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b) Give four factors which you would consider whi le choosing a good fi nancial i nstitution to deal wi th

(2marks)

- I nterest rate . In case of borrowing, banks with relatively less interest rates should be chosenwhile in case of lending; one would prefer the one with relatively high interest rate ondeposits.

- Proximity . Banks which are easily accessible are normally chosen than distant andinaccessible ones especially if they offer same services.

- Legal procedures. A person tending to deal with any financial institution should also

consider whether the institution is registered by the central bank or not. In this caseindividuals and groups should deal with registered financial institutions only.

- Customer care. This is an important aspect of any business. Financial institutions whichhave good customer care are normally liked than those without.

- Payback period. This refers to the time / period with in which bank debtors pay back loansand their interest rates. Financial institutions that give a long pay period are normally likedthan those that give short payback period.

- Conditions of issued loans . Financial institutions that give soft loans should be chosen fasterthan those that give hard loans.

- Service delivery. Financial institutions that give quality and quick services are moreconvenient while those that give poor quality and slow services should be avoided.

- Time of operation. It is better to deal with a well-established financial institution than a

newly established one. In other words it is better to deal with those that have been inoperation for a longer period of time than new ones.

- Securi ty r equir ed. Banks which require low marginal requirements are more appropriatethan those that require high marginal requirements.

3. Explain f our thi ngs a business need to know about their competitors

- Their competitors’ prices

- Their competitors location

- quality of their competitors’ products

- Their competitors market share

- Their competitors strength

-

Their competitors techniques both in production and in market - Their competitors opportunities

- Their competitors weaknesses

- Their competitor’s threats. 4. Br iefly explain four dif ferent types of market surveys

- Customers’ survey: This is a procedure through which a producer or a trader tries to findout customers’ attitudes towards his products on the market or the products that he plans

put on the market.

- Product/service analysis and quality control: This basically refers to asking questionsabout a product and forming answers. It means experts analyzing a product or a memberof the general public or potential customers or a group of people.

And

- quality control

This is a process which attempts to minimize or eliminate errors in the quality of a

product.

It can also be defined as the process of ensuring the production of an output that meets

the required standards of customers.

It can also be defined as a set of working / operational techniques and activities

established from the time of purchase of raw materials up to the end of the production

process that ensures the production of good quality products.



- Suppliers’ survey: Supply survey is the process of finding out and establishing the best

potential suppliers of a given input or product.

- Competitor analysis: This involves comparing a company's products with products of

other similar companies, alongside comparing the strength, opportunities, weakness and

threats of all these companies.

5a) define the term franchising (1 mark)

- it refers to a promotion/marketing strategy that can be adopted by a firm/business toincrease its sales where it uses the name of a well -established or know business to become

known also to the public.

Franchising. This is another way of promoting business growth where by an established

firm/company allows a new firm to use its name while trying to promote its new products. For

example ISHEMA HOTEL allowing ISHEMA SHOPING CENTRE LTD.

b) A business had an opening stock of 200,000 Rwf, purchases of the 150,000 rwf and closing

stock 350,000rwf. Calculate the average stock (3marks)

Average stock =

=

= 275000rwf

6a) Define the term sampling (1mark)Sampling is the collection of information/data from a few but representative member of the population tobe generalized for the whole population.

b) Br iefl y explain any three sampli ng techniques used in business research (3marks)

- Simple random sampling . This is obtaining data by choosing elementary units in such away that each unit in the population has an equal chance of being selected. Simple

random sampling should be free from bias.

- Stratified sampling . This is a sample that is obtained by choosing by independentlychoosing a separate simple random sample from each population.

Using this method the population is divided into separate groups basing on somevariable/ characteristics such as income or age. These groups are referred to as strata.

Select from each stratum a given number of units which may be based on to draw

conclusions.

- Cluster sampling . This is obtained y selecting clusters from the population on the basis of

simple random sampling. A cluster may be something like a village, a school, a class or

a hospital.

- Convenient sampling .Where the researcher questions whoever is available. This method

is quick and heap. However we do not know how representative the sample is and how

reliable the results are.

- Quarter sampling . Using this method the sample audients is made up of potential

purchasers of your product. For example if you feel that your typical customers will be females between the age of 19-25,then some of the respondents you will interview shouldbe of this age group. In this case quarters are given.

- Judgmental sampling/ purposive sampling



This sample is obtained by basing on the idea that people who are deemed to be havingmore relevant information are sampled out especially if they have the relevant

characteristics of the target population.

