Section A

Marking guide
1) Differentiate between an entrepreneurs and a manager (2marks)

- The entrepreneur is the one that starts the business and the business idea creator while the
manager does not start the business himself.
- The entrepreneur is the owner of the business enterprise while the manager is not the owner
of the business but an employee assigned to play the role of managerial responsibility.
- The entrepreneur is one of the factors of production that must be there in order to organize
other factors of production. Without him other factors are rendered useless while the
manager is just an employee therefore part of labour.
- The entrepreneur can be the owner of the business and a manager at the same time but a
manager can hardly become the entrepreneur of the business for he is just part of the hired
labour force.
- The entrepreneur is sole source of new ideas and creative innovation that aim at fostering
new competitive reformations in the enterprise, while the managers major role is to
implement and to put into action the policies, ideas and plans of the entrepreneur. Therefore
he/she is not the initiator of fundamental ideas that come with great changes in the
enterprise.
- The entrepreneur has all the powers of employing the manager therefore the powers of
terminating his/her services. The manager in this sense is an employee like any other worker
and can hardly sack his entrepreneur or the Boss.
- The risks that may be faced by the business enterprise are shouldered by the entrepreneur
who is in this case the owner of the business, and by all means has to organize all the
resources at hand to see that some of the risks are prevented before they affect the well-being
of the business; while the manager has personal responsibility over the risks, he/she can only
assist in the implementation of the strategies that the entrepreneur has designed to avert the
risks.
- The income in form of profits earned by the business enterprise is totally for the entrepreneur
and has financial obligation over the transactions that may occur. The manager on the other
hand only receives a salary as clearly stipulated in the contract given to him / her.
- An entrepreneur does not require skills to become one but managers require skills to become
managers.
- An entrepreneur brings new ideas in the business whereas a manager may not but
implements what is told.
-
b) Differentiate between a purchases day book and a purchases return book? (2marks)
- a purchases day book is a book or original entry which records goods/services
bought/purchased by the business on credit
Where as
- A purchases return book is the book of original entry which record goods/services that have
been return/sent back to the suppliers and they had been purchased on credit
2. Customers are the back bone of any businesses. Briefly give your four arguments on this statement
(2marks)
Yes they are because
- They buy goods and increase capital of the business
- They advise the business on what to produce
- They advise producers on When to produce to avoid miscalculation of the season
- They advise producers on which techniques to use in the production of goods(How to
produce)
- They assist producers in finding proper locations of their businesses (where to produce the
goods)
- They buy goods which reduces resource wastage
- They provide market for the produced goods
- they provide security for the producers goods
- they provide useful information to producers which increases there sales

b) Give four factors which you would consider while choosing a good financial institution to deal with
(2marks)
- I nterest rate. In case of borrowing, banks with relatively less interest rates should be chosen
while in case of lending; one would prefer the one with relatively high interest rate on
deposits.
- Proximity. Banks which are easily accessible are normally chosen than distant and
inaccessible 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 case
individuals and groups should deal with registered financial institutions only.
- Customer care. This is an important aspect of any business. Financial institutions which
have good customer care are normally liked than those without.
- Payback period. This refers to the time / period with in which bank debtors pay back loans
and their interest rates. Financial institutions that give a long pay period are normally liked
than those that give short payback period.
- Conditions of issued loans. Financial institutions that give soft loans should be chosen faster
than those that give hard loans.
- Service delivery. Financial institutions that give quality and quick services are more
convenient 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 in
operation for a longer period of time than new ones.
- Security required. Banks which require low marginal requirements are more appropriate
than those that require high marginal requirements.

3. Explain four things 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 competitors threats.
4. Briefly explain four different types of market surveys
- Customers survey: This is a procedure through which a producer or a trader tries to find
out 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 questions
about a product and forming answers. It means experts analyzing a product or a member
of 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 to
increase 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 to
be generalized for the whole population.

b) Briefly explain any three sampling techniques used in business research (3marks)
- Simple random sampling. This is obtaining data by choosing elementary units in such a
way 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 independently
choosing a separate simple random sample from each population.

