ERETA EDUCATION CONSULTANTS

JOINT MOCK EXAMINATIONS 2019

Uganda Advanced Certificate of Education
ENTREPRENEURSHIP EDUCATION
PAPER 2
(P 230/2) 3 Hours

INSTRUCTIONS TO CANDIDATES:
 Answer four questions only.
 All questions carry equal marks.
 Credit will be given for the use of relevant diagrams and illustrations.
 Any additional question(s) answered will not be marked.
1. You are operating a construction firm and you have won a tender to construct a 10 km road in your
district.
a) Write an acceptance letter to the District Tender Board. (7 marks)
b) Develop the terms and conditions of the contract to be signed with the board. (6 marks)
c) Design a stock requisition form for use in your business. (6 marks)
d) Draw a plan for recovering money from the debtors. (6 marks)

2. You are involved in the production and packaging of various brands of soft drinks.
a) Develop a brand label to be placed on one of your packaging materials. (6 marks)
b) Formulate a policy for proper handling of business machines. (7 marks)
c) Prepare a production plan for the business. (7 marks)
d) Write a document to correct an overcharge on a customer’s invoice. (5 marks)

3. You have established a social enterprise aimed at minimizing levels of malaria in your area.
a) Develop a root cause analysis tool for malaria. (6 marks)
b) Present a GEPIC Structure for Advocacy for promoting your mission. (7 marks)
c) Formulate guidelines for enhancing creativity in the enterprise. (6 marks)
d) Design a news paper advert for the post of an accountant for the enterprise. (6 marks)

4. You have established a metal fabrication project in your town.

a) Advertise a tender for the supply of business requirements. (6 marks)
b) Prepare a budget for the fixed capital requirements of the project. (6 marks)
c) Develop a programme for training business workers. (7 marks)
d) Draft instructions for maintaining workers’ welfare. (6 marks)

5. The following information belongs to Customers’ Enterprise for the year ended 30 / 6 / 2018.
Stock (30/6/2018) Shs 4,000,000
Stock (1/7/2017) Shs 5,000,000
Total operating expenses Shs 2,000,000
Rate of stock turnover 2.67 Times
Net sales Shs 20,000,000
Profit margin 40%

-1–
© 2019 ERETA EDUCATION CONSULTANTS
 Creditors Shs 3,000,000
Debtors Shs 1,500,000
Total fixed assets Shs 8,000,000
Cash at hand Shs 1,200,000
Cash at bank Shs 1,300,000
Commission received in advance Shs 1,000,000
Required:
a) Compute and interpret the following:
i. Cost of sales ratio, (4 marks)
ii. Debt collection period (days), (3 marks)
iii. Cash ratio. (3 marks)
iv. Net profit margin, (3 marks)
v. Rate of return on capital employed. (4 marks)
vi. Working capital ratio (3 marks)
vii. Fixed assets turnover. (3 marks)
b) Explain any two benefits of calculating accounting ratios to the enterprise. (2 marks)

6 (a). The following taxpayers earned the following incomes from various sources.
Taxpayer/ income Employment income Business income Property income
earner Shs Shs Shs
Monday 10,000,000 25,000,000 6,000,000
Molly 8,000,000 20,000,000 7,000,000
Margret 11,000,000 23,000,000 8,000,000
Mama 14,000,000 25,000,000 10,000,000

Tax exempt income for each taxpayer is 10% of the total income. Total expenses and losses take 12%
of the total income of each taxpayer/ income earner.
Calculate each income earners’
i. Gross annual income, (8 marks)
ii. Annual chargeable income. (8 marks)
b) Goober, a landlord collects monthly rent of Shs 600,000 from each of his 12 tenants. In the year
2018, all tenants paid their rent dues promptly except 2 who left at the end of September and were
not replaced. The Income Act provides the following:
I. 20% allowance is deducted from gross income for costs/ expenses incurred.
II. A tax free allowance of Shs 2,820,000 is deducted.
III. The tax rate is 20% of taxable / chargeable income.
Required to compute:
i. Gross annual rental income, (3 marks)
ii. Annual chargeable rental income, (3 marks)
iii. Rent income tax (income tax liability) paid to URA for the year. (3 marks)

- END -

-2–
© 2019 ERETA EDUCATION CONSULTANTS