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.