Answer All the questions

(a) The International Accounting Standards Board's framework for the presentation of financial statements prescribes for recognition of assets only when two conditions are satisfied. Required:

1.state the two conditions that must be satisfied for an item to be recognised in the financial statements as an asset. (2 marks) (b) The storekeeper of Gera Stationers was ill for the month of February, 2015. The clerk left in charge maintained the following inventory transaction records for her store for the month. These transactions were clearly captured in the end of year balances. Date Particulars 1 Opening inventory 1,200 units at Shs 2,350 per unit. 3 Purchased 800 units at Shs 2,350 per unit. 5 Issued 780 units. 8 Purchased 1,500 units at Shs 2,500 per unit. 10 Issued 1,400 units. 13 Purchased 1,000 units at Shs 2,300 per unit. 15 Issued 500 units. 18 Issued 920 units 23 Purchased 1,500 units at Shs 2,200 per unit. 24 Issued 1,500 units. 25 Purchased 2,000 units at Shs 2,000 per unit. 26 Purchased 1,000 units at Shs 2,400 per unit. 27 Purchased 1,200 units at Shs 2,600 per unit. 28 Issued 4,100 units. Required: Prepare stores ledger account for Gera Stationers for the month of February, 2015 using the first in first out (FIFO) method. (23 marks) (c) IAS 2: Inventories, was set out to prescribe the accounting treatment for inventories. Required: Clearly outline the disclosure requirements in respect of inventories as laid out in the standard. (5 marks) (Total 30 marks) SECTION C Question 3 (a) Explain the term 'depreciable amount'. (1 mark)

(b) Considering the asset, loose tools like spanners, screw drivers etc in a Motor Vehicle repair workshop as an example; explain how depreciation can be computed using revaluation method. (2 marks)

(c) The reducing balance method and sum of the digits method of depreciation are collectively referred to as accelerated methods of depreciation. Required: Explain the term 'accelerated method of depreciation'. (2 marks) (d) Whatsapp Property Agency Ltd is a real estate company dealing in the construction and sale of houses and also sells land. An extract of the company's statement of financial position as at 30 November, 2010 showed property, plant and equipment (PPE) at a carrying amount of Shs 1,000,000,000. These items of PPE had an accumulated depreciation of 200,000,000 as at that date. On 1 June 2011, the company acquired a wheel loader for Shs 454,600,000. Fuel worth Shs 5,400,000 was used in testing the wheel loader before it was commissioned. The wheel loader referred to above got involved in an accident and the board of directors recommended its disposal, whereupon it was disposed of in a part exchange for a new one on 30 November, 2012. The old wheel loader was valued at Shs 260,000,000 and the company incurred Shs 32,800,000 to repair the wheel loader before disposal. The new wheel loader received on the same date was acquired at a total valuation of Shs 480,000,000. The balance of the money was paid by cheque. On 28 February, 2014 the company procured an excavator at Shs 300,000,000 excluding taxes. Taxes were agreed at Shs 75,000,000 and Shs 67,000,000 for import duty and VAT respectively. The company's financial year ends 30 November annually. All cash related transactions are effected through the bank. The company's policy on depreciation of non-current assets is to charged depreciation at a rate of 20% per annum on reducing balance method on a pro rata to time basis. Required: Prepare 30 November 2014, the following accounts for Whatsapp Property Agency Ltd: (i) Non-current assets. (4 marks)

(ii) Accumulated depreciation. (6 marks)

(iii) Disposal of non-current assets. (5 marks) (Total 20 marks)

Question 4 (a) Differentiate between real accounts and nominal accounts. (2 marks)

(b) Explain the purpose of maintaining a general journal. (2 marks) (c) 'Goods once sold cannot be returned' is a clause normally appearing on most receipts. However, in spite of this, some goods can be returned. Required: Explain any two circumstances under which goods initially purchased may be returned. (2 marks) (d) The following transactions were extracted from the books of Kas-Kas Enterprises Ltd for the month of February, 2015 after closing the previous month with Shs 40,000,000 in the bank. (i) 2 February: purchased goods Shs 20,000,000 from Twasoma Wholesalers Ltd invoice no.10001 payable at the end of March, 2015.

(ii) 3 February: supplied goods to ABC Ltd Shs 10,000,000, invoice no.100. Payment terms were 2 months from the invoice date.

(iii) 4 February: sent credit note no. 01507 to ABC Ltd Shs 4,500,000 in respect of returns.

