Level: Level 3

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  • 20 Marks

PBL – OCT 2022 – L3 – Q7 – Legal Mortgage over Leasehold Interest

Outline key considerations for taking a legal mortgage over leasehold property and steps to perfect it for a sole proprietorship loan.

Amoasi Enterprise is a sole proprietorship owned and controlled by John Amoasi. The business is engaged in the supply of chips and stones for building projects. John Amoasi has applied for a loan of GHC 500,000 for the purchase of a used tipper truck. He shows you an Indenture covering his Leasehold interest in a property located a Winneba valued GHC 1,000,000.00.

(a) What key consideration would you have in mind in taking a legal mortgage over a leasehold interest? [8 Marks]

(b) Outline the steps which you would take to acquire a legal mortgage over the property in such a manner that the bank’s interest is absolutely protected. [12 Marks]

[Total marks:20]

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  • 20 Marks

PBL – OCT 2022 – L3 – Q6 – Alternative Securities for Construction Loans and Lender Remedies

Identify alternative security for a construction loan where traditional assets are unsuitable, and outline steps to perfect it; list key remedies under the Borrowers and Lenders Act 2020 for borrower default.

(a) Your key customer BBA Construction Ltd. is engaged in a contract for the construction of a 200 kilometer road in the Central Region. He has completed over 60 % of the project and has certified works of GHC 800,000 to be paid. He is applying for working capital loan of GHC 500,000 to purchase materials for the project.

He has no security to offer save the assets of the company which comprise a one storey office building and the road construction equipment. Your managing director is not enthused about taking a fixed and floating charge over the assets of the company as they are subject to rapid wear and tear. The key person Mr. Aras also does not have any personal landed property to offer.

From the above, identify what alternative security may be available in the circumstances and how you would proceed to take the security to ensure that the bank’s interest is protected. [16 Marks]

(b) You have been asked to deliver a lecture on the remedies of a lender in the event of a borrower defaulting in the servicing of a facility. Mention the four key remedies provided under the Borrowers and Lenders Act (2020) Act 1052. [4 Marks]

[Total marks:20]

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  • 20 Marks

POB – LP OCT 2022 – L3 – Q4 – Collecting Bank Duties and Protections in Cheque Collection

A bank collects a stolen cheque for a fraudulent customer, opens an account after clearance, allows withdrawal, and faces a lawsuit from the drawer; questions cover definition of collecting bank, duties, statutory protections, common law defences, and applicability of protection.

As a new Manager at the Edubiase branch of your bank, in the course of your work, your branch has collected a cheque for the account of a customer who turned out not to be the true owner of the cheque. Your Operations Manager did not open the account straightaway but for reasons unknown to you, he told the customer Timothy Ankrah that the bank would not open the account immediately but would only open the account if the cheque of GHC 500,000 the prospective account holder presented was cleared. After the cheque had cleared, your Operations Manager proceeded to open the account and the very next day, Timothy withdrew an amount of GHC 400,000.00 which he claimed was for the purchase of a car.

It transpires that the cheque had been stolen and Timothy was only an impersonator. Timothy is nowhere to be found.

The drawer of the cheque Mr. Banson has sued the bank for refund of the monies he has lost.

(a) What is a collecting bank? [2 Marks]

(b) Mention three duties of a collecting bank. [3 Marks]

(c) Mention and explain the statutory protection available to a collecting bank that collects a cheque for a party who is not the true owner of the cheque? [9 Marks] (d) What are the common law defences available to a collecting bank? [4 Marks]

(e) Will the bank be able to avail itself of the statutory protection? [2 Marks]

[Total marks:20]

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  • 20 Marks

PBL – OCT 2022 – L3 – Q3 – Company Objects Amendment and Cheque Handling Policies

Legal principles for advising on amending company objects for new business ventures and handling a cheque payable to a related company for crediting to a personal account.

State the legal principles you would take into consideration in resolving the following legal matters that have come to your attention.

