QUESTION THREE a. Gidimadjo manufacturing company started business on 1/9/2019 and acquired plant and machinery on 1/12/2019 costing GH 20,000. Gidimadjo manufacturing company prepares account to 31st December each year. Required Compute the capital allowance for the business for 2019 year of assessment. (4 marks) b. On 1st April 2014, Nyamekye acquired 55% ordinary shares of S Ltd. Since the Earning per share kept falling, Nyamekye sold all his shares in S Ltd on 1st April, 2018 at a market price of GH 2.50 per share. He also incurred the following cost when disposing the shares;

Commission 5% on sales value

Legal cost GH 15,000 Consultancy service fees GH2,000 Statement of Financial Position (extract of S Ltd ) as at 31st March, 2018 Noncurrent asset 1,200,000 Current Asset 300,000 Total 1,500,000

Stated Capital; Ordinary shares (@GH 2.00) 1,000,000

Retained Earnings 150,000

Non-Current Liability 300,000

Current Liability 50,000

1,500,000

Nyamekye used GH 660,000 from the money received from sales of his shares in S ltd to acquired 220,000 shares in H Ltd on 30th April, 2018. All shareholders in H Ltd shares appreciated in value by GH 0.20 per share in October, 2018. Required Compute Capital Gain Tax payable (if any) by Mr. Nyamekye and provide notes to support your computation. (Ignore exempt amount) (10 marks) c. Kelkadadi Ltd contracted a loan of GH10 million from Danlerigu Ltd on 1st January 2019 to help it meet its operational activities. The loan is repayable within 2 years. Interest on the debt during the 2 years period amounted to GH2million. At the end of 31st December 2020, Kelkadadi Ltd offered a consideration of 10.5 million to offset it total debt owed to Danlerigu Ltd due to its financial problems. Required Compute the tax Kelkadadi should pay only on gain from the realisation of its debt (if any). (Ignore exempt amount) (6 marks) Page 4 of 4 d. The normal VAT rate in Ghana is 17.5%, which consist of the standard VAT rate of 15% (section 3; VAT Act 2013: Act 870) and National Health Insurance Levy, which is imposed at a rate of 2.5%. Currently, the normal VAT rate still stands at 17.5%, which consists of the standard VAT rate of 12.5%, National Health Insurance Levy, which is imposed at a rate of 2.5% and Ghana Education Trust Fund Levy of 2.5%. Assuming that you are watching a television programme dubbed The aggregate implication of the current VAT rate on taxable persons with your dad who is fully aware that you are a Level 300 BBA Accounting student who has scored an A in Tax Planning course. On the programme, advocates for the current rate argued that its aggregate impact is minimal on taxable persons. On the contrary, critics have argued that the aggregate impact on taxable persons is so devastating. Your father has become so confused than ever. Required With practical example, using ordinary language, educate your father on this phenomenon (Hint: Consideration should be given to Act 971, Act 972 & Act 970) (10 ma