P230/2

ENTREPRENEURSHIP
EDUCATION
Paper 2
Jul/Aug 2016
3 Hours

MUKONO EXAMINATIONS COUNCIL

Uganda Advanced Certificate of Education
ENTREPRENEURSHIP EDUCATION
Paper 2
3 Hours

INSTRUCTIONS TO CANDIDATES
 Answer four questions only.
 All questions carry equal marks.
 Any additional question(s) answered will NOT be marked.

1. You intend to start a carpentry workshop in your home town.

Mukono Examinations Council 2016 Page 1

 a) (i) State the mission statement of the business. (02marks)
(ii) Give the general description of the business. (05marks)
b) Prepare the administration plan of your proposed business. (06marks)
c) Draw a programme for purchasing business inputs. (06marks)
d) Formulate guidelines for promoting creativity among the workers in your project.
(06marks)

2. Babu Enterprises plans to start a business, has availed you with the following
projections for the months of January, February and March 2017.
(i) Cash in hand shs 1,500,000 as at 1st January 2017.
(ii) Cash sales shs 1,860,000, shs 1,395,000 and shs 930,000 for January, February
and March respectively.
(iii) Loan from SEROSACCO shs 1,450,000 in January.
(iv) Receipts from debtors shs 890,000 in February and shs 925,000 in March.
(v) Cash purchases of shs 720,000, shs 480,000 and 240,000 for January, February
and March respectively.
(vi) Monthly direct wages are expected to be shs 48,000. A decrease of 10% is
expected in the month of February.
(vii) Electricity shs 30,000 per month.
(viii) Selling expenses are estimated to be shs 20,000 and shs 15,000 for January and
march respectively.
(ix) Taxes shs 226,900 to be paid in the month of March 2017.
(x) Administrative expenses are expected to amount to shs 60,000 per month. An
increase of 5% every month is expected after the 1st month.
(xi) Cash purchase of assets shs 2,900,000 in January.
(xii) Credit purchases shs 250,000 in February, to be paid for in the following month.
(xiii) A cash deficit is off-set by getting a loan in the following month.
Required
a) Prepare a cash Flow statement for Babu Enterprises for the period of January to
March 2017. (20marks)

Mukono Examinations Council 2016 Page 2

 b) Suggest to Babu Enterprises ways of managing cash short falls in the cash flow
statement. (05marks)

3. You are operating shoe-making factory in an urban centre. You even make products on
special orders.
a) Design a work-order form for the business. (06marks)
b) Formulate policy guidelines for motivating business employees. (06marks)
c) Present a programme for taking out an insurance policy. (07marks)
d) Write an invoice to a customer whom you have supplied products on credit worth
shs 1,000,000. (06marks)

4. You are the Human Resource Manager of a bakery located in a populated town centre.
You have identified the need to train the workers for increased output at minimum
costs.
a) Write a notice inviting all workers to a one day training workshop. (05marks)
b) Prepare a one week training programme for the workers. (06marks)
c) Develop guidelines to be followed to minimize costs of production. (08marks)
d) Design a job advertisement for the post of marketing agent of the business.
(06marks)

5. The following information relates to UNIQUE TRADERS LTD for the year 2015.
Details Shs (000)
Bank 12,000
Cash 18,000
capital 157,000
Opening inventory 10,000
Furniture 30,000
Bad debts written off 4,000
Machinery 15,000
Accounts receivable 20,000
Returns inwards 2,000

Mukono Examinations Council 2016 Page 3

 Purchases discount 33,300
Carriage on sales 1,000
Purchases 75,000
Sales 90,000
Accounts payable 13,000
Returns outwards 4,000
Carriage inwards 1,500
Bad debts recovered 8,000
Sales discount 2,000
Closing inventory 1,000
Bank overdraft 2,000

Required:
a) Compute the;
(i) Average stock (02marks)
(ii) Cost of sales (02marks)
(iii) Gross profit (02marks)
(iv) Net profit (03marks)
b) Calculate the following ratios;
(i) Cash ratio (03marks)
(ii) Net profit to sales (03marks)
(iii) Rate of return on capital employed (03marks)
(iv) Stock turnover (03marks)
c) Interprete the following ratios in relation to 5(b) above.
(i) Cash ratio (02marks)
(ii) Net profit to sales (02marks)

6. You are operating a Hardware shop along a busy street. Your store keeper is
disorganized and inefficient.
a) Write a termination letter to the store keeper. (06marks)

Mukono Examinations Council 2016 Page 4

b) Design a stock card for use in the business. (06marks)
c) Prepare policy guidelines for ensuring proper inventory management. (07marks)
d) Draft a daily work schedule to be followed by your employees. (06marks)

End -

Mukono Examinations Council 2016 Page 5