(a) Mr. Nkumsah is majority shareholder and Chairman of the Board of Directors of Nkumsah Trading Ltd, which has an account with you for the past twenty years. The company issued debentures secured by a floating charge over the company’s assets three years ago. Mr. Nkumsah has 60% shares in the company and is also the sole signatory of the account. Nkumsah Trading Ltd. was established with a registered constitution with the objects of importing medical equipment and ancillary materials. He has applied for a loan of GHC 400,000 for the importation of baby pampers as he claims baby pampers move faster than medical equipment. In appraising the facility, your attention is drawn to the fact that since the company has incorporated with registered objects the company must amend the constitution to enable the company to undertake the new venture. In your discussion with him he asks you of advice of how he could amend the objects of the company’s constitution to enable him to enter into the new venture. He also asks you

what legal difficulties may arise if he engaged in business outside the established objects of the company. [10 Marks]

(b) Secondly Mr. Nkumsah has a cheque payable to a sister company Jamsah Ltd., in which he has shareholding of 50%. His lifelong friend owns the remaining 50%. You advise him that it is a company policy not to credit a cheque payable to a company into a personal account of a director or employee of that company. He argues with you and tells you that since he is the one of the key shareholders he has the right to do so as it is an internal arrangement for him to undertake a specified transaction for the company. [10 Marks]

[Total marks: 20]

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  • 20 Marks

PBL – OCT 2022 – L3 – Q2 – Banker-Customer Confidentiality and Law Enforcement Demands

Scenario involving police demanding customer account information; identify duty of confidentiality, its exceptions, and how to handle the situation.

You enter your office as Retail Manager this morning to find commotion at the front desk of your branch. As you enter you see three persons in police uniforms claiming to be from the National Investigations Bureau (NIB). They claim they have got wind that one Mr. Mahama Obeng who is under investigation for drug trafficking has an account with your branch where he has lodged his ill-gotten gains. They are demanding that your Operations Manager produce the information immediately or he would be hauled to the NIB for impeding an investigation.

(a) What rule of law do you require to resolve this problem? [2 Marks]

(b) Discuss the four (4) exceptions to the duty a bank owes its customers identified in (a) [8 Marks]
(c) How would you deal with the situation that is before you?[10 Marks]

[Total marks: 20]

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  • 20 Marks

ITF – OCT 2022 – L3 – Q8 – Remedies to Fraud in International Contracts

State five remedies to fraud in international contracts based on a copper blister fraud case.

During the summer of 2020, Geneva-based Mercuria Energy Group said it had been the victim of cargo fraud following its purchase of 10,000 tons of copper blister. When the cargoes started arriving in China, it found containers full of painted stones instead. The bizarre case happened despite security and inspection controls. About 6,000 tons were loaded for shipment in more than 300 containers on eight vessels. But before its journey from a port near Istanbul, the copper was switched with paving stones, spray-painted to resemble the semi-refined metal. Once the vessels were at sea, Mercuria paid $36m over five installments. The fraud wasn’t discovered until the ships began arriving in the Chinese port of Lianyungang. Mercuria, one of the five-biggest energy traders in the world, is seeking redress in Turkish and UK courts against the copper supplier, Bietsan Bakir. Turkish police have taken a number of people into custody in relation to the fake copper scheme. “Suspects have been taken under custody who are thought to be involved in the various parts of this organised crime against Mercuria,” the company said in a statement while thanking the Istanbul Financial Crimes Department.

Note: All parties in all commercial transactions should be aware of the potential for fraud. In some cases, those parties you negotiate with may not even be aware of the liability they pose. The above fraud case gained global attention through social media on March 9, 2021.

REQUIRED

State five (5) remedies to fraud in international contracts.

[Total Marks 20]

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  • 20 Marks

ITF – OCT 2022 – L3 – Q7 – Role of Banks in International Trade

List the roles of banks in international trade in bullet points for SMEs under AfCFTA.

