Junior Certificate Business Studies For Households and Enterprises by Matt Hynes

JC Business TM Contents for textbook and workbook Chapter 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 Textbook 1 2 5 7 9 11 12 13 13 14 No exercises 16 No exercises 16 18 19 20 20 21 23 24 No exercises 26 26 27 29 30 32 32 32 34 35 36 38 38 No exercises 40 No exercises 71 80 84 Workbook 182
182 183 185 186 189 192 230 230 232 233 234 234 238 246 249 252 256 258 260 263 264 267 267 269 275 276 277 283 287 287 290 295 297 302 305 310 317 324 325 329
Communications Communications in Action Introduction to Record Keeping Household Accounts Income Expenditure The Budget The Good Consumer Protecting the Consumer Making a complaint Money and Banking I Money and Banking II Money and Banking III Bank Accounts Personal Borrowing Insurance Premium Calculation and Estimating Compensation Economic Framework Budgeting - the National Budget Foreign Trade Forms of Ownership Private Limited Company Chain of Production People at Work Being an Employer Industrial Relations Finance for Business Preparation of a Business Plan Business Loan Applications Banking for Business Business Insurance Delivery Systems Marketing Financial Recording and Filing Business Documents I Business Documents II Recording Credit Transactions Continuous Balancing Ledgers and Statements Analysed Cash Books I Analysed Cash Books II Monitoring Overheads General Journal
42 43 44 45 46 47 48 49 50 51 52 53 54 55
Combined Books of First Entry and Ledger Questions Control Accounts Trading Account Profit and Loss Account Profit and Loss Appropriation Account Balance Sheet Adjustments to Final Accounts Final Accounts and Balance Sheet with Adjustments Assessing a Business Club Accounts Club Accounts with Adjustments Farm Accounts Service Firms Information Technology
91 109 109 111 114 118 127 132 148 152 161 166 173 177
331 333 334 336 337 338 339 341 342 346 347 348 348 348
Junior Certificate
Business Studies
for Households and Enterprises
TEXTBOOK TEACHERS MANUAL

Matt Hynes
Matt Hynes 2005 ISBN 1-84131-703-9 Folens Publishers, Hibernian Industrial Estate, Greenhills Road, Tallaght, Dublin 24. Editor: Fiona Dunne Design and Layout: Compuscript Produced in Ireland by Folens Publishers All rights reserved. The publisher reserves the right to change, without notice, at any time the specification of this product.
FOLENS
Junior Certificate Business Studies Textbook Teachers Manual
Chapter 1 Communications
1.
Factors Destination Cost Speed Record Explanation Is communication within Ireland or worldwide? How do the different methods compare on price? How urgent is the information to be communicated? Is it necessary to keep the information?
2. Internal communication
Method Notice board Meetings Explanation A space that employees will look at to keep them up-to-date with what is happening Bring employees together to discuss topics face-to-face
External communication
Method Letters Newspapers Explanation Written communication from one person to another sent in the post Written communication printed on local or national newspapers
3. Oral communication
Method Telephone Meetings Explanation Use of landline or wire-free device to contact someone else Bring employees together to discuss topics face-to-face
Written communication
Method Letters Notice board Explanation Written communication from one person to another sent by post A space that employees will look at to keep them up-to-date with what is happening
Visual communication
Method Charts Television Explanation Used to provide detailed information in lines or easy-to-understand pictures Used to show people actually communicating in real-life situations
4. See chart at bottom of p4 in the textbook.
Chapter 2 Communications in Action