- Snowball sampling . This is a method in which the researcher identifies one member of

the target population, speaks to him/her and asks that person to identify others in the

target population that the researcher might speak to. This method has an interestingapplication to group membership.

7. study the table below and answer the questions that follow

0 (240,000) 1 80,000

2 120,000

3 70,000

4 40,000

5 21,000

1. Calcul ate the payback per iod (2marks)

For uneven cash flows= A+

YEAR CASH FLOWS CUMULAT IVE CASH

FLOW

NET CUMULATIVE

0 (240,000) (240,000) (240,000)

1 80,000 80,000 160,000

2 (A) 120,000 200,000 40,000 (B)

3 70,000 (C) 270,000 30,000

4 40,000 310,000 70,000

5 21,000 331,000 91,000

x12

2 years and 7 months

2. Giving reasons for your answer, state whether thi s proj ect is viable or not (1 mark)The project is viable because the business will be able recover the initial investment before the time specified (5years)

3. State the decision r ule of any business using the bay back method (1 mark )Only projects that payback within the specified time period are viable and should be undertaken

8. Mukwano group of companies has calculated that it has fixed costs that consist of lease, depression ofits assets, executive salaries and property taxes. Those fixed costs added up to $7,000,000. The product is

a widget. Its variable costs associated with the widget are raw materials, factory labor and salescommission. Variable costs add up to $80 per unit. The price of a widget is $4000 each

Break even in quantity =

Contribution margin = selling price – unit variable cost

= 4000 – 80

= 3920

=

= 1785.7 widgets

ii) Using an illustration show the break-even point of this company



iii) Calculate the breakeven point in value for the company

=

28,000,000,000/3920

$7142857

9. Explain any three roles of entrepreneurship in employment creation (3marks)

- They set up business where people are employed

- They provide market for raw materials form the people

- They setup business premises where people will be employed (construction)

- People provide security services for the business

- They equip workers with skills that enable them to start their own business

- They inspire other people to start their own business

- They pay taxes which are used to set-up new jobs

- They organize seminars for the people which train them on how to start their own business.

10. Briefl y explain any four cannons of a good tax system (4marks)

- Ability to pay: A good tax system should consider the capacity of people to pay the tax assessed

on them. In other words a good tax system should be in such a way that a tax payer is in position

to pay a tax assessed on him. This mainly depends on the level of income of a tax payer.

- Simplicity: A good tax system should be in such a way that the method of collection, calculation,

e.t.c are easy to be understood by both tax payers and collectors. If they are not easy to be

understood, it can lead to resistance by tax payers.

- Convenience: A good tax system should consider how and when to pay taxes, should be

convenient to tax payers e.g. if they are farmers, it should be levied in seasons of selling their

products or harvesting.

- Elasticity/Flexibility: This refers to the rate at which a tax base changes e.g. if there is an

increase in the tax base, taxes should also be increased.



- The principle of certainty. A good tax system is the one whose base, time of payment, amount to

be paid e.t.c is known.

- Neutrality or impartiality. This means that a good tax system should not discriminate tax payers

if they are all supposed to pay the same tax.

- The principle of equity. This is concerned with spreading the burden of the tax according to

income of the tax payer. This principle suggests that people or tax payers should feel the burden

according to their incomes thus it is categorized into two. (a) Horizontal equity: This suggests

that people with similar incomes should pay the same amount of tax. (b) Vertical equity: This

suggests that people who earn differently should pay different amount of taxes- The principle of economy / efficiency. This suggests that the costs of collection and

administration of the tax system should be low. This enables the government to realize the

revenue expected to implement its plans.

- Productivity: A good tax system should be able to encourage personal initiative or encourage

hard work. In other words it shouldn’t discourage the rate of investment.

- Diversity or comprehensiveness. A good tax system should cover a wider source or base or as

many tax bases as possible so that a lot of revenue can be realized.

- Optimal: A good tax system should maintain a good balance between tax revenue and

expenditure on provision of social services e.g. roads, hospitals, and schools e.t.c. This

encourages tax payers to pay tax in time and without evading it.- Consistence: A good tax system should be (i) Consistent in line with national economic objective

especially in allocation of resources (ii) It should have an inbuilt stabilizer. It should have a

stabilizing influence on the economy e.g. ability to control inflation, unemployment, regulating

balance of payment position.

- The principle of double taxation. This states that any tax base should never be taxed more than

once.

