Prepare a Trading Profit and Loss Account for Crown Enterprises for the year ended 31st December 2011.

Here are the solutions to your questions: CROWN ENTERPRISES TRADING PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER 2011 | Particulars | Shs. | Shs. | | :---------------------------------------- | :------------ | :------------ | | Sales | | 1,500,000 | | Less: Returns Inwards | | (20,000) | | Net Sales | | 1,480,000 | | | | | | Cost of Goods Sold: | | | | Opening Stock (1/1/2011) | 550,000 | | | Purchases | 1,000,000 | | | Less: Returns Outwards | (30,000) | | | Net Purchases | 970,000 | | | Add: Carriage Inwards | 8,500 | | | Cost of Goods Available for Sale | 1,528,500 | | | Less: Closing Stock (31/12/2011) | (350,000) | | | Cost of Goods Sold | | (1,178,500) | | | | | | Gross Profit | | 301,500 | | | | | | Add: Other Incomes | | | | Commission Income | | 150,000 | | | | | | Less: Operating Expenses | | | | Discount Allowed | 50,500 | | | Salaries and Wages | 285,000 | | | Total Operating Expenses | | (335,500) | | | | | | Net Profit | | 116,000 | 6. a) Six measures the Government of Kenya may take to control her persistent Balance of Payment deficit: • Devaluation of Currency: The government can devalue its currency, making exports cheaper and more attractive to foreign buyers, while making imports more expensive, thereby discouraging them. This helps to improve the trade balance. • Import Restrictions: Implementing measures such as tariffs (taxes on imports), quotas (limits on import quantities), or outright bans on certain non-essential goods can reduce the volume and value of imports, conserving foreign exchange. • Export Promotion: The government can offer incentives to domestic producers to boost exports. These include subsidies, tax breaks, export credit facilities, and marketing support to make local goods more competitive in international markets. • Fiscal Policy Measures: The government can reduce its own spending or increase taxes. This reduces aggregate demand in the economy, which in turn lowers the demand for imported goods and services, helping to narrow the deficit. • Monetary Policy Measures: Raising interest rates can attract foreign capital into the country, as investors seek higher returns. This inflow of foreign currency can help finance the balance of payments deficit. • Borrowing from International Organizations: In the short term, the government can seek loans from international financial institutions like the International Monetary Fund (IMF) or the World Bank to cover the deficit and stabilize its external accounts. 6. b) Four differences between endowment policy and whole life policy: | Feature | Endowment Policy | Whole Life Policy | | :---------------- | :------------------------------------------------ | :------------------------------------------------ | | Coverage Period | Covers a specific, fixed term (e.g., 10, 20 years). | Covers the insured for their entire life. | | Maturity Payout | Pays out a lump sum at the end of the term or upon earlier death. | Pays out only upon the death of the insured. | | Savings Element | Has a significant savings component, designed to provide a lump sum for a future goal. | Builds cash value over time, but its primary purpose is lifelong protection. | | Premium | Generally higher for the same sum assured due to the guaranteed payout at maturity. | Premiums are typically fixed for life and can be lower than endowment for the same initial sum assured. |