TOPIC 20 – METHODS OF VALUATION PART 2 (QUIZ)

Acer Inc. in Manila ordered 200 units of computer laptops from Belta Inc. in Japan with FOB value of $150.00 per unit. Belta Inc. instructed Chow Inc. in China to manufacture the said computer laptops with their price arrangement amounting to FOB value of $130.00 per unit. Chow Inc. was instructed immediately to export the computer laptops to the Philippines upon completion of the order. The bill of lading shows ocean freight charges of $2,500.00. Based on exchange rate of P42.10/$1.00, how much is the total dutiable value under Method One?

• P1,418,770.00

• P1,243,634.00

• P1,221,742.00

• P1,393,510.00

Techno Inc. in Cebu ordered 5,000 boxes containing kitchen knives from Kit Inc. in Indonesia with FOB value of $30.00 per box. Kit Inc. owns 15% of outstanding voting stock of Techno Inc. Since a relationship has been established, the BOC examines its record of a previous importation of 1,000 boxes of kitchen knives made by the Kit Inc. to Eden Inc., a buyer not related him, with FOB value of $25.00 per unit. Upon arrival of the shipment, the bill of lading shows ocean freight charges of $6,000.00 whereas the local insurance was P242,500.00 with official receipt and certification presented to BOC. If the rate of exchange was P48.50/$1.00, determine the total dutiable value under Method One.

• P6,596,000.00

• P7,808,500.00

• P7,857,000.00

• P7,711,500.00

AJ Enterprises in Cebu imported from BF Industries Inc. in Moscow leather clothes with total CIF value of $12,000.00. On a previous shipment of leather clothes from BF Industries Inc. to Cred Inc., a new customer in Cebu, an $800.00 in damage had occurred during the shipment. BF Industries Inc. asked AJ Enterprises to make an immediate settlement of the damage claim with Cred Inc. and AJ Enterprises would then deduct $800.00 from his invoice price amounting to $11,200.00. How much is the total dutiable value under Method One? Use rate of exchange P53.75/$1.00.

• P602,000.00

• P688,000.00

• P645,000.00

• P559,000.00

Hand Builders Inc., a wholesaler of electrical tools, purchased 100 units of electric drillers from Wuxia Inc. in China. Wuxia’s price list shows quantity discounts depends on the number of units purchased:  0-50 units for 3%, 51-100 units for 5% and over 100 units for 10%. The unit price for the electric driller was FOB $80.00. The bill of lading shows ocean freight charges of $1,100.00. If rate of exchange was P44.60/$1.00, how much is the total dutiable value under Method One?

• P420,132.00

• P383,024.80

• P394,799.20

• P401,578.40

Eve Corporation in the Philippines imports leather handbags from Gaia Inc. in France with total FCA value of $13,000.00. Gaia Inc. sells the fashion bags only through a selling agent who is located in the Philippines. According to the terms of sales contract, the Gaia Inc. requires all importers of his bags to pay an additional 3% of the invoice value directly to a selling agent. To maximize the sale, Eve Corporation asked the selling agent with nation-wide advertising campaign and separately pays the agent 2% of the invoice price as marketing expenses. Upon arrival of the shipment, the airway bill indicated freight charges of $1,300.00. How much is the total dutiable value under Method One? Use rate of exchange P43.75/$1.00.

• P654,062.50

• P648,375.00

• P637,000.00

• P665,437.50

Galley Enterprise in Cebu City orders 5 units of bulldozers from Excel Inc. in USA with FOB value of $8,000 per unit. Galley Enterprise provides the following free of charge:

 

•   Bulldozer wheels at $4,000.00

•   Tools for assembling of units at $850.00

•   Fuel for drive testing purposes at $500.00

•   Engineering plan sourced in Manila at $300.00

 

Upon arrival of the shipment, the bill of lading shows total ocean freight charges of $7,000.00. The local insurance was P52,200.00 without official receipt and certification presented to BOC. If the exchange rate was P43.50/$1.00, how much is the total dutiable value under Method One?

• P2,359,875.00

• P2,346,825.00

• P2,342,475.00

• P2,329,425.00

Silver Milk Inc. in Australia enters into agreement with Ava Corporation in the Philippines for the supply of dairy products. The prices are freely negotiated between Silver Milk Inc. and Ava Corporation. According to sales contact, Ava Corporation must pay 5% of the invoice price as proceeds for subsequent resale. The covering invoice shows total FOB value of $22,000.00 with percentage of proceeds indicated. The bill of lading indicated freight charges of $1,750.00. Determine the total dutiable value under Method One. Use rate of exchange P41.20/$1.00.

• P1,041,948.00

• P1,014,756.00

• P1,060,076.00

• P996,628.00

WS Trading Inc. enters into trade agreement with JX Trading Inc. in USA for the supply of brand new clothes. The covering invoice shows total CIP value of $25,000.00 inclusive of freight charges of $1,450.00. According to terms of agreement, JX Trading Inc. instructs the buyer to pay a trademark royalty of 2% of the invoice value to Levi Strauss Inc. in USA as a condition of sale. The rate of exchange at the time of filing was P54.30/$1.00. How much is the total dutiable value under Method One?

• P1,357,500.00

• P1,382,573.57

• P1,382,091.38

• P1,384,650.00

Yor Industries ordered 100 units of electric fans from Yen Industries in Japan with FCA value of $65.00 per unit. Yor Industries provides the following free of charge:

 

·        Fan blades at $250.00

·        Assembling tools at $80.00

·        Blueprints sourced from China at $120.00

·        Office chairs at $50.00

 

Additionally, Yen Industries requires all his buyer to pay 2% of the invoice as commission to Yen’s agent in Manila. The airway bill shows freight charges of $850.00. The rate of exchange was P48.99/$1.00. Determine the total dutiable value under Method One.

• P401,228.10

• P403,677.60

• P394,859.40

• P397,308.90

ABC Corporation enters into sales contact with XY Corporation for the supply of refined petroleum coke from New Zealand. The invoice shows total CIF value of $46,000.00. The following charges are not yet included to the invoice price:

 

·        A commission of 2% of the invoice value was paid to ABC’s agent in New Zealand

·        A license fee of 1% of the invoice value was paid to XY Corporation for using the necessary oils needed to make the refined petroleum coke 

·        Cost of container vans at $150.00

·        Import duty and tax at $800.00

·        Trucking in the Philippines at $30.00

·        Maintenance cost upon arrival of said products at $10.00

 

Using rate of exchange P42.15/$1.00, how much is the total dutiable value under Method One?

• P1,977,678.00

• P1,938,900.00

• P1,997,067.00

• P2,038,795.50