Section B



11. Using an example of your own choice, draw an organization chart (organogram) (5marks)

A COFFEE PRODUCING FACTORY

b) Assuming that you are the general manager of Bank of Kigal i design a job advert for the post of amanager Bugesera branch

COMPANY: Bank of Kigali

POSITION: branch manager

ABOUT BANK ON KIGALI

Bank of Kigali is the biggest commercial bank in Rwanda having been in business for the last 50 years in

commercial banking. It’s fully owned by the government of the republic of Rwanda. It has won different

awards both locally and internationally for being an outstanding, efficient, and bank for common people.

Key responsibil it ies

- Supervising the workers at the branch

- Monitoring business activities at the branch

- Taking care of branch assets

- Producing financial reports

- Reporting to the general manger in Kigali

- Resolving business disputes at the branch

- Increasing the customers at the branch

- Manage the day to day maintenance of the Bank’s Property, fleet and Assets.

- Supervise and monitor the issuance of stationery for the Bank.

- Ensure provision of excellent and efficient administrative support to all Departments.

- Conduct inventory, update and maintain records of the Bank’s Assets.

- Perform any other duties that may be assigned by the Chief Executive.

Quali fi cations, Ski ll s and Exper ience:

- The ideal candidate should preferably hold a Master’s Degree, from an accredited University, in

Human Resource Management or Business Administration with a demonstrated experience of at

least 5 years’ in a similar job in a busy financial and/or private sector environment Or

Bachelor’s Degree, from an accredited university, in Human Resource Management or Public



Administration & Management plus a Postgraduate Diploma in Human Resource Management &

Administration with a demonstrated experience of at least 7 years' in a similar job in a busy

financial or private sector environment.

- Extensive knowledge of computer is an added advantage

- Possess the ability to work under minimum supervision

- The candidate should be 35 years and above

- Female applicants are highly encouraged

How to Apply:

If your qualifications and experience match those described above please send a detailed application

together with your CV, copies of your academic certificates and transcripts and a cover letter of not

more than 2 pages explaining why you consider yourself to be the best suited candidate.

The Executive Director, Bank of Kigali Limited, Plot 27 , P.O. Box 9485, Kigali Tel+256414313100

E-mail to: [email protected]

Deadline: Monday 29th September, 2014 by 4PM

c) Explain ten cr iteri a you would use whi le choosing people to work with (5marks)

- Age of the worker

- Sex of the person

- Religious affiliation

- Education levels of the worker

- Experience of the worker

- Skills possessed by the person

- Interpersonal abilities of the person

- Recommending referees of the person

- Institution attended by the person

- Scores/grades of the person while at school

- Interest of the person

- Abilities of the person

- Marital status of the person

- Family background of the person

- Former employer of the person

12. Discus the requirements of business that af fect the natural environment (8 marks)

- Land is required to construct premises and extraction of raw materials.

- Packaging materials especially those which do not decompose and which can’t be recycled.

- Agro chemical usage which affect human life and micro-bacteria

-

Machinery, tools and equipment used in production activities- Raw materials extraction which may result in environmental degradation.

- Energy source for the business.

- Transport routes (construction); fumes from the vehicles

- Disposal grounds for rubbish or waste materials produced through consumption and productive

operations

- Livestock which result into over grazing.

- Human resource for labour which require shelter, food etc.

mailto:[email protected]






b) As an entrepreneur what do you think can be done miti gate the negative effects of business to

the natural envir onment (7marks)

- Practicing re-afforestation and afforestation.

- Recycling used products as a way of cleaning up the environment.

- Treating of wastes and selection of proper disposal methods that do not cause negative effects to

the lives of people, animal and water.

- Avoid the use of chemical sin agribusiness and encourage natural fertilizers.

- Adopt new techniques of production which use less raw material and high quantity.

- Encourage use of better farming methods like crop rotation, paddocking terracing.

- Setup environment protection and conservation laws

- Setup and abide by the environmental standard.

- Put in place warning labels (sensitization on the masses ) through various medias

- Provide alternative source of energy which are environmental friendly like solar energy.

- Put in place environmental conservation bodies to monitor and implement environmental

standards e.g REMA.

- Request the business community to contribute funds toward general cleanliness of the working

environment

- Ensure provision of environmental information and quantitative and qualitative materials which

decision makers require to design policies

- Reprimand/punish business operators who fail to comply with the set standards

13. Di fferenti ate between a business plan and an action plan

Business plan is a study of whether the business will be feasible/ possible or not. It is a well prepared document which is intended to serve a particular period of time.

A business plan is also defined as a management tool which focuses on the nature of the business

in a logical and organized manner.

