Technician Pilot Papers PDF

ZAMBIA INSTITUTE OF CHARTERED ACCOUNTANTS
CHARTERED ACCOUNTANTS EXAMINATIONS

TECHNICIAN LEVEL
T 1: FINANCIAL ACCOUNTING
SERIES:PILOT PAPER
TOTAL MARKS 100; TIME ALLOWED: THREE (3) HOURS
INSTRUCTIONS TO CANDIDATES
1.
You have fifteen (15) minutes reading time. Use it to study the examination paper
carefully so that you understand what to do in each question. You will be told when
to start writing.
2.
This paper is divided into TWO sections:

Section A:
Attempt all TEN multiple choice questions.
Section B:
Attempt any FOUR out of FIVE questions.
3.
Enter your student number and your National Registration Card number on the front
ofthe answer booklet. Your name must NOT appear anywhere on your answer
booklet.
4.
Do NOT write in pencil (except for graphs and diagrams).
5.
The marks shown against the requirement(s) for each question should be taken as
an indication of the expected length and depth of the answer.
6.
All workings must be done in the answer booklet.
7.
Present legible and tidy work.
8.
Graph paper (if required) is provided at the end of the answer booklet.
SECTION A
Attempt all the ten (10) multiple choice questions in this section
QUESTION 0NE
Each of the following sub questions has only one answer. Write the letter of the
correct answer you have chosen in your answer booklet. Marks are indicated
against each question.
1.1
Which of the following is a correct presentation of the accounting equation?

A.
B.
C.
D.
1.2
liabilities opening capital + drawings = profit

+ profit + opening capital drawings = liabilities
profit + liabilities drawings = closing capital
liabilities drawings = opening capital + profit
(2 marks)
Which of the following are five qualitative characteristics which make financial
statements reliable according to the IASBs Framework?
A.
B.
C.
D.
1.3
Assets
Assets
Assets
Assets
Faithful representation, neutrality, substance over form, completeness,

consistency
Faithful representation, prudence, consistency, understandability, substance
over form
Going concern, consistency, prudence, accruals basis, true and fair view.
Substance over form, faithful representation, neutrality, prudence,
completeness.
(2 marks)
Mika Fashions had a receivable balance of K1,200,000 at 31 December 2011 and an

allowance for receivables of K75,000 brought forward from the year ended 31
December 2010.
It was decided to write off debts totaling K114,000 and to adjust the allowance for
receivables to 5% of the receivables balance at 31 December 2011.
What charge for irrecoverable debts and allowance for receivables should appear in
the companys income statement for the year ended 31 December 2011?
A.
B.
C.
D.
1.4
K114,000
K134,700
K20,700
K93,300
(2 marks)
Which of the following may cause a situation where a trial balance totals K250,000
more than the debit side.
A.
B.
C.
D.
Sale of goods for K250,000 being omitted from the customers account
Purchase of goods for K250,000 being omitted from the suppliers account
Payment of K250,000 for expenses being omitted from the cashbook.
Invoice for commission receivable of K125,000 being debited to the
commission receivable account.
(2 marks)
2
1.5
A VAT registered trader buys goods on credit for K700,000 gross; sales goods on
credit for K750,000 net; returns some of the goods to the supplier worth K200,000
gross and receives returns from its customers amounting to K175,000 net. State the
amount that will be payable or receivable by the trader to/from Zambia Revenue
Authority?
A.
K23,448 payable
B.
K23,034 receivable
C.
K23,034 payable
D.
K23,448 receivable
(2 marks)
1.6
IAS 7 Statement of Cash flows requires that the statement opens with the calculation
of net cash from operating activities. This is arrived at by adjusting net profit before
taxation.
Which of the following lists consists only of items which could be included in such a
calculation?
A.
B.
C.
D.
1.7
Depreciation, increase in receivables, decrease in payables, proceeds from sale

of equipment, increase in inventories.
Increase in payables, proceeds from sale of equipment, depreciation, increase
in receivables, increase in inventories.
Increase in payables, increase in receivables, decrease in inventories, profit on
sale of plant, depreciation.
Depreciation, interest paid, proceeds from sale of equipment, decrease in
inventories.
(2 marks)
Maambo J M Co has presented to you the following statement of financial position

extract as at 31 March 2012.
K000
Share capital (K2000)
500,000
Share premium
200,000
Retained earnings
300,000
1,000,000
Maambo J M Co has decided on a bonus issue of 1 for 4 to the existing shareholders.

Which of the following correctly shows new balances on the three accounts shown
above after a bonus issue?
A.
Share capital
Share premium
Retained earnings
K000
Cr 500,000
Dr 125,000
Cr 300,000
B.
Share capital
Share premium
Retained earnings
Cr 625,000
Cr 200,000
Dr 300,000
1.8
1.9.
C.
Share capital
Share premium
Retained earnings
Cr 625,000
Cr 75,000
Cr 300,000
D.
Share capital
Share premium
Retained earnings
Cr 500,000
Cr 200,000
Cr 300,000
The primary reason for entities establishing internal audit function is to:
A.
reduce the costs of the external auditors.
B.
Support the work of the external auditors
C.
Prepare the financial statements
D.
Report to shareholders on the accuracy of the accounts.
(2 marks)
A business achieves a margin of 25% on sales. Opening inventory was K162,000.

Closing inventory was K252,000 and purchases were K2,700,000. Calculate the sales
for the period.
A.
B.
C.
D.
1.10
(2 marks)
K3,480,000
K3,262,500
K3,719,070
K3,600,000
(2 marks)
Your firms cash book at 30 April 2012 shows a favourable balance at the bank of
K22,410,000. A comparison with the bank statement received at the same date
revealed the following differences:
Dishonoured cheques not in the cash book
K1,260,000
Receipts not yet credited by the bank
K4,230,000
Bank charges not yet in the cash book
K450,000
Unpresentedcheques
K7,560,000
The correct balance on the bank statement at 30 April 2012 is

A.
B.
C.
D.
K13,140,000
K20,700,000
K23,220,000
K24,030,000
(2 marks)
Total( 20 marks)
SECTION B
QUESTION TWO
Chisomo and Chikondi are in partnership, sharing profits 3:2 respectively and the trial
balance of the business as at 31st October 2011 is given below:
K000
Buildings at cost
K000
48,000
Machinery at cost
24,000
st
Accumulated depreciation at 1 November 2010:

Buildings
18,000
Machinery
9,000
Purchases and Sales
650,000
Returns outwards
906,600
4,100
Returns inwards
10,800
Carriage inwards
3,450
Rent
39,000
Bank
4,125
General expenses
5,700
Selling expenses
52,500
Bank charges
225
Trade receivables and Trade payables
77,100
Wages and salaries
45,270
Insurance
67,800
2,400
Inventory at 1st November 2010
70,500
st
Current accounts at 1 November 2010: Chisomo
7,680
Chikondi
4,110
Allowance for receivables at 1st November 2010

Discounts allowed
2,100
4,020
Drawings: Chisomo
19,500
Chikondi
16,800
st
Capital accounts at 1 November 2010: Chisomo

Chikondi
36,000
________
18,000
1,073,390
1,073,390
The following additional information is available as at 31st October 2011.

(a)
Inventory was valued as K57,000,000
(b)
Chisomo has taken some goods for her own use during the year to the value of
K2,700,000, but this has not yet been recorded in the accounts.
(c)
Interest on drawings for the year is K810,000 for Chisomo and K630,000 for
Chikondi.
(d)
Chikondi is entitled to a salary of K25,500,000 per annum before profits are shared.
(e)
Rent of K3,000,000 has been paid in advance
(f)
There are outstanding wages of K1,200,000
(g)
Irrecoverable debts of K1,200,000 are to be written off and the allowance for
receivables to be adjusted, based on past events to the equivalent of 5% of the
remaining receivables.
(h)
Depreciation is to be provided for as follows:
Buildings at 25% using the reducing balance method.
Machinery at 10% using the straight line method.
Required:
Prepare the following statements for the partnership:
(i)
The income statement and appropriation account for the year ended
31st October 2011
(10 Marks)
(ii)
The partners current accounts for the year ended 31st October 2011
(3 marks)
(iii)
the statement of financial position as at 31st October 2011.
(7 marks)
Total (20 marks)
QUESTION THREE
(a)
You are a newly employed Accounts assistant for Jokoto and Sons Ltd, a business
that has been in existence for barely two years in the city of Kitwe. The Propriator
Jokoto Kalonda has presented you with the following opening balances and
transactions for the year ending 30 September 2011.
Opening balances as at 1 October 2010:
Rent payable account
Dr
K6,000,000
Electricity account
Cr
K3,200,000
Interest receivable account
Dr
K1,200,000
Allowance for receivables account
Cr
K19,200,000
You are told of the following additional information:
Rent is payable quarterly in advance on the last day of November, February,

May and August at the rate of K24,000,000 per annum.
Electricity is paid as follows:

5 November 2010
10 February 2011
8 May 2011
7 August 2011
K4,000,000 (for the period to 31 October 2010)

K5,200,000 (for the period to 31 January 2011)
k6,000,000 (for the period to 30 April 2011)
K4,400,000 (for the period to 31 July 2011)
At 30 September, 2011 there is electricity owing of K3,600,000
Interest was received during the year as follows:

2 October 2010
3 April 2011
K1,000,000 (for the 6 months to 30 September 2010)

K2,400,000 (for the six months to 31 March 2011)
Jokoto estimates that interest of K1,200,000 is accrued at 30 September 2011
At 30 September 2011, the balance of receivables amounts to K500,000,000.

The allowance for receivables is to be amended to 5% of receivables.
Required:
Write up the ledger accounts for:
(i)
(ii)
(iii)
(iv)
Rent payable
Electricity
Interest receivable
Allowance for receivables
(5
(5
(4
(3
marks)
marks)
marks)
marks)
And bring down the balances at 30 September 2011, clearly stating the meaning of
each, and treatment in the statement of financial position.
(b)
Briefly explain the meaning of each of the two accounting concepts:

(i)
(ii)
Going concern
Substance over form
(1 marks)
(1 marks)
Total (20 marks)
QUESTION FOUR
Maboshe, the treasurer of Chipata Tennis Club has provided you with the following details of
transactions during the year ended 31 March 2012.
1. Bank account summary
Receipts
Members annual subscriptions
Sales of old tennis equipment
Receipts from Bar customers
Tennis tournament fee income
Donation
Total receipts
K000
257,580
86,400
150,147
35,559
2,943
532,629
Payments
Caretakers wages
Tennis tournament expenses
Rent of tennis house
Bar ancillary services
Electricity
Bar staff wages
Bar purchases
Telephone
Purchase of Tables for playing tennis
Total payments
91,800
5,562
82,350
5,670
22,896
62,370
115,290
9,990
78,300
474,228
2. Cash account summary

Receipts
Bar cash sales
K,000
26,163
Payments
Tennis tournament expenses
General expenses
Total payments
19,548
5,616
25,164
3. Assets and liabilities balances were as follows:

1 April 2011
K000
31 March 2012
K000
Cash in the till
513
to be calculated
Bank overdraft
59,184
to be calculated
Rent of tennis house prepaid
8,100
12,150
Subscriptions owing
4,050
Subscriptions in advance
8,910
7,290
20,250
17,010
8,100
to be calculated
Payables for bar purchases

Bar inventory
Bar receivables
Telephone accrued
Tennis tables (cost K194,400,000)
1,260
1,242
1,593
89,100
8
to be calculated
4. Tennis tables are depreciated evenly over four years.

5. The bar operates on a gross profit margin of 40%.
6. The tennis equipment sold during the year had a carrying amount of K135,000,000
on 31 March 2011. It is the clubs policy not to depreciate its equipment in the year
of disposal and to depreciate it fully in the year of purchase.
Required
(a) Prepare a bar income statement for the year ended 31 March 2012.
(4 Marks)
(b) Prepare an income and expenditure account for the year ended 31 March 2012.
(9 marks)
(c)
Prepare a clubs statement of financial position as at 31 March 2012.
(7 marks)
Total (20 marks)

QUESTION FIVE
You have just joined Twalumba Ltd, a private business owned by Twalumba and her sisters,
as trainee accounting technician. Twalumba Ltd is a VAT registered business and so is
entitled to claim VAT paid on inputs and charge VAT on outputs. Twalumba has presented
to you the following transactions for the month of March 2012: All transactions are subject
to VAT at 16%.
March 1
Credit purchases from: Mwamba K1,720,000; Mark K896,000 (all gross

amounts)
March 5
Goods sold on credit to: Mbita K2,240,000; Pele K2,900,000; Chitalu

K3,200,000;
Chansa K1,380,000 (all net amounts).
March 8
Credit purchases from: Monde K1,730,000 gross; Mukwa K1,026,800 net;

Tumelo K3,062,200 gross.
March 11
Sold goods to the following: Mbita K1,729,600 gross; Chitalu K1,420,960 net.
March 12
Goods returned to: Mwamba K360,000 net; Mukwa K220,000 gross.
March 17
Bought goods from: Monde K2,683,120 gross; Hamweemba K3,074,280 list

price (We received 5% trade discount and was offered 2% cash discount by
Hamweemba).
March 19
The following customers returned goods to us: Pele K455,000; Chitalu

K520,000 (all tax exclusive).
March 20
Sold goods on credit to: Mubita K1,741,200 gross; Mukwita K588,800 net.
March 24
Goods were returned to Hamweemba K272,000 list price.
March 26
Credit sales to Panda allowing him 2.5% cash discount on list price of
K3,000,000.
March 29
Goods were returned to us by Panda K600,000 list price.
Twalumba also tells you that they maintain control accounts as part of double entry.
Required
(a)
b)
Enter
(i)
(ii)
(iii)
(iv)
the following books of prime entry:

Sales day book
Sales returns day book
Purchases day book and
Purchases returns day book
(Analyzing amounts into Gross, VAT and Net and rounding off all
and above to the nearest whole number)
(5 marks)
(2 marks)
(4 marks)
(2 marks)
figures 5
Post the Subsidiary book totals in double entry in an appropriate ledger. (7 marks)
TOTAL (20 MARKS)
QUESTION SIX
Brian & Sons and Chola enterprises are two competing businesses in the area of childrens
Toys. You have been asked to compare the performances of the two businesses using their
financial statements provided below.
Income statements for the year ended 31 December 2011.
Revenue
Cost of sales
Gross profit
Operating expenses
Operating profit
Finance costs
Profit before tax
Corporation tax
Net profit for the period
10
Brian & Sons
Chola Enterprises
K000
K000
33,000
43,200
(26,400)
(30,240)
6,600
12,960
(3,660)
(10,110)
2,940
2,850
(90)
(90)
2,850
2,760
(1,200)
(1,080)
1,650
1,680
Statements of financial position as at 31 December 2011

Brian & Sons
K000
K000
Chola Enterprises
K000
K000
22,500
43,200
Non current assets

Current assets
Inventory
Receivables
bank
750
3,000
180
Equity and liabilities

Equity shares K1000
General reserves
Non current liabilities
Loans
Current liabilities
Trade payables
Overdraft
Corporation tax payable
3,930
26,430
3,300
46,500
18,000
42,000
6,480
2,460
24,480
44,460
450
660
1,200
300
1,230
30
120
1,500
26,430
Total equity and liabilities
2,160
1,140
0
1,380
46,500
Required
(a)
Calculate the following ratios for both Brian & Sons and Chola.
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Net operating profit margin

Return on capital employed
Current ratio
Gearing
Earnings per share
Interest cover
(6 Marks)
Note: round off all ratios to 1 decimal place.

(b)
Use the ratios calculated in (a) above to comment on the performance of the two
businesses, by giving possible reason for the performance as indicated by the ratios.
(9 marks)
(c)
Define adjusting event and non adjusting event after the reporting period, and
explain the accounting treatment of each.
(3 marks)
11
(d)
Limpopo Plc. is a manufacturing business in secondary industry. After the end of the
reporting period, but before financial statements were authorized for issue, the
following material events took place: Indicate whether each of the events is
adjusting or non adjusting.
(i)
Confirmation has been received about the bankruptcy of a client whose

receivable existed at the period end.
(ii)
There have been large changes in Foreign exchange rates affecting Limpopos
receivables and payables.
(iii)
Limpopo has announced the discontinuance of an operation in one of the

regions it operates from.
(iv)
Limpopo Plc has discovered some fraud and error showing incorrectness of
financial statements.
(2 marks)
Total (20 marks)
END OF QUESTION PAPER
12
T1
SUGGESTED SOLUTIONS
SOLUTION ONE
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
A
D
D
A
C
C
C
B
A
D
SOLUTION TWO
(i)
CHISOMO AND CHIKONDI PARTNERSHIP INCOME STATEMENT AND
APPROPRIATION ACCOUNT FOR THE YEAR ENDED 31 OCTOBER 2011
K000
K000
Sales
906,600
Less returns inwards
(10,800)
895,800
Less cost of sales:

Opening inventory
70,500
Purchases (650,000 2,700)
647,300
Returns outwards
(4,100)
Carriage inwards
3,450
717,150
Less closing Inventory
(57,000)
660,150
Gross profit
235,650
Less Expenses
Discounts allowed
4,020
Irrecoverable debts
1,200
Insurance
2,400
Rent (39,000 3000)
36,000
General expenses
5,700
13
Selling expenses
52,500
Bank charges
225
Wages and salaries (45,270 + 1,200)
46,470
Allowance for receivables
1,695
Depreciation: building [25 x (48,000 -18,000)]
7,500
Machinery (10% x 24,000)
2,400
TOTAL EXPENSES
(160,110)
Net profit
75,540
Add interest on drawings:

Chisomo
810
Chikondi
630
76,980
Less salary- Chikondi
(25,500)
51,480
Share of profit:
Chisomo 3/5
30,888
Chikondi 2/5
20,592
______
51,480
51,480
(ii)
PARTNERS CURRENT ACCOUNTS

Chisomo
Drawings
Interest on drawings
Balances c/d
Chikodi
Chisomo
K000
K000
22,200
16,800
810
630
15,558
32,772
38,568
50,202
K000 K000
Balances b/f
salary- chikondi
Share of profi
7,680 4,110
25,500
30,888 20,592
38,568 50,202
Balances b/d
14
Chikodi
15,558 32,772
(ii)
CHISOMO AND CHIKONDI PARTNERSHIPS

STATEMENT OF FINANCIAL POSITION AS AT 31 OCTOBER 2011
K000
Cost
Non Current Assets
K000
K000
Depn Carrying
Amount
Buildings
Machinery
Current Assets
48,000
25,500
22,500
24,000
11,400
12,600
72,000
36,900
35,100
57,000
Inventory
Receivables (77,100 -1,200 -3,795)
Bank
72,105
4,125
3,000
Rent payable in advance
136,230
171,330
Capital And Liabilities
36,000
Capital accounts: Chisomo
18,000
Chikondi
15,558
Current accounts: Chisomo
32,772
Chikondi
102,330
Current Liabilities
67,800
Payables
1,200
Wages and salaries owing
69,000
171,330
15
SOLUTION THREE
(a)
(i)
2010/11
10.1
11.30
2.29
5.31
8.31
Balance b/f
bank
bank
Bank
bank
10.1
Balance b/d
Rent payable account

K000
2010/11
6,000
9.30
6,000
9.30
6,000
6,000
6,000
30,000
6,000
I/S
Balance c/d
K000
24,000
6,000
_____
30,000
Meaning: rent had been paid in advance by K6,000,000 at 30 September 2011 and
this would be shown as a current asset in the statement of financial position.
(ii)
2010/11
11.5
2.10
5.8
8.7
9.30
Bank
Bank
Bank
Bank
Balance c/d
Electricity
K000
4,000
5,200
6,000
4,400
3,600
23,200
account
2010/11
10.1
9.30
10.1
Balance b/d
I/S
K000
3,200
20,000
Balance b/d
______
23,200
3,600
Meaning: electricity bill was outstanding of K3,600,000 at 30 September 2011. This

would be shown as a current liability in the statement of financial position at the same
date.
(iii)
2010/11
Balance b/f
I/S
Balance b/d
Interest receivable account

K000
2010/11
1,200
10.2
bank
3,400
4.3
bank
_____
9.30
Balance c/d
4,600
1,200
K000
1,000
2,400
1,200
4,600
Meaning: interest was not received amounting to K1,200,000. It would be presented

as a current asset in the statement of financial position as at 30 September 2011.
16
(iv)
2010/11
Allowance for receivable account

K000
2010/11
Balance b/f
I/S
Balance c/d
25,000
25,000
Balance b/d
K000
19,200
5,800
______
25,000
25,000
Working 5% x K500,000,000 = K25,000.

