A small company will be introducing a new line of lightweight bicycle frames to be made from special aluminum alloy and steel alloy. The frames will be produced in two models, deluxe and professional. The anticipated unit profits are currently Sh. 1,000 for a deluxe frame and Sh. 1,500 for […]

Internal control systems are designed, amongst other things, to prevent error and misappropriation. Required: Describe the errors and misappropriations that may occur if the following are not properly controlled: (i) Receipts paid into bank accounts; (2 marks) (ii) Payments made out of bank accounts; (3 marks) (iii) Interest and charges […]

The monthly electricity bill at the Chez Paul Restaurant over the past 12 months has been as follows: Month Amount (Sh.) December January February March April May June 30,660 27,190 30,570 30,640 29,730 31,530 29,720 July August September October November 33,070 30,010 27,550 30,130 27,940 Paul is considering using exponential […]

An increasing number of organizations operate sophiscated corporate planning models. Quite often these models feature integrated models for the production, marketing and finance sub-systems. While linkage between these models is important forecasts of the external environment are also needed and econometric models are frequently used to provide these forecasts. Required: […]

(a) Briefly explain each of the following distributions indicating whether it is a discrete or a continuous distribution. (i) Binomial distribution (3 marks) (ii) Poisson distribution (3 marks) (iii) Normal distribution (3 marks) (iv) Chi square distribution (3 marks) (v) Fisher (F) distribution (3 marks) (b) Give one example in […]

Write explanatory notes on the taxes listed below and in each case indicate whether the tax complies with the main principles of a good tax system. (a) Presumptive tax on agricultural produce. (5 marks) (b) Cess on agricultural produce. (5 marks) (c) Trade licence chargeable to professionals. (5 marks) (d) […]

Kalamuka Maize Millers Limited purchased a building on 1 January 2005, for Sh.4,000,000. It was brought into use on the same day. The sellers construction cost comprised: Sh. Land Architects fees Leveling land Construction (including offices sh.160,000) 200,000 40,000 60,000 1,700,000 2,000,000 B.B. Ltd. purchased the whole of the Kalamuka […]

Because of economic conditions, a firm reports that 30 percent of its accounts receivables from other business firms are overdue. The firm’s policy is that if an accountant takes a random sample of five such accounts and finds that exactly 20 percent of the accounts are overdue 10 percent of […]

(a) What is meant by the term qualifying expenditure? ( 2 marks) (b) Name and briefly explain items which may be included in the qualifying expenditure for the purposes of investment deductions. ( 8 marks)