Letter Writing The answers to letters should follow the nine-point plan. Its good discipline for the students to put in the numbers beside the text when doing the exercises, to ensure that they complete the letter fully. The address of the sender and date of the letter can also be placed on the lefthand side of the page. 1.
1. Top View Road, Sligo. (087) 4325676. Ms News Agent, Corner Grove, Sligo. Dear Ms News Agent, I wish to enquire about a new magazine called Predict Your Future. Can you obtain this magazine for me? How much will it cost? How many issues are there? Please let me know as soon as possible. Yours sincerely,
2. 3.
4. 5. 6.
7. 8. 9.
Patrick Kerns.
2.
1. Harmony Street, Carlow. (086) 85341245. Edge Music Store, Piano Row, Waterford. Dear Mr Edge, I wish to order a new CD called How to Make A Snowman Melt. When can you have it in stock? Please phone or text me when its in. Yours faithfully,
2. 3.
4. 5. 6. 7. 8. 9.
Nora Jones.
3.
1. Students Union, St. Marks Community School, Celbridge, Co. Kildare.
2. 3. Finbar Keenan, Main Street, Maynooth, Co. Kildare. Dear Finbar, I was delighted to hear that you are coming to our school in September. As you will be in Second Year, I would like to set out the ten subjects you will study. Six subjects are compulsory: For the other four you can choose from:
4. 5. 6.
7. 8. 9.
Please contact me if you want details about these subjects. Yours faithfully,
Monica Grey. President Students Union.
Report Writing The answers to reports should follow the nine-point plan. Its good discipline for the students to put in the numbers beside the text when doing the exercises, to ensure that they complete the report fully. 4.
1. Siobhn Gallagher, Class 1, Vocational School, Letterkenny, Co. Donegal. Best Value In Mobile Phone Credit
2. 3. 4.
Class 1, Vocational School, Letterkenny, Co. Donegal. I was asked by you to prepare a report on where the best value in mobile phone credit can be obtained. I checked out all the providers. My findings are set out below. Providers Price per call per minute Price per text I recommend O2 cent cent Vodafone cent cent Meteor cent cent
5. 6.
7. 8. 9.
I am available to discuss my findings if required.
Siobhn Gallagher. Mobile Phone Consultant.
5.
1. Ilona Donnelly, Class D, Mercy Convent. Best Fast-Food Outlets in
2. 3. 4. 5.
Class D, Mercy Convent. I was asked by you to prepare a report on the best fast-food outlets in . I visited all the outlets and sampled the food. My findings are set out below. The providers are rated out of 10. Providers Price Quality Service I recommend Mighty Sams. Mighty Sams 7 8 9 Mini Macks 6 8 7 Burger Queen 9 5 8
6.
7. 8. 9.
I am available to discuss my findings if required.
Ilona Donnelly. Fast Food Consultant.
6.
1. Mire McGrath, Class A, Ard Scoile. Main Sources of Income for Students in Class A
2. 3. 4. 5. 6. 7. 8. 9.
I was asked by you to prepare a report on the main sources of income for students in Class A. I surveyed all twenty-six students. My findings are set out below. Income Percentage of income earned The main source is pocket money. I am available to discuss my findings if required. Pocket money 60% Part-time Work 30% Other 10%
Mire McGrath. Financial Consultant.
7. Notice is given that a meeting of the Business Studies Students Club will take place in Room 5 at 12.30 pm on Monday 3 October 2005. All members please attend. 8. AGM Agenda for the Business Studies Student Club. 1. Minutes of previous meeting 2. Matters arising from the minutes 3. Correspondence received by club officers 4. Treasurers report 5. Club tour to AIB headquarters 6. Membership fees 7. Any Other Business for the next meeting
4
Charts and Graphs 9. Bar chart showing sales of shoes for period 20002005.
10.
Line graph showing rate of inflation for period 19992004.
11.
Pie chart showing breakdown of sales for the four seasons 2005.
Chapter 3 Introduction to Record Keeping

The solutions to exercises 1 to 5 show the accounts balanced. You may wish your students to do likewise depending on their progress. 1.
Date 2005 1/1 6/1 Prize money Pocket money Details Total 100 10 110 11/1 Balance b/d 75 Date 2005 8/1 10/1 10/1 Sports gear Lunch Balance c/d Details Total 30 5 75 110
2.
Date 2005 1/2 4/2 Pocket money Sale of books Details Total 12 55 Date 2005 6/2 8/2 10/2 10/2 67 11/2 Balance b/d 37 New books Video Magazines Balance c/d Details Total 20 4 6 37 67
3.
Date 2006 1/3 4/3 6/3 13/3 Interest Wages Pocket money Balance b/d Details Total 28 32 8 68 22 Date 2006 8/3 12/3 12/3 School books Sweets Balance c/d Details Total 40 6 22 68
4.
Date 2007 1/1 5/1 7/1 Parents Pocket money Interest Details Total 100 12 38 150 10/1 Balance b/d 28 Date 2007 2/1 3/1 9/1 9/1 School books Lunch Magazine Balance c/d Details Total 90 8 24 28 150
5.
Date 2008 1/4 4/4 10/4 Aunt Parents Wages Details Total 20 80 45 145 19/4 Balance b/d 5 Date 2008 6/4 8/4 18/4 18/4 Hair styles Music lessons School tour Balance c/d Details Total 5 75 60 5 145
6.
Date 2008 1/5 9/5 13/5 Birthday Sale of CD Uncle Details Total 75 30 10 115 14/5 Balance b/d 37 Date 2008 2/5 5/5 13/5 13/5 CD Magazine Clothes Balance c/d Details Total 18 15 45 37 115
Chapter 4 Household Accounts

