on the stipulated date.

21" En ecember 1:$ #006$ offered to sell to 3 his house and lost for ":$000$000. 3 requested togive him 60 days within which to raise the ":$000$000. En February :$ #00;$ before the e+piration of

the 60 day period$ informed 3 that he has raised the price to ";$000$000. !an 3$ under the

circumstances$ compel to accept ":$000$000 as payment for the house and lot&

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a" ?o4 because as between ; and B4 there is as $et no er%ected sale"

b" 2es$ because it was who made the offer and 3 is @ust accepting the same.

c" ,o$ because in a contract of sale has the e+clusive right to fi+ the price to which 3 can

only concur

d" 2es$ because he impliedly committed himself to ":$000 in not re@ecting the request of 60days to raise the money

22" Which of these is not a special form of payment&

a" lication o% a$ment

b" acion en pago

c" !ession en pago

d" Tender of payment H consignation

2)" A contract as a rule must be in writing to be valid.

A ta+payer is not entitled to interest on the overpayment of ta+ sub@ect of a refund because an

obligation derived from law is not presumed.

a" 3oth statements are true

b" 3oth are false

c" First is %alse4 second is true

d" econd is false$ first is true

2," %n which of these cases does the law not allow the recovery of deficiency @udgment&

a" n a sale o% ersonal roert$ on the installment basis should the bu$er %ail to a$

two or more installments a%ter %oreclosure o% the chattel mortae

b" %n a contract of real estate mortgage

c" %n a contract of antichresis

d" %n a contract of chattel mortgage

2." A purchased on installment from 3 a house and lot. After a year of installment payment$ A died. 3refuses to accept the monthly installment being tendered by his heirs contending that upon the death

of their father with whom he has a contract$ the contract automatically terminated or cancelled. 3 is

a" &ron %or riht ac5uired in #irtue o% an obliation is transmissible

b" Wrong for the right to continue the payment is personal only to Ac" !orrect for the contract is between him and A only

d" !orrect because the parties did not agree on the transmissibility of the right

2'" The by*laws may provide that the holders of a ma@ority of the outstanding capital stoc) may elect all

members of the board of directors.

That it may also provide that no officer of the corporation shall be required to be a stoc)holder.

a" 3oth statements are true

b" Both are %alse

c" First is false$ second is true

d" First is true$ second is false

2" A subscribed to 1$000 shares of stoc) to B !orporation. he paid #:7 of the said subscription.uring the stoc)holder meeting$ can A vote all her subscribed shares&

a" ,o$ because the subscription has not yet been fully paidb" ,o$ because A/s shares has become delinquent which cannot be voted.

c" 2es$ as to the paid percentage of subscription

d" 3es4 because unaid shares can be #oted

28" and ! agreed that shall deliver to ! ten )ilos of mari@uana instead of paying /s loan amounting

to "1 million. Therefore

a" /s obligation is e+tinguished

b" must deliver 10 )ilos of mari@uana

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c" + must a$ the 1 million"

d" may choose between the two obligations.

2" A= Ebligations between husband and wife$ people/s obligation to pay ta+es$ obligation of the

employer to pay the salaries and benefits of their employees$ and the obligation of the winner in

gambling to return his winning to the loser are obligations derived from law.

3= eath of the victim through mista)e of fact mista)en to be an aswang$ hitting a bystander through

rec)lessness$ rec)less digging on his own property that triggered a landslide and fall of the residential

structure of the ad@acent property owner will give rise to an obligation derived from quasi*delict.

a" Enly A is correct

b" Enly 3 is correct

c" Both are correct

d" 3oth are wrong

)0" A= indo insured his only house with unog Agad %nsurance !o. indo/s house was hit by a

lightning and was totally burned. The insurance co. is not liable because the loss of the house was

due to fortuitous event.