(iv) 6 February: purchased goods Shs 7,600,000 paying by cheque.

(v) 7 February: debit note no. 01007 earlier sent to Twasoma Wholesalers Ltd Shs 3,400,000 was accepted by them.

(vi) 08 February: made cash sales Shs 12,000,000.

(vii) 11 February: made credit purchases from XYZ & Sons Ltd Shs 6,000,000, invoice no. 10002.

(viii) 15 February: made credit sales to KKM Traders Ltd Shs 8,100,000, invoice no.101.

(ix) 20 February: rejected goods Shs 2,000,000 returned by KKM Traders Ltd on grounds that the reasons given were not genuine.

(x) 25 February: cash expenses paid during the month include rent Shs 1,200,000 and wages Shs 3,600,000. (xi) 27 February: debit note no. 01508 to XYZ & Sons Ltd Shs 2,400,000 was accepted by them. Required: (i) Prepare the relevant journals for Kas Kas Enterprises Ltd. (6 marks)

(ii) Post the transactions to the relevant ledgers. (8 marks) (Total 20 Marks) Question 5 (a) Explain the main objective of setting up non-profit organizations. (2 marks)

(b) Fitness for all Health Club is a member-owned organization providing gym, sauna, steam bath and aerobics services to her members among other services. The club also runs a profitable bar for refreshments. All transactions are effected through the club's bank account. The following receipts and payments account was prepared by the club for the year to 30 November 2014. Receipts: Shs '000' Payments: Shs '000' Ordinary subscriptions 28,400 Balance b/ f 6,400 Life membership subscriptions 280,000 Allowance for aerobics instructor 5,200 Bar cash sales 16,200 Bar cash purchases 6,250 Letting out of sports grounds 12,000 Bar attendant's wages 1,800 Electricity 2,000 Water 780 Insurance 2,100 Other club expenses 3,600 . . Balance c/ f 308,470 336,600 336,600 Other balances relating to the club's activities were as follows: 30 November 1 December 2014 2013 Shs '000' Shs '000' Buildings at cost 120,000 Gym equipment at cost 60,000 Ordinary subscriptions accrued 8,400 7,600 Ordinary subscriptions in advance 16,800 12,200 Bar inventory 1,400 1,800 Accrued insurance 654 456 Prepaid electricity 56 Accrued water bills 120 Additional information: (i) The club apportions the following expenses to the bar as per ratios below: Electricity 4 1 Water bills 8 1 Other expenses 20% (ii) The club's depreciation policy on all non-current assets is as follows; buildings 5% on cost and 20% for gym equipment on net book value.

(iii) The club recognises 10% of life subscriptions amount as revenue annually. Required: Prepare, for the year to 30 November, 2014 Fitness for all Health Club's: (i) Bar statement of profit or loss. (4 marks)

(ii) Income and expenditure statement. (8 marks)

(iii) Statement of financial position. (6 marks) (Total 20 marks) SECTION D Question 6 (a) A partnership business is operated in line with the partnership deed; however, the absence of a partnership deed does not necessarily affect the operation of a partnership business. Required: State the provisions in the Partnership Act, 2010 which apply to a partnership in the absence of a partnership deed. (4 marks)

(b) Tom, Lucy and Charles are certified public accountants providing accountancy services as TLC & Co. The partners have unanimously agreed to admit Mary as the fourth partner. Required: Explain the different ways TLC & Co may apply to admit Mary. Question 7 (a) Explain the meaning of the term 'incomplete records' and why some businesses maintain incomplete records. (4 marks)

(b) Explain the challenges likely to be faced by businesses that maintain incomplete records in the process of carrying out their operations. (6 marks)