Meaning: a new allowance as at 30 September 2011 is K25,000,000. It would
be used to reduce receivables balance for recognition in the statement of
financial position.
(b) (i)
Going concern concept

When financial statements are prepared, it is assumed that the business will
continue to operate in the foreseeable future and that operations will not be
discontinued by closure of business. The going concern status is implied unless
stated otherwise.
For example, stating non current assets at their carrying amounts in the
statement of financial position implies they are yet to be used up in future
operations, otherwise they could have been stated at their disposal value.
(ii)
Substance over form

It is an assumption that requires that where the legal form of a transaction differs
from its commercial view, the commercial view should be taken for the purpose of
treatment.
For example, assets acquired under hire purchase are recognized by the acquiring
entity even though it has not paid up all the installments. Legally, it does not own
such assets but from the commercial point of view, it is enjoying economic
benefits.
17
SOLUTION FOUR
(a)
Chipata tennis clubs
Bar income statement for the year ended 31st March 2012
K000
Sales (W5)
Less cost of sales:
K000
177,570
8,100
Opening inventory
112,050
Purchases (w4)
120,150
(13,608)
Less closing inventory(w8)
106,542
71,028
Gross profit
LESS EXPENSES
5,670
Bar ancillary services
62,370
Bar staff wages
(68,040)
2,988
Net profit from trading activities
(b)
Chipata Tennis Clubs
Income and expenditure account for the year ended 31st March 2012
Income
K000
Net profit from trading
K000
2,988
Subscriptions (w2)
255,150
Donations
2,943
Tournament fee income
35,559
Total income
296,640
Expenditure
Caretakers wages
91,800
Tennis tournament expenses (5,562 + 19,548)
25,110
Rent (w6)
78,300
Electricity
22,896
Telephone (w3)
10,341
Depreciation;tennis tables(w7)
68,175
Loss on sale of old tennis equipment(w8)
48,600
General expenses
5,616
18
Total expenditure
(350,838)
Deficit
54,198
(c)
Chipata Tennis clubs
Statement of financial position as at 31st March 2012
K000
Non current assets
Cost
Tennis tables
272,700
Current assets
Bar inventory
Bar receivables
Cash
Rent prepaid
Total assets
K000
depn
173,475
13,608
1,260
1,512
12,150
Accumulated fund and liabilities

Accumulated fund (W1)
Less deficit
K000
carr.
Amount
99,225
28,530
127,755
155,277
(54,198)
101,079
Current liabilities
Bar payables
Bank overdraft
Subscriptions in advance
Telephone accrued
17,010
783
7,290
1,593
26,676
127,755
WORKINGS
1. Accumulated fund calculation
ASSETS
Cash
Rent prepaid
Subscriptions owing
Bar inventory
Tennis tables
Tennis equipment
LIABILITIES
Bank overdraft
Bar payables
Subscription in advance
Telephone accrued
Accumulated fund
K000
513
8,100
4,050
8,100
89,100
135,000
________
244,863
19
K000
59,184
20, 250
8,910
1,242
155,277
244,863
2.
Subscription Account
K000
4,050
Prepaid b/f
255,150
Bank
7,290
Owing b/f
I/E
Prepaid c/d
266,490
3.
Telephone Account
K000
9,990
Balance b/f
1,593
Purchases
11,583
Owing b/d
Bank
Owing c/d
4.
Bank
Balance c/d
Prepaid b/d
Bar Payables Account

K000
115,290
Balance b/f
17,010
Purchases
132,300
Balance b/d
5.
K000
8,910
257,580
_______
266,490
7,290
K000
1,242
10,341
11,583
1,593
K000
20,250
112,050
132,300
17,010
Bar Receivables
Balance b/f
Sales
Balance b/d
K000
151,407
151,407
1,260
Bank
Balance c/d
K000
150,147
1,260
151,407
I/E
Balancec/d
K000
78,300
12,150
90,450
Total sales = 151,407 + 26,163 = 177,570

6.
Prepaid b/f
Bank
Balance b/d
Rent Account
K000
8,100
82,350
90,450
12,150
Note: The candidate may alternatively use the arithmetic format to derive the
missing figures, and write the arithmetic on the face of the Income statement.
7.
Depreciation of tennis tables:

Existing at 1.4.2011
K194,400,000/4 years
= K48,600,000 p/a
New during year
K78,300,000/4 years
= K19,575,000 p/a
20
Total charge for the year = 48,600,000 + 19,575,000 = 68,175,000

Total accumulated depreciation year to 31 March 2012 = 173,475,000
(68,175,000 + 105,300,000)
8.
Closing inventory
Cost of sales is calculated as: 60/100 x 177,570,000 = 106,542,000
Therefore, 120,150,000 x = 106,542,000
X = 106,542,000 120,150,000
X = 13,608,000
9.
Cash Receivables
Balance b/f
Sales (bar)
Balance b/d
10.
Tournament expenses
General expenses
Balance c/d
K000
19,548
5,616
1,512
26,676
Bank Receivables
Sundry receipts
Balance c/d
11.
K000
513
26,163
______
26,676
1,512
K000
532,629
783
533,412
Balance b/f
payments
Balance b/d
Disposal of tennis equipment

Carrying amount
Less proceeds
Loss on disposal
135,000
(86,400)
48,600
21
K000
59,184
474,228
533,412
783
SOLUTION FIVE
(a)
(i) SALES DAY BOOK

date details
3.5
3.5
3.5
3.5
3.11
3.11
3.20
3.20
3.26
(ii)
VAT
amount
Net
amount
K
K
K
Mbita
2,598,400
358,400
2,240,000
Pele
3,364,000
464,000
2,900,000
Chitalu
3,712,000
512,000
3,200,000
Chansa
1,600,800
220,800
1,380,000
Mbita
1,729,600
238,566
1,491,034
Chitalu
1,648,314
227,354
1,491,034
Mubita
1,741,200
240,166
1,501,034
Mukwita
648,208
89,408
558,800
Panda(w3)
3,468,000
468,000
3,000,000
TOTALS
20,510,522 2,818,694 17,761,902
SALES RETURNS DAY BOOK

date details
3.19
3.19
3.29
(iii)
Gross
amount
Gross
amount
K
Pele
527,800
Chitalu
603,200
Panda(w4)
693,600
TOTAL
1,824,600
VAT
Net
amount amount
K
K
72,800
455,000
83,200
520,000
93,600
600,000
249,600 1,575,000
PURCHASES DAY BOOK

Date Details
3.1
3.1
3.8
3.8
3.8
3.17
3.17
Gross
amount
VAT
amount
Net
amount
K
K
K
Mwamba
1,720,000
237,241
1,482,759
Mark
896,000
123,586
772,414
Monde
1,730,000
238,621
1,491,379
Mukwa
1,191,088
164,288
1,026,800
Tumelo
3,062,200
422,372
2,639,828
Monde
2,683,120
370,086
2,313,034
Hamweemba(w1)
3,378,291
457,915
2,920,376
TOTALS
14,660,699 2,014,109 12,646,590
22
(iv)
PURCHASES RETURNS DAYBOOK

date details
3.12
3.12
3.24
Gross
amount
K
Mwamba
417,600
Mukwa
220,000
Hamweemba (w2) 298,917
TOTALS
936,517
VAT
amount
K
57,600
30,345
40,517
128,462
Net
Amount
K
360,000
189,655
258,400
808,055
WORKINGS
1. Purchases from Hamweemba
List price
Less Trade Discount (@ 5% x 3,074,080)
Less cash discount (@ 2% x 2,920,376)
VAT (@ 16% x 2,861,968)
Add back cash discount
Gross amount to record
2. Returns to Hamweemba
List price
Less Trade Discount (@ 5% x 272,000)
Less cash discount (@ 2% x 258,400)
Add VAT (@ 16% x 253,232)
Gross amount before adding back c.d.
Gross amount to record
3. Sales to Panda
List price
Less cash discount (@ 2.5% x 3,000,000)
Add VAT @ 16% X 2,925,000
Gross amount
23
3,074,080
(153,704)
2,920,376
(58,408)
2,861,968
457,915
3,319,883
58,408
3,378,291
272,000
(13,600)
258,400
(5168)
253,232
40,517
293,749
5,168
298,917
3,000,000
(75,000)
2,925,000
468,000
3,393,000
75,000
3,468,000
4. Returns from panda

List price
Less cash discount (@2.5% x 600,000)
600,000
(15,000)
585,000
93,600
678,600
15,000
693,600
Add VAT (@ 16 % x 585,000)

Gross amount
(a)
GENERAL LEDGER
SDB
Balance b/d
PRDB
Bal c/d
SRDB
PDB
Balance c/d
PDB
Receivables ledger control account

K
20,510,522
SRDB
_________
Bal c/d
20,510,522
18,685,922
K
1,824,600
18,685,922
20,510,522
Payables ledger control account

K
936,517
PDB
13,724,182
14,660,699
Balance b/d
K
14,660,699
_________
14,660,699
13,724,182
Sales tax account

K
249,600
PDB
2,014,109
PRDB
683,447
2,947,156
Balance b/d
K
2,818,694
128,462
________
2,947,156
683,447
Purchases account
K
12,646,590
Sales account
K
24
SDB
K
17,691,828
Purchases Returns account

K
PRDB
SRDB
K
808,055
Sales Returns account

K
1,575,000
SOLUTION SIX
(a)
(i)
net operating profit margin =

operating profit/sales x 100
Brian & Sons
Chola
2,940,000
x 100
33,000,000
2,850,000
x100
43,200,000
8.9%
(ii)
(iii)
Return on capital employed =

operating profit/capital employed
Current ratio = current

assets/current liabilities
2,940,000
x 100
24,930,000
2,850,000
x 100
45,120,000
11.8%
6.3%
3,930,000
1,500,000
3,300,000
1,380,000
2.6 : 1
(iv)
Gearing = interest bearing debt

Shareholders funds + interest
bear.
450,000 x 100
24,480,000 450,000
1.8%
(v)
(vi)
Earning s per share =

earnings/no. of equity shares
Interest cover =
operating profit
interest payable
6.6%
2.4 1
660,000 x100
44,460,000 660,000
1.5%
1,650,000
1,680,000
18,000 shares
42,000 shares
K91.67/share
K40.00/ share
2,940,000
90,000
2,850,000
90,000
32.7 times
25
31.7
Times
(b)
(i) Net operating profit margin for Brian & Sons signifies better performance than
that of Chola. However, the percentages are generally both lower than expected
of good profitability.
Possible reasons for Brian & Sons better performance could be due to an absolute
higher profit figure of K2,940,000 from lower sales of K33,000,000 compared to
Chola who had profit of K2,850,000 from sales of K43,200,000. Additionally, it
could be due to Brian & Sons strict control of operating expenses that are 3 times
lower than Cholas. Finally, Brian could have sold lower volume toys at attractive
prices while Chola higher volume sales at unattractive prices.
(ii)
ROCE for Brian & Sons equally indicate better performance at almost double that
of Chola, i.e 11.8% against 6.3%. however, both percentages are much on the
lower side, which could indicate problems in the industry generally where
businesses are not as much profitable as normally expected in the use of their
resources.
Possible reasons for Brian & sons better performance may include the fact that it
could be making an efficient use of its non current assets. Brian & Sons is hence
an attractive investment to potential investors.
(iii) The two businesses current ratios are almost equal and healthy with Brians
being slightly higher than Cholas by 0.2. This may be attributed to the fact that
Brian & Sons have a positive bank balance while Chola is servicing a bank
overdraft.
Both businesses current liabilities are covered by current assets more than twice.
This means they are likely to meet short term obligations as they fall due with
Brian at a most advantage.
(iv) Both businesses Gearing are very low, confirming the fact that their loan finance
as a proportion of total finance is very low. This is healthy as the businesses are
saved the finance cost obligations that usually erode earnings for distribution to
shareholders when large. Although Brian & sons gearing is slightly higher than
that of Chola, its much reasonable as any gearing less than 50% is well within
acceptable levels.
(v)
Brian & Sons earnings per share is twice that of Chola, indicative of better
performance.
This may mean Brian & Sons is putting investors funds to good use, thereby
generating more earnings for the number of shares than Chola. Brian and Sons
becomes an attractive investment destination for investors as a result. The
shareholders of Brian &Sons are more likely to receive dividends than those of
Chola.
(vi) Brian & Sons operating profit covers interest obligations more than Chola. This is
attributed to increased profitability as shown in the other ratios calculated, as
interest obligation is same for both companies.
Note: any other reasonable points for comments may be acceptable
26
(c)
An adjusting event is an event occurring after the reporting period that provides
further evidence of conditions that existed at the reporting date.
A non adjusting event is an event occurring after the reporting date that is indicative
of conditions that arose subsequent to the reporting date.
Accounting treatment
(d)
Adjusting events require adjustment of assets and liabilities or any relevant balances
at the reporting date.
Non adjusting events do not require adjustment of any balances at the reporting
date but need to be disclosed in the financial statements regarding:
The nature of the event
An estimate of the financial effect of the event. Where an estimate cannot be
made, a statement that an estimate cannot be made.
(i)
adjusting
(ii) non adjusting
(iii) non adjusting
(iv) adjusting
27

TECHNICIAN LEVEL
T2: COST ACCOUNTING
SERIES: PILOT PAPER
TOTAL MARKS 100 TIME ALLOWED: THREE (3) HOURS
1.
to start writing.
2.

Section A:
Section B:
3.
of the answer booklet. Your name must NOT appear anywhere on your answer
booklet.
4.
5.
The marks shown against the requirement(s) for each question should be
taken as an indication of the expected length and depth of the answer.
6.
7.
8.
28
SECTION A
Attempt all multiple choice questions in this section.
Each of the following questions has only ONE correct answer. Write the LETTER of the
correct answer you have chosen in your answer booklet. Marks allocated are indicated
against each question.
1.1
The annual use of an item is 10,000 units. The cost of placing an order is K90,000
and the cost of holding one unit in stock for one year is K4,500.
What is the Economic Order Quantity?
1.2
632.46 units
532.46 units
400,000 units
63, 246 units
(2 marks)
Various costs will increase by jumps when certain levels of activity are attained.
These are commonly referred to as Step functions or stepped costs.
Which of the following is usually classified as stepped cost?
1.3
inventory of raw materials
Business rates
Supervisors wages
Telephone
(2 marks)
Which of the following source documents in the area of cost accounting is aimed at
exercising control over the delivery of and accurate recording of the receipt of
goods?
A
Purchase Requisition
Order to the supplier
Goods Received Note
Materials Requisition
(2 marks)
29
1.4
JB company limited operates a piecework system of remuneration. Workers ought to

work for a minimum of 40 hours per week. Mangani Banda produces the following
output for a particular week.
PRODUCT
QUANTITY
STANDARD TIME PER ITEM

(HRS)
AGREGATE
ACTUAL TIME
(HRS)
Gear levers
25
Gaskets
100
1.2
14
Filters
50
12
Springs
14
His payment per standard hour worked is K2000. What are his earnings for the
week?
1.5
1.6
K680,000
K648,000
K656,000
K146,000
(2 marks)
Which of the following would not cause either an under or over-absorption of

overheads.
A
Actual direct labour time per unit being greater than budget.
Actual cost of direct labour being greater than budget
Actual overheads incurred being less than budget
Actual number of units produced being greater than budget.
(2 marks)
In a machining process the normal spoilage rate is expected to be 2% of input.

Spoiled units are sold for K0.53 each. In a period 5,000 units were input at a cost of
K2 each. The total output of good units was 4,750.
How much will be written off to the profit and loss account in respect of the
abnormal spoilage?
A
K225.00
K375.00
K304.50
K507.50
(2 marks)
30
1.7
Product Y has a standard direct material cost of K100 per unit (10kg @ K10 per kg).
During period 4, 1,000 units of Y were manufactured, using 11,700 kg of material Z
which cost K98,600.
What is the material total variance?
1.8
1,400 (F)
18,400 (F)
1,400 (A)
17,000 (A)
(2 marks)
Kanjombi Ltd has a budgeted production overhead of K180,000 and a budgeted

activity of K45000 machine hours.
Calculate the under-/over-absorbed overhead if Actual overheads cost K170,000 and
45,000 machine hours were worked.
1.9
10 000 over-absorbed overhead
20 000 under-absorbed overhead
10 000 under-absorbed overhead
15 000 over-absorbed overhead.
(2 marks)
Activity Based Costing (ABC) establishes separate cost pools for support activities
such as dispatching. Which of the following is a criticism of ABC?
A
ABC helps or facilitates a good understanding of what drives overhead costs.
ABC is concerned with all overhead cost as a result it takes management

accounting beyond its traditional factory floor boundaries.
Some measure of apportionment may still be required at the cost pooling

stage for items like rent, rates and building depreciation
ABC provides data which can be used to evaluate different ways of delivering
business.
(2 marks)
31
1.10
Which of the following best describes interlocking cost accounts?

A
This is a single, comprehensive accounting system with no division between

financial and cost accounts.
This is the system that uses separate cost accounts which periodically are
reconciled with the financial accounts.
This is the system that uses the same bases for items such as stock valuation
and depreciation with no need for reconciliation between cost profit and
financial profit.
This is the system that emphasizes functional analysis eg selling overheads,

rather than analysis by nature.
(2 marks)
(Total: 20 marks)
SECTION B
Attempt any FOUR questions in this section.
QUESTION TWO
(a)
For the six months ended 31st October, Masiwa Musiwa, an importer and distributor
of one type of washing machine has the following transactions in his records. There
was an opening balance of 100 units which had a value of K3, 900,000.
RECEIPTS
DATE
QUANTITY (in units)
COST PER UNIT (K)
May
100
41,000
June
200
50,000
August
400
51,875
The unit price of K51,875 for the August receipt was K6,125 per unit less than the
normal price because of the large quantity ordered.
ISSUES
DATE
QUANTITY (in units)
PRICE EACH (K)
July
250
64,000
September
350
70,000
October
100
74,000
Required:
Show the stores ledger records including closing stock balance and stock valuation
using:
(i)
LIFO
(6 marks)
32
(b)
(ii)
FIFO
(6 marks)
(iii)
AVCO (Average Cost method of pricing)
(4 marks)
The following information relates to component COPPER

Maximum stock
55,000 units
Usage per month:
Estimated delivery period:
Required:
(i)
(ii)
(iii)
(iv)
maximum
11,000 units
Minimum
90,00 units
Maximum
5 months
Minimum
3 months
Calculate the
re-order level
re-order quantity
minimum level
average stock held
(1
(1
(1
(1
mark)
mark)
mark)
mark)
(TOTAL: 20 Marks)
QUESTION THREE
(a)
Sombo Ltd is a manufacturing company. The company has a standard working

week of 40 hours.
Employees are paid on an hourly basis. Any overtime necessary is paid for at a
time and half. For every hour saved a bonus is paid at 40% of the basic rate.
The following information relates to the performance of two of the companys
employees (Chola Lungu and Mwape Mate) in a particular week:
EMPLOYEE
CHOLA LUNGU
MWAPE MATE
Standard time per unit
10 minutes
7.5 minutes
Actual units produced
378
408
Actual hours worked
45
36
Hourly rate
K1,500
K1,800
No. of units scrapped
10 units
12 units
Employees were paid in full for the scrapped units. Mwape Mate was in
attendance for the full 40 hours.
33
Required:
Calculate the.
(b)
(i)
amount of bonus earned by CholaLungu and Mwape Mate separately.

