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  • 20 Marks

STP – Feb 2018 – L2 – Q2 – VAT Credit Notes

Explain circumstances for issuing VAT Credit Notes and tax implications for prior period supplies.

a) As a Tax Consultant, you receive a note from Mr. Emilio Ditto, the Managing Director of a company based in the United Kingdom seeking to expand its operations in Africa through the opening of an office in Accra. He is interested in discussing with you details of some aspects of the VAT regime in Ghana particularly, the basic VAT concepts on the following:
(i) Under what circumstances can a VAT-registered person issue a Credit Note to cancel or amend a VAT invoice?
(ii) What are the tax liability implications for a VAT-registered person who issues a Credit Note to a customer for a supply that was made in a previous tax period?

Required:
Provide a brief for Mr. Emilio Ditto giving your responses to the issues raised above, with reference to the VAT Act, 2013 (Act 870) as amended.

b) Under the provisions of the Excise Duty Act, 2014 (Act 878), the Commissioner-General may, based on any information available, make an assessment of the amount of excise duty payable by a person.

Required:
State four (4) different circumstances under which the Commissioner-General may exercise the discretion to make an assessment of the excise duty payable by a person.

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  • 20 Marks

STP – Feb 2007 – L3 – Q5 – VAT Apportionment

Explain VAT rules for goods on sale or return and input tax apportionment for taxable and exempt supplies.

a) Tanji Enterprises Ltd. operates a Fuel Filling Station and a huge Supermarket in Tamale within the same premises. A joint tax audit team from the LTU Office visited Tanji and noted that Tanji supplies taxable and non-taxable goods and services to customers but fails to notice the split distinction between these services. The VAT team therefore has disallowed some claims and apportioned others to reflect the true VAT claimable.

Required:
i. Explain the VAT rules for goods supplied on sale or return.
ii. Discuss the apportionment of input tax for taxable and exempt supplies.

(b).Required:

Discuss the VAT rules on the timing of supply for the following:

i. Goods or services applied to own use, gifted, or supplied under hire purchase or finance lease.

ii. Continuous or metered supplies like electricity.

iii. Goods supplied under a hire purchase agreement or finance lease.

iv. Goods or services supplied under rental agreements or periodic payments.

v. Ancillary supplies.

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  • 20 Marks

STP – Feb 2007 – L3 – Q4 – Employee Loan Taxation

Advise on tax implications of a $300M loan and bonus for Dr. Ababio, including relevant Tax Act provisions.

(a). Dr. Ababio discusses an engagement she recently accepted with an investment banker with you for advice. She indicates that one of the recruiting inducements that convinced her to accept the position is a $300M loan from her employer. She will receive the loan proceeds on her first day of work and must sign a note to repay the loan plus accrued interest in five equal annual installments.

The employer will forgive any amount of the unpaid debt if Dr. Ababio dies, becomes disabled, or is terminated from employment through no fault of her own. Dr. Ababio’s contract provides that the employer will pay an annual bonus equal to each loan repayment. The contract stipulates that the bonus must be applied to the repayment of her loan.

Required:
i) Advise Dr. Ababio on the implications, if any, of this engagement provisions.
ii) Discuss any three provisions in the Tax Act which will support the position the Commissioner will take in respect of the taxability or otherwise of this engagement provision.

(b). The Free Zone Act declares a 10-year tax holiday for Free Zone Operators. Sweet Entities Inc. desires to set up in the Free Zone enclave but requires an understanding of the practical tax concessions granted to free operators. To this effect, the Tax Director of Sweet Entities Inc. requires that you do a practical presentation of the flow of the corporate tax-exempt concession as extended to the operator. He therefore provides you with the following business forecast for the first 10-year period as follows.
All figures in $M

Year 1 2 3 4 5 6 7 8 9 10
Adjusted Profit 10 60 150 500 1,000 1,000 1,000 520 600 620
Capital Allowance 1000 600 300 150 50 20 20 600 340 200

Compute the tax position, if any, of Sweet Entities Inc. for the exempt period.

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  • 20 Marks

STP – Aug 2016 – L2 – Q3 – Tax Residency

Determine if Berchem Plc is a tax resident in Ghana.

