a) Explain five negative effects of inflation to an economy. (10mks)

b) Explain five functions performed by intermediaries in the chain of distribution. (10mks)

a) Describe six types of partners that can be found in a partnership form of business. (12mks)

b) Kombo traders operates a wholesale business. The following transactions relate to the month of January 2013.

Jan 2 Cash sales shs. 72,000.

Jan 5 Received a cheque of shs.25,000 from Wanjala after cash discount of Shs. 15,000.

Jan 6 Paid wages by cash Shs. 48,000

Jan 10 Cash sales shs.20,000.

Jan 14 Wanjala settled his amount of shs. 80,000 by cheque after deducting 5% cash discount.

Jan 15 Paid Sululu shs. 35,000 by cheque after deducting cash discount of shs.1,700.

Jan 25 Deposited Shs.5,000 cash into the bank.

Jan 30 paid general expenses in cash shs.4,000 Jan 31 Withdrew shs. 15,000 from the bank for office use.

Required:

Record the above transactions in the relevant cash journals and show the discounts accounts in the general ledger

a) The East African countries are working towards integration of their economies. Explain four stages they would go through to attain full integration. (8mks)

b) Discuss six ways in which a well developed transport system may be important to Kenya. (12mks)

a) The following balances meant to Safaricom traders as at 31st December 2013.

Shs.

Cash at hand 13,000

Cash at bank 27,000

Insurance 4,000

Advertising 8,000

Buildings 120,000

Motor vehicles 75,000

Debtors 19,000

Creditors 31,000

Drawings 10,000 3

yr KCB loan 60,000

Discounts allowed 3,000

Discount received 5,000

Capital 184,000

Gross profit 27,000

Stock (31/12/2013) 28,000

Required:

i) Prepare a balance sheet as at 31st December 2013. (8mks)

ii) Calculate : - Rate of return on capital employed. (2mks)

b) Explain five disadvantages of specialization and division of labour to an organization. (10mks)

a) Discuss five measures that may be taken to solve unemployment in a country. (10mks)

b) Explain five functions of micro finance institutions in promoting economic activities in a country (10mks)

a) Explain five ways in which raw material may influence location of a business enterprise.(10mks)

b) Explain five benefits that may accrue to a consumer who buys goods from a hypermarket(10mks)