(7 marks)
(ii)
gross wages payable to Chola Lungu and Mwape Mate.
(3 marks)
(iii)
labour cost per good unit made.
(4 marks)
Magoye ltd is a company that operates interlocking financial and cost accounting
bookkeeping systems. In a particular period, profit in the financial accounts was
K11,287,000 while cost accounts showed a profit of K2,704,000.
Further examination of the accounts showed the following discrepancies:
COST ACCOUNTS
K000
Depreciation
Valuations of stock:
9826
Opening stocks
27510
Closing stocks
18218
Imputed rent charge
3250
FINANCIAL ACCOUNTS
K000
Depreciation
Valuations of stock:
10520
Opening stocks
25500
Closing stocks
18750
Profit on sale of asset
850
Dividends received
2635
Required:
Prepare a statement reconciling the profit figures as per the cost accounts and
financial accounts.
(6 marks)
(TOTAL: 20 marks)
34
QUESTION FOUR
(a)
Moyenda Mulimabvuto Limited company produces a single product in two

successive processes. Below is the information for the month of January.
PROCESS A
There was no work in process on 1st
January
During the month 815 units costing
K2,370 were put into process
Labor and overhead incurred
amounted to K1,668
During the month 600 units were
finished and passed to process B
On 31st January, 190 units remained
in process, the operations on which
were half completed, but the
materials for the whole process have
been charged to the process.
PROCESS B
No opening work in process on 1st
January
The cost of labour and overhead in
this process was K900 and materials
costing K350 were added at the end
of operations
On 31 January, 400 units had been
transferred to finished stock
At that date 200 units remained in
process, and it was estimated that
one quarter () of the operations had
been completed.
Required: Prepare
(i)
(ii)
Process A Account
Process B Account
(8 marks)
(8 marks)
NOTE: All process losses should be treated as normal loss.

(b)
A factory has three service cost centres, MA, TR and BH, costing as below:
MA
K15 000
TR
K10 000
BH
K30 000
The services are to be charged to each other and to the production department
using the following basis:
SERVICE CENTRE
PRODUCTIVE
MA
TR
BH
90%
100%
80%
USAGE BY OTHER CENTRES

MA
TR
BH
10%
10%
10%
Required:
Apportion the total overhead costs of K55 000 among the centres using Elimination
Method.
(4 marks)
(Total: 20 marks)
35
QUESTION FIVE
Sons and Daughters Ltd is a company that manufactures and sells two products Zeddy and
Cee. The following information is available:
Selling price each:
Labour (unit):
Variable production
overheads:
Material:
Production units:
Zeddy
K15
Cee
K20
Zeddy
K2 (1 hour)
Cee
K4 (2 hours)
Zeddy
K3
Cee
K6
Zeddy
K4
Cee
K5
Zeddy - June
Cee
Sales units:
Zeddy
Cee
Fixed overheads:
700
- July
350
- June
300
- July
500
- June
600
- July
400
- June
700
- July
400
- June
K4,600
- July
K2,700
Required:
Prepare a profit statement for June and July showing closing stock valuations
using:
(i)
(ii)
Total absorption costing

Marginal costing
( 10 marks)
( 10 marks)
(Total: 20 marks)
36
QUESTION SIX
Kangwa Chewe chemicals Limited produce an industrial purifying agent known as
Supchem, the budgeted weekly output/sales of which is 10,000 litres. The standard
cost per 100 litres is:
Materials
250 kg costing K2,500 per kg
Labour
4 hours at K6,250 per hour
Budgeted fixed overhead
K2,500,000
The standard selling price is K7,500 per one litre container

During the week ended 20 March, the output of Supchem was 9,860 litres, all of
which was sold, the invoiced value being K73,750,000. The materials input was
24,720 kg, which cost K61,500,000. Production employees booked 380 hours to
process and were paid K2, 450,000. Overhead amounted to K2, 625,000.
Required:
(a)
Calculate the following variances,

(i)
(ii)
(iii)
(iv)
(v)
(vi)
(b)
Direct material usage

Direct material price
Direct labour efficiency
Direct labour rate
Overhead expenditure
Overhead volume
(2 marks)
(2 marks)
(2 marks)
(2 marks)
(2 marks)
(2 marks)
Write brief notes on the following types of standards:

(i)
Basic standard
(2 marks)
(ii)
Current standard
(2 marks)
(iii)
Attainable standard
(2 marks)
(iv)
Ideal standard
(2 marks)
(Total: 20 marks)
END OF PAPER
37
T2
PILOT PAPER
MODEL SOLUTIONS
SECTION A: SOLUTIONS
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
SECTION B
SOLUTION TWO
(a)
DATE
Opening
May
June
STORES LEDGER - FIFO METHOD

RECEIPTS
QTY
PRICE
K
100
41,000
200
50,000
July
August
ISSUES
QTY
PRICE
K
250
400
51,875
100=39000
100=41000
50= 50000
September
350
150x50000
200x51875
October
100
51875
38
BALANCE
QTY
PRICE
K
100
39,000
100
39,000
100
41,000
100
39,000
100
41,000
200
50,000
STOCK
VALUE
K000
3,900
8,000
1,8000
150
50,000
7,500
150
400
200
50,000
51,875
51,875
2,8250
1,0375
100
5,1875
51,87.5
STORES LEDGER - LIFO METHOD

DATE
Opening
May
June
RECEIPTS
QTY
PRICE
K
100
41,000
200
50,000
July
August
ISSUES
QTY
PRICE
K
200 x 50,000
50 x 41000
250
400
51,875
BALANCE
QTY PRICE
K
100
39,000
100
39,000
100
41,000
100
39,000
100
41,000
200
50,000
100
39,000
STOCK
VALUE
K000
3,900
8,000
18,000
50
41,000
5,950
100
50
400
39,000
41,000
51,875
26,700
September
350
51,875
100
50
50
39,000
41,000
51,875
8,543.75
October
100
50 x 51,875
50 x 41,000
100
39,000
3,900
39
STORES LEDGER - AVCO METHOD

DATE
Opening
May
June
RECEIPTS
QTY
PRICE
K
100
41,000
200
50,000
July
ISSUES
QTY
PRICE
K
250
August
400
45,000
51,875
BALANCE
STOCK
QTY PRICE VALUE
K
K000
100
39,000
3,900
200
40,000
8,000
400
45,000
18,000
150
45,000
6,750
550
50,000
27,500
September
350
50,000
200
50,000
10,000
October
100
50
100
50,000
5,000
(b)
(i)
The reorder level = Maximum Lead time Usage

= 11,000 x 5
= 55,000 Units
(ii)
Reorder quantity
Maximum level = Reorder Level + Reorder Quantity Minimum lead time
usage
= 55,000 + RQ (9,000 x 3)
RQ = 55,000 55,000 + 27,000
= 27,000 Units
40
(iii)
The minimum level = Rorder level less average lead time usage
= 55,000 (10,000 x 4)
= 55,000 40,000
= 15,000 units
(iv)
Average stock held = Minimum stock + RQ

= 15,000 + (27,000)
= 15,000 + 13,500
= 28,500 Units
SOLUTION THREE
(i)
CHOLA LUNGU
378 x 10
60
MWAPE MATE
63 hours
408 x7.5
60
51 hrs
Actual hours worked
45 hours
36 hrs
Time saved
18 hours
15 hrs
Overtime = Time allowed time taken

40 hrs 45 hrs = - 5 hrs
40 hrs 36 hrs = 4 hrs
Bonus = (18 xK1,500) x 40%
(15 x K1,800) x 40%
= K10,800
K10,800
Overtime pay = 5 x 2250
NIL
= K11,250
(ii)
Basic pay = K1,500 x 40 hrs =
60,000
40 x K1,800
= 72 000
Overtime (as above)
11,250
Bonus (as above)
10,800
10,800
82,050
82,800
Units produced
378
408
Units scrapped
(10)
(12)
368
396
NIL
(iii)
Labour cost per good unit produced
=
41
82,050
82,800
368
396
K222.96 =
K209
(2b)
MEMORANDUM RECONCILIATION ACCOUNT
K000
Profit as per financial
accounts
K000
11,287
Depreciation difference
Profit on cost accounts
694
2,704
Profit on sale of asset
850
Dividend Received
2,635
Imputed rent charge
3,250
Stock difference (opening)
2,010
_____
(closing)
11,981
532
11,981
SOLUTION FOUR
PROCESS A
Input
units
815
2,370
1,668
Labour and overheads
815
units
Process B (w1)
600
3,240
Work in process c/d (w1)
190
798
Process loss
25
815
4,038
units
4,038
PROCESS B
units
600
3,240
Finished stock (w2)
400
3,310
Labour and overheads
900
Work in process c/d (w2)
200
1,180
Materials added
350
600
4,490
Process A
600
4,490
42
WORKINGS
VALUING WORK IN PROCESS
1
PROCESS A
Materials
Effective units
Labour and overhead
TOTAL
effective units
Work in process
190
95
Transfer to process B
600
600
Total effective units
790
695
K2,370
K1,668
K3
K2.4
570
228
798
1,800
1440
3,240
K2,370
K1,668
Materials
Labour and overhead
Total costs
Cost per effective unit
EVALUATION
Work in process
Transfer to process B
2.
PROCESS B
Effective units
TOTAL
effective units
Work in process
200
50
Transfer to Finished
goods
400
400
Total effective units
600
450
K3,240
K900
K5.40
K2
Work in process
1,080
100
1,180
Finished Goods
2,160
800
3,310
______
_____
_____
K3240
K900
4,490
Total costs
Cost per effective unit
EVALUATION
Material costs
43
(3b)
Indirect costs to be apportioned

Apportionment of BH costs
BH
MA
K000
K000
K000
K000
30,000
15,000
10,000
(30,000)
3,000
3,000
24,000
(18,000)
1,800
16,200
(14,800)
14,800
55,000
Apportionment of MA costs
Apportionment of TR costs
TR PRODU
SOLUTION FIVE
(a)
MARGINAL COSTING
JUNE
ABSORPTION COSTING
K
Sales: Zeddy
Cee
9,000
14,000
JUNE
Sales: Zeddy
Cee
23,000
Variable production cost
6,300
Cee (800 x K15)
Profit
23,000
Labour (2300 hrs x 2)
4,600
12,000
Materials: Zeddy (700 x K4)
2,800
18,300
Cee (800 x K5)
4,000
Less: Closing stock
Variable overhead:
Zeddy (100 x K9)
(900)
Cee (100 x K15)
Fixed costs
14,000
Cost of production
Zeddy (700 x K9)
Contribution
9,000
Zeddy (700 x K3)
2,100
(1,500)
Cee (800 x K6)
4,800
15,900
Fixed overhead
4,600
7,100
22,900
(4,600)
less: Closing stock:
2,500
Zeddy (100 x K11)
(1,100)
Cee (100 x K19)
(1,900)
19,900
3,100
44
ABSORPTION COSTING
MARGINAL COSTING
JULY
Sales: Zeddy
Cee
JULY
6000
Sales: Zeddy
6000
8000
Cee
8000
14000
14000
Variable production cost
Cost of production
Opening stock
Opening stock
Zeddy (100 x K9)
900
Cee (100 x K15)
1500
Zeddy (100 x K11)
1100
Cee (100 x K19)
1900
2400
Add: Zeddy (350 x K9)
Cee (500 x K15)
3000
3150
Labour (1350 hrs x K2)
2700
7500
Materials: Zeddy (350 x K4)
1400
Cee (500 x K5)
2500
Less: Closing stock
Variable overhead:
Zeddy (50 x K9)
(450)
Zeddy (350 x K3)
1050
Cee (200 x K15)
(3000)
Cee (500 x K6)
3000
9600
Fixed overhead
2700
Contribution
4400
Fixed costs
2700
_____
Profit
1700
16350
less: Closing stock:
Zeddy (50 x K11)
(550)
Cee (200 x K19)
(3800)
12000
Profits
2000
COSTS PER UNIT

ZEDDY
CEE
Variable
15
Fixed
11
19
(1:2 hours x K2)
Fixed overhead absorption on labour hours =K,4600

23 00 hours
45
= K2 per hour
SOLUTION SIX
(a)
Variance Calculation:
(i)
Direct material usage:
9.860 litres should use (x 2.5 kg)
But did use
Usage variance in kg
Standard material cost per kg
Direct material usage variance
(ii)
(iii)
(iv)
(v)
(vi)
Direct material Price:
24,650,kg
24,720,kg
70 kg (A)
K2,500
K175,000 (A)
K000
24,720kg should cost (x K2,500)
61,800
But did cost
61,500
Direct material price variance
300(F)
Direct Labour efficiency:

9,860 litres should take ( x 0.04 hours)
394.4 hours
But did take
380.0 hrs
Efficiency variance in hours
14.4 hrs
X standard labour cost per hour
K6,250
Direct labour efficiency variance
K90,000 (F)
Directlabour rate:
K000
380 hours should cost (x K6,250)
2,375
But did cost
2,450
Direct labour rate variance
75 (A)
Fixed Overhead expenditure:
K000
Budgeted fixed overhead
K2,500
Actual fixed overhead
K2,625
Fixed overhead expenditure variance
125 (A)
Fixed Overhead volume
Budget volume
10,000 lites
Actual volume
9,860
Volume variance in litres
140 litres
46
(b)
standard fixed overhead cost per litre
K250
Fixed overhead volume variance
K35,000(A)
(i)
Basic Standard
A standard established for use over a long period from which a current
standard can be developed.
(ii)
Current Standard
A standard established for use over a short period of time, related to current
conditions.
(iii)
Attainable Standard
A standard which can be attained if a standard unit of work is carried out
efficiently, a machine properly operated or material properly used.
Allowances are made for normal shrinkage, wastage and machine
breakdowns.
(iv)
Ideal Standard
This is unrealistic, in that it presumes that ideal conditions will prevail, eg.
Maximum sales at highest prices, most efficient workmanship (with no strikes
or sickness) for maximum pay, first class materials and expense items at low
cost.
47

TECHNICIAN LEVEL
T3: MATHEMATICS AND STATISTICS
SERIES: PILOT PAPER
1.
to start writing.
2.

Section A:
Section B:

3.
booklet.
4.
5.
6.
7.
Formulae are provided at the end of the question paper.
8.
48
SECTION A
Attempt all ten sub-questions in this section.
QUESTION ONE
(MULTIPLE CHOICE)
Each of the following questions has only ONE correct answer. Write the LETTER of
each correct answer you have chosen in your answer booklet. Marks allocated are
indicated against each question.
1.1
1.2
1.3
1.4
The ratio of cash to be shared between John and Peter is 5:4. Peter got a
share of US $540.The money shared is Zambian kwacha (1US$ = ZK5,250)
is:
A.
ZK3,543,750
B.
ZK6,378,750
C.
ZK5,103,000
D.
ZK1,312,500.
Given
(2 marks)
= 5 solution for x is:
A.
0.50045
B.
2.00100
C.
0.66095
D.
0.22000
(2 marks)
The distances covered by eight (8) students from a College were as follows:
5, 7, 6,4,10, 9, 12 and 11. The standard deviation of their distances is
A.
2.9277
B.
5.4256
C.
7.6647
D.
8.5711
(2 marks)
A given frequency distribution has a mean= 155.857, median =156.429 and

the mode= 184.375. Comment on the type of skewness of the above
distribution.
A.
positively skewed
B.
Negatively skewed
C.
Symmetrical
D.
None of the above
(2 marks)
49
1.5
1.6
A fair coin is spun ten (10) times. Calculate the probability of the result giving
exactly six(6) heads (hint: use binomial)
A.
25.65%
B.
45.20%
C.
20.51%
D.
50.21%
In a random sample of 300 employees at University of Zambia, 70% were

found to be in favour of a strike action. Find the 99% confident limits for the
proportion of all employees in the university who were in favour of such
action.
A.
83.76% to 88.34%
B.
44.75% to 65.23%
C.
13.45% to 24.81%.
D.
1.7
(2 marks)
63.17% to 76.88%
The prices of a product are as follows in millions of Zambian Kwacha from

2000 to 2005.
Year
Prices
2000
5.1
2001
4.8
2002
4.5
2003
4.6
2004
4.7
2005
5.9
What is the price index number of a product in 2005 taking 2001 as the base
year?
1.8
A.
116
B.
86
C.
123
D.
92.
(2 marks)
What compound interest rate will quadruple the value of an investment in six
(6) years?
A.
58.74%
B.
25.99%
C.
69.41%
D.
70.42%
(2 marks)
50
1.9
A simple distribution of the weight (kg) is 40, 35, 25, 50, 30, 55, 45 and 20.
The upper quartile of the distribution is:
1.10
A.
25
B.
55
C.
35
D.
45
(2 marks)
How much should a worker invest now (to the nearest Kwacha) in order to
receive K1.5 billion in perpetuity if the annual rate of interest is 12%?
A.
B.
C.
D.
6x-4
9x -4
10x -2
18x-12
(2 marks)
Total: 20 marks
SECTION B
Attempt any four questions in this section.
QUESTION TWO
(a)
The weights of twenty workers of a road construction were as follows:

Mass(kgs)
60-62
63-65
66-68
69-71
72-74
No. of employees
5
4
3
2
6
Required:
Calculate
(b)
(i)
Mean
3 marks
(ii)
Median of the weights to the nearest (2dp) in Kgs
3 marks
(i)
Simplify (
(1 mark)
(ii)
Factorize x+3x+2
(2 marks)
(iii)
Solve for x in log(x+5) = 1.8
(2 marks)
)x(
51
(c)
Solve the following simultaneous equation algebraically

2x + y z =2
3x - 4y +2z = 4
4x + 3y -5z = -8
(9 marks)
Total: 20 marks
QUESTION THREE
(a)
(d)
At a business college in Lusaka, a quarter of the students are ladies. 35% of the
students are enrolled in part-time programmes. A student is selected at random.
What is the probability that the student is.
(i)
male student
(3marks)
(ii)
male and a part-time student
(3marks)
(iii)
female or a part-time student?
(3marks)
The output at a factory and cost of production over the past five months are given
in the following table.
Month
1
2
2
4
5
Output (000units) X
19
15
22
20
16
Cost(K000) Y
82
70
90
85
73
(i)
Draw a scatter diagram.
(ii)
Find the regression equation to determine the expected level of cost, for any
given volume of output.
(5 marks)
Estimate the cost of 220,000 units
(2 marks)
(iii)
(4 marks)
Total: 20 marks
52
QUESTION FOUR
(a)
Price index in Pick and Pay is made up of five items. The price for each item and the
average quantities purchased from manufactures and other companies each week
were as follows in 1999 and 2002
Item
1999
Qty(000) units
A
B
C
D
E
50
30
40
105
20
1999
Prices/unit in
ZK
3
6
5
2
7
2002
Qty(000) units
80
40
20
150
10
2002
Prices/unit in
ZK
4
5
8
2
10
Required:
Calculate the Paasche Price index number taking 1999 as the base year.
(b)
(8 marks)
Complex ltd is considering whether to make an investment costing K30,000,000

which could earn K10,000,000 per annum for five years . The company expects to
make a return of 11% per annum.
Required:
Assess whether the project is viable.
(c)
(7 marks)
If K800,000 is invested today and generates K1,000,000 in one years time.

