Question two:

a. From the following reconstruct the trial balance after making the necessary corrections. You are also required to come up with statement of performance and financial position from the same. Trial balance of S Higton as at 30 June 2010 Debit Credit Shs000 Shs 000 Capital 19,856 - Sales - 119,539 Stationery 1,200 - General Expenses 2,745 - Motor Expenses 4,476 Cash at Bank 1,950 - Stock July 1 2009 7,768 - Wages and Salaries - 9,492 Rent and Rates 10,500 - Office Equipment 6,000 - Purchases 81,753 - Heating and lighting - 2,208 Rent received 2,139 - Debtors 10,353 - Drawings - 4,200 Creditors - 10,230 Motor vehicles 7,500 - Interest received 1,725 - Insurance - 3,444 153,589 153,589 (20 marks)

b. Explain the role of accounting office in any organization (5 marks) Question three: a. Explain the classes of ordinary share capital (6 marks) b. Distinguish between bonus issue and rights issue of shares (6 marks)

c. Explain the meaning of share premium and how it can be applied in the company (5 marks)

d. Explain the meaning of reserves and distinguish between revenue and capital reserves (8 marks)

SECTION B - STATISTICS

Question one: The management of XYZ Company has given you the following data for output at a factory and costs of production over the past six months as follows: Month 1 2 3 4 5 6 Output (Shs000) 20 16 24 22 18 25 Costs (Shs000) 82 70 90 85 73 95 The management believes that there is a relationship between output and costs and has asked you to:

i. Calculate the equation that relates the output and costs (8 marks)

ii. Determine the strength of the relationship (r) (8 marks)

iii. Determine the proportion of changes in dependent variable that can be explained by changes in the independent variable.(r2) (4 marks)

iv. What are the weaknesses of the scatter diagram method of cost estimation? (5 marks)

Question two

a. A company has been growing its sales over the last 5 six years as follows: Year 1 2 3 4 Sales (shs000) 20 33 34 38 42

Required: What is the mean percentage rate of growth? (5 marks)

b. The salary of the lowest paid employee in a consulting firm was Ksh 220,000 per annum four years ago and is now Kshs 335,000. What is the mean rate of growth? (5 marks)

c. If two lorries, one of each type were tested over a distance of 150 miles and yielded rates of 24 km/hr and 36 /hr respectively. Find the average speed. (5 marks)

d. Suppose that the mean age of a group of 16 people is 36 and the mean age of another group of 11 people is 47 what the mean age of the whole group of 27? (5 marks)

e. Distinguish between random and non- random sampling techniques (5 marks)