Question 2 (a) With the help of a diagram; explain the backward bending supply curve of labour. (6 marks) (b) Explain the objectives that international cartels try to achieve in the international market. (4 marks) (c) (1) Explain the features of an oligopoly market structure. (4 marks) (ii) With the aid of a diagram, explain the profit maximisation position of an oligopoly firm. (6 marks) (Total 20 marks) Question 3 (a) Explain the importance of price elasticity of demand to the government. (4 marks) (b) (1) Differentiate between devaluation and revaluation. (2 marks) (i1) Explain the factors necessary for devaluation policy to succeed in an economy. (6 marks) (c) Explain the methods of retiring an external public debt. (8 marks) (Total 20 marks) Question 4 (a) Discuss the factors that influence the supply of labour in an economy. (6 marks) (b) Explain the methods used by trade unions to achieve their objectives (6 marks) (c) Explain the conditions necessary for trade unions to succeed in their demand for increase in wages for their members (8 marks) (Total 20 marks)Question 3 (a) (i) Identify the three commonly used methods in the computation of weighted index numbers. (3 marks) (ii) Explain the importance of weights in the computation of weighted index numbers. (2 marks) (b) A study carried out on Kelly and Jeffa Hotel Ltd revealed that the hotel management subjects their visitors to an informal interview. In a particular period, the average score was 58 points and 25.14% of the visitors scored above 65 points. Assuming the scores were normally distributed; Required: Determine the: (i) variance of the scores. (5 marks) (ii) percentage of visitors who scored below 38 points. (3 marks) (c) A large random sample of n regular customers to BOSS Shopping Arcade was investigated and the findings showed that 60% of the customers buy one item on every visit, with a standard error of 0.02. Required: Calculate the: (i) value of n. (3 marks) (ii) proportion of the ranges of regular customers who buy an item when they visit BOSS Shopping Arcade at 99% confidence level. (4 marks) (Total 20 marks) Question 4 (a) (1) Define the term 'correlation'. (1 mark) (ii) Give any three applications of correlation. (3 marks) (b) A national standards unit investigated nine brands of juice to determine their quality relative to price. The findings were ranked as in the following table: Brand Q Z P R K H N M B Price/ litre (Shs) 1200 900 700 1100 1500 1400 1450 1350 1050 Rank 3 9 8 4 6 1 5 2 7 Required: Using the Spearman's rank correlation coefficient method, determine whether the consumer public generally gets value for money.(6 marks) (c) In a beauty contest, three judges A, B and C ranked the contestants as given in the following table: Rank by Judge Contestant A C E TI G H 2 K Required: (i) Calculate the degree of correlation between Judges A and B; B and C; and A and C. (9 marks) (ii) Comment on the three judges. (1 mark) (Total 20 marks) SECTION B Attempt two of the three questions in this section Question 5 (a) A food vendor buys two types of food; maize flour and rice and prepares them for sale. Maize flour gives a profit of Shs 6,300 per kg while rice gives a profit of Shs 8,500 per kg. The food vendor wishes to establish the weekly profit. The following table gives quantity (in kg) and labour (in hours) required in the preparation. Quantity Labour Maize flour 4 4 Rice 2 6 Total (weekly) 100 180 Required: (i) Formulate simultaneous equations to establish the vendor's weekly buying plan. Hence, solve the simultaneous equations. (4 marks) (ii) Compute the weekly profit. (2 marks)(b) A piece of cloth, x metres long, costs Shs 6,000. If the piece of cloth is 2 metres shorter and each metre costs Shs 100 more, the cost would remain unchanged. Required: Form a quadratic equation and solve it. (5 marks) (c) (i) x3 -1 . Given *= 3+1 ; find dy dx (3 marks) (ii) Given the function /(x)=x' -27x+3; find the coordinates of turning points and distinguish between them. (6 marks) (Total 20 marks) Question 6 (a) Briefly describe how to obtain an optimal solution graphically for a linear programming problem. (4 marks) (b) Give any two advantages of the simplex tableau method for solving linear programming problems. (2 marks) (c) A manager of a certain firm hired x male and y female workers to do an emergency assignment. The cost incurred was given by the function C=200x+30y, in thousands of shillings, which was subjected to the following restrictions: x25, 120 2x + 5y 2 20 -8x + 20y $ 80 10x - 5y $ 60 Required: Graphically find the: (i) number of male and female workers that minimize the cost. (12 marks) (ii) minimum cost. (2 marks) (Total 20 marks)Question 7 (a) Describe the term "critical path' of a network. (2 marks) (b) The following table shows the activities and costs of a network: Activity Preceding activity Time (days) Cost (Shs) Normal Crash Normal Crash A 6 4 5,000 6,000 B 5 3 4,500 5,400 C A 8 7 7,000 7,300 D A 4 3 4,300 4,800 E B,C 6 4 8,500 10,000 Required: Calculate the cost slopes. (5 marks) Draw the activity network diagram for the above data. (5 marks) Determine the critical path