Berchem Plc UK (Berchem) is a foreign company that provides engineering services to Gritty Electricals Company Ltd (GEC) here in Ghana. Koranten Systems (Koranten) serves as a country representative for Berchem in Ghana and assists Berchem to execute their service contracts. Koranten Systems provides labour and local material support to Berchem when needed on the contract, whereas Berchem provides the prefinancing, expertise and specialized equipment for the execution of work. As compensation, Koranten is paid commission in cash and equipment.
Berchem won its first contract with GECin January 2014. To date, no VAT was ever charged on invoices billed to GEC by Berchem. GEC also failed to withhold taxes on payments made to Berchem. Both GEC and Berchem had the general belief that these taxes were not stated as part of the signed contracts and therefore were not applicable in respect of the contracts. Berchem again saw the VAT charge as rendering pricing of the projects uncompetitive.

Consultants to GEC have recently advised GEC to start withholding taxes from payments made to Berchem as required by the Income Tax Act, since Berchem has been providing service in Ghana for “at least 2 years”.

Required:
On behalf of Berchem Plc, The Chief Executive of Koranten requests you to provide tax advisory service on the new development. Koranten requests for a documented Tax expert advice to submit to Berchem in respect of
a) Whether Berchem Plc is tax resident in Ghana,

b) The relevance, the basis and application of VAT, withholding, and corporate taxes on the business dealings between Berchem and GEC.

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  • 20 Marks

STP – Aug 2016 – L2 – Q2 – VAT on Imports

Discuss taxable value for VAT on imported goods and services.

VAT is chargeable on imports. The basic information required to facilitate the VAT charge on imported goods and services is the value of the goods or services. At a recent meeting organized by the Ghana National Chamber of Commerce and Industry to educate members on the taxable value for determining the VAT on imported goods and services you, as a renowned tax consultant, were invited to discuss this issue.

The topic you are to speak on is “What is the taxable value for determining the VAT on imported goods and services.

Required
a) As the preferred consultant, please present to the Chamber a discussion paper on the taxable value for determining the VAT on imported goods and services.

b). Also indicate in your presentation the procedures that must be followed before payment of VAT on the import of services is made.

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  • 20 Marks

STP – Aug 2013 – L2 – Q5 – Strategic Indirect Tax Management

Advise Isak Esh Ltd on VAT responsibilities in Ghana.

(a) Isak Esh Ltd registered to do business in Ghana in October 2012. The CEO read in the papers that the Ghana Revenue Authority intends to embark on a mop up exercise before year 2012 will end. The CEO has been briefed by the Chief Finance Officer of Isak Esh Ltd about his company’s inability to have registered with the GRA for VAT purposes. As Chartered Tax Advisor, the CEO has approached you for advice.

Required Please advice Isak Esh Ltd on its VAT responsibility in Ghana.

(b). As tax advisor to Tanko Enterprises Ltd., you receive a note from the Chief Finance Officer as follows: “We have purchased Processing Plant and Machinery from a company registered in Mauritius. The company has agreed not to sell this machinery to any other party in Ghana for the next ten (10) years and therefore is charging us additional fee of $100,000. Should we pay? What are the tax implications of the payment of the price of the machinery and the additional fee in Ghana? “

Required a) Please advice the Chief Finance Officer on Tanko’s tax responsibilities as detailed in the Tax Acts in respect of such transactions.

b) Discuss the duty and VAT payable on the import of machinery into Ghana.

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  • 21 Marks

STP – Aug 2013 – L2 – Q2 – Taxation of Specialized Business Sectors

Tax obligations for a foreign oil company supplying gas turbine parts and maintenance in Ghana.

Due to the recent oil discovery in Ghana, many oil related companies continue to seek tax advice on doing oil related business in Ghana. As the Tax Partner for XYZ Consult, you receive a note from the Chief of Finance (Tax), Mauuwli Inc. Bubai as follows: “Mauuwli Inc. intends to supply parts of Gas turbines in Ghana. In addition, we shall provide maintenance services on these turbines. This is the business we do in Saudi and will do all the time across nations as the opportunity opens up to us. In view of this, we want to be 100% tax compliant in your country as there is no tax for my company in Saudi. We want to know whether as foreign company ordinarily resident in Dubai, we will be subject to the following taxes:

  • Corporate tax (4 Marks)
  • Withholding tax(WHT) and at what rate (8 Marks)
  • Valued Added Tax(VAT) and National Health Insurance Levy (NHIL) (3 marks)
  • Employee taxes” (4 marks)

Required As Tax Partner for XYZ Consult, provide your answer to the Chief of Finance, Mauuwli Inc., as requested for.

