PAPER 1

1. You have set aside Uganda shs15 million to start a micro-finance business in your town:

a) Write an application letter to the town authorities for a trading license.

b) Prepare a budget of shs5, 000,000 to cater for the pre-operating expenses.

c) Using the fixed installment method, design a loan repayment schedule for a customer who borrowed shs1, 000,000 at an interest rate of 2% per month payable in 5 equal monthly installments.

d) Prepare a payment voucher to record the debtors' payments to the business.

2. The following records were extracted from the books of JACK& JIM EMPORIUM as at 31st December 2008:

Shs

Opening stock 2,500,000

Premises 12,000,000

Sales 26,000,000

Sales returns 1,500,000

Purchases 14,000,000

Salaries 1,750,000

Furniture & fittings 1,250,000

Discount received 225,000

Discount allowed 375,000

Purchases returns 90,000

Insurance premium 190,000

Machinery 7,000,000

Electricity 280,000

Transport 520,000

General expenses 360,000

Cash in hand 120,000

Debtors 3,000,000

Creditors 2,150,000

Capital 15,750,000

Drawings 300,000

Bank overdraft 930,000

Closing stock 3,000,000

Required:

a) Extract JACK & JIM EMPORIUM's trail balance as at 31st December, 2008.

b) Prepare a trading, profit and loss account for the period ending 31st December, 2008.

c) Calculate the gross profit mark up of JACK & JIM EMPORIUM.

3. You are a partner in a large-scale business dealing in goods and transport services:

a) Write an inquiry to a supplier of various household goods.

b) Prepare a Delivery Note for use by the transport department.

c) Make a job description for the post of a transport manager.

d) Prepare a daily time sheet for the workers.

4. The following record of Assets and liabilities was available in the books of ABEY AND SONS ENTERPRISES as at 31st December, 2008.

Shs

Cash in hand 666,667

Cash at bank 14,000,000

Furniture and fixtures 6,000,000

Land and buildings 30,000,000

Closing stock 10,000,000

Debtors 12,000,000

6-year loan 20,000,000

Machinery 7,333,333

Creditors 9,350,000

Outstanding rent & rates 1,300,000

Office equipment 13,000,000

Rent received in advance 3,300,000

Required:

a) Prepare a balance sheet for ABEY AND SONS ENTERPRISES as at 31st December, 2008.

b) Determine the:

i. Current asset ratio,

ii. Debt-equity ratio.

c) Given are the ratios obtained in (b)(i) & (ii) above, explain the position of the business.

5. You are operating a furniture workshop producing various types of products:

a) Write the mission statement of your business.

b) Design the layout of your furniture workshop.

c) Design a sign post for advertising your products.

d) Prepare a marketing plan for your products.

PAPER 2

SECTION A: (40 marks)

1. a) (i) Define the term income.

(ii) Mention any three sources of income to an entrepreneur.

b) (i) Distinguish between direct and indirect taxes.

(ii) Give two reasons why a business should pay taxes.

c)(i) State any two elements of a business plan.

(ii) Outline any two benefits of a business plan to an entrepreneur.

d)(i) What is meant by a contract ?

(ii) Mention any three advantages of a contract to a business.

e)(i) Differentiate between a partnership business and a limited company business.

(ii) Give any two features of a limited company.

F)(i) Define the term risk.

(ii) Mention any three factors that should be considered when assessing risks.

g) Outline any four roles played retailers in the distribution of a product.

h) (i) What is meant by the term market?

(ii) Give any three factors that determine a potential market.

I(i) Define the term investment.

(ii) Suggest any three measures that should be taken to promote investment in Uganda.

j) (i) What is a cheque?

(ii) Mention any three circumstances under which a cheque may not be considered for payment.

SECTION B: (60 marks)

2. a) Outline the various pre-operating expenses of a manufacturing business.

b) How can a business minimize its pre-operating expenses?

3. a) Explain the various principles of insurances.

b) Describe the procedure of taking out an insurance policy.

4. a) Describe the different laws governing business in Uganda.

b) In what ways do business laws protect consumers in Uganda?

5. a) Explain the importance of advertising a product.

b) Describe the various forms of advertisement that may be used by an entrepreneur.

6. a) In what ways have business damaged the natural environment in your country?

b) Suggest measures that should be taken to minimize the damage caused by business to the natural environment.