and its duration. (4 marks) (c) Explain how the earliest start time (EST) and latest start time (LST) are determined. (4 marks) (Total 20 marks)Question 5 (a) (i) Explain the stages of compiling price indices. (6 marks) (ii) Explain the uses of price indices in Uganda's economy. (4 marks) (b) (1) Explain the objectives of the monetary policy in your country. (4 marks) (ii) Explain the tools of the monetary policy employed by the central bank in Uganda to regulate the level of economic activities. (6 marks) Total 20 marks Question 6 (a) (i) Explain the 'quantity theory of money'. (4 marks) (ii) Explain the weaknesses of the quantity theory of money. (6 marks) (b) (i) Distinguish between 'indicative planning' and 'imperative planning'. (2 marks) (ii) Explain the qualities of a good development plan. (8 marks) (Total 20 marks) Question 7 (a) (i) What is meant by the term "absorptive capacity"? (1 mark) (ii) Explain the causes of low absorptive capacity in Uganda. (5 marks) (b) Explain the steps being taken to attract foreign investment in Uganda. (8 marks) (c) Explain the circumstances under which a country may experience economic growth without economic development. (6 marks) (Total 20 marks)Question 2 Lufere Ltd was incorporated in 2008. The company deals in sale of cosmetics for ladies. It is located at Ghetto hill, a Kampala suburb. The company's directors are; Zinda, Bala and Fude. They do not own shares in the company. The company has been facing hard times for the last two years. There was hardly any business carried out last year yet the company has many pending debts. A series of disagreements have occurred among the directors concerning management of company affairs. For instance, Zinda and Fude have of recent contested the transfer by Bala, of one of the company's plots of land to one of the creditors who is a relative of his wife. At the same time, many other creditors have been demanding for payment in vain. The creditors are also threatening to petition courts of law for winding up of Lufere Ltd. Zinda and Fude are afraid that company property will soon be attached. Due to continuous challenges, company members except Bala's wife have resigned from the company. The registrar of companies has been duly notified. Required: (a) Raise and resolve the issues at Lufere Ltd. (12 marks) (b) Explain the procedure and benefits of voluntary winding up to the directors of Lufere Ltd. (8 marks) (Total 20 marks) Question 3 Peter Kiyenje and John Kiku started operating a hardware shop in Kabusu, Rubaga division, Kampala, in 2007. Peter Kiyenje is managing the business while John Kiku is an employee of the Ministry of Gender and Cultural Development. Peter Kiyenje contributed Shs 10 million and John Kiku Shs 8 million to the business. The building in which the hardware shop is operated belongs to John Kiku and a monthly rent of Shs 250,000 is paid to him. Peter Kiyenje and John Kiku agreed to share the profits in the business equally. For the first five years, the hardware business realised a lot of profits. Theyreinvested some of the profits to expand their business, built a warehouse and shared the remaining profits. In the next three years, business went down. Peter Kiyenje was not declaring full proceeds from the partnership businesses and was not allowing John Kiku to access business records. He also clandestinely opened a hardware shop in the neighborhood. The relationship between Peter Kiyenje and John Kiku has become unbearable and they are no longer talking to each other. John Kiku feels betrayed and he has come to you for advice. Required: Identify the issues arising from the facts and resolve them. (20 marks) Question 4 Pio was a shareholder of YY Ltd which was a duly registered company limited by shares and James Wanga as a director. The articles of association of the company provided among others that 'transfer of shares shall be restricted to the existing company share holders, subject to the discretion of the directors, which discretion shall not unreasonably be withheld'. Pio was an active member of the company holding ten shares in the company. However, due to financial constraints, he sold all his shares to his son Odono who is also a shareholder of the company. When Odono presented the share transfer duly signed by his father, Pio, James Wanga declined to effect the transfer. He instead immediately wrote to Odono informing him that his application had been rejected and he copied the letter to Pio. It transpired that James Wanga had given the company office clerk a 10 million cheque to deliver to Pio but Pio rejected it. James Wanga had prior to drawing the cheque cancelled the name of Pio from the register and inserted the name of his wife, Melle Wanga. Upon learning the conduct of James Wanga, Odono started investigating all his acts and omissions before and after he became director. The investigation revealed among others that Wanga presented his age at the time of appointment as a director as 23 years when actually he was 17 at the material time. James Wanga the previous year had legally dismissed Makofi the former company records clerk and