The African Continental Free Trade Area (AfCFTA) is organizing training programs to grow the Small and Medium-sized Enterprises (SMEs) and most importantly to deepen their understanding on international trade and how they can take advantage of the banking system for efficient operation and expansion of their businesses. As Head of Trade Finance of your bank, you have been engaged as a resource person by (AfCFTA) to take Chief Operating Officers of these SMEs on the following topic: “The Role of Banks in International Trade”

REQUIRED:

List these roles (in bullet points only) under the various roles for one mark each.

Note: Long and detailed descriptions are not required.

[Total marks 20]

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  • 20 Marks

ITF – OCT 2022 – L3 – Q6 – Issuing Bank’s Undertaking under UCP 600 Article 7

State the issuing bank's undertaking as per UCP 600 Article 7 a (i-v), b, and c.

State the “Issuing Bank’s Undertaking” as enshrined in Article 7 a (i – v), b and c when it issues a credit on behalf of its customer under the current International Chamber of Commerce (ICC) Publication in respect of Uniform Customs and Practice for Documentary Credit – UCP 600.

[Total Marks 20]

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  • 20 Marks

ITF – OCT 2022 – L3 – Q5 – D/A Collections and Buyer Protection

Explain D/A terms, expected instructions on collection order, address suggestion on refusing non-spec goods, and ways for drawee protection in D/A collections.

Mr. Bob Ferguson, senior director of your customer, Adelaide Ltd is negotiating for the first time with suppliers abroad to purchase some outwear garments, which are at present unobtainable in the UK. The terms of payment which the sellers have suggested are a 90 days’ sight draft D/A with presentation through a UK bank. You understand that the presentation will be subject to Uniform Rules for Collections (and the shipping terms are to be CFR UK port). Your customer believes that he will have the opportunity of examining the goods when they are received in the UK and that, if they are not in accordance with specification, he can refuse the goods and will not be liable to pay the sellers, since all charges will be against the goods.

Required

a) Write brief notes on the terms of payment mentioned above; [4 marks]

b) Indicate the instructions you would expect to see on the collection order; [8 marks]

c) What would say to the suggestion by Mr. Bob Ferguson that, if goods were not in accordance with specification, the company could refuse to take up and pay for them? [6 marks]

d) How can the drawee obtain a measure of protection with D/A collections? [2 marks] [Total Marks 20]

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  • 20 Marks

ITF – OCT 2022 – L3 – Q4 – Back-to-Back Credits for Import Financing and Cash Flow

Describe back-to-back credits to protect the customer and assist cash flow, assess appropriateness for German supplier in Euros, and suggest a compromise for compliance.

Builders Merchants Ltd, customers of your bank, supply the building construction industry with a wide range of building materials and products. Their Financial Director, Mr. Kwame Annoh, calls to see you to discuss a CIF contract, which has been signed, to supply a range of fittings and building materials to an overseas buyer. During the conversation you discover that all the goods will be bought from overseas and that all the suppliers are insisting upon secured methods of payment. The Financial Director asks you to suggest a method by which his company can be fully protected, since cash flow considerations are causing some concerns at the present time. The overseas CIF contract is expressed in sterling but one supplier based in Germany, is insisting upon being paid in Euros.

Required

a) A brief description of basic instrument which would be appropriate in answering the needs of the Builders Merchants Ltd. Indicate why your suggestion will cater for your customer by assisting them to overcome their cash flow difficulties and why it will also give some comfort to their potential suppliers. [12 marks]

b) State briefly whether the method described by you in (a) is or is not, appropriate to the contract with the German supplier. Give reasons for your answer. [2 marks]

c) A compromise that you would consider arranging for Builders Merchants Ltd. which would assist them in complying with the request of the German supplier, bearing in mind that the German company requires security of payment.

[6 marks] [Total Marks 20]

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  • 20 Marks

FRPA – APRIL 2023 – L3 – Q4 – Ratio Analysis and Performance Report for Loan Assessment

Compute five specified ratios for 2021 and 2020 using provided financial statements and write a report analyzing the company's performance comparing the two years.

