P230/2

ENTREPRENEURSHIP
EDUCATION
Paper 2
NOV/DEC 2023
3 hours

LIGHT AFRICA SECONDARY SCHOOL

END OF TERM 3 - 2023

INTERNAL ASSESSMENT EXAMINATIONS

Uganda Advanced Certificate of Education

ENTREPRENEURSHIP
EDUCATION

Paper 2

3 hours.

INSTRUCTIONS TO CANDIDATES:
 Answer four questions only.
 All questions carry equal marks.
 Question 3 is compulsory
 Credit will be given for use of relevant diagrams and illustrations.

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1. You are the purchasing manager of success confectionery. The business is process of
expanding its scale of production.

(a) Send an inquiry to the supplier of raw materials. 5mks

(b) Develop guidelines for selecting machinery and equipment. 6mks
(c) Prepare an organizational plan for the business. 4mks
(d) Design a payment voucher used in the finance department when paying workers.
4mks
2. You have acquired a loan worth shs.60,000.000 for establishing a new branch of your
metal works project. The loan is payable in six equal monthly instalments at a monthly
interest of 2% on reducing balance methods.
(a) Prepare a loan amortization plan (07marks)
(b) Prepare an action plan for the business expansion. (06marks)
(c) Develop a week’s work schedule for your employees (06 marks)
(d) Formulate guidelines for proper loan management. (06 marks)

3. OKOT PATEL is a Kenyan who works in Uganda. He earns a consolidated financial

reward which includes monthly salary of Ugshs 8,035,000,transport allowance of shs
175,000 and medical allowance of shs 245,000.
Given a tax rate for non residents below;

Monthly emoluments TAX RATE (BRACKET)

NOT EXCEEDING Shs.335,000 10%
EXCEEDING Shs335,000 BUT Shs335000 plus 20 of the amount by which chargeable
NOT EXCEEDING Shs 410,000
income exceeds Ushs 335,000
EXCEEDING SHS 410,000 (a) Shs 48500 plus 30% of the by which chargeable
income exceeds Ugshs 410,000.
(b) Where the chargeable income of an individual
exceeds Ugshs 10,000,000 an additional 10%
charged on the amount by which chargeable income
exceeds 10,000,000
Compute for the Pay As You Earn to be withheld and remitted by the Employer of Uganda
Revenue Authority. (05 marks)

(c) LOYALEE PROPERTIES LIMITED earns Shs 50,000,000 from its commercial building
located in Wakiso. Shs 10 million from this apartment it lets ti out to FOODRITE
UGANDA and Shs 18,000,000 from its building that houses a LETS SAVE COMMUNITY
SACCO, Out of this Shs 9,000,000 was incurred as interest on mortgage from the bank
and Shs 20,000,000 as expenses in generating the annual rental income . Question:
Calculate the rental tax payable.(6marks)

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d. Walugembe owns two business, One is a dairy shop located in Mbarara and while
another is a food store located in Entebe. Every year he derives 58 millions from the shop
in Mbarara and 69 millions from the store in Entebbe. Walugembe is not good at keeping
records but has a counter book where he records daily sales. Given the schedule below for
the computation of “presumptive” income tax for small business;

GROSS TURNOVER PER WITH RECORDS WITHOUT

ANNUM RECORDS

Not exceeding UGX10 millions NIL NIL

Exceeding UGX 10 millions 0.4% of annual turnover in excess of UGX 80,000

10 millions

Exceeding UGX30 millions but does UGX 80,000 plus 0.5% of the annual UGX 200,000
not exceed UGX50 millions turnover in excess of 30 millions
Exceeding UGX 50 millions but UGX 180,000 plus 0.6% of annual UGX 400,000
does not exceed UGX 80 millions turnover in excess of UGX 50
millions
Exceeding UGX 80 millions but UGX 360,000 plus 0.7% of annual UGX 900,000
does not exceed UGX 150 millions turnover in excess in excess of UGX
80 millions
Question: Calculate Walugembe’s tax payable every year. (4 marks)

(c) Advice the executive Director of Uganda Revenue Authority on ways tax compliance in
Uganda. (4 marks

(b) Given the Value Added Tax (VAT) rate as 18%, Calculate the VAT charged at each

stage in the table below:- (6 marks)

Stage Activity VAT Inclusive VAT Inclusive

Purchase price Selling price
(shs. (shs)
(i) Producer 80,000,000
(ii) Producer to wholesaler 80,000,000 96,000,000

(iii) Wholesaler to 96,000,000 120,000,000

retailer
(iv) Retailer to final consumer 120,000,000 160,000,000

(v) Final consumer 160,000,000

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4. You are operating a business which deals in sale of cosmetics. It was reported that
your workers lack good customer care, no wonder you have noted gradual decline
in sales.
(a)Develop a root cause analysis for the declining sales 06mks
(b)Develop a consumer satisfaction survey tool to be used by the business 06mks

(c) Propose guidelines for ensuring good customer care. 08mks

(d)Design a market flow chart for your business 05mks

5. The following projects related to Emma Enterprises during the month of June-
September 2014
- On June 1st 2014 the enterprise had a cash balance of (40,000,000) shillings
- The business expected cash sales of sh 8,000,000 per months
- Credit sales were projected at shs 2,500,000 per months for which 60% payment
were to be made in the following month and the balance after one month from the
month of sale for all sales.
- Rent income was to increase by 10% monthly.
- Rent to be received on June 1st 2014 was shs 600,000
- Monthly cash purchase were projected at shs 7,000,000
- Salary bill of shs 3,000,000 was to be paid monthly
- Machinery worth shs 6,000,000 was to be bought in June and cash payment of
shs 3,800,000 made and the balance to be paid in installments of 30% and 40% in
the next months.
- The business was to get a loan of shs 5,000,000 in the months of July
- 5% per annum interest on loan was to be paid monthly after one month grace
period
- Credit purchases of shs 3,000,000 were made in June. The business has a policy
of paying for credit purchases in 3 equal monthly installments after one month.
- The business has a policy of paying a 2% sales commission monthly on cash sales
of every month.
- The business was to sell some old furniture worth shs 800,000 in June, shs
500,000 cash was received and the balance was to be received in the next month.
- The business is to clear any cash short fall using a debenture at the beginning of
the next month.

REQUIRED:
(a) Prepare a cash flow statement for the months of June, July, August and September
2014. 17mks
(b) Comment on the Net cash position of Emma Enterprises for four months. 4mks
(c) Suggest measures that Ema Enterprises should undertake to avoid deficits in the
cash flow. 4mks

END

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