Required:
Calculate the rate
(5 marks)
Total: 20 marks
53
QUESTION FIVE
(a)
How long will it take to accumulate K7,800,000 when K6,000,000 is invested at 10%
interest compounded quarterly.
(3 marks)
(b)
In a quality control tests, the weights of standard packages were measured to give
the following grouped frequency table
Weights in grams
150 <160
160<170
170<180
180<190
190<200
Number of packages
5
10
30
70
40
Required:
(c)
(i)
Calculate the mean
(3marks)
(ii)
Calculate Standard deviation
(4 marks)
(iii)
Calculate the coefficient of skewness and comment on the results (5marks)
Given the following data

Year
2004
2005
Quarters
1
2
3
4
1
2
3
4
Calculate four point moving averages trend values
Data
50
52
56
60
56
52
58
60
(5marks)
Total: 20 marks
54
QUESTION SIX
(a)
The sales distribution of four items A, B, C and D in a shop are sown in the table
below:
ITEM
AMOUNT
10
13
Required:
Draw a pie chart.
(8marks)
(b)
A firm plans to invest a sum of money at the beginning of every year of K150 million
for five years. What is the value of the amount if the investment rate is 12.5%?
(8 marks)
(c)
Mr Konda deposited K70 million in a bank offering 15% simple interest for three
years.
Required:
Calculate the amount gained.
(4,marks)
Total: 20 marks
55
STATISTICAL FORMULAE
1.
I=
PRT
100
(i)
Simple Interest
(ii)
Compound interest (Values and Sums)

Future Values of S, of a sum of , invested for n periods, compounded at
r% interest:
S = 1 r
A = P (1
OR
R n
)
100
A
(1 i ) n
where i
(iii)
Present Value (PV) =
(iv)
(1 i ) n 1
Ordinary Annuity Amount A P

i
(v)
Due Annuity Amount
(vi)
The Present Value of an Annuity
R
100
where
P Annuity
(1 i) n1 1
P
A P
i
Present value of an annuity of K1 per annum receivable or payable for n

years, commencing in one year, discounted at r% per annum:
PV =
(vii)
Pv
1
1
1
r 1 r n
Present Value of a perpetuity is:
R
i
Where R is a perpetuity payable at the end of each interest period worth i per
interest period.
2.
1 % Confidence limits:
Za
2
S
n
, t a , n 1
2
S
n
56
3.
Correlation and regression:

(i)
Product moment correlation coefficient:
r
(ii)
a
(i)
6 d 2
n(n 2 1)
Least square regression line:

b=
4.
[n x 2 ( x) 2 ][n y 2 ( y ) 2 ]
Spearmans rank correlation coefficient:
rs 1
(iii)
n xy x y
n
n 2
y
x
OR
b
n
n
a y bx
Z-test statistic:
(ii)
Standard error for a proportion:
pq
n
p
5.
(i)
Arithmetic mean (grouped data):
(ii)
Arithmetic mean (ungrouped data):
6.
(i)
f
f
Sample standard deviation (grouped):

SD =
f
f
57
(ii)
Sample standard deviation (ungrouped):
( )
SD =
(iii)
(i)
Mean deviation(Grouped data)
7.
n 1
Mean deviation:
(iv)
f
f
nth term of geometric series:
Tn ar n1
(ii)
Sum of the firstnterms of a geometric series:
Sn
ar n 1
r 1
OR
Sn
a1 r n
1 r
Where a is the first term and r is the common ratio; r 1

(iii)
nth term of an arithmetic progression.
(iv)
Sum of the first n term of an arithmetic progression:
Tn a (n 1)d
Sn
n
(a L) OR
2
n
2a n 1d
2
Where a is the first term, L is the last term and dis the difference.
8.
Probability distribution:
(i)
Binomial
P( x) n CxP X q n x
(ii)
OR
n x n x
p q
x
where q 1 p
Poisson
P(x)
m x e m
x!
Where x = 0,1,2,3, ; and where m is Mean Value.

58
(iii)
Z=
Normal Distribution
A
](b a)%
A B
9.
IRR a% [
10.
Quadratic formula:
x
11.
b b 2 4ac
2a
Index Numbers:
(i)
Laspeyre Price
Laspeyre Quantity
P Q
P Q
Q
Q
(ii)
100
0 P0
Paasche Price
(iii)
100
Price Relative = 100 * P1/P0
Price:
12.
100
Paasche Price
P Q1 100 Q P
P Q
Q P
1
P0
P1
0 100
w
w P
Quantity Relative = 100*Q1/Q0
Quantity:
Coefficient of skewness:
Psk
Mode
S
OR
Sk =
3( Median )
S tan dard Deviation
59
Q1
0 100
w
w Q
60
61
Standard Normal (Z) Table

Area between 0 and z
0.00
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
0.0 0.0000 0.0040 0.0080 0.0120 0.0160 0.0199 0.0239 0.0279 0.0319 0.0359
0.1 0.0398 0.0438 0.0478 0.0517 0.0557 0.0596 0.0636 0.0675 0.0714 0.0753
0.2 0.0793 0.0832 0.0871 0.0910 0.0948 0.0987 0.1026 0.1064 0.1103 0.1141
0.3 0.1179 0.1217 0.1255 0.1293 0.1331 0.1368 0.1406 0.1443 0.1480 0.1517
0.4 0.1554 0.1591 0.1628 0.1664 0.1700 0.1736 0.1772 0.1808 0.1844 0.1879
0.5 0.1915 0.1950 0.1985 0.2019 0.2054 0.2088 0.2123 0.2157 0.2190 0.2224
0.6 0.2257 0.2291 0.2324 0.2357 0.2389 0.2422 0.2454 0.2486 0.2517 0.2549
0.7 0.2580 0.2611 0.2642 0.2673 0.2704 0.2734 0.2764 0.2794 0.2823 0.2852
0.8 0.2881 0.2910 0.2939 0.2967 0.2995 0.3023 0.3051 0.3078 0.3106 0.3133
0.9 0.3159 0.3186 0.3212 0.3238 0.3264 0.3289 0.3315 0.3340 0.3365 0.3389
1.0 0.3413 0.3438 0.3461 0.3485 0.3508 0.3531 0.3554 0.3577 0.3599 0.3621
1.1 0.3643 0.3665 0.3686 0.3708 0.3729 0.3749 0.3770 0.3790 0.3810 0.3830
1.2 0.3849 0.3869 0.3888 0.3907 0.3925 0.3944 0.3962 0.3980 0.3997 0.4015
1.3 0.4032 0.4049 0.4066 0.4082 0.4099 0.4115 0.4131 0.4147 0.4162 0.4177
1.4 0.4192 0.4207 0.4222 0.4236 0.4251 0.4265 0.4279 0.4292 0.4306 0.4319
1.5 0.4332 0.4345 0.4357 0.4370 0.4382 0.4394 0.4406 0.4418 0.4429 0.4441
1.6 0.4452 0.4463 0.4474 0.4484 0.4495 0.4505 0.4515 0.4525 0.4535 0.4545
1.7 0.4554 0.4564 0.4573 0.4582 0.4591 0.4599 0.4608 0.4616 0.4625 0.4633
1.8 0.4641 0.4649 0.4656 0.4664 0.4671 0.4678 0.4686 0.4693 0.4699 0.4706
1.9 0.4713 0.4719 0.4726 0.4732 0.4738 0.4744 0.4750 0.4756 0.4761 0.4767
2.0 0.4772 0.4778 0.4783 0.4788 0.4793 0.4798 0.4803 0.4808 0.4812 0.4817
2.1 0.4821 0.4826 0.4830 0.4834 0.4838 0.4842 0.4846 0.4850 0.4854 0.4857
2.2 0.4861 0.4864 0.4868 0.4871 0.4875 0.4878 0.4881 0.4884 0.4887 0.4890
2.3 0.4893 0.4896 0.4898 0.4901 0.4904 0.4906 0.4909 0.4911 0.4913 0.4916
2.4 0.4918 0.4920 0.4922 0.4925 0.4927 0.4929 0.4931 0.4932 0.4934 0.4936
2.5 0.4938 0.4940 0.4941 0.4943 0.4945 0.4946 0.4948 0.4949 0.4951 0.4952
2.6 0.4953 0.4955 0.4956 0.4957 0.4959 0.4960 0.4961 0.4962 0.4963 0.4964
2.7 0.4965 0.4966 0.4967 0.4968 0.4969 0.4970 0.4971 0.4972 0.4973 0.4974
2.8 0.4974 0.4975 0.4976 0.4977 0.4977 0.4978 0.4979 0.4979 0.4980 0.4981
2.9 0.4981 0.4982 0.4982 0.4983 0.4984 0.4984 0.4985 0.4985 0.4986 0.4986
3.0 0.4987 0.4987 0.4987 0.4988 0.4988 0.4989 0.4989 0.4989 0.4990 0.4990
62
Chi-Square Table
Right tail areas for the Chi-square Distribution
df\area
.995
.990
.975
.950
.900
.750
.500
.250
.100
.050
.025
.010
.005
0.00004
0.00016
0.00098
0.00393
0.01579
0.10153
0.45494
1.32330
2.70554
3.84146
5.02389
6.63490
7.87944
0.01003
0.02010
0.05064
0.10259
0.21072
0.57536
1.38629
2.77259
4.60517
5.99146
7.37776
9.21034
10.59663
0.07172
0.11483
0.21580
0.35185
0.58437
1.21253
2.36597
4.10834
6.25139
7.81473
9.34840
11.34487 12.83816
0.20699
0.29711
0.48442
0.71072
1.06362
1.92256
3.35669
5.38527
7.77944
9.48773
11.14329 13.27670 14.86026
0.41174
0.55430
0.83121
1.14548
1.61031
2.67460
4.35146
6.62568
9.23636
11.07050 12.83250 15.08627 16.74960
0.67573
0.87209
1.23734
1.63538
2.20413
3.45460
5.34812
7.84080
10.64464 12.59159 14.44938 16.81189 18.54758
0.98926
1.23904
1.68987
2.16735
2.83311
4.25485
6.34581
9.03715
12.01704 14.06714 16.01276 18.47531 20.27774
1.34441
1.64650
2.17973
2.73264
3.48954
5.07064
7.34412
10.21885 13.36157 15.50731 17.53455 20.09024 21.95495
1.73493
2.08790
2.70039
3.32511
4.16816
5.89883
8.34283
11.38875 14.68366 16.91898 19.02277 21.66599 23.58935
10
2.15586
2.55821
3.24697
3.94030
4.86518
6.73720
9.34182
12.54886 15.98718 18.30704 20.48318 23.20925 25.18818
11
2.60322
3.05348
3.81575
4.57481
5.57778
7.58414
10.34100 13.70069 17.27501 19.67514 21.92005 24.72497 26.75685
12
3.07382
3.57057
4.40379
5.22603
6.30380
8.43842
11.34032 14.84540 18.54935 21.02607 23.33666 26.21697 28.29952
13
3.56503
4.10692
5.00875
5.89186
7.04150
9.29907
12.33976 15.98391 19.81193 22.36203 24.73560 27.68825 29.81947
14
4.07467
4.66043
5.62873
6.57063
7.78953
10.16531 13.33927 17.11693 21.06414 23.68479 26.11895 29.14124 31.31935
15
4.60092
5.22935
6.26214
7.26094
8.54676
11.03654 14.33886 18.24509 22.30713 24.99579 27.48839 30.57791 32.80132
16
5.14221
5.81221
6.90766
7.96165
9.31224
11.91222 15.33850 19.36886 23.54183 26.29623 28.84535 31.99993 34.26719
17
5.69722
6.40776
7.56419
8.67176
10.08519 12.79193 16.33818 20.48868 24.76904 27.58711 30.19101 33.40866 35.71847
63
18
6.26480
7.01491
8.23075
9.39046
19
6.84397
7.63273
8.90652
10.11701 11.65091 14.56200 18.33765 22.71781 27.20357 30.14353 32.85233 36.19087 38.58226
20
7.43384
8.26040
9.59078
10.85081 12.44261 15.45177 19.33743 23.82769 28.41198 31.41043 34.16961 37.56623 39.99685
21
8.03365
8.89720
10.28290 11.59131 13.23960 16.34438 20.33723 24.93478 29.61509 32.67057 35.47888 38.93217 41.40106
22
8.64272
9.54249
10.98232 12.33801 14.04149 17.23962 21.33704 26.03927 30.81328 33.92444 36.78071 40.28936 42.79565
23
9.26042
10.19572 11.68855 13.09051 14.84796 18.13730 22.33688 27.14134 32.00690 35.17246 38.07563 41.63840 44.18128
24
9.88623
10.85636 12.40115 13.84843 15.65868 19.03725 23.33673 28.24115 33.19624 36.41503 39.36408 42.97982 45.55851
25
10.51965 11.52398 13.11972 14.61141 16.47341 19.93934 24.33659 29.33885 34.38159 37.65248 40.64647 44.31410 46.92789
26
11.16024 12.19815 13.84390 15.37916 17.29188 20.84343 25.33646 30.43457 35.56317 38.88514 41.92317 45.64168 48.28988
27
11.80759 12.87850 14.57338 16.15140 18.11390 21.74940 26.33634 31.52841 36.74122 40.11327 43.19451 46.96294 49.64492
28
12.46134 13.56471 15.30786 16.92788 18.93924 22.65716 27.33623 32.62049 37.91592 41.33714 44.46079 48.27824 50.99338
29
13.12115 14.25645 16.04707 17.70837 19.76774 23.56659 28.33613 33.71091 39.08747 42.55697 45.72229 49.58788 52.33562
30
13.78672 14.95346 16.79077 18.49266 20.59923 24.47761 29.33603 34.79974 40.25602 43.77297 46.97924 50.89218 53.67196
10.86494 13.67529 17.33790 21.60489 25.98942 28.86930 31.52638 34.80531 37.15645
64
T3: SUGGESTED SOLUTIONS

SECTION A
SOLUTION ONE
1.1
4-------------------$540
9------------------ X
Therefore X =
x 540 = $1,215
Using the rate 1$ = K5,250

Money shared 1,215 X 5,250 = B (ZK6,378,750)
1.2
5
=5
Log
=log 5
2x+1log2 = log 5
2x+1 =
X= (
= (
= 0.5x 1.3219
= 0.66095C.
1.3
x
(x- )2
x-
5
7
6
4
10
9
12
11
64
Mean =
-3
-1
-2
-4
2
1
4
3
9
1
4
16
4
1
16
9
60
= 64/8= 8
65
(
Standard Deviation =
=
=
= 2.9277 (A)
1.4
1.5
1.6
(b)Negative skweness
Binomial
P(r=6) = nCr
= 10C6(
)(
) = 0.2051= 20.51% .C)
= 0.70 n = 300
= 0.70
(
=
(
=
)(
= 0.02646
Assume normal distributions of 99% confidence limits are

= 0.7
= 0.7
2.58(0.02646)
0.06826
= 0.76826 & 0.63174

: . 99% confident limits are 63.17% and 76.83% (D)
1.7
index = (5.9/4.8 )x 100= 123 (C )
1.8
A = p(1+i)n
:.
4p =p (1+i)6
4 = (1+i)6
1+i
-1 = .i = 1.2599 -1 = 0.2599 = 25.99%( B)
1.9
20, 25, 30, 35,40, 45, 50, 55

Q3 Position = (8) = 6th
66
Answer D
15,000,000
K12,500,00
0.12
1.10 PV =
nswer B
SECTION B
SOLUTION TWO
a)
Range
60-62
63-65
66-68
69-71
72-74
x
61
64
67
70
73
f
5
4
3
2
6
20
fx
305
256
201
140
438
1340
i) Mean = =
cum f
5
9
12
14
20
=1340/20 = 67
(3marks)
ii) Median = L +R/f = 66+(1/3)x3 L = 66, R = 10-9 , f = 3 , c=3

=66.67
= 66 + 1 = 67 (kg)
(3marks)
b)
( )(
)x(
)= ( )=( )
(ii) X2 +3X +2
X2 + X +2X +2
X(X+1)+2(X+1)
(x+1)(x+2)
(iii) log (x+5) = 1.8
1 mark
2marks
Log to indices
X+5 =
X+5 = 63.09573 : . x = 58.09573
c) 2x +y -2z = 2
3x -4y +2z = 4
4x +3y -5z = -8
1
2
3
67
Multiply (1) by 2 and add it to (2)

4x +2y -4Z =4
+ [3x -4y +2Z = 4]
7x 2y = 8
Multiply (1) by 5 and subtract (2) from it

10x +5y -5z = 10
-[4x +3y -5z = -8]
6x +2y =18
Add (5) to (7)

7x 2y = 8 5
+[ 6x +2y =18]
13x = 26
X=2
(3marks)
Put x=2 in 5
7x 2y = 8- 5
7x2 -2y =8
14-8 = 2y :. y = 3
(3marks)
Replace x=2 and y=3 in
(1)
2x +y -2z = 2
2x2 +3 -2z = 2
4+3-2 = 2z
Z=5
(3marks)
68
SOLUTION THREE
(i) P(F) =
a)
P(M) = 1 - =
(3marks)
(ii) P(M and PT) = P(M) P(PT)

= (0.35) = 0.2625
(3marks)
(iii) P(FOR PT) = P(F) + P(PT) P(FPT)

= 0.25 + 0.35 (0.25 x 0.35)
= 0.6 0.0875
(3marks)
b) (i)
X
y
19
82
15
70
22
90
20
85
16
73
Scatter Diagram
X versas Y
1
100
80
60
2
y
40
20
0
0
10
15
20
25
x
19
15
22
20
16
92
y
x2
y2
xy
82
361
6724
1558
70
225
4900
1050
90
484
8100
1980
85
400
7225
1700
73
256
5329
1168
400
1726 32278
7456
Mean of x = 92/5 =18.4 ; mean of y = 400/5 =80

69
(2marks)
b = -n. . = 7456 -5x(18.4)x(80) = 96

-n. 1726-5x(18.4)2
33.2
=2.8916
a = -b
= 80 2.8916x18.4 = 80-53.20=26.8
Y=a+bx
y = 26.8 +2.8916x
(iii)
(5marks)
y = 26.8+2.8916(220)
= 662.952
Or K662952
(2 marks
SOLUTION FOUR
a)
Q0
P0
50
30
40
105
20
Qn
3
6
5
2
7
Pn
80
40
20
150
10
4
5
8
2
10
pnqn
qopn
320
240
200
240
160
100
300
300
100
70
1080
Paasche price index =
Pn qn
Po qn
x 100
1080
950
70
x 100 113.63
950
b)
year
cash flow
discount
factor(11%)
present value
(30,000,000.00) 1.000
(30,000,000.00)
10,000,000.00
0.901
9,009,009.01
10,000,000.00
0.812
8,116,224.33
10,000,000.00
0.731
7,311,913.81
10,000,000.00
0.659
6,587,309.74
10,000,000.00
0.593
5,934,513.28
NPV
6,958,970.18
NPV is positive , therefore the project is viable

c) PV cost = PV of benefits
800,000 =
1,000,000
1 r
1+r = 1000000/800000 =1.25

.r = 1.25-1 = .25 = 25% (5marks)
71
(7marks)
SOLUTION FIVE
a) A = p(1 +i)n
A= 7,800,000; P=6,000,000;.i = 0.10/4 =0.025
7,800,000= 6,000,000(1.025)n
7800000/6000000=1.025n
1.3 = 1.025n
Taking logs
Log 1.3 = log 1.025n
Log1.3 = nlog1.025
N = log1.3/log1.025 = 0.113943/0.010724 = 10.625 quarters app.=2 years.
(3marks)
b)
x
155
165
175
185
195
f
5
10
30
70
40
155
fx
775.00
1,650.00
5,250.00
12,950.00
7,800.00
28,425.00
(i) Mean =
cumf
5
15
45
115
155
x2
24,025.00
27,225.00
30,625.00
34,225.00
38,025.00
fx2
120,125.00
272,250.00
918,750.00
2,395,750.00
1,521,000.00
5,227,875.00
= 28425/155 =183.39(3marks)
(ii) Standard deviation =square root ( 2/ - ( / )2

= square root (5,227,875/155 (183.39)2)
=
= 9.869
(iii)
(4marks)
Median = L + (R/f)*C ; middle number (155+1)/2 = 78

Modal class = 180<190
; L =180; f=70 ; R =78-45=33, c = 10
Median = 180+(33/70)10 = 184.71

Coefficient of skewness = 3(mean-median)/standard deviation
=3(183.39-184.71)/9.869= -0.401
(3marks)
The distribution is negatively skewed but the skewness is
relatively small
(2 marks)
72
c)
1
2
3
4
1
2
3
4
SALES(Y) TOTALS AVERAGES CENTERED(T)

50
52
218
54.50
56
224
56.00
55.25
60
224
56.00
56.00
56
226
56.50
56.25
52
226
56.50
56.50
58
60
5 marks
SOLUTIONS SIX
(a)
Ao = 8/36 x 360o = 80o

Bo = 100o
Co 50
Do = 130
(1 mark)
(1 mark)
(1 mark)
(1 mark)
D
B
130
100
50
80
A
(b)
(1 i) n 1 1
i
A = P
(1.125) 6 1
0.125
= 150
2.0273 1
0.125
150
150
150
150
150 (8.2184) 150

1232.76 150
K1082.76
73
(c)
I=
PRT 1 70 x15 x3
K 31.5m
100
100
A = P + I = 70 + 31.5 = K101.5m
(4 marks)
74

TECHNICIAN LEVEL
T 4: BUSINESS ECONOMICS
SERIES: PILOT PAPER
1.
to start writing.
2.

