1. a)Explain FIVE ways in which central Bank of Kenya regulates the operations of commercialbanks in Kenya. 10mks

The table below represents a farmer's supply of cabbages in a local urban center.

Year

Quantity of cabbages (Tonnes)

2001

20,000

2002

15,000

2003

10,000

Assuming the price remained constant, explain five possible reasons for the trend in the supply of cabbages. 10mks

2. a)Explain FIVE differences between a public corporation and a public limited company.

10mks

b)The following trial balance was prepared from the books of Triumphant NO-TABLES Enterprises as at 31st Dec. 2005.

Triumphant Notables Enterprises

Trial Balance

As at 31st Dec. 2005

Dr

Cr

Sales

900,000

Purchases

600,000

Returns inwards

80,000

Returns outwards

20,000

Carriage inwards

40,000

Carriage outwards

3,000

Stock (Jan 2005)

100,000

Rent

60,000

Delivery van

180,000

Bank

60,000

Creditors

170,000

Debtors

120,000

Interest Expenses

18,000

General expenses

7,000

Capital

178,000

1,268000

1,268,000

Stock on 31 Dec. 2005 was valued at sh. 135,000. Prepare trading profit and loss accounts for the year ended 31 Dec. 2005. 10mks

3. a)Highlight five reasons why a distributor of consumer goods would prefer to locate his or her warehouse near the consumers. 10mks

b)Explain five factors that have limited the adoption of containerisation in the transportation of goods. . 10mks

4. a)Explain five benefits that accrue to a company by using a prize winning competition to promote its products. 10mks

The following transactions relate to Expert Traders for the month of may 2005.

May 5: Sold goods on credit to Paul sh. 12,000 and Jane sh. 16,000

8: Bought goods on credit from Shah traders sh. 40,000

10: Purchased goods on credit from Grace sh. 34,000 and Peter traders sh. 31,050

16: Goods worth sh. 6,000 were returned to Shah traders and goods worth sh. 3,000 to Grace.

20: Goods sold on credit to Paul sh. 8,000 Tom sh, 11,000 and Joseph sh. 13,000.

26: Goods returned by Betty sh. 2000

Prepare the relevant journals. 10mks

5. (a) The following assets and liabilities relate to Manyonge a trader who does not maintain a complete set of accounts.

1998 shs.

Outstanding general expenses 8,250

Creditors 32,000

Debtors 18,000

A cashbook summary extracted on the same revealed the following.

Receipts

Cash sales - sh 35,000

Purchase - sh.31,200

Paid creditors - 54,000

At the end of the year, the following information was available:

Discount received amounted to sh. 7,600

Discount allowed shs. 2,500

Creditors sh. 25,000

Debtors shs. 23,000

Outstanding general expenses shs 10,700

Prepare:

General expenses Account

Total Debtors Account

Total creditors Account.

(b) Outline six measures that a country may take to reduce unemployment.10mks

6. Country Z is a developing country and it intends to liberalize its economy. Discuss the effects of such a trading policy to the economy of the country. 20mks