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  • 20 Marks

ATP – Aug 2019 – L2 – Q2 – Indirect Taxes

Calculate NHIL, GET Fund, VAT, and Withholding Tax for Menuaa Manufacturing for October 2018.

Menuaa Manufacturing Limited (MML) produces iron rods for sale in both the domestic and foreign markets. The company is registered with the Ghana Revenue Authority for Value Added Tax (VAT). The company’s transactions during the month of October 2018 were as follows:

Transactions GH¢
Sales (VAT Inclusive) 756,000
Exports to Sierra Leone 120,000
Relief Supplies 48,000
Purchase of Rolling Equipment 55,500
Hotel Expenses for Staff at a workshop on the new amendment on the VAT law. (VAT Inclusive) 4,500
Stationery purchased for Administration work 15,600
Iron Ingot imported (CIF) 141,750
Local Purchases 50,000

Unless otherwise stated Sales and Purchases are all Value Added Tax exclusive. National Health Insurance and GET Fund Levies are also exclusive except where it has been specifically stated.
Required:
a. You are required to calculate the NHIL and GET fund levies, VAT payable, if any, and Withholding Tax for October 2018.

b. State the last date when each payment is due.

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  • 20 Marks

TAI – Aug 2020 – L1 – Q3 – Audit Review and Reporting

Comment on matters and audit evidence for bad debt provisions and VAT claims of Mina Macarthy Limited for 2019.

(a) You are a tax audit team leader responsible for the audit of Mina Macarthy Limited.

Mina Macarthy Limited owns a block of flats and earns its income through rentals and general dealing. On 1st January 2019, the ledger accounts of the company included the following balances.

Debtors’ account GH¢475,000

Provision for doubtful debts account GH¢ 42,235

The balance on the provision account consisted of the following: GH¢

Specific provision of 100% against the debt of Charles Sulemana, a tenant 31,500

General provision of 1% against remaining debts
12,235

During the year ended 31st December 2019, the following events occurred.

i. Charles Sulemana paid Mina Macarthy GH¢11,150 and then vanished without trace to new world, leaving no assets.

ii. Another tenant, Antonio Banderas, who owed GH¢3,900 fell into a river and was also found to have died penniless.

iii. Azuma Nickson returned from total obscurity and paid an amount of GH¢6,450 which Mina Macarthy Ltd had written off in 2017.

iv. Credit sales for the year amounted to GH¢8,167,400 and cash received from debtors (other than Sulemana and Azuma) totaled GH¢3,150,000

v. On 31st December 2019, Mina Macarthy Ltd decided to provide in full against a disputed debt of GH¢51,200 owed by Kwesi Otoo Pratt, and to maintain the 1% general provision on other debtors.

Additional notes

The company has submitted its returns for 2019 which showed a profit before tax of GH¢375,650.

Required: Comment on the matters to be considered. In addition to your comments, explain the audit evidence expected to be obtained during your review of Mina Macarthy Limited’s audit working papers prepared by the audit team member in respect of each of the issues described above.                                                                                                                                                                                                                                                                                                                                                                                                                             (bi)

In order to claim a VAT bad debt, a business must show proof of the bad debt.

Required:

i. Explain how a bad debt may arise for VAT.

(bii) In order to claim a VAT bad debt, a business must show proof of the bad debt.

Required:

ii. Explain the circumstances under which a bad debt relief can be claimed.

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  • 20 Marks

ATP – Feb 2017 – L3 – Q2 – VAT Returns

Explain what VAT Returns are for a newly registered company.

The Managing Director of EDVALLEY (Ghana) Limited, a newly registered company, has approached you to assist their company to comply with the Value Added Tax law in Ghana. They have asked you specifically to assist in the area of VAT Return and payment of the related tax.

Required:

a) Explain what VAT Returns are (4 Marks)

b) Advise the Managing Director company with respect to registration, submission of returns and the payment of the tax. (10 Marks)

c) A person with turnover below the registrable level could apply voluntarily to the Commissioner-General to be registered as a taxable person.