Using this method the population is divided into separate groups basing on some
variable/ 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 should
be 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 having
more 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 interesting
application 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. Calculate the payback period (2marks)

For uneven cash flows= A+

YEAR CASH FLOWS CUMULATI VE CASH
FLOW
NET CUMULATI VE
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 this project 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 rule 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 of
its 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 sales
commission. 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. Briefly 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 shouldnt 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 PRODUCI NG FACTORY

b) Assuming that you are the general manager of Bank of Kigali design a job advert for the post of a
manager Bugesera branch
COMPANY: Bank of Kigali
POSI TI ON: branch manager
ABOUT BANK ON KI GALI
Bank of Kigali is the biggest commercial bank in Rwanda having been in business for the last 50 years in
commercial banking. Its 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 responsibilities
- 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 Banks 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 Banks Assets.
- Perform any other duties that may be assigned by the Chief Executive.
Qualifications, Skills and Experience:
- The ideal candidate should preferably hold a Masters 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
Bachelors 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: admin@bk.com
Deadline: Monday 29th September, 2014 by 4PM
c) Explain ten criteria you would use while 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 affect 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 cant 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.
b) As an entrepreneur what do you think can be done mitigate the negative effects of business to
the natural environment (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. Differentiate 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 industries which is a business company wants to build an international accommodation
centre in Gasabo district which is thought to be going to take five years from 2015 to 2020. Prepare an
action plan for Inyange industrys international accommodation center.(7marks)
Activity Period /time I n-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
plan
Construction of the
premises
2 years Engineering
company/technical team
of the company
buildings
I nstallation of
equipment
6 months Company Technical
team
Fully installed
Recruitment of workers 6 months Human resource
manager
Availability of all
workers
Stocking raw materials 3 months Procurement
department
Availability of raw
materials
Starting production 3 months Production manager Goods
Marketing and selling
of products
Continuous Marketing team Marketing report



14. a) Assuming that immediately after senior six national exams you are going to be a
member of a committee that will plan for the establishment of a certain business,
explain nine business growth strategies that you would advise your fellow committee
members to plan for 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.
Diversification of sources of income. 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.
J oint venture. These can be great ways for small businesses to grow and getting opportunities
such as bargaining power that an individual business would otherwise miss.
Attracting angel investors. Angel investors are the honest and reliable business men who reject
any 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 bodys 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 efficient 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 selling of high quality products: With this aspect/policy/strategy the business will
be able attract customers e.g. Dell, Nokia etc.
Using different terms of selling 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 points)

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 its 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 Entrepreneur/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 instability: 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 citizen of Rwanda, explain what the government has done to mitigate the problems
limiting 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 yeas loan 200,000
Plant and machinery 70,000
Furniture and fittings 150,000
Buildings 100,000
Land 89,000
4 years 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.byamugishas 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 term
liabilities
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 Furniture
and fitting
150,000
Current
liabilities
Motor van 120,000
Creditors 10,000 Office
equipment
15,000
Bank over draft 20,000 Total F.A 544,000
Total current
liabilities
30,000 Current
assets

Total liabilities 280,000 Debtors 90,000
Cash at hand 60,000
Cash 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 traders cash float is 150,000Rwf on 30
th
April 2006 .the balance
at hand was 15,000Rwf . if the following transactions took place during the month of April
2006;
5
th
bought postage stamps 100
6
th
paid for staff tea 11,000
8
th
paid for transport 2,000
10
th
paid for posters wages 25,000
15
th
purchased new lock for office 1,500
16
th
paid for repair of water system 2,000
20
th
paid for floor polish 6,000
25
th
paid for sugar for staff tea 3,000
27
th
paid for envelops 1,000
29
th
paid for paper clips 1,500
30
th
paid for cleaning of carpet 2,000
30
th
paid for papers wages 10,000
a) Prepare Jean Claude traders 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 Stationa
ry
Transpo
rt
Maintenanc
e
Wages Sundry
150,000 30
th