declined to pay him his four months' salary arrears. Makofi has got nothing from the company from the time he was dismissed to date, and he hangs around the company premises soliciting money for survival.The aggrieved parties have come to you for advice on how the injustice in the company may be addressed. Required: Raise and resolve all the issues arising from the facts. (20 marks) SECTION C Attempt two of the three questions in this section Question 5 (a) Explain the following. (i) Simple contracts (4 marks) Contract of record (4 marks) (iii) Contracts under deed (4 marks) (iv) A condition (4 marks) A warranty. (4 marks) (Total 20 marks) Question 6 (a) Briefly explain the circumstances under which the directors of a company may refuse to register a transfer of shares of a public company. (10 marks) (b) Outline the procedure through which a company can reduce its capital. (10 marks) (Total 20 marks) Question 7 (a) Distinguish between criminal law and civil law. (14 marks) (b) Differentiate between legal wrongs and moral wrongs. (6 marks) (Total 20 marks)Question 1 The monthly salaries for employees at XYZ Ltd is as follows: Shs Managers 1,200,000 Officers 800,000 Clerks 500,000 Cooks 270,000 Guards 250,000 The responsibility allowance is paid as percentage of the salary. It is apportioned as follows: Percentage (5% ) Managers 10 Officers Clerks Cooks Guards Required: (a) Open an appropriate spreadsheet program and enter the above data appropriately. (3 marks) (b) With help of formulae, compute the allowances for each category of employees. (4 marks) (c) XYZ Ltd has a statutory obligation to remit 10% of gross pay to the revenue authorities. Calculate net pay for each category of employees. (6marks) (d) Insert an appropriate heading. (1 mark) (e) Put cell borders on your worked out table. (1 mark) (Total 15marks)THE SOCIAL IMPLICATIONS OF ICT The debate about the impacts of ICT ranges from enthusiasts to pessimists with very different views about where it is taking us. The following table sums up some of the main dimensions of the debate. ICT Scenarios for the 21" Century Dimension Enthusiasts Pessimists Social structure |Golden age of leisure | Haves and have-nots Economy Shared affluence Very rich/very poor Geography New rural society Electronic hermit Politics Genuine participation | Manipulation The actual impact is not likely to be either of these extremes but may have features that are perceived by different observers as having characteristics of either. Adapted from Unmasking ICT by Bazibu Moses, First Edition. Required: Using a word processing application of your choice, create the above document as it is. (5 marks)Question 1 (a) Explain any one limitation of the percentage distribution tables. (1 mark) (b ) The table below shows the weights of items, in grams, produced by Yextra Plastic Factory: Weight No. of items 119.5 - 124.5 3 124.5 - 129.5 10 129.5 - 134.5 12 134.5 - 139.5 18 139.5 - 144.5 15 144.5 - 149.5 6 149.5 - 154.5 1 Required: Using 137 as the working mean, calculate the mean for the number of items produced by Yextra Plastic Factory. (7 marks (c) A researcher collected the following information from Kora Bank relating to traffic fines paid by taxi drivers in Kampala for a period of one week. Day Mon. Tue. Wed. Thur. Fri. Sat. No. of payments 185 180 135 120 240 80 Required: Calculate the geometric mean of payments. (5 marks) (d) The following table shows the number of animals slaughtered at three slaughter houses in Kampala in a period of three months. Slaughter house Animals X Y Z Cows 800 1,000 1,200 Goats 300 800 300 Sheep 400 600 600 Total 1,500 2,400 2,100Required: Represent the given data on a compound bar graph. (5 marks) Explain two advantages of a compound bar graph. (2 marks) (Total 20 marks) Question 2 (a) Explain the term 'dependent events' as used in probability. (1 mark) (b) A driver approaching traffic lights at a road junction finds the traffic lights either red or orange or green. Required: (i) Construct a probability possibility space corresponding to this situation if the lights follow the cycle: red 35 seconds, green 45 seconds and orange 4 seconds. (4 marks) (ii) Compute the probability that the driver will find the lights either green or orange. (2 marks) (c) A practising lawyer would like to make a decision on how to bill a client for an upcoming suit. The lawyer can charge a flat fee of Shs 800,000 or take a percentage of the amount awarded to a client if the case is won. If the case is lost and the bill was based on the percentage of the amount to be awarded, the lawyer receives no money which is considered a loss of Shs 800,000. If the case is won, the lawyer's percentage would amount to Shs 2,500,000. Suppose the possibility of winning the case is; Required: (i) calculate the expected gain for the lawyer when the bill is based on percentage. (5 marks) (ii) identify the method of billing that gives the lawyer a higher expected gain. (2 marks) (d) From 4 men and 6 women, 2 jurors are to be selected at random to be on duty. Required: Determine the probability that both jurors selected are men. (6 marks) (Total 20 marks)