As the Credit Officer for TCB Bank, Alpha Technology Solutions Limited has submitted its financial statements as part of the process to secure a loan of GHS 5million. You are required to:
i. Compute the following ratios for 2021 and 2020.
• Gross Profit Margin
• Return on Capital Employed
• Acid Test Ratio
• Payable period
• Debt to equity

ii. Write a report to the Head of Credit analyzing the performance of the company for the 2020 and 2021. Your report should explain the ratios and analyze them in relation to the previous year.

ALPHA TECHNOLOGY SOLUTIONS LIMITED STATEMENT OF FINANCIAL POSITION AS AT 31ST DECEMBER 2021

2021 (GHS) 2020 (GHS)
NON-CURRENT ASSETS
Property, Plant and Equipment 438,631 428,210
Fixed Deposit – 400,000
Total Non-Current Assets 438,631 828,210
CURRENT ASSETS
Inventories 2,284,401 2,409,650
Accounts Receivable 2,712,529 1,368,010
Cash on Hand and Bank 642,951 2,177,519
Total Current Assets 5,639,881 5,955,179
TOTAL ASSETS 6,078,512 6,783,389
2021 (GHS) 2020 (GHS)
LIABILITIES AND SHAREHOLDERS’ EQUITY
NON-CURRENT LIABILITIES
Loans 115,484 115,484
Deferred Tax 18,127 22,110
Total Non-Current Liabilities 133,611 137,594
CURRENT LIABILITIES
Accounts Payable 1,843,574 2,869,489
Current Tax 30,512 129,464
Total Current Liabilities 1,874,086 2,998,953
Total Liabilities 2,007,697 3,136,547
SHAREHOLDERS’ EQUITY
Stated Capital 1,240,000 1,240,000
Retained Earnings 2,830,815 2,406,842
Total Shareholders’ Equity 4,070,815 3,646,842
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 6,078,512 6,783,389

ALPHA TECHNOLOGY SOLUTIONS LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31ST DECEMBER 2021

2021 (GHS) 2020 (GHS)
Revenue 11,180,208 12,957,649
Direct Cost (7,446,676) (9,703,650)
Gross Profit 3,733,532 3,253,999
Other Income – 23,436
Administrative Expenses (3,168,234) (2,483,480)
Operating Profit 565,298 793,955
Income Tax Expense (141,325) (198,489)
Profit/(Loss) After Taxation 423,973 595,466

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  • 20 Marks

FRPA – APRIL 2023 – L3 – Q3 – IAS 27 Separate Financial Statements

Statement describing the prescription of IAS 27 for accounting and disclosure requirements in separate financial statements.

A) IAS 27: Separate Financial Statements prescribes the accounting and disclosure requirements for investments in subsidiaries, joint ventures and associates when an entity elects, or is required by local regulations, to present separate financial statements.

B) Define the following terms in accordance with IAS 27: Separate Financial Statements.                                                                               i Associate                                                                                                                                                                                                                              ii. Joint control                                                                                                                                                                                                                  iii. Joint venture                                                                                                                                                                                                                  iv. Equity method v. Separate financial statements                                                                                                                                                  vi. Investment entity

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  • 20 Marks

FRPA – APRIL 2023 – L3 – Q2 – Property Treatment, IAS 16, and IAS 2

Explain the treatment of three identical properties in the financial statements of Black Trust real estate and identify the applicable IAS for each; define property, plant and equipment under IAS 16, explain recognition criteria for PPE, and state five disclosure requirements under IAS 2 Inventories.

Black Trust real estate (in the business of building and selling properties) owns three (3) identical properties, East Legon Hills, Dansoman and Kasoø New Town.

Dansoman is used as the head office of Black Trust. East Legon Hills is let to, and occupied by, a subsidiary. Kasoø New Town is part of the buildings constructed for sale.