march
float
15,000 1
st

April
Balance b/f
135,000 1
st
Reimbursement
April
5
th

April
stamps 100 100
6
th
Staff tea 11,000 11,000
8
th
transport 2000 2,000
10
th
Posters wages 25,000 25,000
15
th
Purchase of
lock
1500 1500
16
th
Repair of water
system
2000 2000
20
th
Floor polish 6000 6000
25
th
Sugar for staff
tea
3000 3000
27
th
Envelops 1000 1000
29
th
Paper clips 1500 1500
30
th
cleaning of
carpets
2000 2000
30
th
Papers wages 10,000 10,000
65100 2500 2000 11500 35000 14,100
30
th

april
Balance c/d 84900
150,000 150,000
84900 1
st
may Balance b/d
65100 1
st
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
30
th

April
Cash
book
2,500 30
th

April
Balance
c/d
2,500
2,500 2500
1
st
may Balance
b/d
2,500
Transport account
Date Details Folio Amount Date Details Folio Amount
30
th
april Cash
book
2,000 30
th
April Balance
c/d
2,000
2,000 2,000
1
st
may Balance
b/d
2,000
Maintenance account
Date Details Folio Amount Date Details Folio Amount
30
th
Cash
book
11,500 30
th
April Balance
c/d
11,500
11,500 11,500
1
st
may Balance
b/d
11,500
Wages account
Date Details Folio Amount Date Details Folio Amount
30
th
Cash
book
35,000 30
th
April Balance
c/d
35,000
35,000 35,000
1
st
may Balance
b/d
35,000
Sundry expenses
Date Details Folio Amount Date Details Folio Amount
30
th
Cash
book
14,100 30
th
April Balance
c/d
14,100
14,100 14,100
1
st
may Balance
b/d
14,100

General / total petty expenses account
Date Details Folio Amount Date Details Folio Amount
30
th
april Balance
c/d
65,100 30
th
april Cash
book
65,100
65,100 65,100
1
st
may Balance
b/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 31
ST
DECEMBER 2014
Details Amount Amount Details Amount Amount
Opening stock 8,050 Sales 64,500
Add: Purchases 42,000 Net sales 64,500
Add: carriage
inwards
400
Less: return
outwards
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 profit
b/d
23,950

A TRADI NG AND LOSS ACCOUNT (I NCOME STATEMENT) FOR THE YEAR ENDI NG
30
TH
DECEMBER 2004
Details Amount Amount Amount
Sales 64,500
Net sales 64,500
Opening stock 8,050
Add: Purchases 42,000
Add: carriage
inwards
400
Less: return outwards 300
Net purchases 42,100
Goods available for
sale
50,150
Less: closing stock 9,600
Cost of sales 40,550
Gross profit 23,950
Add: Supplementary
income

Discount received 450
Gross income 24,400
Less: operational
expenses

Rent and rates 8,200
Less: rent prepaid 1,000
Light and water 900
Add: payment due 300
Miscellaneous
expenses
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
2
nd
Agaba cleared his account by cheque after reducing 2 1/2 % cash discount
8
th
Withdrew cash for business use worth 1,400,000
14
th
received cash from Rhoda in full settlement of her account less 2% cash discount
20
th
paid for wages worth 1,300,000
Issued a cheque to Annet in full settlement of her account less 3% cash discount
28
th
deposited cash into the bank worth 1,000,000
30
th
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)





JARIBUS JOURNAL ENTRIES AS AT APRIL 2014
Date Details Folio Debit (rwf) Credit (rwf)
1
st
April Cash
Bank
Capital
Beginning business
L1
L2
L3
4,800,000
6,500,000