Required:

Outline the circumstances under which the Commissioner–General could refuse the request to register a taxable person. (6 Marks)

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  • 20 Marks

STP – Feb 2018 – L2 – Q2 – VAT Credit Notes

Explain circumstances for issuing VAT Credit Notes and tax implications for prior period supplies.

a) As a Tax Consultant, you receive a note from Mr. Emilio Ditto, the Managing Director of a company based in the United Kingdom seeking to expand its operations in Africa through the opening of an office in Accra. He is interested in discussing with you details of some aspects of the VAT regime in Ghana particularly, the basic VAT concepts on the following:
(i) Under what circumstances can a VAT-registered person issue a Credit Note to cancel or amend a VAT invoice?
(ii) What are the tax liability implications for a VAT-registered person who issues a Credit Note to a customer for a supply that was made in a previous tax period?

Required:
Provide a brief for Mr. Emilio Ditto giving your responses to the issues raised above, with reference to the VAT Act, 2013 (Act 870) as amended.

b) Under the provisions of the Excise Duty Act, 2014 (Act 878), the Commissioner-General may, based on any information available, make an assessment of the amount of excise duty payable by a person.

Required:
State four (4) different circumstances under which the Commissioner-General may exercise the discretion to make an assessment of the excise duty payable by a person.

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  • 20 Marks

STP – Feb 2007 – L3 – Q5 – VAT Apportionment

Explain VAT rules for goods on sale or return and input tax apportionment for taxable and exempt supplies.

a) Tanji Enterprises Ltd. operates a Fuel Filling Station and a huge Supermarket in Tamale within the same premises. A joint tax audit team from the LTU Office visited Tanji and noted that Tanji supplies taxable and non-taxable goods and services to customers but fails to notice the split distinction between these services. The VAT team therefore has disallowed some claims and apportioned others to reflect the true VAT claimable.

Required:
i. Explain the VAT rules for goods supplied on sale or return.
ii. Discuss the apportionment of input tax for taxable and exempt supplies.

(b).Required:

Discuss the VAT rules on the timing of supply for the following:

i. Goods or services applied to own use, gifted, or supplied under hire purchase or finance lease.

ii. Continuous or metered supplies like electricity.

iii. Goods supplied under a hire purchase agreement or finance lease.

iv. Goods or services supplied under rental agreements or periodic payments.

v. Ancillary supplies.

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  • 20 Marks

STP – Feb 2007 – L3 – Q4 – Employee Loan Taxation

Advise on tax implications of a $300M loan and bonus for Dr. Ababio, including relevant Tax Act provisions.

(a). Dr. Ababio discusses an engagement she recently accepted with an investment banker with you for advice. She indicates that one of the recruiting inducements that convinced her to accept the position is a $300M loan from her employer. She will receive the loan proceeds on her first day of work and must sign a note to repay the loan plus accrued interest in five equal annual installments.

The employer will forgive any amount of the unpaid debt if Dr. Ababio dies, becomes disabled, or is terminated from employment through no fault of her own. Dr. Ababio’s contract provides that the employer will pay an annual bonus equal to each loan repayment. The contract stipulates that the bonus must be applied to the repayment of her loan.

Required:
i) Advise Dr. Ababio on the implications, if any, of this engagement provisions.
ii) Discuss any three provisions in the Tax Act which will support the position the Commissioner will take in respect of the taxability or otherwise of this engagement provision.

(b). The Free Zone Act declares a 10-year tax holiday for Free Zone Operators. Sweet Entities Inc. desires to set up in the Free Zone enclave but requires an understanding of the practical tax concessions granted to free operators. To this effect, the Tax Director of Sweet Entities Inc. requires that you do a practical presentation of the flow of the corporate tax-exempt concession as extended to the operator. He therefore provides you with the following business forecast for the first 10-year period as follows.
All figures in $M

Year 1 2 3 4 5 6 7 8 9 10
Adjusted Profit 10 60 150 500 1,000 1,000 1,000 520 600 620
Capital Allowance 1000 600 300 150 50 20 20 600 340 200

Compute the tax position, if any, of Sweet Entities Inc. for the exempt period.

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  • 20 Marks

STP – Aug 2016 – L2 – Q3 – Tax Residency

Determine if Berchem Plc is a tax resident in Ghana.

