(a) (i) Prepare a stores ledger account for the following transactions using first in, first out (FIFO) method of inventory valuation and determine the value

(a) (i) Prepare a stores ledger account for the following transactions using first in, first out (FIFO) method of inventory valuation and determine the value of closing inventory and the cost of materials to be charged to production: January 1 Received 1,000 units at Shs 100 each. 10 Received 260 units at Shs 105 each. 20 Issued 700 units. February 4 Received 400 units at Shs 115 each. 21 Received 300 units at Shs 125 each. March 16 Issued 620 units. 18 Returned 200 units to store by user department being part of issues of 16 March. April 12 Issued 240 units. May 10 Received 500 units at Shs 110 each. 15 A shortage of 10 units was registered being part of items received on 10 May. 25 Issued 380 units. (10 marks) (ii) Outline the factors that influence the choice of a materials pricing method. (5 marks) (b) In a certain company each employee is expected to work for 49 hours a week and paid at an hourly rate of Shs 20,000. If an employee works for more than 40 hours in a week, the company pays for extra hours at a rate of Shs 15,000 per hour. These workers are engaged in production of rulers and it takes one minute to produce one ruler. In a certain week, Peter produces 3,000 rulers. Required: (i) How much did Peter earn as a bonus? (4 marks) (ii) How much was paid to Peter in total for the whole week? (2 marks) (c) Mention four circumstances when it is suitable to use a group bonus scheme in remunerating employees. (4 marks) (Total 25 marks) Question 3 (a) A company reapportions the costs incurred by its two service cost centers; materials handling and inspection to three production cost centers; machining, finishing and assembly. The following are the overhead costs which have been allocated and apportioned to the cost centers. Shs Production cost centres: Machining 400,000 Finishing 200,000 Assembly 100,000 Service cost centres: Materials handling 100,000 Inspection 50,000 Technical estimates of the benefits received by each cost centre are as follows: Machining Finishing Assembly Material handling Inspection Material handling 30% 25% 35% - 10% Inspection 20% 30% 45% 5% Required: (i) Calculate the charge for overhead to each of the three production cost centers including amounts reapportioned from the two service cost centers using repeated distribution method. (14 marks)

(ii) Comment on whether re-apportioning of service cost centre costs is generally worthwhile. (4 marks)

(b) A company operates a manufacturing process which produces two joint products Tang and Bang and a by-product Exe. Manufacturing costs for the period ended May 2012 totalled Shs 272,926,000 in manufacturing the products as given below: Tang 16,000 kg (selling at Shs 6,100 per kg) Bang 53,200 kg (selling at Shs 7,500 per kg) Exe 2,770 kg (selling at Shs 800 per kg) Required: Calculate the cost, per kg, of Tang and Bang for the period using market values to apportion costs. (7 marks) (Total 25 marks) Question 4 Simba Ltd is involved in the manufacture of ladies bags and has availed you the following records for the following months of 2012: July Aug Sept Oct Nov Dec Budgeted sales (bags) 4,000 4,200 4,500 5,000 4,800 4,700 Closing inventory (bags) 1,000 1,500 1,300 800 1,200 1,400 Simba Ltd anticipates to sell each bag at Shs 2,000. The company had opening inventory of 500 bags. Simba Ltd plans to reserve the closing inventory of bags at the end of the month as part of the finished bags. The production manager has availed the following costs of manufacturing a single bag: Shs Raw materials 5 metres each Shs 2,000 10,000 Labour costs 10 hours each Shs 500 5,000 Variable overhead costs 20% of labour costs 1,000 16,000 Required: (a) Prepare:

(i) sales budget. (3 marks)

(ii) production budget. (6 marks)

(iii) raw material utilization budget. (3 marks) (b) (i) Explain the essential requirements for successful budgeting. (6 marks)

(ii) Outline the requirements of a good variance analysis. (5 marks)

(iii) Why are ideal standards unrealistic? (2 marks) (Total 25 marks) SECTION C Attempt two of the three questions in this section. Question 5 (a) Outline the essential features of process costing. (4 marks) (b) Distinguish between absorption costing and marginal costing in regard to: (i) inventory valuation.