Whereas

An action plan: This is a plan put down by the entrepreneur in form of a timetable to guide him

on how he will implement the ideas of a business plan.

Therefore an action plan is a management tool which deals with currying out sequenced steps

towards achieving a business goal in order to get things done.

b) Explain any six elements of a business plan.

- Executive summary/ general description

- Mission statement, goals and objectives

- Production plan

- Administrative/organization plan

- Marketing plan

- Financial plan

- Implementation plan/action plan



c) I nyange industri es which is a business company wants to build an international accommodation

centr e in Gasabo distr ict which is thought to be going to take five years from 2015 to 2020. Prepare an

action plan for Inyange industry’s international accommodation center.(7marks)

Activi ty Peri od /time In-charge I ndicator of progress

Business

research/survey

1 year Company technical

team

Research report

Developing a business

plan

6 months Entrepreneur/company

planning authority

Copies of a business

planConstruction of the

premises

2 years Engineeringcompany/technical teamof the company

buildings

I nstallation of

equipment

6 months Company Technicalteam

Fully installed

Recrui tment of workers 6 months Human resource

manager

Availability of all

workers

Stocking raw mater ials 3 months Procurement

department

Availability of raw

materials

Starti ng production 3 months Production manager Goods

Marketing and sell ing

of products

Continuous Marketing team Marketing report

14.

a) Assumi ng that immediately after senior six national exams you are going to be a

member of a commi ttee that wil l plan for the establishment of a cer tain business,

explain nine business growth strategies that you would advise your fel low commi ttee

members to plan f or and undertake. ( 9 marks)

Product and service strategies. This involves increasing the capacity of the firm/company to produce and provide quality goods and services.

Organization strategy . This strategy holds together everything within the organization. This is

because an organization/business consists of structures, systems policies, procedures, activities

and people with different skills and personalities. To achieve business growth all these must be

properly organized.

People strategy. This covers better categorization of energies, skills and attitudes of employees so

that workers are put where they qualify and in right numbers. This is because employees and

companies grow together.

Finance strategy. Using this strategy the company/business defines the way in which it should

manage control and utilize its resources to ensure business growth. There should be quality

systems and skill for accounting, budgeting etc so that funds are used in only profitable ventures.

Organization of trade shows . Tradeshows have also been identified one of the effective strategies

for business growth. These are officially organized exhibitions intending to show the public the

existence of a variety of commodities available for sale. These ones help to maintain and attract

new customers.

Franchising. This is another way of promoting business growth where by an established

firm/company allows a new firm to use its name while trying to promote its new products. For

example ISHEMA HOTEL allowing ISHEMA SHOPING CENTRE LTD.



Diversif ication of sources of i ncome . The income streams have to be diversified in order to be

used to expand the business. Diversification of income can be achieved by dealing in many

activities rather than a few of them.

I ncreasing sales in the existing market . This is a growth strategy that many businesses can use

and is one of the easiest strategies to implement. Increasing sales can be achieved through

advertisement of products, good customer care and selling quality products.

Joint ventur e. These can be great ways for small businesses to grow and getting opportunities

such as bargaining power that an individual business would otherwise miss.

Attr acting angel investors . Angel investors are the honest and reliable business men who rejectany thing in transparent in the business especially aiming at personal benefits at the expense of

others. Working with such people is one of the strategies towards business growth.

Creating a great international market plan. Growing the business can also be achieved through

exporting commodities to other countries.

Creating sales incentive programs. These can be one of the effective strategies to business

growth. It involves techniques that make people like some body’s products. These can include

provision of transport for sod product, advertisements, and other after sales services.

Market Assessment : Refers to the process by which information is collected and analyzed on the

basis on which market opportunity and problems may be identified. With this business will be

able to grow. Using eff icient channels: Distribution channel refers to the arrangement through which the

products move from the producer to the final consumer. For a business to grow the producers has

to select a distribution channel that is efficient and cost effective

Producing or sell ing of high qual ity products: With this aspect/policy/strategy the business will

be able attract customers e.g. Dell, Nokia etc.

Using dif ferent terms of sel li ng goods and services: For example ; selling goods on credit,

payment in kind and paying in installments

14. b) As an entrepreneur , what do you think are constraints of business growth in

Rwanda? (3marks for 6 poin ts)

Inadequate capital

Un favorable government policies such as over taxation

Insecurity

Inaccessibility of some areas

Un favorable legal procedures of getting trading documents such as a trading license

Poor technology

Poor systems of education that creates job seekers than job makers

Dependence syndrome where most people in developing countries always expect help

from developed countries which may not be there.

