565/2 · BUSINESS STUDIES · Paper 2 · Nov. 2024 · 2½ hours
Instructions: Answer any five questions. Each question carries 20 marks.
1. (a) Guru, an entrepreneur, wants his new products to reach the consumers. Explain five factors he would consider in choosing a distribution channel to use. (10 marks)
(b) Discuss five demerits of free trade to a country. (10 marks)
2. (a) Manji bought a car for business use. Describe five steps he will follow to obtain an insurance policy for the car. (10 marks)
(b) Kimali started a transport business with one matatu. Over the years the number of matatus has increased to 40. Explain five factors that could have made his business thrive. (10 marks)
3. (a) Explain five factors in the external environment that may positively influence the operations of a business. (10 marks)
(b) The following transactions relate to Mzabuni Traders for the month of November 2022.
| Date | Transaction |
|---|---|
| Nov 1 | Started business with Sh. 20,000 in cash and a bank overdraft of Sh. 10,000 |
| 2 | Purchases of Sh. 15,000 in cash |
| 5 | Ngonde, a debtor, settled his account of Sh. 15,000 by issuing a cheque of Sh. 12,000 and the rest by cash |
| 7 | Paid wages by cheque Sh. 4,000 |
| 8 | Received cash from Oloo, a debtor, Sh. 3,500 |
| 9 | Paid Warui, a creditor, Sh. 5,000 in cash |
| 12 | Received a cheque of Sh. 7,250 from Maweu |
| 15 | Paid insurance Sh. 2,000 by cheque |
| 16 | Deposited Sh. 6,000 from the office till into the bank account |
| 18 | Purchased stock worth Sh. 9,500 by cheque |
| 20 | Received a cheque of Sh. 10,000 from Mawea |
| 21 | Paid Sh. 3,200 water bill in cash |
| 24 | Received Sh. 8,600 from Ngonde in cash |
| 28 | Paid rent Sh. 5,000 by cheque |
| 30 | Took all the cash and deposited into the bank account |
Required: prepare a two-column cash book for the month of November 2022. (10 marks)
4. (a) Discuss five causes of unemployment in Kenya. (10 marks)
(b) Explain five reasons why people earning the same income may hold different amounts of money for the transactions motive. (10 marks)
5. (a) Explain four types of capital in a business. (8 marks)
(b) (i) With the aid of a diagram, describe the effect of a shift in the supply curve to the right while the demand curve remains constant. (6 marks)
(ii) Explain three factors that can lead to the shift in the supply curve to the right. (6 marks)
6. (a) The Government of Kenya intends to privatize some public corporations. Discuss five reasons that may have led to this decision. (10 marks)
(b) The following balances were extracted from the books of Jabali Enterprises on 1st January 2021.
| Item | Sh. |
|---|---|
| Capital | 1,000,000 |
| Motor vehicle | 400,000 |
| Creditors | 360,000 |
| Loan | 200,000 |
| Debtors | 160,000 |
| Stock | 120,000 |
| Cash in hand | 200,000 |
| Cash at bank | 280,000 |
| Machinery | 400,000 |
The following transactions took place during the year ending 31st December 2021:
(i) Sold machinery worth Sh. 120,000, received Sh. 80,000 in cash and the balance to be settled at a later date.
(ii) Purchased goods worth Sh. 200,000 and paid Sh. 140,000 cash; the remaining amount remained unpaid.
(iii) Took Sh. 20,000 cash from the business kitty for personal use.
Required: prepare Jabali Enterprises' balance sheet as at 31st December 2021. (10 marks)