11,300,000
1
st
Agaba
Rhoda
Debtors
Sale of goods on credit
L4
L5
L6
1,200,000
2,800,000


4,000,000

1
st
Creditors
Annet
Ali
Purchase of goods on
credit
L7
L8
L9
7,000,000


2,600,000
4,400,000
2
nd
Agaba
Profit and loss account
Bank
Clearing of Agabas
account by 2

discount
L4
L11

L2
1,170,000
30,000





1,200,000
8
th
Cash
Bank
Withdrawal for business
use
L1
L2
1,400,000



1,400,000
14
th
Cash
Profit and loss account
Rhoda
Cash from Rhoda
L1
L11
L5
2,744,000
56,000


2,800,000
20
th
Wages
Cash
Payment for wages
L13
L14
1,300,000



1,300,000
20
th
Annet
Profit and loss
Bank
Issued a cheque to annet
L8
L11
L2
2,522,000
78,000



2,600,000
28
th
Bank
Cash
Cash deposits
L2
L1
1,000,000
1,000,000

30
th
Ali
Profit and loss
Cash
Clearing Ali by cheque
L9
L11
L1
4,290,000
110,000



4,400,000
Totals 37,000,000 37,000,000



JARIBUS THREE COLUMN CASH BOOK FOR THE MONTH OF APRIL
Date Details Folio Discount
allowed
Cash Bank Date Details Folio Discount
received
Cash bank
1
st

April
Capital L1 4,800,000 6,500,000 8
th
Cash C 1,400,000
2nd Agaba L2 30,000 1,170,000 20
th
Wages L4 1,300,000
8
th
Bank C 1,400,000 20
th
Anent L5 78,000 2,522,000
14
th
Rhoda L3 56,000 2,744,000 28
th
Bank C 1,000,000
28
th
Cash C 1,000,000 30
th
Ali L6 110,000 4,290,000
30
th
Balance c/d 6,590,000 3,922,000
86,000 8,944,000 8,670,000 188,000 8,944,000 8,670,000
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
Date Details Folio Amount Date Details Folio Amount
30
th
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

Agabas account L 2
Dr Cr
Date Details Folio Amount Date Details Folio Amount
30
th

April
Balance c/d 1,170,000 2
nd
April Cash 1,170,000
1,170,000 1,170,000
1
st
may Balance b/d 1,170,000
Rhodas account L 3
Dr Cr
Date Details Folio Amount Date Details Folio Amount
30
th

April
Balance c/d 2,744,000 14
th
April Cash 2,744,000
2,744,000 2,744,000
1
st
may Balance b/d 2,744,000
Wages account L 4
Dr Cr
Date Details Folio Amount Date Details Folio Amount
20
th
Cash 1,300,000 30
th

April
Balance c/d 1,300,000
1,300,000 1,300,000
1
st
may Balance b/d 1,300,000
Annets account L 5
Dr Cr
Date Details Folio Amount Date Details Folio Amount
20
th
Bank 2,522,000 30
th

April
Balance c/d 2,522,000
2,522,000 2,522,000
1
st
may Balance b/d 2,522,000
Alis account L 6
Dr Cr
Date Details Folio Amount Date Details Folio Amount
30
th
Cash 4,290,000 30
th

April
Balance c/d 4,290,000
4,290,000 4,290,000
1
st
may Balance b/d 4,290,000
Discount allowed account
Dr Cr
Date Details Folio Amount Date Details Folio Amount
30
th
Discounts 86,000 To be transferred to the profit and loss
account
Discount received account
Dr Cr
Date Details Folio Amount Date Details Folio Amount
To be transferred to the profit and loss
account
30
th
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.
2
nd
bought goods for resale and paid by cheque 45,000
3
rd
sold goods for cash 7,000
7
th
paid a creditor called Wambedi by cheque 10,000
8
th
sold goods on credit to Odongo 15,000
13
th
bought goods by cheque 30,000
14
th
received cash 15,000
15
th
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
24
th
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
Date Details Folio Amount Date Details Folio Amount
30
th
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
Date Details Folio Amount Date Details Folio Amount
1
st
oct Capital L1 200,000 2
nd
oct Purchases L7 45,000
17
th
oct Loan L5 50,000 7
th
oct Wambedi L8 10,000
24
th
oct kk.co L6 21,000 13
th
oct Purchases L7 30,000
30
th
oct balance c/d 186,000
271,000 271,000
1
st
nov Balance b/d 186,000

