- Explain Five factors that one needs to consider when selecting an office layout. (10Mks)
- Outline Five measures that may be taken by the Kenyan government to promote her exports. (10mks)
- There has been a general rise in prices of consumer goods and services in Kenya. Explain Five negative effects of this trend. (10 Mks)
- Highlight Five measures that the Kenyan government has put in place to facilitate an efficient road transport.(10Mks)
- Explain Four ways in which the government may positively influence / attract business activities to a given area (8Mks)
- The following trial balance was extracted from the books of Daisy Traders as at 31/12/2021.
As at 31st December 2021
A/C NAME DR (Shs) CR (Shs) Purchases & Sales
Cash at bank
Cash in hand
Stock was valued at Sh.50,000 as at 31ST/12/2021.
- Prepare Daisy Traders, Trading, profit and loss Account for the year ended 31/12/2021 (7Mks)
- Balance sheet as at 31/12/2021. (5Mks)
- Co-operative societies have become very popular today. Discuss Five features of a co-operative society. (10Mks)
- With the aid of a diagram, explain the effect of an increase in consumers’ level of income on the equilibrium price and quantity. (10Mks)
- Explain Five circumstances under which a country may experience low levels of national income. 10Mks)
- Explain Five ways in which insurance industry contributes to the development of a country’s economy. (10Mks)
- Explain Five measures that can be taken to reduce the level of unemployment. (10Mks)
- Zakayo Traders had the following balances on 1st July 2012.
During the month the following transactions took place:
July 6TH – Purchased goods worth Sh.9,500 by cheque
July 7TH – Paid creditors, Sh. 10,600
July 23RD – Received a cheque of Sh.22,00 for goods sold.
July 28TH – Withdrew Sh. 5,000 from the bank to pay salaries.
Required:Open the relevant ledger accounts and extract a trial balance as at 30TH July, 2012. (10Mks)
- Work flow – Work should flow smoothly with minimal interruptions.
- Supervision – Easy/ quick monitoring of staff to discourage absenteeism.
- Office appearance – should be attractive and pleasant conducive to boost workers morale/ enhance performance.
- Working space – Workers should have adequate space to work from/ Enhance concentration.
- Cost of construction – Office layout chosen should be relatively cheap/ affordable/cost effective.
- Flow of workers/minimal movement – Should enhance reduce/ no staff movement/distractions (To enhance overall performances).
- Ease of communication – Have easy passage of messages within the organization.
- Legal requirements – Be according/compliance with laws of the land.
- Nature of work – Confidential work require enclosed office layout.
- Proximity to equipment/Accessibility of equipment number of equipment – Shared equipment require open office layout.
Mention – 1mks
Otherwise – 2mks
- By entering bilateral trade agreements/ joining trading blocs to improve/encourage free flow of goods.
- Organizing trade fairs and exhibition in foreign countries to create awareness.
- Looking/searching for more markets abroad through KETA enabling more exports
- Giving export subsidies making exports cheaper
- Easy export licensing for exporters to encourage exports
- Encouraging production of high quality goods and services to increase competitiveness
- Diversifying her export commodities to cushion slump demand for market security.
- Lowering duties on imported raw materials meant for producing goods for exportation.
- Giving customs drawback to investors to produce goods for export.
- Establishing export processing zones (EPZ) to enhance exports.
- Diversifying markets/widening markets/venturing into hitherto unchartered markets.
2 x 5= 10mks
- Lower standards of living – As people can only manage to buy fewer goods/services.
- Reduced savings – Much of income is used on goods/services, thus little investments/leading to poverty.
- Reduced real value of money – People lose confidence in money/preference to hold wealth in form of assets other than money form/Banks is negatively affected.
- Losses to creditors – Receive/get paid their debts when money value is eroded.
- Reduced profits – Low sales volumes/products become unaffordable.
- Conflicts between employers and employees – Due to demand for higher wages.
- Emergence of black markets – Sneaking in of illegal/harmful goods.
- Erosion of people’s purchasing power - People become poorer.
- Increase in interest rates/banks rates – Making borrowing/loans expensive.
- Political unrest – People complain of too high cost of living.
Mention = 1mk
Otherwise = 2mks
- Use of speed governors to reduce/moderate speed of vehicles to reduce accidents.
- Introduction of safety belts to minimize injuries as a result of accidents.
- Introduction of dual carriage roads to ease congestion
- Advocacy/publicity campaigns on road safety (through mass media)
- Refresher training to drivers to improve skills/efficiency
- Good road signage to reduce accidents/confusion
- Identification of black spots/accident prone areas and rectification/looking for remedies.
- Use of uniforms/identification badges/photos for drivers and touts for easy identification.
- Revival of railway transport/standard gauge railway to ease congestion.
