1.a)Discuss five importances of entrepreneurship to an economy

b)Explain five measures that the government may take to curb inflation

2.a)Discuss five problems linked to rapid population growth.

b)Explain five factors that may hinder economic development.

3.a)Explain the differences between non-banking financial institutions and commercial banks.

b)Discuss five circumstances under which an insurance company would not compensate the insured in the event of loss.

4.a)Highlight five situations where demand may increase with increase in commodity price.

b)Give five reasons for differences in terms of trade between countries.

5.a)Explain five benefits of localization of industries.

b)Explain five reasons why consumers need protection against malpractices by some traders.

6.a)Explain five ways in which the government can influence the price of a commodity.

b)Oriabengi shop sells all its goods at a margin of 20%.For the year ended 30th April 2006,its trading activities were as follows:

Purchases800,000

Sales950,000

Net profit 5% of sales

Closing Stock200,000

Calculate:-

The gross profit

Opening stock

Mark-up percentage

Net profit

(a) Enter the following transactions in the petty cash book of Maendeleo stores for the month of July 2003 using the following analysis columns Telephone and postage, office stationary, traveling expenses and office expenses. The business operates the petty cash book on an imprest system of 4000/= replenished on a weekly basis July 1st-Received a cheque from the cashier to start the imprest July 1st-Paid for taxi hire250/= and 130/= for office cleaning July 2nd-Bought postage stamps for 210/= and a ball of string for use in the office 100/= July 3rd-Postage of a parcel cost 100/= and paid a telephone bill 900/= July 4th Purchased envelopes for 150/= and one ream of photocopying paper 500/= July 5th-Paid for bus fare 500/= and made a telephone call costing 50/= July 6th-purchased a window cleaning cream for 250/= paid bus fare 200/= July 8th-Received a cheque to replenish the imprest July 8th-Bought various office stationary for 400/= July 9th-Purchased postage stamps for 210/= and paid 950/= telephone bill July 10th-paid train fare 600/= and taxi fare 250/= July 11th Paid for office cleaning 150/= July 12th- Purchased two reams of writing paper 600/= and office dusters 300/= July 14th - Obtained a cheque from the cashier to replenish the imprest Required

Prepare the petty cash book for the two weeks

The following trial balance relates to Leshao traders for the year ended 31st January 2005 PARTICULARS DR CR Capital 110,000 Land and buildings 70,000 Machinery 21,600 Furniture 20,000 Debtors 78,000 Creditors 50,000 Opening stock 1,100 Bank 60,000 Cash 9,000 Sales 15,400 Sales returns 400 Purchases 8,000 Purchases returns 1,200 General expenses 1,200 Carriage inwards 400 Carriage outwards 900 Rent received 2,500 Commission received 1,000 Salaries and wages 6,000 Electricity 700 Insurance 1,500 Postage 300 Drawings 1000 Bank loan 100,000 Total 280,100 280,100 Note: Closing stock on 31st January 2005 was valued at Kshs. 2,500 Prepare Trading, profit and loss account for the year ended 31st January 2005

Balance sheet as at 31st January 2005