Section A:
Section B:
Attempt any TWO Microeconomics questions.

Attempt any TWO Macroeconomics questions.
3.
booklet.
4.
5.
6.
7.
8.
75
SECTION A- Answer any two questions

QUESTION ONE
(a)
In Zambia, since the government liberalized the economy in the 1990s, markets
have been left alone because it is believed that price and quantity will always move
to equilibrium.
(i)
State four benefits of economic liberalization.
(4 marks)
(ii)
Discuss the four disadvantages of economic liberalization.
(4 marks)
(b)
State five arguments in favor of nationalization.
(5 marks)
(c)
Explain five arguments that are used in support of privatization.
(8 marks)
(d)
Using a diagram discuss the consequences of imposition of a minimum wage.

(4 marks)
Total Marks 25
QUESTION TWO
(a)
(b)
State clearly two general conditions for profit maximization.

The following data relate to costs and the demand for its product.
OUTPUT
Price(K000)
Total Cost (K000)
1
2
3
4
5
6
7
8
9
10
10
21
20
19
18
17
16
15
14
13
12
25
36
44
51
59
69
81
95
111
129
(4 marks)
Calculate at each level of output

(i)
(ii)
(iii)
(iv)
(v)
Total revenue.
(4 marks)
Marginal revenue.
(4 marks)
Average cost.
(4 marks)
Marginal cost.
(4 marks)
Identify the profit maximization of level of output and indicate the profit.
(5 marks)
Total Marks 25
76
QUESTION THREE
(a)
(b)
(c)
(d)
(e)
What are the main characteristics of a competitive industry?

(6 marks)
Explain three reasons why economists in Zambia should prefer prefect competition.
(6 marks)
Explain why consumers may not always suffer if a competitive industry became
monopolized.
(5 marks)
What is meant by price discrimination?
(2 marks)
Explain the main conditions that must exist for price discrimination to be successful.
(6 marks)
Total Marks 25
SECTION B- Answer any two questions

QUESTION FOUR
(a)
(b)
(c)
(d)
(e)
What is meant by economic growth?

(3 marks)
Explain the benefit to a country for achieving an increase in economic growth.
(4 marks)
What are the problems to a country which is achieving higher rates of economic
growth?
(4 marks)
What are the main reasons for calculating national income statistics in Zambia?
(8 marks)
Distinguish between an inflationary gap and a deflationary gap?
(6 marks)
Total Marks 25
QUESTION FIVE
(a)
Throughout history , money has taken many forms

(i)
Explain the main functions of money.
(8 marks)
(ii)
Describe the five main characteristics of money which make it useful.

(5 marks)
(b)
Explain the main factors that determine the demand for money according to the
Keynes liquidity preference theory.
(6 marks)
(c)
What are the main functions of the Lusaka Stock Exchange?
(d)
Explain what is meant by the Central Bank being Lender of last resort.
(2 marks)
(4 marks)
Total Marks 25
77
QUESTION SIX
(a)
What is meant by a multinational company?
(4 marks)
(b)
Discuss four reasons which have led to the growth of multinational companies in
Zambia.
(8 marks)
(c)
What are the advantages of multinational companies to the host country? (5 marks)
(d)
Outline five arguments against the operation of multinational companies. (5 marks)
(e)
What is meant by globalization of capital markets?
(3 marks)
Total Marks 25
QUESTION SEVEN
(a)
Distinguish between balance of payments and balance of trade.
(5 marks)
(b)
Explain the composition of the balance of payments of the Zambian economy.

(8 marks)
(c)
List four advantages and four disadvantages of floating exchange rates.
(d)
Outline the reasons why a country might want to control the value of its currency.
(4 marks)
(8 marks)
Total Marks 25
78
SOLUTIONS T4
SUGGESTED SOLUTIONS
PILOT PAPER 2012
SECTION A
1(a) (i)
The Benefits of economic liberalization are;

-
(ii)
The disadvantages of economic liberalization are the following;

-
(b)
Enables countries to gain access to global markets for their products and so
increase home employment and incomes.
Forces firms to become more efficient and to compete with overseas products
in home and foreign markets.
Encourages inward investment from foreign investors to revitalize home
industries.
Improves choice and quality to home consumers.
Developing countries can be exploited due to weakness in their industrial

base and need for investment.
Deterioration of pay and conditions of service for workers.
Environmental degradation if there are poor environmental protection laws.
Increased dependence on other countries for markets and investment.
Arguments in favor of nationalization;

- Natural monopoly such as public utilities e.gzesco.
- Sufficient capital available for investment because of government support.
- Provision of uneconomical services.
- Strategic control over key industries.
- Protects employment and minimizes social costs.
- Leads to a more and fair distribution of income and wealth.
(c)
Arguments in support of privatization;

- Improves efficiency.
- Wider share ownership encouraged.
- Competition leads to better quality and lower prices.
- Provides extra revenue to the treasury.
- Greater economic freedom.
- Attracts foreign investment.
79
- To remove from political influence.

(d)
The consequences of a minimum wage would be to raise wage levels for all
workers above thee quilibrium wage rate and to reduce demand for labour and so
cause job losses.
DL
SL
Minimum Wages
Wages
WE
LD
LE
LS
Labour
2.(a)
The two conditions for profit maximization are;

(i)
Total revenue must exceed total cost by the greatest amount.
(ii)
MC=MR and MC must be rising.
(b
Output
0
1
2
3
4
5
6
7
8
9
10
(iv)
3(a)
(i)
(ii)
(iii)
(iv)
TR (K000)
0
21
40
57
72
85
96
105
112
117
120
MR(K000)
21
19
17
15
13
11
9
7
5
3
AC(K000)
25
18
14.67
12.75
11.8
11.5
11.57
11.87
12.33
12.9
MC(K000)
15
11
8
7
8
10
12
14
16
18
Profit(K000)
-10
-4
4
13
21
26
27
24
17
6
-9
Profit maximization occurs at output 6 where profit is at K27, 000.
Characteristics of perfect industry:

- Large number of buyers and seller in the market.
80
-Firms are Price takers.

- Product is homogeneous.
- Producers and consumers act rationally and have perfect information about product
market.
- Free entry into and exit out of the market.
- No transport and no information gathering costs.
(b)
Economists prefer perfect competition;

- The elimination of supernormal profits in the long run.
- Efficient use of resources under equilibrium.
- Producers will produce where average cost is at its minimum i.e. technical
efficiency.
- Price equal to marginal cost.
(c)
Prices lower because of economies of scale.

- Can afford to spend more on R&D.
- Find it easier to raise capital to finance new products.
- Stimulate competition because of super normal profits leading to better products.
- Greater stability of supply.
- Award of patents rights to firms encourages entrepreneurship flair and innovation.
(d)
Price discrimination refer to a situation in which a firm sells the same product at
different prices in different markets.
(e)
Conditions for price discrimination;

- Able to control output and prices.
- Different price elasticitys of demand in the submarkets.
- No communication between the markets.
- Able to segment the market.
81
SECTION B
4(a)
(b)
Economic growth refers to an increase in real GNP. The economy produces more
goods and Services.
Benefits of economic growth.
- Elimination of primary poverty.
- Improved quality of life.
- Rising employment.
- Improved social infrastructure such as in education and health.
(c)
Problems of economic growth.

- Promotion of inflation.
- Environmental impact.
- Inequalities in income and wealth.
- Regional disparities.
(d)
Reasons for calculating national income.

- To access the economic performance of a country.
- To establish the material standards of living.
- To monitor the impact of government economic policies.
- To enable government and business to compare progress and prospects of different
economies.
- To assist government in economic planning.
(e)
Inflationary gap is created when aggregate demand is greater than the supply of
goods and Services and the economy is operating at full employment level. The
pressure to buy goods and services forces prices to go up.
Deflationary gap arises when aggregate demand is insufficient to absorb all the
output that could be produced if all resources were fully employed.
82
5. (a)
(i)
Functions of money are:

- Medium of exchange- it allows the exchange of goods and services.
- Money as unit of accounts- money enables to measure exactly what
something is worth.
- Money as standard of deferred payment- money allows payments to be
made in future.
- Money as a store of value or wealth.
(ii)
Characteristics of money.
-
Acceptability- it must generally be accepted to its users.

Durability- must be able to withstand wear and tear.
Portability- Easy to carry.
Divisibility- it needs to be convenient for small transactions.
Scarcity- Purchasing power must be stable.
Difficult to counterfeit.
(b) Factors that determine demand for money

(i)
Transaction motive. People need money to buy goods and services.
(ii)
Precautionary motive- people wish to keep money in order to meet unforeseen

personal and financial contingencies.
(iii)
Speculative motive- people keep money to take advantage of profitable

opportunities.
(c) Functions of the Lusaka Stock Exchange;

- Makes it easier for large firms to raise long term capital.
- Publicizes prices of quoted securities in the media.
- Enforces certain rules of conduct for listed companies.
- Primary market for newly issued shares
- Secondary market for already issued securities.
(d) The central bank play as guarantors of sufficient liquidly when there is cash shortage
in the monetary system.
6.(a)
A multinational company is one that has production or service facilities in more than
one country.
83
(b)
Reasons for growth of multinational companies.

- To gain access to markets protected by tariffs.
-To reduce transport costs.
- To exploit national or regional differences in demand for goods and services.
- To take advantage of low labour costs, thereby reduce production costs.
- To secure supply through backward vertical integration.
- Encouragement of developing countries.
(c)
Advantages of multinational companies.

- Improves the economic welfare.
- Introduction of new technology.
- Provides employment.
- Improves productivity of local producers through linkages.
- Balance of payments from inflow of foreign direct investment.
- Increase in tax revenue by government.
(d)
Arguments against multinationals.

- Possibility of displacing local investment
- Technological transfer at low level.
- May not create new employment.
- May evade tax by not declaring their true profits.
- Governments that offer grants and subsidies may end worse off.
(e)
7. (a)
(b)
Globalization of capital markets describes the process by which capital markets of

each country have become integrated.
Balance of payments is a measure of payments that flow into and out of the
country from other countries for a specified period. Balance of trade is the
difference between visible exports and imports in the current account.
The balance of payments consists of three parts.
84
(i)
Current account made up of trade in goods, trade in services, investment

income and transfers.
(ii)
Capital accounts which records all financial transactions of external assets and
external liabilities.
(iii)
Financial account which record purely financial assets.
(c)
Four advantages of floating exchange rates.

- Governments do not need to hold foreign currency reserves
- Balance of payments deficits and surpluses are automatically corrected.
- Governments do not need to adopt policies that are undesirable.
- Efficient allocation of resources.
Disadvantages of floating exchange rates
-
(d)
Exchange rate uncertainty and this deters trade.

International competitiveness reduced if currency appreciates too much.
May lead to inflation if exchange rate falls too much.
Currency risk maximized.
Governments may not pursue domestic policies which they should.
Reasons for controlling exchange rate.

- To rectify a balance of payments deficit.
- To prevent a balance of payments becoming too large.
- To emulate economic conditions in other countries.
- To stabilize the exchange rate of its currency.
85

TECHNICIAN LEVEL
T5: TAXATION
SERIES: PILOT PAPER
TOTAL MARKS: 100 TIME ALLOWED: THREE (3) HOURS
1.
to start writing.
2.

Section A:
Section B:

3.
booklet.
4.
5.
6.
7.
8.
A Taxation Table is provided on pages 2 and 3 of this paper.
86
Taxation Table for the Charge Year 2011/12

1.
Income Tax
Personal Income Tax Rates
Chargeable Income
First K12 000 000
Next K8 820 000
Next K29 580 000
Above K50 400 000
2.
On income from manufacturing and other

On income from non-traditional exports
On income from farming
(a)
Implements, plant and machinery and commercial vehicles wear and tear
allowances:
Used normally
25%
Used in manufacturing, tourism, farming and leasing

50%
(b)
Non Commercial Vehicles:
(c)
(d)
Wear and Tear Allowance

Initial Allowance
Investment Allowance
5%
10%
10%

Initial Allowance
10%
10%
Commercial Buildings:
(f)
20%
Low Cost Housing (Cost up to K20 000 000):
(e)
Wear and Tear allowance
Industrial Buildings:
2%
Farming:
Development Allowance
Farm Work Allowance
Farm Improvement Allowance
10%
100%
100%
Property Transfer Tax
5.
Rate
35%
15%
15%
Capital Allowances
4.
0%
25%
30%
35%
Company Income Tax Rates
3.
Rate
Rate of Tax on realized value
5%
Value Added Tax

Registration threshold
Standard Value Added Tax Rate
(on VAT exclusive turnover)
K200 000 000

16%
87
6.
Presumptive Tax for transporters

Tax per Annum
Tax per Day
K000
K000
600 000
1 600
From 12 to 17 passengers
1 200 000
3 300
2 400 000
6 600
3 600 000
10 000
4 800 000
13 000
6 000 000
16 400
From 64 passengers and over
7 200 000
19 700
Less than 12 passengers and taxis
7. Turnover Tax
3%
8. Customs and Excise

(i)
(ii)
Motor cars and motor vehicles (up to 10 passengers):

Customs Duty
Excise Duty:
- 1 500 cc and less
- 1 500 cc and above
Customs Duty
Excise Duty
15%
10%
Buses/coaches more that 30 passengers:
(iv)
20%
30%
Pick up trucks/minibuses/lorries up to 20 tonnes not more than 16 passengers:
(iii)
25%
Customs Duty
Excise Duty
15%
0%
The minimum amount of customs duty on motor vehicles in categories from (i) to
(ii) above, is K2 000 000.
88
SECTION A
Attempt ALL multiple choice questions in this section.
Each of the following questions has only ONE correct answer. Write the letter of the correct
answer you have chosen in your booklet.
QUESTION ONE
1.1
Call Again Limited offers its customers a discount of 5% of the amount payable if
they pay within one month of the date of the sales invoice.
Call Again Limited will calculate its output VAT on the selling price
(a)
(b)
(c)
(d)
1.2
ignoring the discount.

less the discount with a subsequent adjustment being made if the discount is
not taken.
with a subsequent adjustment being made if the discount is taken.
less the discount regardless of whether the discount is actually taken.
(2 marks)
For the year ended 31st March 2012 Lusaka Limited made a trading loss of
K160,000,000 and had a property business profit of K40,000,000. For the year
ended 31 March 2011 the company made a trading profit of K48,000,000 and a
property business profit of K36,000,000.
What is the maximum amount of loss relief that Lusaka Limited can carry forward to
the year ended 31st March 2013.
(a)
(b)
(c)
(d)
1.3
K160,000,000
K159,912,000
K36 000 000
None of the above.
(2 marks)
On 30th April 2011 Mrs Sililo an employee of Kaoma Limited received a monthly
salary of K5 000 000. Her deductions were 5% NAPSA on her basic salary and K500
000 monthly standing order deduction with her local bank to her aged-mother.
Mrs Sililos net salary after deducting PAYE will be:
(a)
K3,696,000
(b)
K3,601,000
(c)
K3,626,000
(d)
K3,126,000
1.4
(2 marks)
Employers are required to give to each employee in respect of whom PAYE

deductions have been made before 1 June following the end of the charge year to
which the return relates a document.
This document is known as:
(a)
Employee leaving form ITF/P13 (part I).
(b)
Details of old employment form ITF/P13 (part II).
(c)
Certificate of pay and tax deducted ITF/P22.
(d)
Remittance card form CF/P16.
89
(2 marks)
1.5
Which of the following factors indicates that Fanwell Ngoma should be treated as
employed rather than as self-employed?
(a)
(b)
(c)
(d)
1.6
provides his own equipment.

must accept all the work offered to him.
can hire his own helpers.
can work when he chooses.
(2 marks)
Which of the following is exempt from Property Transfer Tax?

(a)
(b)
(c)
(d)
1.7
Fanwell
Fanwell
Fanwell
Fanwell
A painting sold for proceeds of K80,000,000.