1.
Analysed Cash Book Date 2005 1/3 3/3 Balance b/d Wages Details Total 200 600 Date 2005 5/3 6/3 7/3 8/3 Groceries Fuel Petrol Electricity Details Total 120 220 40 80 145 60 665 12/3 Balance c/d 800 13/3 Balance b/d 135 135 800 265 300 145 60 100 80 HK 120 L&H 220 40 Other
10/3 Groceries 12/3 Window clean
2.
Analysed Cash Book Date 2005 1/4 6/4 Balance b/d Wages Details Total 500 850 Date 2005 2/4 4/4 5/4 8/4 Groceries Petrol Electricity Car service Details Total 300 45 100 155 185 35 820 13/4 Balance c/d 1,350 14/4 Balance b/d 530 530 1,350 485 200 185 35 135 155 HK 300 45 100 Car Other
11/4 Groceries 13/4 School books
3.
Analysed Cash Book Date Details Total Cash 180 120 650 Total Date Bank 320 2007 2/2 6/2 7/2 9/2 Car service Groceries Insurance Petrol 3 4 85 12/2 Balance c/d 300 13/3 Balance b/d 215 970 315 215 300 2 25 320 100 655 315 970 100 310 110 320 1 60 150 Details Ch. Total Total no. Cash Bank 85 HK Car Mortgage
2007 1/2 3/2 4/2 Balance b/d Child Benefit Wages
60 150
85
25 320
10/2 Mortgage 12/2 Meat bill
4.
Date 2007 1/3 3/3 12/3 Balance b/d Child Benefit Wages Details Total Cash 50 120 450 Analysed Cash Book Total Date Details Ch. Total Total Bank no. Cash Bank 230 2007 4/3 5/3 6/3 8/3 Heating oil Milk bill Groceries Hair cut 3 4 5 82 12/3 Balance c/d 170 13/3 Balance b/d 88 680 81 88 170 1 2 82 50 31 100 599 81 680 120 81 380 38 HK 38 82 50 31 100 480 Per L&H 380
10/3 Doctor 12/3 Electricity
5.
Date 2008 1/4 5/4 6/4 Balance b/d Child Benefit Wages Details Total Cash 100 120 500 Analysed Cash Book Total Date Details Ch. Total Total Bank no. Cash Bank 2008 1/4 7/4 8/4 9/4 Balance b/d Groceries Mortgage Insurance 1 2 3 4 55 150 13/4 14/4 Balance c/d 220 Balance b/d 70 625 1,125 13/4 Balance c/d 14/4 Balance b/d 70 220 1,125 625 160 355 95 355 380 65 75 65 75 55 510 250 HK 95 355 380 Mort- Other gage
11/4 Milk bill 12/4 Electricity 13/4 School fees
6.
Date 2008 1/6 2/6 8/6 Balance b/d Child Benefit Wages Details Total Total Cash Bank 320 120 860 Analysed Cash Book Date Details Ch. Total Total no. Cash Bank 2008 1/6 3/6 5/6 6/6 10/6 12/6 12/6 13/6 Balance c/d 440 Balance b/d 320 45 905 13/6 Balance b/d 12/6 Balance b/d Groceries Insurance Electricity Milk bill Holiday Balance c/d 1 2 3 4 80 320 440 905 45 80 500 55 50 50 130 55 50 50 550 55 250 HK 80 500 L&H Other
7.
Date 2008 1/2 2/2 3/2 10/2 Balance Wages Bank C Child Benefit 100 80 Details Total Total Cash Bank 40 120 850 Analysed Cash Book Date Details Ch. Total Total L& School Other no. Cash Bank H 2008 3/2 4/2 5/2 6/2 7/2 11/2 Cash C Groceries School uniform Electricity Petrol Central Heating Balance c/d 3 88 12/8 220 13/8 Balance b/d 312 970 175 132 220 1 2 38 440 440 795 545 175 970 150 88 50 150 105 105 38 150 100 50
Chapter 5 Income
1. (a) Toms gross wage = 400 (40 hours @ 10. Basic = 400. No overtime.) (b) Annes gross wage = 648 (40 hours @ 12. Basic = 480 + overtime 168.) (c) Jims gross wage = 624 (40 hours @ 8. Basic = 320 + overtime 304.) 2. (a) Pats gross wage (b) Irenes gross wage 3.