(ii) overhead cost recovery.

(iii) financial reporting. (6 marks) (c) The use of cost-volume-profit (CVP) analysis as a decision making tool has some shortcomings because of the limitations it presents. Required: Outline the limitations of CVP analysis. (5 marks) (Total 15 marks) Question 6 (a) (i) Outline the ideas on which activity-based costing (ABC) was developed. (3 marks)

(ii) Explain the difficulties that are often encountered when using ABC. (3 marks)

(b) Explain the role of the management accountant in regard to planning and cost control. (4 marks)

(c) "Relevant costs are those future costs that differ between alternatives". Required: (i) Explain the four main characteristics of relevant costs. (4 marks) (ii) Define the 'term incremental cost'. (1 mark) (Total 15 marks) Question 7 (a) (i) Distinguish between job and batch costing. (2 marks) (ii) Outline the factors that influence the choice of a costing method to be used in any company. (4 marks) (b) Identify the special features of a contract. (4 marks)

Bogere Supermarket The following is a statement of comprehensive income for Bogere Supermarket Ltd for the year ended 31 March 2012: Shs '000' Shs '000' Sale of merchandise 45,757 Cost of sales (10,527) Gross profit 35,230 Other income 1,495 Total income 36,725 Expenditure: Administration fees paid 2,225 Advertising 200 Amortisation of operating leases 321 Audit fees 1,200 Provision for bad debts 4,000 Bank charges 100 VAT penalties 600 Depreciation 4,589 Donations 300 Electricity and water 5,000 Motor vehicle expenses 5,678 Professional services and legal expenses 1,000 Rent paid 2,000 Repairs and maintenance 1,689 Staff costs 3,000 Capital assets 4,000 (35,902) Trading profit 823 Fixed assets which were purchased during the year included: (i) 2 fridges each costing Shs 1.5 million.

(ii) a van with a seating capacity of 28 passengers at a cost of Shs 26 million. (

iii) a computer of Shs 4 million. (iv) a piece of land at Bunga which is yet to be developed at Shs 50 million. The company supplied goods to the Ministry of Health and a withholding tax of Shs 3 million was deducted. The corresponding tax credit certificate was obtained. In the course of the year, the supermarket was audited for VAT purposes and the tax authority disallowed VAT of Shs 4.5 million as non - claimable because the invoices which were given to the supermarket were not proper tax invoices. In addition, a penalty of Shs 600, 000 was imposed due to errors in completion of the VAT returns. Included in legal and professional fees are lawyers' fees of Shs 400,000 for working on the legal affairs of the director's friend. Donation was made to a staff member's wedding. Provisions for bad debts are general. Required: (a) Explain why the Ministry of Health withheld tax from the supplies made to them and what the supermarket can do with the tax withheld. (5 marks) (b) Advise the supermarket on what it should do in its corporation tax computation with the disallowed VAT of Shs 4.5 million. (2 marks) (c) Compute the capital allowances due to the supermarket. Assume that there was no brought down tax written down values. (6 marks) (d) Compute the tax payable and offset any credits available to the supermarket. (12 marks) (Total 25 marks) Question 3 Coco Ltd made the following payments to its employees for the month ended 30 June 2012: Shs '000' Moses Willy 1,789 Kalumba Isaac 400 Gashumba Oslo 230 Komaketch Andrew 12,300 The company also paid the following consultants the corresponding amounts: Shs '000' Slyvia Were (non-resident) 5,300 Anita Mwanje (resident) 1,200 Required: (a) Compute the tax: (i) payable by each employee showing the detailed workings. (12 marks)

(ii) deductible from each consultant. (4 marks)

(i) motor vehicle benefit. (6 marks)