- Improving infrastructure – Thus creating enabling environment by building roads/supplying electricity/water
- Providing/improving security – To safeguard investor’s life/ their properties/create confidence in investors.
- Giving/increasing subsidies – To enable producers to produce goods cheaply/lower cost of production.
- Providing incentives like tax relief/tax holidays/Tax exemptions – To reduce cost of production.
- Providing free land – To reduce cost of doing business.
- Providing loans easily/cheaply/at low interest rates – to encourage entrepreneurship.
- Starting major projects - Attracts other firms to the area.
- Facilitate/provide auxiliary services e.eg Banking, insurance, transport – to attract investors.
- Protect local investors – by establishing restricting imports.
- Establishment of economic zones/export processing zones - To encourage establishment of firms.
- Daisy Traders
Trading profit and Loss Account
For the year ending 31st December 2021
Opening Stock 30,000
Add: Carriage in 16,000
Less :Return out 6,000 285,000
Less: Closing Stock 50,000
Gross profit C/D 115,000
Carriage outwards 8,000
Bad debts 3,000
Disc Allowed 5,000
Net profit C/D 91,000
Less: Return inwards 10,000
Net sales 380,000
Gross profit C/D 115,000
Commission received 36,000
Discount received 7,000
Net profit B/D 91,000
- DAISY TRADERS
AS AT 31ST DECEMBER 2021√
Furniture 180,000√ 630,000√
C.I.H 40,000√ 387,000√
CAPITAL 689, 000√
Add: Net profit 91,000√
Less: Drawings 25,000√
New capital 755,000√
Bank order draft 210,000√
- Daisy Traders
- The demand curve shifts to the right from DoDo to D1D1.
- Equilibrium point shifts eo to e1
- Equilibrium price increases from Pe0 to Pe1
- Equilibrium quantity increases from Eq0 to Eq1
- Democratic administration/management – Decisions are made as a one man vote basis/management committee elected on one man one vote basis.
- Open and voluntary membership – Membership is free for those who qualify /above 18 years/ No forcing to join.
- Promotion of education to members- Obliged/have duty to educate members/staff/management on co-operative activities/through seminars/workshops.
- Political/religious neutrality- Not supposed to favour/identify with any political/religious group.
- Co-operation with other co-operative- To share ideas/experiences/at regional/national/international level.
- Payment of dividends – Based on contribution/on pro-rata basis.
- Limited interest on share capital- Capital paid is meant for running the business not for generating interest.
- Limit number of shares one can buy – to avoid control by one/a few members.
- Non-profit motivated – Main aim is to assist members.
- Individuals constitute members- No corporate membership.
Mention- 1 Mk
Otherwise – 2mks
- Poor/inadequate/low human resource/labour/work force- a country with poorly skilled/untrained manpower will generate low income/produce low quality/quantity goods or services thus low income.
- Poor natural resource endowment- Limiting the ability to create wealth /low quantity of low materials.
- Low/poor technology- Leading to low quality/quantity goods and services.
- Political instability/Insecurity- Leading to closure of firms/low productivity.
- Inadequate capital/ Man-made resources- Making production difficult/low quantities produced.
- Inadequate entrepreneurs/poor entrepreneurial cultures- Reducing levels of production.
- Poor infrastructure eg. Road networks – making movement of factor services/finished goods/raw materials impossible/difficult.
- NB THE CIRCUMSTANCE TO BE BROUGHT OUT
- Creation of employment- For those who work in the insurance industry eg. Actuaries, brokers, underwriters, salespersons etc.
- Continuity of business- By providing compensation in the event of loss.
- Creating confidence in investors- Encouraging investment in risky areas.
- Source of revenue to government- through taxes
- Encourages saving- Life policies(endowment policies) enables people to save, which can be used for investment.
- Life policies can be used as securities for borrowing loans- which can be used to expand businesses.
- Employees feel secure/confident/comfortable when they have statutory schemes like NSSF/NHIF.
- Money collected by insurance companies is invested in other ventures thus expanding economy.
- Diversification of economy – Encouraging/establishing different industries to create employment.
- Transforming/improving education system- to improve on skills/produce employable graduates.
- Encouraging informal sector/Jua Kali sector- To promote self-employment.
- Population control- To have labour force that the economy can absorb.
- Exporting labour/Assisting people to acquire jobs abroad/to countries which labour force differences.
- Reviving collapsed industries/projects- By injecting funds/selling them/privatizing them.
- Improve infrastructure- To stimulate economic activities that create jobs.
- Leading/setting up funds- to spur economic activities.
NB: Accept examples of funds as a mention.
- Increase government expenditure- To expand the size of the economy/By financing development projects.
- Establishment of employment policy- To make is easy for people to get jobs.
- NB: Accept viable government policies as a mention.
- Delocalization/Decentralization policy- For balanced regional development/ To curb rural –urban migration.
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