Deductions Statutory Non-statutory Difference
= 531 (38 hours @ 9. Basic = 342 + overtime 135 + 54.) = 440 (38 hours @ 8. Basic = 304 + overtime 120 + 16.)
Explanation Example Income Tax, PRSI Pension, Savings, VHI, Union Fee
Compulsory payments by employees to the government taken from the gross wage Voluntary amounts taken from an employees gross wage at the request of the employee Statutory payments are compulsory whereas non statutory are voluntary
4.
Employee (a) Shelia (b) Paul (c) Breda (d) Conor
Gross Wage 320 320 450 500
Tax before deducting tax credit 64 64 90 100
Tax Credit 25 35 50 60
Tax Due 39 29 40 40
5. Employee Gross Wage Tax before deducting tax credit Tax Credit Tax Due
(a) Martin (b) Louise 350 650 70 273 50 65 20 208
PRSI 17.50 32.50
Net Wage 312.50 409.50
6. (a) Gerard
Gross pay First 21,586 @ 20% Remainder @ 42% Tax before deducting tax credits Less tax credits Tax due Add PRSI due 30,000 21,586 8,414 Tax Due 4,317.20 3,533.88 7,858.64 1,592 6,259.08 1,500 7,759.08 Total Deductions
Net pay = Gross pay less deductions: 30,000 7,759.08 = 22,240.92
(b) Monica
(c) Adrian
(d) Josephine
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Chapter 6 Expenditure
1. Our income is limited = We have not got enough income to buy all the things we would like to buy. 2. The financial cost = The actual price of the item purchased. The opportunity cost = What is given up when you decide to purchase one item instead of another. 3. (a) The financial cost is 30. (b) The opportunity cost of buying the shirt is not being able to go to the football match. 4. (i) Make a list and stick to it. (ii) Only bring enough money with you to buy necessities. 5.
Type of Expenditure Fixed Irregular Discretionary Examples House insurance, mortgage Electricity, telephone Birthday presents, entertainment
6. Capital expenditure is spending on things that will last for more than one year e.g. cars, houses. Current expenditure is spending on things that are used up within one year e.g. petrol for the car, groceries. 7.
Number of units used (i) 636 (ii) 622 (iii) 714 (iv) 1,052 (8,516 7,880) (9,202 8,580) (5,493 4,779) (3,393 2,341) Cost of electricity 44.52 43.54 49.98 73.64
8.
Cost of electricity (i) 44.52 (ii) 43.54 (iii) 49.98 (iv) 73.64 Standing charge 9 9 9 9 VAT@ 13.5% 7.23 (13.5% of 53.52) 7.09 7.96 11.16 Total Cost 60.75 59.63 66.94 93.8
9.
Lynch Units used Cost Standing charge VAT Total cost 723 68.69 9 10.49 88.18 King 737 70.02 9 10.67 89.87 King Highest Bill
11
10. Households usually receive a telephone bill every two months for a landline and once a month for a mobile phone bill.
Butler Number of calls Cost Rental charge VAT Total cost 1,432 71.60 40.00 23.44 135.04 Lennon 689 34.45 40.00 15.64 90.09
Chapter 7 The Budget