A piece of land sold for K100,000,000.
A building sold for K160,000,000.
Shares sold in an unquoted trading company.
(2 marks)
Mr Zulu sold a piece of land to his daughter for K10,000,000 on 1 March 2012, which
he had bought at a cost of K50,000,000 five years ago. The market value of the
land on 1 March 2012 as determined by the Commissioner General was K80,000,000.
The property transfer tax payable by Mr Zulu on the sale of the land will be:
(a)
(b)
(c)
(d)
1.8
Nil
K500,000
K 2 500 000
K4 000 000
(2 marks)
Mrs Jibinga received the following investment income:
Gross
Gross
Gross
Gross
dividend from North-Western Company of K10 000 000

dividend from Luapula PLC of K6 000 000
dividend from Mongu Copper Mines Limited of K8 000 000
Interest from Treasury Bill of K15 000 000
The total withholding tax payable by Mrs Jibinga in the charge year 2011/12 is:
(a)
(b)
(c)
(d)
1.9
K5
K3
K2
K3
850
750
400
450
000
000
000
000
(2 marks)
The Revenue Appeals Tribunal was established under the Revenue Appeals Tribunal
Act of 1998 to do all the following except to.
(a)
(b)
(c)
(d)
hear and determine appeals lodged before it.

award costs to the successful party.
subpoena any person to produce documents as evidence in a matter before
it.
assist the Republican President in appointing the Commissioner General of
Taxes.
(2 marks)
90
1.10
Mrs Chibechibe who worked as an underground train driver at Coal Mines Limited for
10 years was discharged from her employment on 31 March 2012. She was paid a
lump-sum payment on medical grounds of K400,000,000.
A tax
(a)
(b)
(c)
(d)
on medical discharge will be payable amounting to:

NIL
K36,500,000
K97,000,000
K40,000,000
(2 marks)
(Total 20 marks)
SECTION B
Attempt any FOUR questions in this section.
QUESTION TWO
You are a tax senior at one of the accounting firms. You had an immediate engagement to
attend to and therefore you left the Income Statement of ZibaZako Ltd, one of your firms
clients, with your recently recruited tax assistant with strict instructions to calculate the Tax
Adjusted business Profit for the year ended 31 March 2012.
When you returned to the office, he assistant presented you with the following computation
of tax adjusted business profits which contains a number of incorrect adjustments.
ZibaZako Limited: Accounting period for the year ended 31 March 2012.
Deduct
K000
Net Profit as per accounts
Subscriptions:
Zambia Chamber of Commerce and Industry
ZICA subscriptions for accounts staff
Local trade protection
Political party
Depreciation (straight line depreciation)
Office equipment acquired three years ago
(at 5% per annum)
Managing Directors car acquired threes years
ago
(at 10% per annum) private use 25%
Factory building acquired six years ago
(at 4% per annum)
Entertainment
Staff
Local Suppliers
Foreign Suppliers
Audit and accounting charges
Bad Debts
91
Add
K000
300,000
2 500
3 000
8 000
4,000
5,000
10,000
15,000
4 500
2 300
8,000
5,600
Increase in general provision
3,100
Increase in specific provision

Bad debts written off
Loan to supplier written off
Unpaid for stock supplied to trickster
Legal fees
- Breach of environment regulations
- Negotiations fee for acquiring title deeds to
premises
- Court fine paid to secure release of
- Managing Director on charges of drunken driving
- Re-loan to employee
- Re-staff service agreements
- Negotiating successful tax appeal
- Unsuccessful lawsuit costs re-unfair Dismissal case
Repair and Maintenance
Painting luminary sign over premises
2,700
6,500
5,800
6,500
1,400
500
1,200
900
10,000
8,000
4
,250
3,600
Portable office partitioning

Annual maintenance contract
Sundry repairs
Total
Tax adjusted profit
2,500
52,350
323,250
3,100
375,600
Required:
Prepare a corrected computation of the taxable business profits of Zibazako Ltd for the
charge year 2011/12.
(Total 20 marks)
QUESTION THREE
(a)
Until 31 March 2012, Mr Edward Luapula a differently abled person had been
employed by Mansa Limited when he retired upon attainment of age 55 years. In
the tax year 2011/12 Mr Luapula received the following income from his employers
Mansa Limited:
During the time of employment, Mr Luapula was entitled to the following:
K120,000,000 payable on the
last day of each month
K3,000,000
K1,000,000 per month
Annual salary:
School childrens allowance per term:

Fuel allowance:
Bonus for the year at 10% of his basic
salary
Medical expenses refund claimed during K4,000,000
the year
K20,000,000
Leave pay:
92
On 1 May 2011 Mr Luapula received a Labour Day award as the most hard working
employee consisting of the following:
K000
2,000
2,800
2,200
7,000
Cash
Fridge
Colour TV
Total value of award
Mansa Limited made the following additional payments to Mr Luapula on cessation of

his employment on 31 March 2012:
Repatriation pay
Severance pay
Accrued Service bonuses
Refund from Approved Pension fund
K000
25,000
10,000
50,000
500,000
The payments made by Mr Luapula from his income during the charge year 2011/12
were as follows:
K000
51,388
6,000
10,000
6,000
73,388
Income Tax paid under the Pay As You Earn

NAPSA contributions 5% of his basic salary
Mortgage interest on his main residence
Alimony maintenance to his divorced wife(K500 000 per month)
Total payments made
Required:
Calculate the total tax payable by MrLuapula for the charge year 2011/12. (15 marks)
(b)
During the year Mr Edward Luapula had also imported a 5 tonnes Toyota Canter
Lorry from Japan at a cost of $6,000. He paid insurance of $300 and freight of
$2 000. His in-land charges from Dar-es-Salam to Nakonde boarder totalled $1 000.
At the time of arrival at Nakonde, the exchange rate at a local bank was $1 to K5
100 while the Zambia Revenue Authority exchange rate was $1 to K5 000.
While in Kitwe, Mr Luapula insured his vehicle at a cost of K8 000 000.
Required:
(i)
Calculate the value for duty purposes.
(ii)
Calculate the total import taxes payable at Nakonde boarder post.
(5 marks)
(Total 20 marks)
93
QUESTION FOUR
(a)
Senanga is a sole trader who has recently registered for Value Added Tax.
Senanga does not really understand certain important aspects of VAT.
Required:
(i)
Explain to her:
The meaning of a sale or return consignment.

(1 marks)
How the tax point is determined for a sale or return consignment.
(2 marks)
(ii)
Explain to her any THREE powers that VAT Inspectors have that enables
them ensure that the registered traders are performing their obligations
under VAT.
(3 marks)
(iii)
Recently Senanga was visited by her uncle, Mr Zambezi who is also a sole
trader. He would also like to register for VAT even though his turnover does
not exceed the statutory registration limit of K200 million.
Explain TWO benefits of voluntarily registering for VAT, to Mr Zambezi.
(4 marks)
(b)
Kabamba, Chanda and Chileshe commenced business on 1 October 2009, preparing

their accounts to 30 September each year and sharing profits equally.
On 1 January 2010, Bule was admitted to the partnership and profits continued to be
shared equally.
On 1 July 2011, Chanda retired and on 31 December 2011, the partnership was
dissolved.
The adjusted profits of the partnership, after deducting capital allowances were as
follows:
K000
Year ended 30 September 2010
Year ended 30 September 2011
Three months ended 31 December 2011
425,000
400,000
175,000
Required:
Show the allocation of profits to each partner for all the accounting periods.
(10 marks)
(Total 20 marks)
94
QUESTION FIVE
(a)
Mr Lameck Zimba owns three properties which were rented out. His assessable
income and allowable expenses for the two years to 31 March 2012 were:
1
K000
Income
2010/11
2011/12
Expenses
2010/11
2011/12
Property
2
K000
3
K000
82,000
60,680
90,000
350,000
78,000
63,000
105,000
55,000
82,000
41,000
68,000
71,000
Required:
Calculate Mr Lameck Zimbas property income assessable for the 2010/11 and 2011/12 tax
years.
(10 marks)
(b)
Mr Lameck Zimba also owns 4 buses which operates as public transport for the
general public on the various Lusaka routes with the following sitting capacities:
Minibus
AZP 2001
Seating Capacity
21 passengers
Cashing for the Month

K4,650 000
AYC 9181
66 passengers
K11,700 000
AGK 566
36 passengers
K10,642 500
ALY 347
12 passengers
K4,000 000
The buses have operated daily throughout the month of March 2012.
Required:
Calculate the total tax payable by Mr Lameck Zimba on the buses for the month of
March 2012.
(5 marks)
(c)
Mrs Zimba registered a business at the Patents and Company Registration Agency
(PACRA) in November 2011.
The business is doing quite well with sales and expenses being as follows:
November 2011 Sales
December 2011 Sales
January 2012 Sales
February 2012 Sales
March 2012 Sales
K11,500,000
K11,900,000
K15,000,000
K14,800,000
K16,000,000
Expenses
Expenses
Expenses
Expenses
Expenses
K1,010,000
K2,000,000
K2,500,000
K2,300,000
K2,300,000
The above figures are all VAT exclusive.

Required:
Calculate the tunover tax payable by Mrs Zimba and state the due dates for paying
the tax.
(5 marks)
(Total 20 marks)
95
QUESTION SIX
(a)
Chipolopolo Plc, is a registered Zambian company which listed its shares on the
Lusaka Stock Exchange on 1 April 2011.
Its capital composition is 1,000 000 shares with a nominal value of K15,000 each.
70% of these shares were issued to indigenous Zambians and the other 30% to non
Zambians.
During the tax year ended 31 March 2012, it estimated its taxable profit to be
K3,000,000,000 (K3 billion). Provisional tax was computed and paid on the due
dates.
The actual taxable profits for the tax year ended 31 March 2012 was instead
K3,800,000,000 (K3.8 billion).
Other incomes were:
Bank interest received (net)
Debenture interest received (net)
K200,000,000
K120,000,000
Chipolopolo Plc, also paid its shareholders a gross dividend of K1,000,000,000

(K1 billion).
Required:
(b)
(i)
State the date by which Chipolopolo Plc is supposed to submit the provisional
income tax return to Zambia Revenue Authority (ZRA) for the year 2011/12.
(1 mark)
(ii)
Calculate the withholding tax that Chipolopolo Plc is required to withhold on the
dividends paid to its shareholders.
(1 mark)
(iii)
Calculate the final company tax payable by Chipolopolo Plc for the tax year
2011/12.
(8 marks)
(iv)
State the due dates by which Chipolopolo Plc is supposed to submit the actual
return and the final payable account if any.
(2 marks)
Choma Commercial Farm Limited is growing bananas and coffee for the first time for
its local and export markets.
The expenditure incurred in the relevant charge years was as follows:
Bananas
K000
150,000
178,000
112,000
90,200
80,000
2007/08
2008/09
2009/10
2010/11
2011/12
Coffee
K000
160,000
180,000
120,000
110,000
100,000
Commercial production on bananas commenced in the charge year 2011/12 but

commercial production of coffee had not yet started.
96
Sales of bananas in charge year 2011/12 was K800 000 000.

Choma Commercial Farm Limited also acquired the following plant and machinery
during the tax year 2011/12.Choma Commercial Farm Limited is not registered for
VAT.
Plough
Furniture
Toyota Land Cruiser
K86,000,000 (VAT Inclusive)

K10,000,000
K12, 000,000 (used 60% on business and
40% on personal errands)
Choma Commercial Farm Limited did not incur any other expenditure in the charge
year 2011/12.
Required:
(i)
Calculate the maximum development allowance and capital allowances

claimable by Choma Commercial Farm Limited in the charge year 2011/12.
(6 marks)
(ii)
Compute the tax payable by Choma Farm Ltd. for the charge year 2011/12.
(2 marks)
(Total 20 marks)
97
T5: SUGGESTED SOLUTIONS

SOLUTION ONE
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
98
SOLUTION TWO
ZibaZako Limited
Tax adjusted Profit for the tax year 2011/12
Profit per accounts

Add back disallowables
Subscriptions:
Local trade protection
Political party
Depreciation:
Office equipment
Managing Directors car
Factory building
Entertainment:
Local suppliers
Foreign supplier
Bad Debts:
Increase in general provision
Loan to supplier written off
Unpaid stock supplied to trickster
Legal fees:
Breach of environmental regulations
Negotiating fee for acquiring title deeds
Court fine to secure release of drunken Managing
Director
Re-loan to employee
Negotiating successful tax appeal
Repair and Maintenance
Painting luminary sign over premises
Portable office partitioning
Less allowable deductions
Capital allowances
Office equipment: (K100m x 25%)
Managing Directors car: (K100m x 20%)
Factory building: (K375m x 5%)
Tax adjusted profit
99
K000
300 000
Marking
key
3 000
8 000
1
1
5 000
10 000
15 000
8 000
2 300
1
1
3 100
5,800
6 500
1
1
1
1,400
500
1 200
1
1
1
900
10 000
1
1
4 250
3 600
388 550
1
1
25 000
20 000
18 750
324 800
1
1
1
20
SOLUTION THREE
(a)
Mr Edward |Luapula
Pay as You Earn charge year 2011/12
K000
Employment Income
Salary
Allowances:
Fuel
Bonus
Leave pay
School/children allowance
Less deductions:
NAPSA
Chargeable Income
12 000 ooo x 0%
8 820 000 x 25%
29 580 000 x 30%
123 740 000 x 35%
120 000
12 000
12 000
20 000
12 000
176 000
1
1
1
1
1 860
174 140
205
874
309
388
(3 000)
(51,388)
-
1
1
25 000
10 000
50 000
85 000
(35 000)
50 000
5 000
2
8
43
54
Less Differently abled tax credit

Less PAYE
Marking
key
Tax on cessation of employment Income

Repatriation pay
Severance pay
Accrued service bonus
Total
Exempt amount
Taxable Income: 50 000 x 10%
The K500 000 000 refund from an approved Pension fund is
exempt from tax
$
6 000
300
2 000
Cost
Insurance
Freight
100
1
1
K000
(b)
Value for duty purposes:
Marking
key
Incidental Costs
1 000
9 300
VDP $9 300 x K5 000 =

15% Customs Duty
46
6
53
5
58
9
10% Excise Duty

VAT 16%
Total Import taxes
500
975
475
347
822
411
000
000
000
500
500
600
1
6 975 000
5 347 500
1
1
1
1
9 411 600
21 734 100
SOLUTION FOUR
(a)
(i)
Sale or return consignment means a situation where the goods have not been
supplied or sold because the suppliers still owns the goods until such a time
as the customer adopts them.
(1 Mark)
(ii)
The tax point for a sale or return consignment is

following times:
Date of Adoption
(iii)
Date of payment
Date of invoicing
2 marks
VAT Inspectors:
Power to enter the premises
1 mark
Inspect the documents
1 mark
Inspect the financial statements
1 mark
Take samples and inspect the computers and other machine, that are
employed in preparation of accounting records and financial statements.
1 mark
Issue an assessment where it is incorrect or incomplete to collect unpaid
tax or to refund the overpaid tax.
1 mark
__
Any three possible answers
3_
(iv)
the earliest of the
Benefits of Voluntary Registration
Mr Zambezi will be able to claim input VAT on expenses provided it is

recoverable
It will give an impression of substantial business since traders normally

register when turnover is high.
Mr Zambezis business will compete favourably with other businesses that

are registered.
101
(4b)
Allocation of Profits
Total
K000
Kabanda
K000
Chanda
K000
Chileshe
K000
Bule
K000
1 Oct 31 Dec 2009
106 248
35 416
()
35 416
()
35 416
()
()
1 Jan 2010 - 30 Sep
318 752
_79 688
()
_79 688
()
_79 688
()
79 688
()
425 000
115 104
1 Oct 30 June 2011
300 000
75 000
()
75 000
()
75 000
()
75 000
()
1 July 30 Sep 2011
100 000
33 333
()
_____-
()
33 333
()
33 333
()
400 000
108 333
175 000
58 333
Year ended 30 Sept 2010
115 104
115 104
79 688
Year ended 30 Sept 2011
Period to 31 Dec 2011
75 000
()
_____-
108 333
()
58 333
108 333
()
58 333
()
10 marks
SOLUTION FIVE
(a)
2010/11
0Property 1
K000
Property 2
K000
Income
Less expenses
Total
82 000
_105 000
(23 0000)
90 000
82 000
_8 000
Property 3
K000
78 000
68 000
10 000
(5 000)
Property income assessment (loss c/f K5 000 000)

2011/12
Income
Less expenses
Total
60 680
55 000
_5 680
350 000
__41 000
_309 000
Nil
63 000
71 000
(8 000)
306 680
Less Property loss b/f.
Property Assessable income
(5 000)
301 680
102
10 marks
(b)
Mr Lameck Zimba
Presumptive Tax March 2012
Minibus
Seating
Capacity
Tax per day
AZB 2001
21
AYA 9181
66
AGK 566
36
ALY 341
12
Total presumptive Tax
K6
K19
K13
K3
600
700
000
300
x
x
x
x
Amount
K000
31
31
31
31
Marking
Key
204 600
610 700
403 000
__102300
1 320600
1
1
1
1
_1
_5
MrsZimba
Turnover Tax
(c)
Turnover Tax
November
December
January
February
March
K11
K11
K15
K14
K16
500
900
000
800
000
000
000
000
000
000
x
x
x
x
x
3%
3%
3%
3%
3%
K345
K357
K450
K444
K480
000
000
000
000
000
Due Date
14 Dec
14 Jan
14 Feb
14 Mar
14 Apr
SOLUTION SIX
(a)
(i)
Chipolopolo Plc is supposed to submit it provisional return by 30 June 2011.

1 mark
(ii)
WHT withheld by ChipolopoloPlc on dividend payable to its shareholders is

K1 000 000 x 15% = K15 000 000.
1 mark
(iii)
Final Company Tax Payable Tax Year 2011/12

Taxable profit
Other income:
Gross bank interest (200m x 100/85)
Gross debenture interest (K120m x
100/85)
K000
3 800 000
235 294
141 176
4 176 470
Company Tax 35%

Less: Provisional Tax 35% x K36
WHT Bank interest
(235 294 200 000)
(1 050 000)
Debenture interest
(141 176 120 000)
Additional Tax payable
103
K000
1
1
1
1 461
764.5
1
1
(35 294)
(21 176) (1 106 470)

_______ 335 294 .5
1
1
2011
2011
2011
2011
2011
(iv)
The actual return must be submitted by 30 September 2012.
The additional tax payable should be paid by 30 September 2012.
1_
12
(b)(i) Development Allowance on bananas:

K000
2010/11
2009/10
2008/09
10% x
10% x
10% x
90 200
112 000
178 000
Year of production 10% x 80 000

Total allowable expenditure
K000
=
=
=
=
9
11
17
38
_8
46
020
200
800
020
000
020
Marking Key
1
1
1
1
Choma Commercial Farms Limited

Capital Allowances Tax Year 2011/12
Plough
K80 000 000 x 50% =
K000
40 000
Furniture
K10 000 000 x 25% =
2 500
Land Cruiser
K120 000 000 x 25% =
30 000
72 500
(ii)
Sales
Less allowable expenditure
Development allowance
Wear and tear allowances
800 000
(46 020)
(72 500)
681 480
96 222
Income Tax (15% x 641 480)
104
1
2

TECHNICIAN LEVEL
T6: MANAGEMENT
SERIES: PILOT PAPER
1.
to start writing.
2.
There are FIVE questions in this paper. You are required to attempt any FOUR.
questions carry equal marks.
3.
booklet.
4.
5.
6.
7.
105
ALL
QUESTION ONE
A few months ago, Mama Agness Fwenkula, won herself five million kwacha on the More
money in your pocket game show aired on Muvi Television to enable the winners start
businesses. She has been hiring and firing people, almost on weekly basis and changing
how things are done by the same frequency. Upon visiting her at her new venture, you
discover that actually she had no previous experience as a manager and does not seem to
understand what her role is exactly.
Explain to Mama Fwenkula;
(a)
five (5) roles performed by a manager.
(10 marks)
(b)
The factors that may cause resistance to change among employees.
(15 marks)
(Total: 25 Marks)
QUESTION TWO
Here is an extract of a Press Statement issued by Mopani Plc. in the Zambia Daily Mail of
Saturday, 11th February, 2012, titled: Multi-Stakeholder Committee formed to Facilitate
Dialogue over Mufulira West Mining Heap Leach Project:
Following a positive consultative meeting held at Bufuke Hall in Mufurila on Thursday,
9th February, 2012, a committee comprising members of various organizations and the
community from Butondo Township has been formed to facilitate dialogue about the
operations of Mufurila West Mining and Heap Leach Project.
(a)
Explain what is meant by the term stakeholders.
(5 marks)
(b)
Identify the various possible stakeholders for the and explain their possible roles.
(8 marks)
(c)
Discuss the term rganisational Culture, state its features/dimensions and

importance to the organization.
(12 marks)
(Total: 25 Marks)
106
QUESTION THREE
(a)
Explain the meaning of the terms: Job rotation, Job enrichment and Job enlargement
()
(b)
Discuss the effects of Job rotation, Job enrichment and Job enlargement on employee
motivation.
(c)
(i)
(ii)
()
Define Partnership as a form of business organization.
()
Explain four advantages and four disadvantages of Partnerships.
(Total: 25 Marks)
QUESTION FOUR
(a)
Abraham Maslows hierarchy of needs theory is one of the most commonly known
motivation theory. List and explain the five levels of needs and briefly state the two
main principles of growth according to the theory.
(b)
()
(i)
Explain the terms Coaching and Mentoring
(ii)
Discuss how a manager would use coaching and mentoring to develop capacities
of new employees in an organization.
()
(Total: 25 Marks)
QUESTION FIVE
(a)
Define the term Recruitment and explain the standard recruitment process.
()
(b)
(i)
Define the term Ethics and discuss the four ethical dimensions to managerial
decisions and actions
()
(ii)
Using an example, explain how a public sector organization, can apply ethics to
its operations.
()
(Total: 25 Marks)
107
T6: MANAGEMENT
SUGGESTED SOLUTIONS
SOLUTION ONE
(a)
Dr. Mintzberg delineated ten managerial roles in three categories:

