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76.A A Marketing incurred the following expenses in relation to its business during the taxable year:

Provision for bad debts- P 15,000

Research and development cost, treated as deferred expense 500,000

Contributions during the year: To the government for priority programs in sports - 50,000

To the government for public purposes- 10,000

To accredited NGOs, whose total administrative expenses amounted to 25% 100,000

To the Catholic Church for charitable purposes- 6,000

Additional information:

a. Allowance for doubtful accounts per aging of accounts receivable revealed a beginning and ending balances of P20,000 and P30,000, respectively.

b. Accumulated depreciation on machine at the beginning and end of the year amounted to P100,000 and P110,000, respectively

c. During the year, the firm sold a machine with a cost and accumulated depreciation of P300,000 and P30,000, respectively

d. Taxable income before contributions amounted to P300,000 e. The research and development cost was incurred in the preceding year but the benefit was received during the taxable year

If A Marketing is a sole proprietorship, the allowable deductions for contributions are:

A. P80,000 B. P166,000 C. P90,000 D. P30,000

77.Furthermore, the amount of deduction from gross income including contributions is:

A. P235,000 B. P225,000 C. P175,000 D. P200,000

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