TOPIC 21 – METHODS TWO-SIX (QUIZ)

ABC Trading Inc., a wholesaler of construction supplies, imported 100 boxes STC: iron nails from Shenzhen, China at FOB value of $275.00/box. The transaction value under Method 1 cannot be established but BOC had a record on file covering previous importation identical to the shipment being valued. It showed 10 boxes sold by a different seller in China at gross retail price of $350.00/box, less 5% trade discount as a retailer. The seller likewise grants 20% trade discount for wholesalers with a minimum purchase of 50 boxes. Upon arrival of the shipment, the importer paid $1,500.00 for ocean freight charges. How much is the total dutiable value under Method 2? Use rate of exchange P42.75/$1.00.

• P1,285,065.00

• P1,309,005.00

• P1,263,262.50

• P1,286,775.00

Which among the following does NOT conform to the use of Method Two?

• Produced by same producer of the goods being valued

• Produced in the same country as the goods being valued

• Produced by different producer in the same country as the goods being valued

• Produced by different producer in different country as the goods being valued

   

In applying Method Two and Three, if more than one transaction value of the goods is found, which value shall be used to determine the dutiable of imported goods?

• Lowest of such value

• Highest of such value

• The value of the highest quantity

• The value of the lowest quantity

Delaware Enterprise, a wholesaler of fruits, imported from Green Corp. in Australia 30 cartons STC: raspberry with FCA value of $875.00/carton. The air waybill shows freight collect of $1,250.00. Method 1 cannot be established by BOC prompting the retrieval of import records for price comparison. There were 4 previous importation of similar fruits made under Method 1 and were compared to the air waybill dates of the similar fruits being valued, namely: 20 days ago - $880.00/carton, 35 days ago - $750.00/carton, 40 days ago - $800.00/carton and 60 days ago - $700.00/carton. The similar fruits were purchased by different wholesalers and sold by same seller in Australia as the fruits being valued. How much is the total dutiable value under Method 3? Use rate of exchange P44.70/$1.00.

• P1,252,717.50

• P1,276,185.00

• P1,101,855.00

• P1,081,740.00

What does the term “unit price” under Method Four mean?

• The price at which the greatest number of units is sold in sales to persons who are not related to the persons from whom they buy such goods at first commercial level after importation

• The price at which the greatest number of units is sold in sales to persons who are related to the persons from whom they buy such goods at first commercial level after importation

• The price at which the lowest number of units is sold in sales to persons who are not related to the persons from whom they buy such goods at first commercial level after importation

• The price at which the lowest number of units is sold in sales to persons who are related to the persons from whom they buy such goods at first commercial level after importation

   

Mystic Leather Inc. imported 100 leather bags from Zon Inc. in Australia. The transaction value cannot be determined under Method 1 since the seller and buyer are related and relationship has influenced the price and there were no previous importation of the same shipment thus Methods 2 and 3 were not used. However, the BOC had record of domestic prices of said leather bags and information below:

 

•    A previous importation of 500 leather bags were sold in the domestic market in the Philippines.

•    200 bags were sold to an unrelated buyer at P3,500.00/bag while the rest of the bags were sold to another unrelated buyer at P3,000.00/bag.

•    Importer’s profit and general expenses at P480.00/bag.

•    Import duties and taxes at P250.00/bag.

•    Export duties and taxes at P100.00/bag.

•    Local freight and internal insurance cost in the Philippines at P50.00/bag.

 

Determine the total dutiable value under Method 4.

• P212,000.00

• P272,000.00

• P222,000.00

• P271,000.00

Under 3.6.2 of CMO 16 – 2010, states about the calculation of dutiable value under Computed value, which of the following is NOT to be added in the calculation of dutiable value under Method Five?

• Materials employed in producing the imported goods

• Fabrication, production and processing cost for the imported goods

• Engineering, development, artwork, design work and plans and sketches undertaken in the Philippines and charged to the producer

• Add amount of profit and general expenses equal to that usually reflected in the sales of goods of different class or kind as the goods being valued which are made by producers in the country of exportation for export to the Philippines

Hard Drive Inc. imported 10 units of computers from USA for its office operations. The BOC found out that the such was made under leasing contract thus Method 1 was not used. There were no previous importations of identical and similar computers and no domestic sale was ever recorded thus, Methods 2, 3 and 4 were not used. However, BOC had record of the following cost breakdown for the computers under valuation:

 

•    Cost of materials at $2,500.00/unit.

•    Cost of fabrication at $1,500.00/unit.

•    Profit and General Expenses at $250.00/unit.

•    Ocean freight cost to Philippines at $20.00/unit.

•    Marine Insurance cost to Philippines at $10.00/unit

•    Import Duties and Taxes at $180.00/unit

 

If the rate of exchange was P47.80/$1.00, how much is the total dutiable value under Method 5?

• P1,912,000.00

• P2,031,500.00

• P2,131,880.00

• P2,045,840.00

If the dutiable value cannot be determined under Method Four and Five, then the dutiable value shall be determined under Method Six. No dutiable value shall be determined under Method Six on the basis of the following instances, EXCEPT:

• Arbitrary of fictitious values

• The price of goods for export to the Philippines

• The cost of production, other than computed values, that have been determined for identical or similar goods in accordance with Method Five

• The selling price in the Philippines of goods produced in the Philippines

Yun Trading Inc. enters into trade agreement with Wex Trading Inc. in China to supply 150 cartons of phone parts and accessories with FOB value of $18,000.00. However, the shipment was imported in a consignment basis thus Method 1 was not used. Customs had information of the following:

·         Wex Trading Inc. sells the same phone parts and components to his local market in China at FOB value of $20,000.00;

·         Wex Trading Inc. exports the same phone parts and accessories to an importer in Singapore at FOB value of $21,000.00;

·         Similar phone parts and accessories from the Philippine industry locally made at FOB value of $20,500.00;

·         Identical phone parts and accessories imported by a buyer in the Philippines from a seller in Korea at $21,500.00.

 

The bill of lading shows freight charges of $1,600.00. The domestic insurance was P29,450.00 with official receipt and certification presented to BOC. Based on rate of exchange P58.90/$1.00, how much is the total dutiable value under Method 6?

• P1,390,040.00

• P1,331,140.00

• P1,360,590.00

• P1,301,690.00