2018 Business Studies paper 2
1. (a)Explain five circumstances that may lead to the existence of a business opportunity to be exploited by the entrepreneur. (10 marks)
(b) Explain five factors that Chuma Steel Manufacturers may consider when choosing a channel for distributing their products. (10 marks)
2. (a)Explain five clauses that must be specified in the Memorandum of Association of a public limited company. (10 marks)
(b) The following information was extracted from the books of Kisababu Traders on 31 December 2014:
i. Prepare Kisababu Traders Trading Account for the period ending 31 December 2014. (5 marks)
ii. Work out Kisababu Traders percentage mark up.(2 marks)
iii. Calculate Kisababu Traders Rate of Stock Turnover.(3 marks)
3. (a)Explain five demerits of using carts as a means of transport in towns. (10 marks)
(b) Explain five types of direct taxes that the government may use to collect revenue from individuals and companies. (10 marks)
4. (a)The demand for soft drinks has been on the increase. Explain five factors that may have contributed to this. (10 marks)
(b) Describe five forms of economic integration that countries may join to promote international trade. (10 marks)
5. (a) Explain five differences between an open office and an enclosed office. (10 marks)
(b) The following opening balances were extracted from the books of Mageta Traders on 1 July 2016:
The following transactions took place in the course of the month:
— Paid a creditor Sh4,500 in cash.
— Took Sh3,000 from the bank for family use.
— Bought stock Sh 18,600 on credit.
— Acquired a 10 year bank loan Sh 165,000 which was credited to the business bank account.
— Purchased land worth Sh 82,000 paying by cheque.
Converted a family table worth Sh5,500 to business use.
— Received Sh 7,300 in cash from debtor.
Required: Prepare Mageta Traders Balance Sheet at the end of July 2016 (10 marks)
6. (a) Explain five problems of using national income statistics to compare the living standards of citizens of Kenya and Tanzania. (10 marks)
(b) Use the transactions given below to prepare Jawabu Traders two column cash book for the month of February 2015. (10 marks)
1st Feb.Had Sh 12,500 cash and a bank overdraft of Sh 5,000
2nd Feb.Used cash to pay for water bill Sh 800, electricity Sh 1,100 and wages Sh4,700.
3rd Feb.Received a cheque of Sh 18,900 from a debtor
5th Feb.Sold goods worth Sh 7,150 in cash.
7th Feb.Paid for goods bought for resale worth Sh 6,400 by cheque.
9th Feb.Received a cheque of Sh 13,000 from the co-operative society as earnings from dividends.
10th Feb.Withdrew Sh 2,500 from the bank for family use.
13th Feb.Received Sh 15,900 in cash from a debtor.
15th Feb.Deposited Sh9,500 from the office into the business bank account.
17th Feb. Paid a creditor by cheque Sh4,390.
27th Feb.Used all the money in the bank to purchase furniture leaving only a balance of Sh2,010.