The vicious cycle of poverty. That is to inheritance of a poor economic back ground.

Inadequate financial institutions that would help in giving loans to potential business

men.

Trade barriers. It is hard to obtain a legal document that allows a business man to

transact internationally.



Language barrier

Poor Customer Care

Lack of market: If a business has no market for its product definitely a bound to fail.

Poor location of a business: If a business is located in a bad area with poor road

networks no electricity few buyers of products it’s bound to fail.

Poor management: When a business is poorly managed workers will be inefficient

business assets are misused and lost this will fail the business.

Death of the Entr epreneur /business owner : Most business depends on the personal

effort and skills. When the entrepreneur dies the business will also collapse.

Law/poor quality products: If products sold by a business are of a low quality many

people will not buy products and this leads to the collapse of the business.

Bad debtors; when you allow some customers to take good on promises to pay but then

fail to pay the business will have to fail.

Political instabili ty : Civil wars, riots and demonstrations can cause business failure.

Natural calamities: For example floods, Earth Quakes can cause business failure.

Change in Customers taste and Preference : Who used to buy products may change taste

and preference and start consuming something different.

Theft of business assets.

C).As a citi zen of Rwanda, explain what the government has done to mi tigate the problems

limi ting business expansion in Rwanda. (3 marks for 6 points)

Land reforms to solve the problem of land disputes and limited land

Population control to reduce pressure on land

Provision of incentives to then people to solve the issue of capital

It has improved on the security of the country

Strengthening laws on corruption and wrong doers

Providing free education to people to solve the issue lack of skills

It has sent people overseas to get more skills to solve the issue of limited skills

It has signed trade agreement s to reduce the trade barriers like joining the EAC

Education reforms to reduce on job seekers like syllabus reviews

Encouraging cooperatives to raise more capital to different interest groups

Improving on infrastructure to allow accessibility to most of the areas Attracting more financial and service providing companies in Rwanda like insurance companies

to reduce on accident/risks

Reduction on legal procedures for getting business documents



Section C

15. Below is a list of assets, liabilities and capital of Mr. Byarugaba as at 31 st

December 2000.

capital ?

7 yea’s loan 200,000

Plant and machinery 70,000

Furniture and fittings 150,000

Buildings 100,000

Land 89,000

4 year’s loan 50,000

Creditors 10,000

Bank overdraft 20,000

Debtors 90,000

stock 40,000

Cash at hand 60,000

Cash at bank 55,000

Motor van 120,000

Office equipment 15,000

a) prepare Mr.byamugisha’s balance sheet as at 31 st

December 2000. (5 marks)

b) calculate the following

i) Capital net worth/owned ii) Working capital

iii) Working capital ratio IV) liquid funds

v) Liquid capital VI) liquid capital ratio

vii) Circulating capital viii) Fixed capital

ix) capital employed x) Borrowed capital

(1 mark each)



BYARUGABA BALANCE SHEET AS AT 31 ST DECEMBER 2010

Details Amount Amount Details Amount Amount

capital ? Fixed assets

Long termliabilities

Land 89,000

7 years loan 200,000 Building 100,000

4 years loan 50,000 Plant

machinery

70,000

Total long

liabilities

250,000 Furnitureand fitting

150,000

Currentliabilities

Motor van 120,000

Creditors 10,000 Officeequipment

15,000

Bank over draft 20,000 Total F .A 544,000

Total cur rent

liabilities

30,000 Currentassets

Total liabilities 280,000 Debtors 90,000

Cash at hand 60,000Cash at bank 55,000

Stock 40,000

Total

current

assets

245,000

Capital net worth/capital owned = total assets – total liabilities.

= 789,000 – 280,000

= 509,000rwf

Working capital = current assets – current liabilities

= 245,000 – 30,000

= 215,000 rwf

Working capital ratio =

=

= 8.2

Liquid funds = cash at hand + cash at bank

= 60,000 + 55,000

= 115,000

Liquid capital = current assets – stock

= 245,000 – 40,000

= 205,000 rwf

Liquid capital ratio =



=

= 6.83333

Circulating capital = current assets

= 245,000 rwf

Fixed capital = fixed assets

= 544,000 rwf

Capital employed = fixed assets + working capital

= 544,000 + 215,000

= 759,000 rwf

Borrowed capital = long term liabilities

= 250,000 rwf

16. Given that Jean Claude trader’s cash float is 150,000Rwf on 30th

April 2006 .the balance

at hand was 15,000Rwf . if the following transactions took place during the month of April