You are required to:                                                                                                                                                                                                           a. Explain how the three properties will be treated in the financial statements of Black Trust real estate and identify the International Accounting Standard that will be applicable for each of them.                                                                                                    b. IAS 16 Property, Plant and Equipment deals with Accounting for Property, Plant and Equipment.                                                        i. With respect to IAS 16: Property, Plant and Equipment, define property, plant and equipment?                                                            ii. Explain the criteria for recognizing an item of property, plant and equipment. iii. State 5 disclosure requirements of inventory under IAS 2 inventory.

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  • 20 Marks

ITF – APR 2023 – L3 – Q8 – Non-Financial Non-Transport Documents in Trade

Briefly explain ten documents important in international trade that are neither financial nor transport in nature.

Documents are very important in international trade as they control the movements of goods and in some cases give legal titles to true owners. Briefly explain ten documents which are neither financial nor transport in nature but which nonetheless, are equally important in international trade. [2 marks each]

[Total Marks 20]

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  • 20 Marks

FRPA – APRIL 2023 – L3 – Q1 – Financial Statements Preparation, Conceptual Framework, and Intangible Assets

Prepare the statement of profit or loss and other comprehensive income and the statement of financial position for ANG Ltd based on the given trial balance and additional information; explain the objective of general-purpose financial reporting and the terms relevance and faithful representation; define intangible assets, explain recognition criteria, and state disclosure requirements under IAS 38.

  A
The following is the trial balance of ANG Ltd, a trading company, as of 30 September 2022:

Debit Credit
GH¢’000 GH¢’000
Sales
Inventory 3,150
Cost of sales 35,500
Selling & distribution expenses 5,600
Administration expenses 8,540
Loan Note interest paid 110
Bank interest 85
Investment income
Leasehold building at valuation – 1 Oct 2021 14,000
Plant and equipment – cost/depreciation 13,750
Computer equipment – cost/depreciation 7,200
Motor vehicles – cost/depreciation 1,500
Trade receivables 17,900
Bank
Trade payables
500,000 Ordinary shares
8% Loan notes (2019 – 2023)
Revaluation surplus
General reserve
Retained earnings – 1 Oct 2021
107,335 107,335

The following additional information is made available:
i. The company paid ordinary dividends of GH¢2.2 per share on 31 January 2022 and GH¢2.6 per share on 30 June 2022. The dividend payments are included in administrative expenses in the trial balance.
ii. Provision is to be made for a full year’s interest on the Loan notes.
iii. non-current assets:
• Depreciation of Property, plant and equipment is to be provided on the following bases:

  • Plant and equipment – 10% on cost
  • Computer equipment – 25% on cost
  • Motor vehicles – 20% on reducing balance.
    • No depreciation has yet been charged on any non-current asset for the year ended 30 September 2022.
    • ANG Ltd revalues its buildings at the end of each accounting year. On 30 September 2022, the relevant value to be incorporated into the financial statements is GH¢14,100,000.
    • The building’s remaining life at the beginning of the current year (1 October 2021) was 25 years. ANG Ltd does not make an annual transfer from the revaluation reserve to retained earnings in respect of the realization of the revaluation surplus. Ignore deferred tax on the revaluation surplus.
    iv. Estimated corporate income tax payable on the profit for the year is GH¢3,500,000.

You are required to:
Prepare the following financial statements of ANG Ltd. for publication in accordance with International Financial Reporting Standards (IFRS):
a. Statement of profit or loss and other comprehensive income for the year ended 30 September 2022 and.
b. Statement of financial position as of 30 September 2022.
c. Show clearly all relevant workings.

 B
I. What is the objective of general-purpose financial reporting?
II. The IASB’s Conceptual Framework for Financial Reporting states that “If financial information is to be useful, it must be relevant and faithfully represent what it purports to represent.” Explain the terms Relevance and Faithfully Representation.

 C
The accounting treatment of intangible assets is prescribed by IAS 38 Intangible Assets. You are required to:
i. Define intangible asset under IAS 38 Intangible Assets.
ii. Explain the recognition criteria for intangible assets.
iii. State 5 disclosure requirements of Intangible Assets under IAS 38.

