BWEYOGERERE HIGH SCHOOL-KITO CAMPUS
END OF TERM 1 2024
SENIOR FIVE
ENTREPRENEURSHIP EDUCATION PAPER TWO
TIME: 2 HOURS
Instructions.
Attempt 3 Questions
All questions carry equal marks
Any additional question attempted shall not be marked.
Question 1.
The following information relates to blessed investment Limited for the month of May, June and
August 2022.
(i) Opening balance as of 1st May 2022 was shs.320,000.
(ii) Output of 800, 900, 700 and 100 units were sold at shs.500 each during the month of
May, June, July and August respectively less 10%discount.
(iii) Capitalization loan of shs.500,000 and shs.300,000 were obtained from opportunity
Bank in June and August respectively.
(iv) Receipts from debtors of shs.100,000, shs.80,000, shs.30,000 were requested for the
month of June, July and August respectively.
(v) Purchases of 700,800,900 and 1000 units of raw materials were made in the month of
May, June and July and August respectively at a cost of 200 shillings per unit.
(vi) Labor costs for the month of May, June, July and August were shs.150,000,
shs.120,000, shs.100,000 and shs.140,000 respectively.
(vii) A generator was bought and paid for in July for shs.1000,000. This was expected to
deprecate at a rate of 10% per annium.
(viii) Monthly supervision and marketing expenses of shs.20,000. This was to reduce by
20% in August.
(ix) Monthly rent income was shs.150,000. This was to increase by 10% monthly.
(x) The owner withdrew goods worth shs.100,000 in the month of June 2022.
(xi) The thieves broke into cash office and stole shs.70,000.
Required
(a) Prepare a cash budget for Blessed investment Limited for the few months period.
(23mks)
(b) Comment on the cash position of the business. (2mks)
Question 2
(a) The following information was extracted from the books of Kukundekwe for the year
ended 31/12/1021.
Item shs.
Purchases 820,000
Returns inwards 85,000
Carriage outwards 130,000
Returns outwards 160,000
Stock (31st/ 12/2012) 280,000
Carriage inwards 90,000
Stock (on 1st/01/1012) 100,000
Determine
(i) Net purchase
(ii) Goods available for sale
(iii) Cost of sales
(iv) Average stock
(b) The following was obtained from Trust care Limited for the period ending 31 st December
2018.
Opening stock shs.700,000
Closing stock shs.820,000
Sales shs.6,200,000
Purchases shs.3,640,000
Salary shs. 300,000
Calculate
(i) Cost of sales
(ii) Gross profit
(iii) Rate of stock turn
(iv) Net profit
Question 3
You own a Tea processing factory in your home area.
(a) Write a letter to the local Authority seeking permission to launch the business products.
(7mks)
(b) Design a cash sale slip for business use. (6mks)
(c) Write an inquiry letter to the supplier of machines in your business. (7mks)
(d) Design a sign post for your business. (5mks)
Question 4
The following projections were made by Malaya Enterprises during the month of January 2020.
(i) On January 1st 2020 the business had a cash balance of shs.33,000,000
(ii) The business expected to make credit sales of shs.12,000,000 monthly of which
payment of 80%was in the month of sale and the remaining balance paid in the next
month.
(iii) The business was to get a loan of shs.3,000,000 in January. The loan was to attract an
interest of 5% after one month of grace period.
(iv) The business expected a donation of shs.2,000,000 in January. This was expected to
increase by 10% monthly.
(v) Cash sales expected monthly amounted to shs.20,000,000.
(vi) The business had a policy of paying 2% commission on each sale.
(vii) The business was to sell the old vehicle at shs.8,000,000 and receive 80% of the total
price the balance in a ratio of 3:2 in the following month.
(viii) The business was to buy 50 office desks in March each at a cost of shs.60,000.
(ix) Monthly cash purchases expected to be shs.17,000,000.
(x) Loan repayment was to be in two equal monthly principal installments.
(xi) Credit purchases were expected to increase by 5% every month. Credit purchase
made in January amounted to shs.18,000,000.
(xii) Labour costs was expected at shs.600,000 per employee for 20 employees.
(xiii) The VAT of 18% was to be paid separately in response to purchase of office desks.
Required
(a) Prepare Molaya Enterprises’ monthly cash flow statement for 4 months.
(b) Comment on the trend of Net cash position of the business.
END