2006;

5th bought postage stamps 100

6 th

paid for staff tea 11,000

8th

paid for transport 2,000

10th

paid for poster’s wag es 25,000

15th

purchased new lock for office 1,500

16 th

paid for repair of water system 2,000

20th paid for floor polish 6,000

25th

paid for sugar for staff tea 3,000

27 th

paid for envelops 1,000

29th

paid for paper clips 1,500

30th

paid for cleaning of carpet 2,000

30th

paid for papers’ wages 10,000

a) Prepare Jean Claude trader’s petty cash book with analysis columns for; stationery,

transport, maintenance, wages, sundry expenses and balance as at 30th April 2006.

(10marks)

Receipt Date details payment Stationary

Transport

Maintenance

Wages Sundry

150,000 30t

march

float

15,000 1 st

April

Balance b/f

135,000 1 st

Reimbursement



April

5t

April

stamps 100 100

6 t

Staff tea 11,000 11,000

8t

transport 2000 2,000

10t

Posters wages 25,000 25,000

15t

Purchase oflock

1500 1500

16 t

Repair of water system

2000 2000

20t

Floor polish 6000 6000

25t

Sugar for stafftea

3000 3000

27 Envelops 1000 1000

29t

Paper clips 1500 1500

30t

cleaning ofcarpets

2000 2000

30t

Papers wages 10,000 10,000

65100 2500 2000 11500 35000 14,10030

t

april Balance c/d 84900

150,000 150,000

84900 1 s

may Balance b/d

65100 1 s

May Reimbursement

150,000

b) Open up the necessary accounts and post them to general ledger ( 5 marks)

Stationary account

Date Details Folio Amount Date Details Folio Amount

30t

April

Cashbook

2,500 30t

April

Balancec/d

2,500

2,500 2500

1 s

may Balanceb/d

2,500

Transport account


30

t

april Cashbook 2,000 30

t

April Balancec/d 2,000

2,000 2,000

1 st

may Balanceb/d

2,000

Maintenance account


30t

Cashbook

11,500 30t

April Balancec/d

11,500

11,500 11,500



1 st

may Balanceb/d

11,500

Wages account


30t

Cashbook

35,000 30t

April Balancec/d

35,000

35,000 35,000

1 s

may Balanceb/d

35,000

Sundry expenses


30t

Cashbook

14,100 30t

April Balancec/d

14,100

14,100 14,100

1 st

may Balanceb/d

14,100

General / total petty expenses account


30t

april Balancec/d

65,100 30t

april Cashbook

65,100

65,100 65,100

1 st

may Balanceb/d

65,100

17. trial balance as at 31 st

December 2004.

particulars Dr Cr

Capital 20,550

Drawings 10,000

Cash in hand 300

Cash at bank 4,200

Furniture and fittings 11,800

Stock 01-01-04 8,050

Purchases 42,000



Sales 64,500

Return out wards 300

Debtors 3,800

Creditors 5,150

Carriage inwards 400

Rent and rates 8,200

Light and water 900

Discount received 450

Miscellaneous expenses 1,300

Total 90,950 90,950

Adjustments

i) closing stock was valued at 9,600

ii) out of amount 8,200 for rent and rates 1,000 was for rent paid in advance.

iii) Allowed depression at a rate of 10% per annum on furniture and fittings

iv) A debt of 800 is to be written off as irrecoverable .

v)

An amount of 300 was due for light and water

a) prepare a trading account for the year ended on 31 st

December,2004 ( 5 marks)

b) prepare a trading ,profit and loss account for the year ended on 31 st

December,2004

(10 marks)

A TRADING ACCOUNT FOR THE YEAR ENDING ON 31ST

DECEMBER 2014

Details Amount Amount Details Amount Amount

Opening stock 8,050 Sales 64,500

Add: Purchases 42,000 Net sales 64,500 Add: carriageinwards

400

Less: returnoutwards

300

Net purchases 42,100

Goods available for sale

50,150

Less: closing stock 9,600

Cost of sales 40,550

Gross profit c/d 23,950



64,500 64,500

Gross prof it

b/d

23,950

A TRADING AND LOSS ACCOUNT (INCOME STATEMENT) FOR THE YEAR ENDING

30 TH DECEM BER 2004

Details Amount Amount AmountSales 64,500

Net sales 64,500

Opening stock 8,050

Add: Purchases 42,000

Add: carriageinwards

400

Less: return outwards 300

Net purchases 42,100

Goods available for sale

50,150

Less: closing stock 9,600Cost of sales 40,550

Gross profit 23,950

Add: Supplementaryincome

Discount received 450

Gross income 24,400

Less: operationalexpenses

Rent and rates 8,200

Less: rent prepaid 1,000

Light and water 900 Add: payment due 300

Miscellaneousexpenses

1,200

Depreciation of furniture and fittings

1,300

Bad debts 1180

Total operating

expenses

11,680

Net profit 12,720

18.the following information was extracted from books of Jaribu enterprise for the month of

April ,2010 .