1. (a)
Employee Monica Oliver Pat Monthly wage 780 920 535 5% Increase 39 46 26.75 Future Income 819.00 966.00 561.75
(b)
Saver Pat Mike Kate Mary Deposit 1,230 740 335 1,940 3% Interest 36.90 22.20 10.10 58.20
2.
Expenditure Mortgage Housekeeping Telephone Car Tax Present Cost 260 140 90 290 3% Increase 7.80 4.20 2.70 8.70 Future Cost 267.80 144.20 92.70 298.70
3. People save because: (i) They want to earn interest; (ii) They want to go on a holiday; (iii) They want to buy a car; (iv) They want to have money in case of an emergency. It is important to plan savings because otherwise the money will be unwisely spent before one thinks about it.
12
Chapter 8 The Good Consumer

1.
1. Handlebar Street, Roscommon. (086) 8732258.
2. 3. KM Cycles Ltd, Main Street, Longford.
4. Dear Mr. Martin, 5/6. I wish to order one of the new racing bicycles which you advertised on Shannonside Northern Sound on 15/4/2006 at a price of 140. 7. Can you ring me if one is available? 8. 9. Yours faithfully,
Mary Farrell.
Chapter 9 Protecting the Consumer

1. Consumers need protection because of: (i) Unsafe goods; (ii) Overcharging by retailers; (iii) Misleading advertisements. 2. (a) Laura is entitled to a full refund or replacement shoes. She does not have to accept a credit note. (b) Pat is entitled to a replacement suit unless he was clearly warned in advance by the drycleaner that the suit might shrink. (c) Sheila is entitled to have her engine repaired or replaced and also any damage repaired. (d) Maura can refuse to take the ham in case it is out-of-date. 3. Sign 1: This sign is legal because the shop does not have to sell on credit. Sign 2: This sign is not legal because the shop has to refund money if the good sold is faulty. Sign 3: This sign is not legal because the shop has to refund money if the good sold is faulty. 4. (a) The Small Claims Court helps consumers who cannot get a retailer to make good any loss due to faulty goods, but who do not want to go to the District Court or employ a solicitor. The largest amount they can claim is 1,270. The Office of the Ombudsman can help consumers who have difficulty getting satisfaction from government bodies and departments. (b) Trade Associations are made up of members of similar types of business to protect their interests and provide them with assistance when required, e.g. Irish Travel Agents Association. The Office of the Director of Consumer Affairs is responsible for enforcing the Consumer Information Act 1978. It educates consumers on their rights. 5. (a) The Consumer Association of Ireland. (b) Consumer Choice Magazine.
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6.
(i) (ii) (iii) (iv) (v)
Goods should be of merchantable quality; Good should be fit for their purpose; Goods should be as described; Goods should correspond to sample shown; The suppliers of services must be qualified.
Chapter 10 Making a complaint

1. Consumers complain because: the seller gives misleading information; they are unhappy with the quality of goods or service; they are overcharged; goods are not as ordered. 2. The steps a consumer should take when a product is unsatisfactory will depend on the problem. If it is a normal good then the consumer should: Identify the problem; obtain proof of purchase; contact the seller and ask for a refund or replacement; put the complaint in writing; contact the sellers trade association if available; bring the seller to the Small Claims Court. 3. (a)
1. 6 Bridge Street, Granard, Longford. 8/9/2006 Ms Susan Tarpey, Manager, S&S Arkin Ltd, Dublin Road, Longford. Dear Ms Tarpey, I am writing to you concerning a new colour television set SAMO Model P107, which I bought in your shop on 7/9/2006. The sound does not work. I require a replacement or a refund of my money 399. Please let me know your response by return of post. Yours faithfully,
2. 3.
4. 5. 6. 7.
8. 9.
Tom Murphy.
(b) Mr Murphy could contact the sellers trade association or contact the registrar of the Small Claims Court.
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4. (a)
1. 16 Castle Street, Ennis, Co. Clare. 15/4/2006 Mr. Frank Clarke, Manager, The Bike Shop Ltd, Nenagh Road, Limerick. Dear Mr Clarke, I am writing about a new bicycle Model RB 25, which I bought in your shop on 11/4/2006. Within a few days the bicycle has given me trouble. The chain slips off every time I meet a hill. I am very disappointed with it. I require a replacement or a refund of my money 179. Please let me know your response by return of post. Yours faithfully,
2. 3.
4. 5. 6. 7. 8. 9.
Peter Cooney.
(b) Mr Cooney could contact the local media or the registrar of the Small Claims Court. 5. (a)
1. Rioscarraig, Ardara, Co. Donegal. 3/3/2006 The Sales Manager, Allbrite Ltd, Church Street, Letterkenny, Co. Donegal. Dear Sir/Madam, I am writing to you concerning a new, fitted aluminium patio door from your firm. I enclose a copy of the contract. After a month, it did not seal properly and allowed in the wind and rain. Spots of rust have developed on it. I'm very dissatisfied with the door and demand an immediate replacement or a full refund of my money 698. Please let me know your response by return of post. Yours faithfully,
2. 3.
4. 5. 6. 7.
8. 9.
Maeve O'Sullivan.
(b) The Sale of Goods and Supply of Services Act 1980. The goods were not fit for the purpose and the fitter was not properly qualified. (c) The receipt; credit card statement; the door itself, copy of contract signed by Allbrite Ltd.
15
6. A credit note is a document given by a seller to a customer that states that the amount owing or paid has been reduced. It is only acceptable if the customer agrees to it. This is usually when there is nothing wrong with the goods but the customer changes his/her mind on the colour etc.
Chapter 11 Money and Banking I

