(a) Explain five problems encountered when calculating consumer price indices. (10 marks)
(b) Explain five principles under which cooperative societies should be managed. (10 marks)

The following is the trial balance for Pen Point Enterprises as at 31/12/2014
Pen Point Enterprises
Trial balance as at 31/12/2014
Dr. Cr
shs. Shs.
Sales 1,000,000
Sales returns 10,000
Premises 500,000
Purchases 650,000
Discount received 9,000
Motor vehicle 125,000
Creditors 60,000
Capital 487,500
General expenses 120,000
Drawings 20,000
Cash at bank 30,000
Debtors 75,000
Rent expenses 23,500
Cash in hand 3,000
1,556,500 1,556,500
Stock at 31/12/2014 was valued at sh.25, 000
Prepare:
i) Trading, profit and loss account. (6 marks)
ii) Balance sheet. (6 marks)
(b) Explain four features of monopoly as a form of product market. (8 marks)

(a) Explain five factors than an entrepreneur would consider when evaluating a business idea. (10 marks)
(b) Explain five factors that should be considered when choosing means of communication. (10 marks)

(a) Explain five circumstances under which a high population growth may be desirable to a country. (10 marks)
(b) Explain five circumstances under which a wholesaler becomes essential in the chain. (10 marks)

(a) Explain five advantages of buying goods from a departmental store. (10 marks)
(b) Explain five problems encountered in development planning in Kenya. (10 marks)

(a) On 1st
September 2010,Hamisi Traders had sh.15,000 cash at hand and a bank overdraft of sh.40,000.
During the month the following transactions took place:
September
4 Kabogo,a debtor settled his account of sh.10,000 by cheque of sh.8,000
7 Deposited sh.400 into the business bank account from the cash till
8 Paid rent by cash sh.4, 000
14 Cash sales sh.14, 000
17 Purchased furniture worth sh.3, 000 paying by cheque
18 Settled Kofi’s account sh.10, 000 after being allowed a discount of 5%
20 Received sh.6000 cash from Njeri,a debtor
22 Kambu,a debtor settled his sh.4000 account by cheque, having been allowed 20% discount
25 Deposited sh.17, 000 into the bank from private sources
30 Banked the available cash except sh.1, 000
Required:
(a) Prepare a duly balanced three column cash book. (12 marks)
(b) Explain four reasons that make international trade more difficult to conduct than home trade. (8 marks)