3= The condition not to do an impossible thing shall be considered as not having been agreed upon.

a" Enly A is false

b" Onl$ is true

c" 3oth are true

d" 3oth are false

)1" The insurer refuses to pay the insurance claim by the insurer on the ground that the loss was due to

fire which is a fortuitous event is

a" !orrect for no person shall be responsible for damage or in@ury due to fortuitous event

b" %ncorrect for the very nature of the insurer is he assumed the ris) of loss

c" %ncorrect for his obligation is derived from contract which is the law between the parties

d" Both B and *

)2" En refusal by obligor to perform a positive personal obligation

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b" That the ledor or mortaor be the rincial debtor

c" That the pledgor or mortgagor has the free disposal of the properties

d" That it is the essence of the pledge or mortgage that if the obligation is not paid the things

in which the pledge or mortgage consist may be alienated for the payment of the debt

)'" %n the absence of a marriage settlement$ or when the regime agreed upon is void$ the property

relations of the spouses who married before August ?$ 1D88 shall be governed bya" Absolute community of properties

b" *on>ual artnershi o% ains

c" Absolute separate of properties

d" ,o property relations

)" The ranch of the decedent was mortgaged to accommodate the request of his brother for a loan. The

value of the loan to the brother was not included as receivable in the gross estate of the decedent.

What would be the treatment of the unpaid mortgage on the ranch&

a" eductible from gross estate

b" ?ot deductible %rom the ross estate

c" eductible from the gross income of the estate

d" eductible either from the gross estate or the gross income of the estate

)8" >r. (ohn amuelson$ resident alien$ donated a piece of @ewelry to his son who got married on (anuary

1:$ #00D. The piece of @ewelry was mailed to his son on (anuary 10$ #00D$ and was received andaccepted on (anuary #0$ #00D. When is the last day to file the donor/s ta+ return&

a" February D$ #00D

b" February 14$ #00D

c" Februar$ 14 200

d" >arch #0$ #00D

)" For value*added ta+$ which is not a requisite for the ta+ability of the sale of goods or property&

a" The sale must be an actual sale o% oods o% roerties %or a #aluable consideration"

b" The transaction is underta)en in the course of trade or business.

c" The goods are for use or consumption in the "hilippines.

d" The transaction must not be e+empt under the Ta+ !ode$ special law or international

agreement.

,0" reamboat !orporation registered under the JAT system on (anuary 1:$ #00D. When would the lastday to manually file its first monthly JAT declaration&

a" February #0$ #00D

b" =arch 204 200

c" April #:$ #00D

d" ,one of the choices

,1" An international air carrier doing business in the "hilippines shall be sub@ect to

a" ?7 percentage ta+ on gross receipts in the "hilippines only

b" # K 7 income ta+ on gross "hilippine billings only

c" Both the 2 @A income tax on ross Philiine billins and )A ercentae tax on

ross receits in the Philiines

d" ,either the # K7 income ta+ on gross "hilippine billings nor the ?7 percentage ta+ on

gross receipts in the "hilippines

,2" Ene of the following is not a large ta+payer.a" Ta+payer who pays value*added ta+ of "100$000 per quarter

b" Ta+payer whose gross sales or receipts per year is "1$000$000$000

c" Taxa$er who a$s income tax o% P1004000 er 5uarter

d" Ta+payer whose net worth is "?00$000$000 at the close of each calendar or fiscal year

,)" The following information are presented to you in connection with the determination of the fringe

benefits ta+ of the general manager of (asmin >erchandising

"aid by the company with official receipts in the name of the company

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a= Laptop computer for manager/s office use$ "80$000

b= Air*conditioning unit for manager/s office use$ "?0$000

c= Iroceries for manager/s family consumption$ "10$000

d= "lumbing materials for use in the repair of manager/s residential house$ ":$000

"aid by the manager with official receipts in the name of the companya= "urchase of clothes and shoes for the manager/s wife$ "1:$000

b= amples of merchandise sold in the competitor/s store for mar)eting study$ "1#$0009ow much is the fringe benefits ta+ due&

a" P1,4118 b" "48$640 c" ":8$8#4 d" ";1$:#D

,," Ene of the following is deductible from the gross income even if not business related.