(ii) interest free loan provided by an employer to an employee. (3 marks) (Total 25 marks) SECTION C Attempt two of the three questions in this section. Question 4 Joan Enterprises Ltd is a company dealing in letting of commercial premises. During the November 2012 tax period, the company sold off all its properties to Ruka Enterprises Ltd which also deals in letting of commercial premises. Both companies are registered for VAT. Required: (a) Advise both companies on what needs to be done to ensure that the disposal qualifies to be a transfer of a business as a going concern under the VAT Act and the related practice notes. (10 marks) (b) Explain the benefits of having a disposal treated as a transfer of business as a going concern. (5 marks) (Total 15 marks) Question 5 Briefly explain: (a) five benefits of a customs union. (10 marks) (b) the disadvantages of smuggling. (5 marks) (Total 15 marks) Question 6 (a) Kintu has residential flats located in Najjera, Ntinda. He earned Shs 12 million from these flats for the year ended 30 June 2012. In addition, he has a supermarket in Kyalo from which he earned Shs 46 million. He pays tax on income from the supermarket under the small business taxpayers. Required: (i) Compute the rental tax payable on the income from the flats. (6 marks) (ii) Compute the tax payable on the income from the supermarket. (6 marks) (b) Define the term 'year of income' as per the Income Tax Act. (3 marks) (Total 15 marks)

Question 2 (a) Distinguish between direct taxes and indirect taxes. (4 marks)

(b) Explain four advantages and four disadvantages of direct taxes. (16 marks) (Total 20 marks) Question 3 (a) Explain seven factors that determine the rate of economic growth in an economy. (14 marks) (b) Give six benefits of economic growth. (6 marks) (Total 20 marks)

Question 4 (a) Define the term 'private sector'. (2 marks) (b) Explain six problems faced by the private sector in Uganda. (6 marks) (c) Describe measures that should be taken to promote the private sector in Uganda. (12 marks) (Total 20 marks)

Question 5 (a) With the use of illustrations, distinguish between: (i) change in demand and change in quantity demanded. (4 marks) (ii) increase in supply and increase in quantity supplied. (4 marks)

(b) Explain six factors that lead to an increase in supply of a commodity. (12marks) (Total 20 marks) Question 6 (a) What is a trade union? (2 marks) (b) Outline four methods that trade unions use to obtain wage increments. (4 marks) (c) Explain seven factors that limit the ability of trade unions to demand for high wages. (14 marks) (Total 20 marks)

Question 7 (a) Explain five causes of uneven income distribution in Uganda. (10 marks)

(b) Give five measures that have been adopted to minimize uneven distribution of income in Uganda. (10 marks) (Total 20 marks)

(a) What do you understand by the following computer terms? (i) Multiprogramming. (ii) Mouse. (iii) Printer. (iv) Image scanner. (v) RAM. (vi) Distributed computing. (vii) Bandwidth. (viii) Client/server computing. (ix) Device driver. (x) Computer security. (20 marks) Question 3 (a) Define the term 'information system'. (2 marks) (b) Explain the different elements of an information system. (12 marks) (c) Explain, with examples, the standard office applications of information and communication technology in business today. (6 marks) (Total 20 marks)

Question 4 (a) Outline, with examples, some of the factors that affect information systems projects. (3 marks) (b) Explain some of the advantages of using the World Wide Web. (8 marks) (c) Explain the characteristics of the following information systems: (i) Transaction processing system.

(ii) Management information system.

(iii) Expert system. (9 marks) (Total 20 marks) Question 5 (a) Identify any three types of computer networks that can be set up by an organization. (3 marks)

(b) Outline the common basic technologies for storing binary information. (3 marks) (c) Identify the three major components of the central processing unit. (3 marks)

(d) Input into a computer can be supplied from a variety of sources. Name any three of such sources. (3 marks)

(e) Explain four major sources of danger to computers and information. (8 marks) (Total 20 marks)

Question 6 (a) Explain the differences between analog and digital devices and give examples of each of them. (4 marks) (b) Identify the computer hardware components that make up a computer system. (5 marks)

(ii) Describe the steps you would go through to start a computer and to shut it down. (9 marks) (Total 20 marks) Question 7 (a) (i) What do you understand by the term 'computer virus'? (2 marks) (ii) Identify one operating system which is not affected by computer viruses. (1 mark) (iii) Explain how viruses can be eliminated from a computer system. (3 marks) (b) Describe the factors necessary for a computer to continue functioning normally during and after the warranty period. (10 marks) (c) Differentiate between the following: (i) Icon and file. (2 marks) (ii) Desktop computer and laptop computer. (2 marks)