A company intends to promote its products by arranging a prize winning competition through the media. Prizes can only be won through buying the products.

Explain five benefits that the company would get by using this method of sales promotion 10mks

(b) Explain four factors determining the market prices of commodities. 10mks

(a) The government of Kenya has been adopting the policy of privatisation of firms.

Discuss some of the benefits that the Kenyan people reap from this policy 10mks

The following balance were extracted from the books of Charles & Sons Co.

as at May 31st 2002 .

Capital 600,000

Net profit 130,000

Plant fixtures 160,000

Equipments 100,000

Buildings 240,000

Office furniture 10,000

Stock 192,000

Cash 118,000

Debtors 158,000

Pre-paid expenses 22,000

Creditors 130,000

Outstanding expenses 20,000

Bank overdraft 110,000

Required :

(i) Prepare balance sheet as at 31st may 2002 7mks

Calculate

Working capital

Current ratio

Net profit as percentage to capital 3mks

3. (a) Explain five circumstances under which an insurance company would not compensate

the insured in the event of loss 10mks

(b) Odhiambos publishing company recently joined the Nairobi stock exchange.

Describe five benefits 10mks

Opportunities exist for purchasing of necessary durable goods by instalment

Describe two methods commonly used for this purpose 4mks

Mention three advantages of each to:

Manufacturers

Consumers 12mks

(c) Give any two differences of the two methods 4mks

5. (a) Explain any five methods that the Kenyan government may adopt in order to control the

volume of imports 10mks

(b) Discuss the main sources of capital to small scale enterprises 10mks

6. (a) Explain five reasons why it is necessary for a country to control international trade

10mks

(b) Explain five diseconomies that may be suffered by firms due to large scale production

a) Discuss the factors that should be considered in choosing a channel of distribution

for any particular product. 10mks

b) Explain any five types of wholesalers who may be found in our country today. 10mks

a) Assume that you are the sales manager of Kenya Breweries limited. Explain the

qualities you would look for every time you are recruiting your sales executives. 12mks

What do you understand by the term production. Explain any four factors of

production. 8mks

a) The following balances were extracted from the books of spikes Ltd on 31st Dec 2001.

Shs.

Fixed Assets 42,000

Stock 48,000

Debtors 50,000

Bank overdraft 25,000

Creditors 40,000

Cash in hand 2,000

Capital 77,000

During the month of January, the following transactions took place.

Bought motor vehicle on credit valued at Kshs. 80,000 from General motors.

Withdrew sh. 28,000 for personal use.

Prepare

balance sheet as at 31st Jan 2002 for spikes Ltd.

c) Give any five reasons to justify that the central Bank is not a Commercial Bank.

10mks

a) Discuss circumstances under which a wholesaler may be eliminated from the chain

of distribution. 10mks

b) Explain the essentials of a good warehouse. 10mks

a) Advertising media refers to the means used to convey the sales message to the customers /

users of any given product. Explain any five. 10mks

b) What do you understand by containerization. Briefly explain the benefits associated

with containerisation. 10mks

a) Explain the role played by consumer co-operative societies in Kenya today. 10mks

b) To a certain extent, public corporations are to considered desirable. Explain 10mks