Berchem Plc UK (Berchem) is a foreign company that provides engineering services to Gritty Electricals Company Ltd (GEC) here in Ghana. Koranten Systems (Koranten) serves as a country representative for Berchem in Ghana and assists Berchem to execute their service contracts. Koranten Systems provides labour and local material support to Berchem when needed on the contract, whereas Berchem provides the prefinancing, expertise and specialized equipment for the execution of work. As compensation, Koranten is paid commission in cash and equipment.
Berchem won its first contract with GECin January 2014. To date, no VAT was ever charged on invoices billed to GEC by Berchem. GEC also failed to withhold taxes on payments made to Berchem. Both GEC and Berchem had the general belief that these taxes were not stated as part of the signed contracts and therefore were not applicable in respect of the contracts. Berchem again saw the VAT charge as rendering pricing of the projects uncompetitive.

Consultants to GEC have recently advised GEC to start withholding taxes from payments made to Berchem as required by the Income Tax Act, since Berchem has been providing service in Ghana for “at least 2 years”.

Required:
On behalf of Berchem Plc, The Chief Executive of Koranten requests you to provide tax advisory service on the new development. Koranten requests for a documented Tax expert advice to submit to Berchem in respect of
a) Whether Berchem Plc is tax resident in Ghana,

b) The relevance, the basis and application of VAT, withholding, and corporate taxes on the business dealings between Berchem and GEC.

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  • 20 Marks

STP – Aug 2016 – L2 – Q2 – VAT on Imports

Discuss taxable value for VAT on imported goods and services.

VAT is chargeable on imports. The basic information required to facilitate the VAT charge on imported goods and services is the value of the goods or services. At a recent meeting organized by the Ghana National Chamber of Commerce and Industry to educate members on the taxable value for determining the VAT on imported goods and services you, as a renowned tax consultant, were invited to discuss this issue.

The topic you are to speak on is “What is the taxable value for determining the VAT on imported goods and services.

Required
a) As the preferred consultant, please present to the Chamber a discussion paper on the taxable value for determining the VAT on imported goods and services.

b). Also indicate in your presentation the procedures that must be followed before payment of VAT on the import of services is made.

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  • 20 Marks

STP – Aug 2013 – L2 – Q5 – Strategic Indirect Tax Management

Advise Isak Esh Ltd on VAT responsibilities in Ghana.

(a) Isak Esh Ltd registered to do business in Ghana in October 2012. The CEO read in the papers that the Ghana Revenue Authority intends to embark on a mop up exercise before year 2012 will end. The CEO has been briefed by the Chief Finance Officer of Isak Esh Ltd about his company’s inability to have registered with the GRA for VAT purposes. As Chartered Tax Advisor, the CEO has approached you for advice.

Required Please advice Isak Esh Ltd on its VAT responsibility in Ghana.

(b). As tax advisor to Tanko Enterprises Ltd., you receive a note from the Chief Finance Officer as follows: “We have purchased Processing Plant and Machinery from a company registered in Mauritius. The company has agreed not to sell this machinery to any other party in Ghana for the next ten (10) years and therefore is charging us additional fee of $100,000. Should we pay? What are the tax implications of the payment of the price of the machinery and the additional fee in Ghana? “

Required a) Please advice the Chief Finance Officer on Tanko’s tax responsibilities as detailed in the Tax Acts in respect of such transactions.

b) Discuss the duty and VAT payable on the import of machinery into Ghana.

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  • 21 Marks

STP – Aug 2013 – L2 – Q2 – Taxation of Specialized Business Sectors

Tax obligations for a foreign oil company supplying gas turbine parts and maintenance in Ghana.

Due to the recent oil discovery in Ghana, many oil related companies continue to seek tax advice on doing oil related business in Ghana. As the Tax Partner for XYZ Consult, you receive a note from the Chief of Finance (Tax), Mauuwli Inc. Bubai as follows: “Mauuwli Inc. intends to supply parts of Gas turbines in Ghana. In addition, we shall provide maintenance services on these turbines. This is the business we do in Saudi and will do all the time across nations as the opportunity opens up to us. In view of this, we want to be 100% tax compliant in your country as there is no tax for my company in Saudi. We want to know whether as foreign company ordinarily resident in Dubai, we will be subject to the following taxes:

  • Corporate tax (4 Marks)
  • Withholding tax(WHT) and at what rate (8 Marks)
  • Valued Added Tax(VAT) and National Health Insurance Levy (NHIL) (3 marks)
  • Employee taxes” (4 marks)

Required As Tax Partner for XYZ Consult, provide your answer to the Chief of Finance, Mauuwli Inc., as requested for.