a" ent e+pense

b" Travel e+penses

c" 3ad debts

d" *haritable other contributions

,." An operator of an illegal horse*betting business$ single$ has the following data

eceipts from illegal bets$ ":00$000

ent of space where bets are received$ gross of :7 withholding ta+$ "#0$000

alaries of assistants$ gross of creditable withholding ta+$ "100$000

3ribe money to obtain protection from arrest and prosecution$ ":0$000

9ow much is the ta+able income&

a" "?80$000 b" "?60$000 c" "))04000 d" "#80$000

,'" ,oynoy o+as paid Liberal ealty "600$000 for the right to lease a store space in >a)ati for : years

starting Ectober 1$ #008. 9e would also pay a monthly rental of ":0$000 starting Ectober 1$ #008$

and would shoulder the annual real estate ta+ of "#0$000 starting #00D. 9ow much would be the total

deductions of ,oynoy o+as in #008&

a" "6;0$000 b" "#00$000 c" "1804000 d" "1:0$000

," The ta+able income before income ta+ of 'laine !orporation for the current year was ":00$000.

uring the year$ the corporation received the following refund of ta+es paid in previous years and

recoveries of accounts written off$ all of which were credited to miscellaneous income

efund of percentage ta+ "#0$000efund of income ta+ ":0$000

3ad debt recovered

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b" A (apanese visiting professor who occasionally teaches at one of the leading universities

in the "hilippines$ and stays here for an aggregate of 18: days

c" A Taiwanese singer who performs in one of the hotels in the "hilippines for one ect to ;ection 2, (!

c" ub@ect to either 67 capital gains ta+ or ection #4 r. Tony ayag$ JAT*registered real estate dealer$ sold a real estate for "#$000$000 on ,ovember #D$

#008. The cost of property was "1$:00$000. The terms of the sale were as follows

own payment$ ,ov. #D$ #008$ "400$000$ balance payable in monthly installments of "100$000

beginning on ecember #D$ #008 until fully paid$ "1$600$000.

9ow much was the income to be reported in #008&

a" ":00$000 b" "#00$000 c" "12.4000 d" "100$000

.," 5sing the same data in the preceding number$ how much was the output JAT in ,ovember #D$ #008&a" "60$000 b" ":0$000 c" ",84000 d" "1:$000

.." An individual ta+payer is qualified to substituted filing of income ta+ return if he meets the following

requisites$ e+cept

a" "ure compensation income earner

b" Ene employer in the "hilippines

c" Withholding ta+ is correct

d" =inimum wae earner

.'" A ta+payer receives an assessment notice on (anuary :$ #00D. 9e files a motion for reconsideration

with the 3% on (anuary 1:$ #00D. When is the last day for the submission of complete documents to

support his motion for reconsideration&

a" February 4$ #00D

b" =arch 1'4 200

c" (anuary 1:$ #011

d" ,one of the choices

." 3oy 3onafe resides in 3acoor$ !avite while his place of wor) is in ampaloc$ >anila. 9e files his

income ta+ return for #00; income on eptember 10$ #008 in Mue-on !ity because the evenue

istrict Efficcer in the place is his college friend. The amount of ta+ due is "100$000. 9ow much

will be the surcharge&

a" P.04000 b" "#:$000 c" "#0$000 d" ,one

.8" 5sing the same data in the preceding number$ how much is the interest on delinquency&

a" "8$111 b" "8$???.?? c" P8401")) d" ";$:00

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." Which of the following national ta+es is found in the Ta+ !ode&

a" ugar ad@ustment ta+es

b" Ta+es on narcotic drugs

c" +ocumentar$ stam tax

d" "rivate motor vehicle ta+

'0" When a property is donated in contemplation of death$ the basis of the ta+ shall be

a" Fair mar)et value at the time of donationb" Fair mar)et value in the hands of the donor before the time of donation

c" Fair mar/et #alue at the time o% death o% the donor

d" !ost when the property was acquired

'1" %f a corporation to which the stoc)holder is indebted forgives the debt$ the transaction has the effect of

a payment of what )ind of dividend&

a" toc) dividend

b" !ash dividendc" Liquidating dividend

d" ndirect di#idend

'2" !. 5berita has three wives under his tribal customs and practice. 9e has a total of si+

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"urchases$ total invoice value "?$D#0$000

>onthly JAT payments