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BUSINESS AND TRANSFER TAXATION 6th Edition (BY: VALENCIA & ROXAS) 115SUGGESTED ANSWERS

Ch!t"# $%: EXCISE TAXES

CA'TER $%

EXCISE TAXES

Problem 15 – 1

1. False – excise tax is also imposed on luxurious goods and mineral products.2. False – excise tax imposed to vehicles is based on the value of the vehicles, hence, an example of advalorem tax.3. True4. False – The primar purpose of excise tax is for regulation and protection.5. True!. False – "1 per #ilo$. False – 2%& of the 'holesale price.(. True – )t is the same as distilled spirits.*. False – +xcise tax is a business tax.1%. False – +xcise tax is an indirect tax.

11. True12. False – "1% per ton means based on measure, hence, specific excise tax.13. False – subect to excise tax of "%.$* per #ilo.

Problem 15 – 2

1. True2. False – +xcise tax is also imposed on imported goods.3. False – +xcise tax is paid upon transfer or release from the -ureau of ustoms.4. True5. False – net retail price or retail price basicall excludes /0T and excise tax.!. False – " is a separate and distinct product from processed gas.$. True(. False – 0lcohol products for medicinal purposes are exempt from excise tax.*. False – The excise taxes imposed on imported articles are paid to the -ureau of ustoms.1%. False – ubect to excise tax upon production or importation.11. True12. True

Problem 15 – 3

1. !. 0 11. 2. $. 12. -3. - (. 0 13. 4. - *. 14. -5. 1%.

Problem 15 – 4 C

Total sales " 1,2%%,%%%ivided b net retail price per cigar !%% umber of cigar sold at "!%% each 2,%%%

6ultiplied b excise tax on cigar sold at "!%% each 7"5% 8 915& x 1%%:; !5Total excise tax " 13%,%%%

Problem 15 – 5

1. Not in the choicesTotal sales excluding /0T 9"15*,5%%

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Total sales including /0T "15*,5%%0dd= +xcise tax 12%,$*(Total amount of sales including /0T and excise tax "2(%,2*(

Problem 15 – 6 A

+xcise tax 9"11.!5 x 2%%: " 2,33%

Problem 15 – 7 D

Tax>exempt

Problem 15 – 8 A

+xcise tax per proof liter " 11.!56ultiplied b proof liters 92%% x 12 x $5%

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Problem 15 – 17

+xcise tax=  91,%%% x 12 x .$5% x "11.!5: " 1%4,(5%

  91,%%% x 12 x 1 x "252: 3,%24,%%%"3,12(,(5%

Problem 15 – 18

a. 915,%%%,%%%up 9"2,1%%,%%% x 3%&: !3%,%%%Total "2,$3%,%%%0dd= +xcise tax on "2,1%%,%%% "512,%%%  +xcess 9"!3%,%%% x !%&: 3$(,%%% (*%,%%%Total sales price inclusive of excise tax and /0T "3,!2%,%%%

Problem 15 – 21

Total #ilograms of copper 91,%%% tons x 25& x 1,%%% #g.:6ultipl b 'orld price per #ilogramTotal in @ dollars

6ultipl b exchange rate of peso per dollar Total6ultipl b excise tax rate+xcise tax

25%,%%%  A%.!%A 15%,%%%

  "5%" $,5%%,%%%  2&" 15%,%%%

Problem 15 – 22

  Gold Copper TotalQuantity (tons of concentrate) 100 100Multiplied by kilogram per ton 1,000 1,000Total kilogram 100,000 100,000Multiplied by gram per kilogram 1,000 1,000Total grams 100,000,000 100,000,000Multiplied by percent of metal content 0.0! ".00! #ctual grams of metals 0,000 ",000,000Multiplied by market price per gram $ % $0.01

Total in dollars $1&0,000 $"0,000Multiplied by peso rate per dollar '&0 '&0Totals in pesos ',&00,000 '1,%00,000Multiplied by applicable ecise ta rate ! 1!*cise ta '1,000 '1%,000 '10,000