Cash account L 2
Dr Cr
Date Details Folio Amount Date Details Folio Amount
1
st
oct Capital L1 100,000 15
th
oct Wages L12 6,000
3
rd
oct Sales L9 7,000 16
th
oct Shop
fittings
L13 19,000
14
th
oct Debtors L11 15,000 16
th
Carriage L14 4,000
30
th
oct balance c/d 93,000
122,000 122,000
1
st
nov Balance b/d 93,000

Building account L 4
Dr Cr
Date Details Folio Amount Date Details Folio Amount
1
st
oct Capital L1 300,000 30
th
oct balance c/d 300,000
300,000 300,000
1
st
nov Balance b/d 300,000
Loan account L 5
Dr Cr
Date Details Folio Amount Date Details Folio Amount
30
th
oct balance c/d 50,000 17
th
oct Bank L3 50,000
50,000 50,000
1
st
nov Balance b/d 50,000

K.K.co account L 6
Dr Cr
Date Details Folio Amount Date Details Folio Amount
30
th
oct balance c/d 21,000 24
th
oct Bank L3 21,000
21,000 21,000
1
st
nov Balance b/d 21,000

Purchases account L 7
Dr Cr
Date Details Folio Amount Date Details Folio Amount
2
nd oct
Bank L3 45,000 30
th oct
balance c/d 70,000
13
th
oct Bank L3 30,000
70,000 70,000
1
st
nov Balance b/d 70,000
wambedi account L 8
Dr Cr
Date Details Folio Amount Date Details Folio Amount
7
th
oct Bank L3 10,000 30
th oct
balance c/d 10,000
10,000 10,000
1
st
nov Balance b/d 10,000

Sales account L 9
Dr Cr
Date Details Folio Amount Date Details Folio Amount
30
th
balance c/d 22,000 3
rd
Cash L2 7,000
8
th
Odongo L10 15,000
22,000 22,000
1
st

November
Balance b/d 22,000
Odongo account L 10
Dr Cr
Date Details Folio Amount Date Details Folio Amount
8
th
Sales L9 15,000 30
th
balance c/d 15,000
15,000 15,000
1
st

November
Balance b/d 15,000

Debtors account L 11
Dr Cr
Date Details Folio Amount Date Details Folio Amount
30
th
balance c/d 15,000 14
th

October
Cash L2 15,000
15,000 15,000
1
st

November
Balance b/d 15,000

Wages account L 12
Dr Cr
Date Details Folio Amount Date Details Folio Amount
15
th
Cash L2 6,000 30
th
balance c/d 6,000
6,000 6,000
1
st

November
Balance b/d 6,000

Shop fittings account L 13
Dr Cr
Date Details Folio Amount Date Details Folio Amount
16
th
Cash L2 19,000 30
th
balance c/d 19,000
19,000 19,000
1
st

November
Balance b/d 19,000
Carriage account L 14
Dr Cr
Date Details Folio Amount Date Details Folio Amount
16
th
Cash L2 4,000 30
th
balance c/d 4,000
4,000 4,000
1
st

November
Balance b/d 4,000

JAMES TRIAL BALANCE AS AT 30
TH
OCTOBER 2014
Details/particulars Debit Credit
CAPI TAL 600,000
BANK 186,000
CASH 93,000
BUI LDI NG 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
CARRI AGE 4,000
TOTALS 708,000 708,000
(5marks)