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

SUGGESTED ANSWERS
Ch!t"# $%: EXCISE TAXES
C&A'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. True
4. False The primar purpose of excise tax is for regulation and protection.
5. True
!. False "1 per #ilo
$. False 2%& of the 'holesale price.
(. True )t is the same as distilled spirits.
*. False +xcise tax is a business tax.
1%. False +xcise tax is an indirect tax.
11. True
12. False "1% per ton means based on measure, hence, specific excise tax.
13. False sub,ect to excise tax of "%.$* per #ilo.
Problem 15 2
1. True
2. 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. True
5. False net retail price or retail price basicall excludes /0T and excise tax.
!. False 1"2 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 3ub,ect to excise tax upon production or importation.
11. True
12. True
Problem 15 3
1. 4 !. 0 11. .
2. 4 $. 4 12. -
3. - (. 0 13. .
4. - *. 4 14. -
5. 4 1%. 4
Problem 15 4 C
Total sales " 1,2%%,%%%
4ivided b net retail price per cigar !%%
5umber of cigar sold at "!%% each 2,%%%
6ultiplied b excise tax on cigar sold at "!%% each 7"5% 8 915& x 1%%:; !5
Total excise tax " 13%,%%%
Problem 15 5
1. Not in the choices
Total sales excluding /0T 9"15*,5%%<1.12: "142,411
4ivided b net retail price per liter 14.5%
5umber of liters produced *,(21
6ultiplied b applicable excise tax per liter " 12.3%
+xcise tax "12%,$*(
2. 5ot in the choices
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.!5
6ultiplied b proof liters 92%% x 12 x $5%<1,%%%: 1,(%%
+xcise tax paable "2%,*$%
Problem 15 9 B
First "2,1%%,%%% " 512,%%%
+xcess 9"1,*%%,%%% x !%&: 1,14%,%%%
+xcise tax "1,!52,%%%
Problem 15 10 A
+xempt from excise tax, hence, " %.
Problem 15 11 B
1ocal 'holesale price "15%,%%%
6ultiplied b percent of excise tax 2%&
+xcise tax " 3%,%%%
Problem 15 12 A
5one
Problem 15 13 B
+xcise tax on=
-un#er oils 92%,%%% liters x "%.3%: " !,%%%
2rease 92,%%% x "4.5%: *,%%%
1ubricating oil 9(,%%% x "4.5%: 3!,%%%
Total "51,%%%
1ess= .reditable excise tax on bun#er oils !,%%%
+xcise tax "45,%%%
Problem 15 14 A
?ero
Problem 15 15
+xcise tax per metric ton of coal " 1%
6ultiplied b metric tons of coal produced 1,%%%
+xcise tax "1%,%%%
Problem 15 16
+xcise taxes=
For ear 2%%5 and 2%%!= 91%% x 5% x 1% x "25: "1,25%,%%%
For ear 2%%$ and 2%%(= 91%% x 5% x 1% x "2!.%!: "1,3%3,%%%
For ear 2%%* and 2%1%= 91%% x 5% x 1% x "2$.1!: "1,35(,%%%
For ear 2%11= 91%% x 5% x 1% x "2(.3%: "1,415,%%%
Problem 15 17
+xcise tax=
91,%%% x 12 x .$5% x "11.!5: " 1%4,(5%
91,%%% x 12 x 1 x "252: 3,%24,%%%
"3,12(,(5%
Problem 15 18
a. 915,%%%,%%%<1,%%%: x "1 " 15,%%%
b. 91,%%%,%%% x "%.$*: $*%,%%%
c. 95%,%%% x "2: 1%%,%%%
d. 91%%,%%% x "!.35: !35,%%%
e. 95,%%% x 5%% x 1%&: 25%,%%%
Total excise tax "1,$*%,%%%
Problem 15 19
First "!%%,%%% " 12,%%%
+xcess 9"2%%,%% x 2%&: 4%,%%%
+xcise tax " 52,%%%
Problem 15 20
"urchase price per car "1,5%%,%%%
.ustom duties !%%,%%%
6ar#>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 #ilogram
Total in @3 dollars
6ultipl b exchange rate of peso per dollar
Total
6ultipl b excise tax rate
+xcise tax
25%,%%%
A%.!%
A 15%,%%%
"5%
" $,5%%,%%%
2&
" 15%,%%%
Problem 15 22
Gold Copper Total
Quantity (tons of concentrate) 100 100
Multiplied by kilogram per ton 1,000 1,000
Total kilogram 100,000 100,000
Multiplied by gram per kilogram 1,000 1,000
Total grams 100,000,000 100,000,000
Multiplied by percent of metal content 0.0! ".00!
#ctual grams of metals 0,000 ",000,000
Multiplied by market price per gram $ % $0.01
Total in dollars $1&0,000 $"0,000
Multiplied by peso rate per dollar '&0 '&0
Totals in pesos '(,&00,000 '1,%00,000
Multiplied by applicable e)cise ta) rate ! 1!
*)cise ta) '1(,000 '1%,000 '10,000