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  • 20 Marks

ATP – Aug 2019 – L2 – Q2 – Indirect Taxes

Calculate NHIL, GET Fund, VAT, and Withholding Tax for Menuaa Manufacturing for October 2018.

Menuaa Manufacturing Limited (MML) produces iron rods for sale in both the domestic and foreign markets. The company is registered with the Ghana Revenue Authority for Value Added Tax (VAT). The company’s transactions during the month of October 2018 were as follows:

Transactions GH¢
Sales (VAT Inclusive) 756,000
Exports to Sierra Leone 120,000
Relief Supplies 48,000
Purchase of Rolling Equipment 55,500
Hotel Expenses for Staff at a workshop on the new amendment on the VAT law. (VAT Inclusive) 4,500
Stationery purchased for Administration work 15,600
Iron Ingot imported (CIF) 141,750
Local Purchases 50,000

Unless otherwise stated Sales and Purchases are all Value Added Tax exclusive. National Health Insurance and GET Fund Levies are also exclusive except where it has been specifically stated.
Required:
a. You are required to calculate the NHIL and GET fund levies, VAT payable, if any, and Withholding Tax for October 2018.

b. State the last date when each payment is due.

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  • 20 Marks

TAI – Aug 2020 – L1 – Q3 – Audit Review and Reporting

Comment on matters and audit evidence for bad debt provisions and VAT claims of Mina Macarthy Limited for 2019.

(a) You are a tax audit team leader responsible for the audit of Mina Macarthy Limited.

Mina Macarthy Limited owns a block of flats and earns its income through rentals and general dealing. On 1st January 2019, the ledger accounts of the company included the following balances.

Debtors’ account GH¢475,000

Provision for doubtful debts account GH¢ 42,235

The balance on the provision account consisted of the following: GH¢

Specific provision of 100% against the debt of Charles Sulemana, a tenant 31,500

General provision of 1% against remaining debts
12,235

During the year ended 31st December 2019, the following events occurred.

i. Charles Sulemana paid Mina Macarthy GH¢11,150 and then vanished without trace to new world, leaving no assets.

ii. Another tenant, Antonio Banderas, who owed GH¢3,900 fell into a river and was also found to have died penniless.

iii. Azuma Nickson returned from total obscurity and paid an amount of GH¢6,450 which Mina Macarthy Ltd had written off in 2017.

iv. Credit sales for the year amounted to GH¢8,167,400 and cash received from debtors (other than Sulemana and Azuma) totaled GH¢3,150,000

v. On 31st December 2019, Mina Macarthy Ltd decided to provide in full against a disputed debt of GH¢51,200 owed by Kwesi Otoo Pratt, and to maintain the 1% general provision on other debtors.

Additional notes

The company has submitted its returns for 2019 which showed a profit before tax of GH¢375,650.

Required: Comment on the matters to be considered. In addition to your comments, explain the audit evidence expected to be obtained during your review of Mina Macarthy Limited’s audit working papers prepared by the audit team member in respect of each of the issues described above.                                                                                                                                                                                                                                                                                                                                                                                                                             (bi)

In order to claim a VAT bad debt, a business must show proof of the bad debt.

Required:

i. Explain how a bad debt may arise for VAT.

(bii) In order to claim a VAT bad debt, a business must show proof of the bad debt.

Required:

ii. Explain the circumstances under which a bad debt relief can be claimed.

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  • 20 Marks

ATP – Feb 2017 – L3 – Q2 – VAT Returns

Explain what VAT Returns are for a newly registered company.

The Managing Director of EDVALLEY (Ghana) Limited, a newly registered company, has approached you to assist their company to comply with the Value Added Tax law in Ghana. They have asked you specifically to assist in the area of VAT Return and payment of the related tax.

Required:

a) Explain what VAT Returns are (4 Marks)

b) Advise the Managing Director company with respect to registration, submission of returns and the payment of the tax. (10 Marks)

c) A person with turnover below the registrable level could apply voluntarily to the Commissioner-General to be registered as a taxable person.

Required:

Outline the circumstances under which the Commissioner–General could refuse the request to register a taxable person. (6 Marks)

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