(i)
Interpersonal roles grow directly out of the authority of a managers

position and involve developing and maintaining positive relationships with
others.
1)
The figurehead performs symbolic legal or social duties.
2)
The Leader builds relationships with employees and communicates with,

motivates, and coaches them.
3)
The liaison maintains a network of contacts outside the work unit to

obtain information.
(ii)
Informational roles pertain to receiving and transmitting information so

that managers can serve as the nerve centers of their organizational units.
1)
The monitor seeks internal and external information about issues that
can affect the organization.
2)
The disseminator transmits information internally that is obtained

from either internal or external sources.
3)
The spokesperson transmits information about the organization to

others.
(iii)
Decisional roles involve making significant decisions that affect the

organization.
1)
The entrepreneur acts as an initiator, designer, and encourager of

change and innovation.
2)
The disturbance handler takes corrective action when the

organization faces important, unexpected difficulties.
3)
The resource allocator distributes resources of all types, including

time, funding, equipment, and human resources.
4)
The negotiator represents the organization in major negotiations

affecting the managers areas of responsibility
(5 x 2 Marks each= 10 Marks)
108
(a)
People must be motivated to change. But often they resist change. Many people
settle for mediocrity rather than aspire to be of world class status. To successfully
implement positive change, it is important to understand why people often resist
change.
General reasons for people resistance: Several reasons for resistance to change
arise regardless of the actual content of the change:
(i)
Timing. People often resist change because of poor timing. If managers

and employees are usually or under stress, or if relations between
management and employees are strained the timing is wrong for introducing
new proposals. Where possible introduce change when people are receptive.
(ii)
Inertia. Usually people do not want to disturb the status quo. The old ways
of doing things are comfortable and easy, so people do not want to shake
things up and try something new.
(iii)
Surprise. One key aspect of timing and receptivity is surprise. If the change
is sudden, unexpected or extreme, resistance may be the initial almost
reflective reaction.
(iv)
Peer Pressure. Sometimes work teams resist new ideas. Even if individual
members do not strongly oppose a change suggested by management, the
team may band together in opposition. If a group is highly cohesive and has
anti-management norms, peer pressure will cause the individuals to resist
even reasonable changes.
Specific reasons for resistance Change

Other causes of resistance arise from the specific nature of a proposed change.
Specific reasons for resistance to change stem from what people perceive as the
personal consequences of the change.
(a)
Self interest. Most people care less about the organisations best interest than
they do about their own best interests. They will resist change if they think it
will cause them to lose something of value.
(b)
Misunderstanding. Even when management proposes a change that will

benefit everyone, people may resist because they do not fully understand its
purpose.
(c)
Different assessments. Employees receive different and usually less

information than what management receive. Even within the top management
ranks, some executives know more than others. Such discrepancies cause
people to develop different assessments of proposed changes. Some may be
aware that the benefits far outweigh the costs, while others may see only the
costs and not perceive the advantages.
Resistance to change is a coping strategy adopted by individuals and
organisations to change that was not anticipated. Resistance to change is a
common place at both organisational and individual levels. Resistance to change
takes various forms and most times difficult to pinpoint the reasons for it. Some
of the common reasons for individual resistance to change include the following:
109
i)
Selective perception.This is a biased view of change and is subject to

an individual person's interpretation of change.
ii)
Habit.People respond to situations in an established and accustomed

manner. Habits may serve as a means of comfort and security and as a
guide for easy decision-making. Changing to strong habits, will be
resisted.
iii)
Inconvenience or loss of Freedom. Should change be perceived to

have a potential effect of making life more difficult, reduce freedom of
action or result in increased control, there will be resistance to change.
iv)
Economic implications. When change is perceived to lead to a

reduction either directly or indirectly in their pay or other benefits,
employees are likely to resist change.
v)
Security in the past. Many people find a sense of security in the past
and when they face difficulties or unfamiliar situations people always look
back into the past. Many times people want to retain their old and
comfortable ways. Any change which threatens to disturb the old order
tends to be resisted.
vi)
Fear of the unknown. When people fear the proposed change for they
do not know the possible implications at a personal level. Many changes
to work organisation present a degree of uncertainty for instance, change
in structure or technology or method of working raises a lot of unanswered questions.
(5x 3 Marks= 15 marks)
(Total = 25 Marks)
110
SOLUTION TWO
(a) Definition: Organisational stakeholders may be defined as individuals or groups of
people who have an interest in and/or are affected by the goals, operations or
activities of the organisation or the behaviour of its members.
i.
Customers
Customers are the reasons for the existence of an organisation. They bring
money to the business, provide new product ideas and they are marketing
agents for the organisation. The success of the organisation depends on
customer patronage. The customers or consumers or clients have certain
expectations of the organisation, such as good value for money, safety and
durability of goods and services, after sale service, respect and recognition, longterm satisfaction such as convenience, serviceability consistence of supply and
full and unambiguous information.
ii.
Suppliers
Suppliers of production inputs to the organisation are major sources of
competitive advantage. The suppliers want money from the organisation for
various supplies they make. The quality of the goods and services are affected by
the quality of inputs from the suppliers. The organisation should develop suitable
social responsibility programmes to maintain a productive working relationship.
Suppliers may provide quantity or cash discounts to the organization.
iii. Government
Government is a major buyer of various goods and services. In addition, the
government enacts laws and makes regulations that should be respected and
obeyed even if it is not in the interest of the company. The regulations and
measures to control inflation such as ceilings on wage claims, control on the
sale of tobacco and display of health warnings are among the regulations
government may set. Compliance with tax laws and other legislations that affect
the organisation is important for a good corporate citizen. The government
collect tax revenues for the implementation of its various programmes.
iv. Financiers
In any business, there are shareholders, providers of investment capital such as
insurance companies, Pension funds, Building Societies, Commercial and
Investment banks who may invest their funds into an organisation and expect a
reasonable return on their invested funds. In some cases people buy shares at
a stock exchange like the Lusaka Stock Exchange and expect a dividend at the
end of a period. These financiers have an interest in the company and expect it
to be responsibly managed in the most transparent and most accountable
manner to ensure that their investment is safeguarded and earns some return
for the risk and use of their capital. These financiers expect management to
provide them with full and complete information and shareholders question top
management on policy decisions.
v.
Community Publics
The customers of the organisation are part of the community and contribute to
111
the growth of the organisation. A good corporate citizen is more pronounced in

the company's support for local community projects and its concern for the
environment. The initiative by Mopani bring together community organisation
such as the Citizens for Better Environment (CBE), local church groups, women
organisations and the Zambia Environmental Management Agency (ZEMA) to
such initiatives to promote environmental awareness and safeguard health in
Zambia. These are some of the examples of how organisations show
appreciation of community support to the business. An organisation may have
negative corporate image if it did not undertake such activities.
The communities have expectations of good corporate citizens to be good to the
community publics in areas they operate in. The environmentally friendly policies
of organizations are other expectations of the community such as promoting the
Keep Zambia Clean Campaign, avoidance of using excessive packaging and more
use of biodegradable materials. The continued existence of the organization is of
public interest in nature as it provides employment to society.
(15 Marks)
(b)
Define organizational culture.

Just as individuals have a personality, so, too, do organizations. We refer to an
organizations personality as its culture.Organizational culture is a system of
shared meaning and beliefs within an organization that determines, in large degree,
how employees act. This definition implies several things:
1.
Culture is a perception that exists in the organization, not in the individual.
2.
Organizational culture is a descriptive term. It describes rather than evaluates.
3.
Seven dimensions of an organizations culture have been proposed:

a.
Innovation and risk taking (the degree to which employees are

encouraged to be innovative and take risks)
b.
Attention to detail (the degree to which employees are expected to

exhibit precision, analysis, and attention to detail)
c.
Outcome orientation (the degree to which managers focus on results or

outcomes rather than on the techniques and processes used to achieve
those outcomes)
d.
People orientation (the degree to which management decisions take

into consideration the effect on people within the organization)
e.
Team orientation (the degree to which work activities are organized

around teams rather than individuals)
f.
Aggressiveness (the degree to which people are aggressive and

competitive rather than easygoing and cooperative)
112
g.
Stability (the degree to which organizational activities emphasize

maintaining the status quo in contrast to growth)
Employees learn an organizations culture in different ways:

1. Organizational stories are one way that employees learn the culture.
These stories typically involve a narrative of significant events or people.
2. Rituals are repetitive sequences of activities that express and reinforce
the key values of the organization, what goals are most important, which
people are important.
(10 Marks)
(Total= 25 Marks)
SOLUTION THREE:
(a)
Distinguish between Job rotation, Job enrichment and Job enlargement and how they
motivate employees
i.
Job rotation is the practice of periodically shifting workers through a set of jobs
in a planned sequence.
a. One purpose of job rotation is to combat boredom, but its success is shortlived if tasks are too simple.
b. Another purpose of job rotation is cross training so that there is maximum
flexibility in job assignments.
c. A related purpose is employee development so that employees increase their
capabilities and understanding of various aspects of the organization.
d. A potential problem is that rotating individuals may be treated as temporary
helps and their loyalty perceived as questionable.
ii.
Job enlargement is the allocation of a wider variety of similar tasks to a job in

order to make it more challenging.
a. Job enlargement broadens job scope, the number of different tasks an
employee performs in a particular job.
b. The problem is that if additional simple tasks are added, worker boredom may
persist. Too, lower efficiency, mental overload, increased errors, and other
problems may develop.
113
iii. Job enrichment, pioneered by Frederick Hertzberg, is the process of upgrading

the job-task mix in order to increase significantly the potential for growth,
achievement, responsibility, and recognition.
a.
Job enrichment increases Job depth, the degree to which individuals can
plan and control the work involved in their jobs.
b.
The important job characteristics model is a model developed to guide

job enrichment efforts that include consideration of core job
characteristics, critical psychological states, and outcomes.
The job characteristics model has five core job characteristics.

1)
Skill variety is the extent to which the job requires a number of activities
that require different skills.
2)
Task identity is the degree to which the job allows the completion of a
major identifiable piece of work, rather than just a fragment.
3)
Task significance is the extent to which the worker sees the job output
as having an important impact on others.
4)
Autonomy is the amount of discretion allowed in determining schedules

and work methods for achieving the required output.
5)
Feedback is the degree to which the job provides clear, timely

information about performance results.
According to the job characteristics model, the core characteristics will increase
worker motivation only if workers experience three critical psychological states:
1) Workers must feel that the work is meaningful.
2) Workers must know they are responsible for the outcomes.
3) Workers must actually find out results.
According to the job characteristics model, outcomes of the critical states will be
higher internal work motivation, greater satisfaction of growth needs, higher general
job satisfaction, and increased work effectiveness.
The job characteristics model is likely to be used successfully under two conditions:
1) Workers have high growth-need strength, the degree to which an
individual needs personal growth and development on the job.
2) Workers are satisfied with other aspects of the job context, i.e. supervision,
pay, coworkers, and job security.
(5 each x3= 15 Marks)
114
(b)
Define a Partnership and explain and explain four (4) advantages and four
(4) disadvantages of a Partnership
Definition: Partnerships may be established for purposes of pooling of skills,

experiences, knowledge, contacts, finances, assets or a combination of any two
or more factors. At individual levels, people may realize that they did not have
adequate skills, knowledge or finance to run a business on their own, but as a
team, they could achieve more.
Advantages of Partnerships
vi.
A Partnership is easy to set up, as it does not involve long costly

procedures.
vii.
Division of labour is possible, as there are many people involved with

various skills and experiences.
viii.
More people are involved in the business so more capital can be raised.
ix.
Expenses and management of the business are shared.
x.
The individuality of each partner is not totally lost, as partners maintain

many of the personal advantages of the sole proprietorship.
xi.
There is greater continuity in a partnership than in sole proprietorship.

In case of death or resignation, the remaining partners can form a new
partnership.
xii.
Decision-making is consultative leading to improved quality of decisions.
xiii.
A partnership is not required to publish its accounts annually so there is

secrecy.
Disadvantages of Partnerships
i.
Decisions may be delayed by disagreements among partners.
ii.
Partners have unlimited liability and are therefore personally liable for
the debts of the partnership. Personal assets are at risk.
iii.
Lack of capital may limit expansion as it depends on partners for raising

capital.
iv.
When one partner dies or leaves, a new partnership is required, which

may be awkward to the remaining members.
v.
Membership in a partnership is limited to twenty except for professional

partnerships. This restricts the ability of the partnership to raise capital.
vi.
One partners decision can be binding on all the other partners even if it
is a wrong decision. This makes the partnership a risky affair.
115
vii.
A partnership is a delicate business and can break at any time. This is

particularly the case in many auditing and legal firms/partnerships.
(5 each x2= 10 Marks)
(Total= 25 Marks)
SOLUTION FOUR:
(a)
Maslows Need Theory

According to Abraham Maslows hierarchy of needs theory, one of the most
widely known theories of motivation, individual needs form a five-level hierarchy.
1.
Maslows hierarchy of needs from the most basic to the highest.

a.
Physiological needs are basic and include needs for food, water, and
shelter.
b.
Safety needs pertain to the desire to be safe, secure and free from
threats to our existence.
c.
Belongingness needs involve the desire to affiliate with and be

accepted by others.
d.
Esteem needs are related to the two-pronged desire to have a positive

self-image and to have our contributions valued and appreciated by
others.
e.
Self-actualization needs pertain to the requirement of developing our

capabilities and reaching our full potential.
2.
Needs at one level do not have to be completely fulfilled before the next level
becomes relevant.
3.
As needs on one level are fulfilled, they cease to act as motivators and tension
develops to fulfill needs at the next level.
4.
Recent studies have raised questions as to whether the hierarchical aspect of

Maslows theory is applicable to everyone and whether there might be fewer
than five levels of needs.
Analysis and Weakness of Theory

1.
Five levels of need are not always present.
2.
Order of needs and hierarchy may not be the same for all employees.
3.
There are certainly cultural differences which the theory did not take care.
4.
Analyzing the theory in country and cultural context, for example in China, the
hierarchy of needs found was different from Maslows theory.
(10 marks)
116
(b)
Training and Developing using Coaching and/ or mentoring

Coaching
Coaching is one of the new methods used in management development along with
mentoring. Coaching is ensuring that the new member of staff is being helped to
develop and grow in the organisation. The person who coaches employees may be
referred to being a mentor. Mentoringand coaching are increasing trends towards
helping the individual take charge of his/her learning.
The primary driver of the
acquisition of knowledge and skills becomes the employer, the coach or mentor
available to give guidance, insight and encouragement in the learning process.
Coaching teaches us to monitor our progress and change direction when necessary.
As we reach milestone on the way, we need to celebrate our successes. Coaching is
action oriented, continuous and deliberate.
Definition
Coaching is a process that uses deductive or drawing-out techniques to increase an

individuals ability and willingness in a specific subject or problem area.
The
technique is used in a structured manner. The coach does not need to be an expert
in the subject
Characteristic of Coaching
a.
Uses deductive techniques (drawing of conclusions from the point of view of

coaches).
c)
b.
The coach does not have to be expert in the subject matter
c.
The prime beneficiary is the individual but the organisation also benefits;
d.
A coaching session is measured in minutes
e.
Can be an off the cuff session
f.
Usually informal but can be formal,but respect for the coach is usual; and
g.
Rapport between the coach and the new employee is essential.
Mentoring
Mentoringrequire a number of skills, which include the role of the coach. A
mentor plays the role of a counsellor, net worker, facilitator and a coach.
Definition
Mentoring is a process that uses a mixture of inductive (pushing it in or

telling) and deductive drawing out or coaching) techniques to increase an
individuals ability or willingness in specific subject. A structured programme
is usually used. The mentor should be an expert in the subject matter.
117
Characteristics of Mentoring
a.
Uses a mixture of deductive and inductive techniques
b.
The mentor must be an expert in the subject
c.
The prime beneficiary is the organisation but the individual benefits as

well;
d.
A mentoring programme is measured in months- may be formal or

informal.
e.
The mentor must be available almost on demand but at least on regular

basis
f.
Respect for the mentors knowledge of the subject is essential; and
g.
Rapport between mentor and new employee is essential.

(15 Marks)
Total= 25 Marks)
SOLUTION FIVE
(a)
The Recruitment Process

Recruitment is defined as a process of locating, identifying and attracting capable
applications for jobs in the organisation. The sources of recruitment include internal
staff where an internal search is carried out for suitable candidates for resourcing the
organisation. Attracting external candidates could be through the use of media
advertising, employee referrals, public and private employment agencies, school
placements and/or temporary help services.
Summary of the Recruitment Process:
Step 1: Prepare
Conduct job analysis to identify the need for recruitment and the skills
requirements for the specific job
Create a job description outlining competences, the role expectation and skills
requirements for the specific job
Choose a selection criteria
Step 2: Review
Draft interview questions
Review questions for legality and fairness
Step 3: Organise
Select the interview team and the method of interviewing
Assign roles to your team and divide the questions
Step 4: Conduct the interview

118
Gather data from the job candidate
Step 5: Evaluate
Determine the match between the candidate and the job
Shortlist promising candidates
Step 6: Decide
Make the final decision

(10 marks)
(b)
(i) MANAGERIAL ETHICS.

Ethics refers to the rules and principles that define right and wrong
conduct. There are ethical dimensions to managerial decisions and actions.
Four Views of Ethics.
1.
The utilitarian view of ethics states that ethical decisions are made
solely on the basis of their outcomes or consequences.
2.
The rights view of ethics says that ethical decisions are concerned
with respecting and protecting individual liberties and privileges such as
the rights of privacy, freedom of conscience, free speech, life and
safety, and due process.
3.
The theory of justice view of ethics states that decision makers

seek to impose and enforce rules fairly and impartially.
4.
Finally, the integrative social contracts theory proposes that ethical

decisions should be based on empirical (what is) and normative (what
should be) factors. This view is based on the integration of two
contractsthe general social contract and a more specific contract
among members of a specific community that might be affected by a
decision.
(ii)
Toward Improving Ethical Behaviour

What can be done to improve ethical behaviour? There are a number of
things organizations can do to cultivate ethical behaviour among members.
Eight suggestions can be explored:
1.
The selection process for bringing new employees into organizations

should be viewed as an opportunity to learn about an individuals level
of moral development, personal values, ego strength, and locus of
control.
2.
A code of ethics is a formal statement of an organizations primary

values and the ethical rules it expects employees to follow. Also,
119
decision rules can be developed to guide managers in handling ethical

dilemmas in decision making. Top managements leadership and
commitment to ethical behavior is extremely important because its
the top managers who set the cultural tone.
4.
Employees job goals should be tangible and realistic, because when

goals are clear and realistic, they reduce ambiguity and motivate
rather than punish. Job goals are usually a key issue in performance
appraisal.
5.
If an organization wants it employees to uphold high ethical

standards, it must include this dimension in its appraisal process.
Performance appraisals should be comprehensive and not just focus
on economic outcomes.
6.
Ethics training should be used to help teach ethical problem solving

and to present simulations of ethical situations that might arise. If it
does nothing else, ethics training should increase awareness of ethical
issues
7.
Independent social audits evaluate decisions and management

practices in terms of the organizations code of ethics and can be used
to deter unethical behavior.
8.
Finally, organizations can provide formal protective mechanisms so

that employees with ethical dilemmas can do something about them
without fear of reprisal.
(15 Marks)
Total= 25 Marks)
120

TECHNICIAN LEVEL
T7: INFORMATION TECHNOLOGY AND COMMUNICATION
SERIES: PILOT PAPER
1.
to start writing.
2.