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  • 20 Marks

ITF – APR 2023 – L3 – Q7 – Fraudulent Remittance Prevention

Explain in 10 bullet points how to prevent a fraudulent remittance scenario involving a SWIFT MT910 message.

You are in charge of the Foreign Remittances Department of your bank. About a week ago, a certain man came to your office to enquire whether you have received any remittance on his behalf. When asked how much he was expecting he said the amount was USD 23, 745.00 from his brother in America, to which you replied in the negative. He had a few discussion with with you, gave you his name as well as cell phone number and left.

Three days after, you received a SWIFT message MT9 10 (confirmation of credit advice) with an amount of USD 23, 745.00 (from Citbank N.A. so you called him. He gave his account details of your bank’s branch at Somanya. Upon this you gave instruction for payment to be processed into his current account in local currency. Customer withdrew the funds as soon as it hit the account explaining to the branch manager that it was for a building project and had to quickly buy the building material before prices escalate. A week later, you returned from a meeting at Head Office to find a SWIFT message on your desk from Citbank N.A requesting for immediate return of the paid out USD 23.745 received under MT9 10 as it has been confirmed by the FBI as a fraudulent transaction. In fact, Citbank is urgently demanding authorization message from your bank to debit its Nostro account in settlement.

Required:

Explain what you could have done to prevent this from happening to your bank. Your answer should be a ten (10) bullet point format.

[Total Marks 20]

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  • 20 Marks

ITF – APR 2023 – L3 – Q6 – Export Factoring vs Invoice Discounting

Define export factoring and state 8 differences between factoring and invoice discounting.

a. What is Export Factoring? [4 marks]

b. State 8 differences between factoring and invoice discounting. [16 marks]

[Total – 20 marks]

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  • 20 Marks

ITF – APR 2023 – L3 – Q5 – Medicare & Associates Documentary Credit Issue

State issuing bank's responsibilities under UCP 600 and measures to prevent non-payment in a documentary credit scenario for hospital equipment importation.

You are the head of your bank’s Trade Department. Through the bank’s Corporate Department you received an application for the establishment of documentary letter of credit (L/C) from a customer. Medicare & Associates for the importation of hospital equipment from Germany. You supervised the issue of the credit in favour of the beneficiary and advised it through your euro correspondent, Commerzbank, Frankfurt. The credit amount of Euro 350, 000 was the total cost of the hospital equipment at CIF. Tema port. Upon receiving the L/C. Commerzbank immediately advised the beneficiary suppliers who organized the goods and shipped them under the CIF terms to Tema port. Documents were accordingly sent to the counters of Commerzbank for payment as the credit was under sight payment.

After thoroughly examining the documents, Commerzbank paid the beneficiary under the compliant presentation and sent the documents to your bank for reimbursement.

Upon receiving the documents, your examination team went through for any discrepancy but found none. Unfortunately, Medicare & Associates had no funds in their account to meet the payment of the reimbursement claim from Commerzbank.

Your bank had to reimburse Commerzbank immediately in accordance with Article 7 of UCP 600 – which is categorical on the Issuing Bank’s undertaking when it issues a documentary credit. You released the documents received from Commerzbank to customers and goods were cleared to their warehouse which was eventually sold to ultimate buyers. Strangely enough, Medicare & Associates could not pay your bank – citing Covid-19 problems as their reason for the failure to pay.

Medicare & Associates are now asking for the Euro 350,000 to be converted into a loan facility and be given time to pay.

Required i. State the undertaking/responsibilities of your bank with respect to UCP 600 of your bank which agreed to issue this documentary credit on behalf of its customer. (9 marks) ii. Indicate what could have been done to prevent this from happening? (11 marks)

[Total Marks 20]

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  • 20 Marks

ITF – APR 2023 – L3 – Q4 – Johnson Company Ltd Contract Negotiations

Identify and explain two bank products to overcome problems in negotiations between Johnson Company Ltd and Al Watany Ltd for generator export.