1 st

balance b/f from march



Cash at hand 4,800,000

Cash at bank 6,500,000

Debtors

Agaba 1,200,000

Rhoda 2,800,000

Creditors

Annet 2,600,000

Ali 4,400,000

2nd

Agaba cleared his account by cheque after reducing 2 1/2 % cash discount

8th

Withdrew cash for business use worth 1,400,000

14th

received cash from Rhoda in full settlement of her account less 2% cash discount

20th

paid for wages worth 1,300,000

Issued a cheque to Annet in full settlement of her account less 3% cash discount

28th

deposited cash into the bank worth 1,000,000

30th

paid Ali by cash after deducting 21/2 cash discount .

a) show the journal entries and determine the capital as at April 2010 (5marks)

b)

write up a three column cash book and balance it .(5 marks)

JARIBU’S JOURNAL ENTRIES AS AT APRIL 2014

Date Details Folio Debit (rwf) Credit (rwf)

1 st

April Cash BankCapital Beginning business

L1 L2 L3

4,800,0006,500,000

11,300,000

1 st

Agaba Rhoda DebtorsSale of goods on credit

L4 L5 L6

1,200,0002,800,000

4,000,000



1 st

Creditors Annet Ali Purchase of goods oncredit

L7 L8 L9

7,000,0002,600,0004,400,000

2n

Agaba Profit and loss account Bank

Clearing of Agaba’saccount by 2

⁄ discount

L4 L11

L2

1,170,00030,000

1,200,000

8t

Cash BankWithdrawal for businessuse

L1 L2

1,400,0001,400,000

14t

Cash Profit and loss account RhodaCash from Rhoda

L1 L11 L5

2,744,00056,000

2,800,000

20t

Wages

Cash Payment for wages

L13

L14

1,300,000

1,300,000

20t

Annet Profit and loss Bank Issued a cheque to annet

L8 L11 L2

2,522,00078,000

2,600,000

28t

BankCashCash deposits

L2 L1

1,000,0001,000,000

30t

Ali Profit and loss

CashClearing Ali by cheque

L9 L11

L1

4,290,000110,000

4,400,000

Total s 37,000,000 37,000,000

JARIBU’S THREE COLUMN CASH BOOK FOR THE MONTH OF APRIL

Date Detail s Folio Discount

allowed

Cash Bank Date Details Foli o Di scount

received

Cash ba

1 st

April

Capital L1 4,800,000 6,500,000 8t

Cash C 1,4

2nd Agaba L2 30,000 1,170,000 20t

Wages L4 1,300,000

8t

Bank C 1,400,000 20t

Anent L5 78,000 2,5

14t

Rhoda L3 56,000 2,744,000 28t

Bank C 1,000,000

28 Cash C 1,000,000 30 Ali L6 110,000 4,290,000

30 Balance c/d 6,590,000 3,9

86,000 8,944,000 8,670,000 188,000 8,944,000 8,6

1 st

Balance b/d 6,590,000 3,922,000



may

c. post the information to relevant ledger accounts and balance these accounts . (5 marks)

Capital account L 1

Dr Cr


30t

April Balance c/d 11,300,000 1st April Cash 4,800,000

1 st

April Bank 6,500,000

11,300,000 11,300,000

1 st

may Balance b/d 11,300,000

Agaba’s account L 2

Dr Cr


30t

April

Balance c/d 1,170,000 2n

April Cash 1,170,000

1,170,000 1,170,000

1 st


Rhoda’s account L 3

Dr Cr

Date Details Folio Amount Date Details Folio Amount30

t

April Balance c/d 2,744,000 14

t April Cash 2,744,000

2,744,000 2,744,000

1 s


Wage’s account L 4

Dr Cr


20t

Cash 1,300,000 30t

April

Balance c/d 1,300,000

1,300,000 1,300,000

1 st


Annet’s account L 5

Dr Cr


20 Bank 2,522,000 30 April


2,522,000 2,522,000



1 st


Ali’s account L 6

Dr Cr


30t

Cash 4,290,000 30t

April


4,290,000 4,290,000

1 s may Balance b/d 4,290,000

Discount allowed account

Dr Cr


30 Discounts 86,000 To be transferred to the profit and lossaccount

Discount received account

Dr Cr Date Details Folio Amount Date Details Folio Amount

To be transferred to the profit and lossaccount

30t

Discount 188,000



19. 2004 0ctober 1 st James started a business with cash at hand 100,000 and cash at bank 200,000

with a building worth 300,000.

