Question

business mathematics

name: ____________________ date: _____________ rating: _______
subject schedule: __________ instructor/professor: ___________________

1. find the tax due on the following properties. (use yellow ruled pad for your computation.)

property	value	assessed tax rate	tax due
2	\\( \text{p } 30\\,280 \\)	\\( 5 \frac{1}{4}\\% \\)
3	\\( \text{p } 25\\,320 \\)	\\( 4.25 \text{ per } \text{p } 100 \\)
4	\\( \text{p } 142\\,790 \\)	\\( 5\\% \text{ on 1st } \text{p } 50\\,000 \\)
		\\( 3\\% \text{ on next } \text{p } 50\\,000 \\)
		\\( 1\\% \text{ over } \text{p } 100\\,000 \\)

1. if the selling price of an item is \\( \text{p } 2\\,300.00 \\) and the tax paid is \\( \text{p } 57.50 \\), what is the tax rate?

1. complete the following: (use yellow ruled pad for your computation.)

	amount	percent
less: sales discounts	\\( 3\\,000 \\)
sales ret. & allow	\\( 2\\,000 \\)
net sales	\\( 320\\,000 \\)	\\( 100.00\\% \\)
less: cost of sales	\\( 145\\,600 \\)
gross profit	\\( 174\\,400 \\)
operating expenses	\\( 105\\,200 \\)
net income before tax	\\( 69\\,200 \\)
income tax	\\( 24\\,220 \\)
net income after tax	\\( \text{p } 44\\,980 \\)

chapter 2: percentage, ratio, and proportion 153

1. using the data in (7) on the preceding page, compute for:

a. return on net sales (profit margin)
b. return on assets if average total assets is \\( \text{p } 150\\,000.00 \\).

Explanation:

🆕 New Concept Discovered: Property Tax and Financial Ratio Analysis
Calculating taxes using rates and analyzing business performance ratios.

---

Step 1: Solve Question 5 (Property Tax Due)

To find the tax due, we apply the given tax rate to the property value.

Property 1

• Value: ₱18,500
• Assessed Tax Rate: \(12\frac{1}{2}\% = 12.5\% = 0.125\)
• Calculation:

$$ \text{Tax Due} = 18,500 \times 0.125 = \text{₱2,312.50} $$

Property 2

• Value: ₱30,280
• Assessed Tax Rate: \(5\frac{1}{4}\% = 5.25\% = 0.0525\)
• Calculation:

$$ \text{Tax Due} = 30,280 \times 0.0525 = \text{₱1,589.70} $$

Property 3

• Value: ₱25,320
• Assessed Tax Rate: ₱4.25 per ₱100
• Calculation:

$$ \text{Tax Due} = \frac{25,320}{100} \times 4.25 = 253.20 \times 4.25 = \text{₱1,076.10} $$

Property 4

This property uses a graduated tax rate structure:

• Value: ₱142,790
• First ₱50,000 at 5%:

$$ 50,000 \times 0.05 = \text{₱2,500} $$

• Next ₱50,000 at 3%:

$$ 50,000 \times 0.03 = \text{₱1,500} $$

• Remaining amount over ₱100,000 at 1%:

$$ \text{Remaining} = 142,790 - 100,000 = 42,790 $$

$$ 42,790 \times 0.01 = \text{₱427.90} $$

• Total Tax Due:

$$ 2,500 + 1,500 + 427.90 = \text{₱4,427.90} $$

---

Step 2: Solve Question 6 (Tax Rate Calculation)

We find the tax rate by dividing the tax paid by the selling price and converting it to a percentage.

• Selling Price: ₱2,300.00
• Tax Paid: ₱57.50
• Calculation:

$$ \text{Tax Rate} = \frac{57.50}{2,300.00} \times 100\% = 0.025 \times 100\% = 2.5\% $$

---

Step 3: Solve Question 7 (Vertical Analysis Percentages)

In financial statements, vertical analysis expresses each line item as a percentage of Net Sales (which is set as \(100.00\%\)).

• Net Sales (Base): ₱320,000 \((100.00\%)\)

We calculate the percentage for each item using the formula:

$$ \text{Percent} = \frac{\text{Amount}}{\text{Net Sales}} \times 100\% $$

• Gross Sales:

$$ \frac{325,000}{320,000} \times 100\% \approx 101.56\% $$

• Less: Sales discounts:

$$ \frac{3,000}{320,000} \times 100\% \approx 0.94\% $$

• Sales ret. & allow:

$$ \frac{2,000}{320,000} \times 100\% \approx 0.63\% $$

• Less: Cost of Sales:

$$ \frac{145,600}{320,000} \times 100\% = 45.50\% $$

• Gross Profit:

$$ \frac{174,400}{320,000} \times 100\% = 54.50\% $$

• Operating Expenses:

$$ \frac{105,200}{320,000} \times 100\% \approx 32.88\% $$

• Net Income before Tax:

$$ \frac{69,200}{320,000} \times 100\% \approx 21.63\% $$

• Income Tax:

$$ \frac{24,220}{320,000} \times 100\% \approx 7.57\% $$

• Net Income after Tax:

$$ \frac{44,980}{320,000} \times 100\% \approx 14.06\% $$

---

Step 4: Solve Question 8 (Financial Ratios)

a. Return on Net Sales (Profit Margin)

This ratio measures how much net income is generated as a percentage of net sales.

• Formula:

$$ \text{Return on Net Sales} = \frac{\text{Net Income after Tax}}{\text{Net Sales}} \times 100\% $$

• Calculation:

$$ \frac{44,980}{320,000} \times 100\% \approx 14.06\% $$

b. Return on Assets (ROA)

This ratio measures how efficiently a company uses its assets to generate profit.

• Formula:

$$ \text{Return on Assets} = \frac{\text{Net Income after Tax}}{\text{Average Total Assets}} \times 100\% $$

• Calculation:

$$ \frac{44,980}{150,000} \times 100\% \approx 29.99\% $$

---

Answer:

5. Tax Due on Properties:

• Property 1: ₱2,312.50
• Property 2: ₱1,589.70
• Property 3: ₱1,076.10
• Property 4: ₱4,427.90

6. Tax Rate:

• Tax Rate: 2.5%

7. Completed Table (Percentages):

• Gross Sales: 101.56%
• Less: Sales discounts: 0.94%
• Sales ret. & allow: 0.63%
• Net Sales: 100.00%
• Less: Cost of Sales: 45.50%
• Gross Profit: 54.50%
• Operating Expenses: 32.88%
• Net Income before Tax: 21.63%
• Income Tax: 7.57%
• Net Income after Tax: 14.06%

8. Financial Ratios:

• a. Return on Net Sales: 14.06%
• b. Return on Assets: 29.99%