You are the manager of Merchant Bank Ltd, which maintains the account of Johnson Company Ltd (JCL.) a local generator dealerships JCL’s Managing Director. Kingsley Arthur, has advised you today that the company has decided to purchase new generators from manufacturers in Europe because the terms of local suppliers are no longer favourable to their business.

Mr. Arthur informs you that he is in negotiations with a new Egyptian buyer. Al Watany Ltd for the export of the generators to Cairo for a total cost of USD 500, 000,00.

Some of the contract details are that the Egyptian buyers would have to make an advance payment of 20% upon signing the contract. Again, the buyers. Al Watany Ltd, should pay the last 10% immediately after shipment of the generators. Mr. Arthur is facing two major problems in the negotiations:

a) Since it is a new trading relationship, Al Watany Ltd is reluctant to agree to the 20% deposit when the contract is signed. Al Watany Ltd is concerned that the money could be lost if the contract did not work out as expected. b) Al Watany Ltd also insists on paying the final 10% of the contract price two months after shipment, so that they can check the generators are in good and acceptable condition on arrival in Cairo. Mr. Arthur is worried that the delay in payment will adversely affect the company’s cash flow.

Required: i. Identify two bank products that would help to overcome the problems in the commercial contract negotiations between Johnson Company Ltd and Al Watany Ltd. [5 marks] ii. Explain how each of these products would operate and advise the companies of the possible effects on their businesses by using these products. [15 marks]

[Total Marks 20]

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  • 20 Marks

ITF – APR 2023 – L3 – Q3 – Foreign Exchange Rate Scenarios

For five FX scenarios, state the type of rate quotation, bank's position, applicable rate, and settlement amount.

In each of the five scenarios below, you are required to state clearly the following: A. The type of rate quotation and its applicable rules on the market. (1 mark) B. The position of your bank in the transaction. (1 mark) C. The applicable rate for your calculation. (1 mark) D. The settlement amount for your customer’s account. (1 mark)

  1. Cement Solutions Ltd (CSL) is a new manufacturing company taking advantage of the housing deficit of the country to produce quality and affordable cement for the real estate industry. They have imported clinker from a Norwegian company worth NOK 750, 000, 00. Payment is due tomorrow and the Accountant called the sales desk at your bank’s Treasury for the rate to know how much will be debited to their Ghana Cecil account at your branch at Ridge, Accra. Your bank’s rate is as follows: Spot NOK/GHS 1.2210 1.2235
  2. Asesewa Quarries Ltd. (AQL) taking advantage of the AICFTA, shipped limestone to a mining company in Angola costing Angolan Kwanza 3, 000, 000.00. AQL did not cover forward and want to know how much the company will receive in Ghana Cedis as payment is due today. AQL keeps its business account with your bank’s branch at Somanya. See rates below: Spot GHS/AOA 39.6805 39.9815
  3. Dampare & Sons are dealers in quality rice on the Ghanaian market and have been importing mainly from the Asian millers which are always quoted in US dollars. The uncertainty of the depreciating local currency is affecting their profit margins. Under the AICFTA they now get their supplies from neighbouring Nigerian millers which have improved their bottom-line. The Accountant called at your Tema Market branch to make payment for NGN 15.0 million and your quote for the day is as follows: Spot NGN/GHS 0.0285 0.0295
  4. The Head of Finance of University of KwaZulu-Natal, which has been chosen among the ten universities doing Medicine in South Africa, called at your Durban branch this morning to make payment for GBP 40,750,00 to a hospital equipment supplier in London to the debit of their local currency account. The value date is today and your bank has quoted the following rate from its trading floor:

Spot GBP/ZAR 21,95010 21,9835 5. You are in charge of the trading desk for foreign exchange operations at Commerzbank Tower, Frankfurt Main. You picked up an in-coming phone call and the counterpartry, your well-known customer, requested to pay GHS 775, 000,00,00 to a beneficiary company in Adum, Kumasi for goods imported. Based on your bank’s electronic screen displaying the rates for today as shown below, calculate how much should be debited to your customer’s euro account:

Spot EUR/GHS 13,5605 13,5675

[Total marks 20]

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