2nd bought goods for resale and paid by cheque 45,000

3rd sold goods for cash 7,000

7 th

paid a creditor called Wambedi by cheque 10,000

8th sold goods on credit to Odongo 15,000

13th bought goods by cheque 30,000

14th received cash 15,000

15th paid wages in cash 6,000

16 th bought shop fittings by cash 19,000

16 th paid carriage for goods in cash 4,000

17 th received a loan from micro finance by a cheque 50,000

24th sold goods to k.k co. and received a cheque 21,000

From the above transactions, derive out a trial balance. (15 marks)

Capital account L 1

Dr Cr


30t oct Balance c/d 600,000 1 st oct Cash L2 100,000

1 st

oct Bank L3 200,000

1 st

oct building L4 300,000

600,000 600,000

1 st

nov Balance b/d 600,000

Bank account L 3

Dr Cr


1 st

oct Capital L1 200,000 2n

oct Purchases L7 45,000

17 t oct Loan L5 50,000 7 t oct Wambedi L8 10,00024 oct kk.co L6 21,000 13 oct Purchases L7 30,000

30 oct balance c/d 186,000

271,000 271,000

1 st




Cash account L 2

Dr Cr


1 s

oct Capital L1 100,000 15 oct Wages L12 6,000

3r

oct Sales L9 7,000 16 oct Shop fittings

L13 19,000

14t oct Debtors L11 15,000 16 t Carriage L14 4,000

30t

oct balance c/d 93,000

122,000 122,000

1 st


Building account L 4

Dr Cr


1 st

oct Capital L1 300,000 30t

oct balance c/d 300,000300,000 300,000

1 st


Loan account L 5

Dr Cr


30t

oct balance c/d 50,000 17 t

oct Bank L3 50,000

50,000 50,000

1 st


K.K.co account L 6

Dr Cr


30 oct balance c/d 21,000 24 oct Bank L3 21,000

21,000 21,000

1 s


Purchases account L 7

Dr Cr


2n oct

Bank L3 45,000 30t oct

balance c/d 70,000

13t

oct Bank L3 30,000

70,000 70,000

1 st




wambedi account L 8

Dr Cr


7 t

oct Bank L3 10,000 30t oct

balance c/d 10,000

10,000 10,000

1 st


Sales account L 9

Dr Cr


30t

balance c/d 22,000 3r

Cash L2 7,000

8t

Odongo L10 15,000

22,000 22,000

1 st

November

Balance b/d 22,000

Odongo account L 10

Dr Cr


8t

Sales L9 15,000 30t

balance c/d 15,000

15,000 15,000

1 st

November

Balance b/d 15,000

Debtors account L 11


30

balance c/d 15,000 14October

Cash L2 15,000

15,000 15,000

1 st

November

Balance b/d 15,000

Wages account L 12


15t

Cash L2 6,000 30t

balance c/d 6,000

6,000 6,000

1 st

November

Balance b/d 6,000



Shop fittings account L 13

Dr Cr


16 t

Cash L2 19,000 30t

balance c/d 19,000

19,000 19,000

1 s

November

Balance b/d 19,000

Carriage account L 14

Dr Cr


16 t

Cash L2 4,000 30t

balance c/d 4,000

4,000 4,000

1 st

November

Balance b/d 4,000

JAME’S TRIAL BALANCE AS AT 30TH OCTOBER 2014

Details/particulars Debit Credit

CAPITAL 600,000

BANK 186,000

CASH 93,000

BUILDING 300,000

LOAN 50,000

K.K.CO 21,000

PURCHASES 75,000

WAMBEDI 10,000

SALES 22,000

ODONGO 15,000

DEBTOR 15,000

WAGES 6,000

SHOP FI TTI NGS 19,000

CARRIAGE 4,000

TOTALS 708,000 708,000

(5marks)

mock marking guide. 2docx

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