Section A:
Section B:
Attempt any THREE Information Technology questions.

Attempt any TWO Communication Skills questions.
3.
booklet.
4.
5.
6.
7.
8.
121
SECTION A: INFORMATION TECHNOLOGY

Attempt any three questions from this section.
QUESTION ONE
(a)
Businesses tend to have several "information systems" operating at the same time.
Discuss the following main categories of information systems and provide examples.
(i)
(ii)
(iii)
(iv)
(b)
Executive Support System ("ESS")

Decision support system ("DSS")
Knowledge Management Systems ("KMS")
Transaction Processing Systems ("TPS")
(4
(4
(4
(4
List four (4) qualities of good information in an organisation
marks)
marks)
marks)
marks)
(4 marks)
[Total marks 20]

QUESTION TWO
(a)
Briefly explain three (3) malware security threats that a computer user should be on
guard against that might challenge the organisation.
(15 marks)
(b)
State the three practices to combat these malware threats
(5 marks)
[Total marks 20]
QUESTION THREE
Distinguish between the following:
(i)
Virtual memory and cache memory.
(5 marks)
(ii)
Distributed Database and Centralized Database
(5 marks)
(iii)
Multiprogramming and multitasking systems.
(5 marks)
(iv)
Primary memory and secondary memory.
(5 marks)
[Total marks 20]
QUESTION FOUR
(a)
Describe the facilities available in an email application.
(5 marks)
(b)
Briefly describe the purpose and two facilities of the following software applications:
(i)
Payroll
(5 marks)
(ii)
Stock control
(5 marks)
(iii)
Spread sheet
(5 marks)
[Total marks 20]
122
SECTION B: COMMUN ICATION SKILLS

Answer any TWO question from this section
QUESTION FIVE
Listening, speaking and writing skills are critical in meetings being conducted in
organisations. These skills are exhibited by the Chairperson, Secretary and meeting
attendants.
Required:
(a)
(b)
(i)
State five (5) attributes of a good listener.
(5 marks)
(ii)
State two (2) duties of a Secretary before the meeting.
(2 marks)
(iii)
State two (2) duties of a Chairperson during the meeting.
(2 marks)
(iv)
State one duty of a meeting attendant after the meeting.
(1 mark)
Your organization intends to hold a meeting next week. Issues to be discussed are
punctuality, attitude towards work and knocking off early from work.
This
information has already been communicated to all members of staff.
Required:
As Head of Department, write a reminder on the intended meeting as earlier
planned.
(10 marks)
Total marks: 20
QUESTION SIX.
The Managing Director of the organization that you work for has expressed disappointment
on the poor performance of the organization through a memorandum that was circulated to
all staff. You have been requested to investigate the causes of poor performance in the
company and submit a report.
Required:
Write a schematic report to your Managing Director on the causes of poor performance of
the company.
Total marks: 20
123
QUESTION SEVEN
The government of the republic of Nzeru in 2011 declared that colleges should enroll one
thousand accountancy students at various levels by 2012. The directive was well received
by various stakeholders. By 2012 the enrolment was as follows:
Level
Number of students
Technician
300
Licentiate
350
Professional
250
Specialised areas
100
Required:
(a)
(b)
(i)
Calculate the percentage of enrolment for each level
(ii)
Draw a pie-chart depicting the enrollment figures.
(4 marks)
(iii)
Give the key or legend for the chart.
(2 marks)
Give five advantages of using a Pie-chart.
(4 marks)
(10 marks)
Total marks: 20
124
SUGESTED SOLUTIONS
SECTION A: INFORMATION TECHNOLOGY
SOLUTION ONE
(a)(i)
An Executive Support System ("ESS") is designed to help senior management

make strategic decisions. It gathers analyses and summarises the key internal and
external information used in the business. ESS typically involves lots of data
analysis and modelling tools such as "what-if" analysis to help strategic decisionmaking.
An example of an ESS is to imagine the senior management team in an aircraft
cockpit - with the instrument panel showing them the status of all the key
business activities.
(4 marks)
(ii)
Decision-Support Systems ("DSS") are specifically designed to help management

make decisions in situations where there is uncertainty about the possible
outcomes of those decisions. DSS comprise tools and techniques to help gather
relevant information and analyse the options and alternatives. DSS often
involves use of complex spreadsheet and databases to create "what-if" models.
(4 marks)
(iii)
Knowledge Management Systems ("KMS") exist to help businesses create and

share information. These are typically used in a business where employees
create new knowledge and expertise - which can then be shared by other people
in the organisation to create further commercial opportunities. Good examples
include firms of lawyers, accountants and management consultants. KMS are
built around systems which allow efficient categorisation and distribution of
knowledge
(4 marks)
(iv)
Transaction Processing Systems

As the name implies, Transaction Processing Systems ("TPS") are designed to
process routine transactions efficiently and accurately. A business will have
several (sometimes many) TPS; for example:
- Billing systems to send invoices to customers
- Systems to calculate the weekly and monthly payroll and tax payments
- Stock control systems to process all movements into, within and out of the
business
(4 marks)
(b)
Characteristics of good quality information.

- Information should be relevant
- Information should be up-to-date
- Information should meet the need of the organisation or user
- Information should be accurate
- Information should be worth cost
- Information should be reliable
(4 marks)
[Total marks 20]
125
SOLUTION TWO
(a)
- Viruses
A computer virus is a type of malware that propagates by inserting a copy of itself into and
becoming part of another program. It spreads from one computer to another, leaving
infections as it travels. Viruses can range in severity from causing mildly annoying effects to
damaging data or software and causing denial-of-service (DoS) conditions. Almost all viruses
are attached to an executable file, which means the virus may exist on a system but will not
be active or able to spread until a user runs or opens the malicious host file or program.
When the host code is executed, the viral code is executed as well. Viruses spread when the
software or document they are attached to is transferred from one computer to another
using the network, a disk, file sharing, or infected e-mail attachments.
(5 marks)
-
Worms
Computer worms are similar to viruses in that they replicate functional copies of themselves
and can cause the same type of damage. In contrast to viruses, which require the spreading
of an infected host file, worms are standalone software and do not require a host program
or human help to propagate. To spread, worms either exploit vulnerability on the target
system or use some kind of social engineering to trick users into executing them. A worm
enters a computer through vulnerability in the system and takes advantage of file-transport
or information-transport features on the system, allowing it to travel unaided.
(5 marks)
-
Trojans
Trojan is a harmful piece of software that looks legitimate. Users are typically tricked into
loading and executing it on their systems. After it is activated, it can achieve any number of
attacks on the host, from irritating the user (popping up windows or changing desktops) to
damaging the host (deleting files, stealing data, or activating and spreading other malware,
such as viruses). Trojans are also known to create back doors to give malicious users access
to the system.
Unlike viruses and worms, Trojans do not reproduce by infecting other files nor do they selfreplicate. Trojans must spread through user interaction such as opening an e-mail
attachment or downloading and running a file from the Internet.
(5 marks)
(b)
Best Practices for Combating malwares

The first steps to protecting your computer are to ensure that your OS is up to
date. This means regularly applying the most recent patches and fixes
recommended by the OS vendor.
Secondly, you should have antivirus software installed on your system and
download updates frequently to ensure that your software has the latest fixes for
new viruses, worms, Trojans, and bots.
Additionally, you want to make sure that your antivirus program can scan e-mail
and files as they are downloaded from the Internet. This will help prevent
malicious programs from reaching your computer.
You may also want to consider installing firewalls.
(5 marks)
[Total marks 20]
126
SOLUTION THREE
(i)
Virtual memory and main memory.

Virtual (or logical) memory is a concept that, when implemented by a computer
and its operating system, allows programmers to use a very large range of
memory or storage addresses for stored data. The computing system maps the
programmer's virtual addresses to real hardware storage addresses. Usually,
the programmer is freed from having to be concerned about the availability of
data storage.
CacheRAM is very high-speed RAM chips which sit between the CPU and main
memory. It stores (i.e., caches) memory accesses by the CPU. Cache RAM
helps to alleviate the gap between the speed of a CPU's megahertz rating and
the ability of RAM to respond and deliver data. It reduces the frequency that
the CPU must wait for data from the main memory.
(5 marks)
(ii)
Distributed Database and Centralized Database

-
(iii)
Centralized database keeps its data in storage devices that are in a single
location connected to a single CPU, a distributed database system keeps its
data in storage devices that are possibly located in different geographical
locations and managed using a central DBMS.
A centralized database is easier to maintain and keep updated since all the
data are stored in a single location.
Furthermore, it is easier to maintain data integrity and avoid the
requirement for data duplication. But, all the requests coming to access data
are processed by a single entity such as a single mainframe, and therefore it
could easily become a bottleneck.
But with distributed databases, this bottleneck can be avoided since the
databases are parallelized making the load balanced between several
servers.
Keeping the data up to date in distributed database system requires
additional work, therefore increases the cost of maintenance and complexity
and also requires additional software for this purpose.
designing databases for a distributed database is more complex than the
same for a centralized database
(5 marks)
Multiprogramming and multitasking systems.

-
Multiprogramming is a method of running several different programs in a

computer apparently at the same time.
Usually on a mainframe - the computer has a number of programs loaded
into memory and the operating system switches quickly between them,
processing a little bit of each one in turn.
The high speed of the processor makes it seem like more than one program
is being run at the same time.
-multitasking is the process which occur when more than one task (job) are
executed by CPU at a time.
Multitasking should not be confused with multiple program where by in
multiprogramming more than one program(task) is in the main memory but
each one is executed by the CPU at a different time. It is impossible for the
CPU to run more than one program at the same time
(5 marks)
127
(iv)
Primary memory and secondary memory.

Primary memory is the memory that is directly accessed by the CPU to store
and retrieve information, whereas the secondary memory is not accessible
directly by the CPU.
Primary memory is accessed using address and data buses by the CPU,
while secondary memory is accessed using input/ output channels.
Primary memory does not retain data when the power is turned off (volatile)
while secondary memory retains data when the power is turned off (nonvolatile).
Furthermore, primary memory is very fast compared to the secondary
memory and has a lower access time.
Primary memory devices are more costly compared to secondary memory
devices.
Computers comprise of a smaller primary memory and a much larger
secondary memory.
(5 marks)
SOLUTION FOUR
(a)
Describe the facilities available in an email application.

All email systems have the ability to send, receive and discard mail.
Most systems have facilities for storing mail which is to be kept rather than
discarded.
lt is important to discard mail which does not need to be kept, as it uses
storage space on disks.
Mailboxes can soon accumulate a large number of mail messages making it
difficult to read and process new mail, in addition to wasting disk space.
There is almost always a connection between the email system and the
computer's standard file system which allows mail to be read from files or
written to files.
Most systems have a reply facility, although some of these do not always work
as expected. Care should be taken when using this facility in electronic mail, as
replies do not always go back to the sender.
It also allows sending of stand alone files as attachments
(5 marks)
(b)
Briefly describe the purpose and two facilities of the following software applications:
(i)
Payroll
To provide an accurate and timely process for authorizing and compensating
employees for time worked, and for unworked accrued benefit time in
accordance with all Federal and State Wage and Hour laws.
Facilities
-
The payroll accounting management software gives facilities to create

companies and set their departments.
It fills all the data related to an employee only once and the use them in
many calculation automatically.
The Payroll accounting management software handles all kinds of
transaction details of each employee.
(5 marks)
128
(ii)
-
Stock control
Maintaining inventory data on the quantity, location, and condition of supplies
and equipment due-in, on-hand, and due-out, to determine quantities of
material and equipment available and/or required for issue and to facilitate
distribution and management of materiel.
Facilities
Inventory Labels with barcodes support
Support for purchase order approval process
Vendor and customer payments tracking
(iv)
(5 marks)
Spread sheet
The manipulation of figures and functional relations and their conversion
respectively, represented in charts is the main objective behind the purpose
of spread sheets, i.e. organizing information into machine readable columns
and rows.
Facilities
- One of Excel's most useful features is that it allows users to create custom
formulas to perform calculations on their data.
- Excel also contains built-in formulas called functions that make it easy to
perform common calculations on data. .
- Spread sheets enable the analysis of data using different types of charts.
(5 marks)
SECTION B: COMMUNICATION SKILLS
SOLUTION FIVE
(a)
The following are the attributes of a Good Listener:

(i)
(ii)
Opportunities: asks what is in it for me
Judges content skips over delivery errors
Doesnt judge until comprehension is complete
Listens for central themes
Takes notes
Attentive
Allows speaker to conclude
Goes for nonverbal messages
Asks for clarification
Looks for triger words
Duties of Secretary before the meeting

-
Prepare a notice/memo for the meeting

Distribute/put memo on notice board
129
(iii)
Prepare the venue
Prepare agenda
Look for the venue
Two (2) duties of a Chairperson

-
Conduct the meeting
Appoint speakers
Adjourn the meeting
Postpone the meeting
Cancel meeting
Cancel the meeting
Close the meeting
Welcome members
Discipline members
(iv)
(b)
Start the meeting
The duty of a meeting attendant

-
Contribute/speak
Vote if necessary
Can give vote of thanks
Can pray/start national anthem.
MEMORANDUM:
TO:
All Artists
FROM:
Head of Department Costume and Props
DATE:
15th April 2012
SUBJECT:
Achieving Competitive advantage
It has been observed that our company has come under serious competition which
has resulted in low performance. Other organisations have been preferred by our
clients leaving us with limited jobs. To come up with profitable solutions, you are
being reminded that the meeting for brainstorming as planned will be on Friday 28th
April 2011. Items on discussion are as follows:
-
Punctuality
Good attitude towards work
Time to nock off.

Let us all attend the meeting to uplift our organization.
130
SOLUTION SIX
MUTENDELE COMPANY PLC
1.0
POOR PERFORMANCE IN THE COMPANY
2.0
TERM OF REFERENCE
Reference is made to a memorandum on the above subject of 21st July 2011, in
which you requested for an investigation on the poor performance by staff at
different levels. The report was to be submitted in three (3) weeks time.
3.0
PROCEDURE
3.1
3.2
4.0
I interviewed heads of departments, section supervisors and Trade Union

leaders, to find out the root cause of poor performance in the organization by
staff at various levels in the company.
I also used questionnaires and respondants (staff) were not allowed to write
their names. This helped to obtain move information on whether poor
performance in the company was wide spread among staff at all levels.
FINDINGS
The results of the interviews I had with heads of departments, supervisors and
unionized staff including the outcome of the questionnaire were generally the same.
They (results) were as follows:
4.1
4.2
4.3
4.4
5.0
Workers were dissatisfied with the lack of yearly salary increment since the
imposition of salary freeze five (5) years ago.
There was luck of individual advancement (promotion) in the company, like
some heads of department & supervisors have been in their present positions
for over five (5) years. Since the impositions of the salary freeze.
There has been lack of training for staff at different levels, and this has
caused great worry to workers, since technology is changing faster.
Employees have remained doing their jobs with old methods, which is not
good for the company.
The Unionized employees complained bitterly particularly for the lack of
housing loans in the organization to enable them construct their own homes.
CONCLUSION
The poor performance by staff at all levels came about of because of the failure by
the organization to motivate staff. The company should re-address workers concerns
by awarding them incentives of different types. The worker grievances are the main
root cause of poor performance leading to poor profitability in the company .
Workers can he motivated through.
5.1
Yearly salary increments when they are due.
5.2
Introduction of promotions to deserving employees
5.3
Introduction of training for employees in the departments
5.4
Advancing of loans of various types particularly housing loans.

131
6.0
RECOMMENDATIONS.
I submit the following recommendations for your consideration:
7.0
6.1
Salary freeze should be done away with and yearly salary increment should
be restored in the next years budget.
6.2
Funds for promotion to deserving staff should he included in next years

budget.
6.3
In next years budget funds for training should be provided to cater for this
purpose.
6.4
The company should introduce a housing scheme for staff at all levels. In
next years budget a provision for housing loans should be made available.
(i)
Signature
(ii)
Name
(iii)
Title
(iv)
Date
SOLUTION SEVEN
Pie-chart
(a)(i)
300
x100 30%
1000
Technician
350
x100 35%
1000
Licentiate
250
x100 25%
1000
Professional
100 100
x
10%
1000 1
Specialised areas
132
(ii)
10%
30%
25%
35%
Key
Licentiate
Technician
Professional
Specialised areas
(b)
Five (5) advantages of pie chart are:(i)
It is easy to construct
(ii)
Provides a visual picture that appeals to the user
(iii)
Less words required to interpret information
(iv)
Its is easy to communicate important information.
(v)
It is easy to interpret information
(vi)
Provides information as quickly as possible.
133

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ZAMBIA INSTITUTE OF CHARTERED ACCOUNTANTS

CHARTERED ACCOUNTANTS EXAMINATIONS

This paper is divided into TWO sections:

Attempt all TEN multiple choice questions.

Attempt any FOUR out of FIVE questions.

Do NOT write in pencil (except for graphs and diagrams).

All workings must be done in the answer booklet.

Present legible and tidy work.

Which of the following is a correct presentation of the accounting equation?

liabilities opening capital + drawings = profit

Faithful representation, neutrality, substance over form, completeness,

Mika Fashions had a receivable balance of K1,200,000 at 31 December 2011 and an

Depreciation, increase in receivables, decrease in payables, proceeds from sale

Maambo J M Co has presented to you the following statement of financial position

Maambo J M Co has decided on a bonus issue of 1 for 4 to the existing shareholders.

reduce the costs of the external auditors.

Support the work of the external auditors

Prepare the financial statements

Report to shareholders on the accuracy of the accounts.

A business achieves a margin of 25% on sales. Opening inventory was K162,000.

Receipts not yet credited by the bank

Bank charges not yet in the cash book

The correct balance on the bank statement at 30 April 2012 is

Accumulated depreciation at 1 November 2010:

Purchases and Sales

Trade receivables and Trade payables

Wages and salaries

Inventory at 1st November 2010

Current accounts at 1 November 2010: Chisomo

Allowance for receivables at 1st November 2010

Capital accounts at 1 November 2010: Chisomo

The following additional information is available as at 31st October 2011.

Inventory was valued as K57,000,000

Rent of K3,000,000 has been paid in advance

There are outstanding wages of K1,200,000

Depreciation is to be provided for as follows:

Buildings at 25% using the reducing balance method.

Machinery at 10% using the straight line method.

the statement of financial position as at 31st October 2011.

Interest receivable account

Allowance for receivables account

You are told of the following additional information:

Rent is payable quarterly in advance on the last day of November, February,

Electricity is paid as follows:

K4,000,000 (for the period to 31 October 2010)

At 30 September, 2011 there is electricity owing of K3,600,000

Interest was received during the year as follows:

K1,000,000 (for the 6 months to 30 September 2010)

Jokoto estimates that interest of K1,200,000 is accrued at 30 September 2011

At 30 September 2011, the balance of receivables amounts to K500,000,000.

Briefly explain the meaning of each of the two accounting concepts:

2. Cash account summary

3. Assets and liabilities balances were as follows:

Cash in the till

Rent of tennis house prepaid

Payables for bar purchases

4. Tennis tables are depreciated evenly over four years.

Prepare a clubs statement of financial position as at 31 March 2012.

Total (20 marks)

Credit purchases from: Mwamba K1,720,000; Mark K896,000 (all gross

Goods sold on credit to: Mbita K2,240,000; Pele K2,900,000; Chitalu

Credit purchases from: Monde K1,730,000 gross; Mukwa K1,026,800 net;