There are no exercises in the textbook.
Chapter 12 Money and Banking II

1.
Method Cheque Bank draft Standing order Direct debit Credit transfer Cost Expensive Most expensive Fixed charge Fixed charge Least expensive Safety Could be forged 100% safe 100% safe 100% safe 100% safe Record Yes in stub Yes in a receipt Yes in statement Yes in statement Yes in statement
2. A standing order is an instruction by a bank current account holder to pay a fixed sum of money on a fixed date to a named person/organisation. A direct debit is where a named person/organisation obtains permission from a current account holder to take a varying amount out of their account on a date to be decided by the person/organisation. 3. (a) 75 (b) 600 (c) 1,197 4. (a) 78.81 (b) 702 (c) 1,481.19 5. (a) 40 (b) 160 (c) 100 (d) 144 (e) 288 (f) 319.20
Chapter 13 Money and Banking III

Chapter 14 Bank Accounts

1.
Date 2005 1/4 5/4 30/4 Balance b/d Wages Wages Details Total Date 2005 Cash Insurance Groceries Car repairs Cash Balance c/d ATM 7 8 9 ATM Details Cheque/ATM Total 100 600 250 200 200 1,000 2,350
Bank A/C 950 8/4 600 800 15/4 19/4 23/4 28/4 30/4 2,350
1/5
Balance b/d
1,000
16
2.
Date 2006 1/5 8/5 31/5 Balance b/d Wages Wages Details Total 1,200 950 950 Date 2006 Bank A/C 11/5 13/5 22/5 26/5 29/6 31/5 3,100 1/6 Balance b/d 1,600 Cash Milk bill Grocery bill Mortgage Cash Balance c/d ATM 4 5 6 ATM 200 230 170 600 300 1,600 3,100 Details Cheque/ATM Total
3.
Date 2006 31/5 Balance b/d CT Details Total 210 700 Date 2006 Bank A/C SO DD Interest/charges Balance c/d 910 1/6 Balance b/d 125 480 200 105 125 910 Details Total
Bank Reconciliation Statement as on 31/5/2006 Balance as per Bank Statement 1,925 Add lodgements not credited 1,100 3,025 Less cheques not cashed 2,900 Balance as per Updated Bank Account 125 4. (a) The statement was issued on 30 March 2006. (b) Michael Lynch had money in his bank account. (c) People do not cash cheques in the order they are issued. Some people keep them for up to six months. (d) Current account fees could include: cost of standing orders; cost of direct debits; cheque book. (e) A direct debit differs from a standing order in the following ways: The amounts can vary in direct debits but are fixed in standing orders; the date the money is taken from the account is decided by the receiver when a direct debit is used and by the account holder when a standing order is used.
17
(f)
Date 2006 31/3 Balance b/d CT Details Total Date Details Total Fees Balance c/d 783 1/6 Balance b/d 777 6 777 783 2006 Updated Bank A/C 683 100
Bank Reconciliation Statement as 31/5/2006 Balance as per Bank Statement 497 Add lodgements not credited 355 852 Less cheques not cashed 75 Balance as per Updated Bank Account 777
Chapter 15 Personal Borrowing

1. The lender will require the following information: Name and address of applicant; where the person is employed; the amount earned; the amount required; the purpose of the loan; security available. 2. Renting is suitable for obtaining something that is only needed on a once-off basis. It is cheaper than most other methods in that you only have to pay for it when you need it. 3. (a) Hire purchase has two stages. The first stage involves a person hiring the item by making a number of instalments. The second stage involves the person taking ownership of the item by paying a final instalment. (b) Hire purchase can be used for obtaining cars; furniture; household equipment such as washing machines, refrigerators, TVs etc. 4. (a) Cost 600 (b) Cost 1,255 (c) Cost 780 (d) Cost 1,330
5. Two rights of the borrower are: To be shown the APR; To know the cash price. Two responsibilities of the borrower are: To provide true and accurate information about him/herself; To repay the amount owing on time. 6. It is important to budget for the cost of borrowing because if a person does not allow for the cost of repaying a loan, then that person may not be able to repay the amount owing on time.
18
7. (a) The extra cost of buying the cooker by Easy Pay is 487.10. (b) The ESB might offer this form of repayment because borrowers can make their repayments when they are paying their electricity bills. The cost is spread over five years. (c) Yes, the Lee household will keep within their budget by saving 6 per week because they only need to repay 40.87 per two months and they are saving 48 per two months. (d) A five-year loan of 739 at 15% flat rate would cost them 1,293.25 in total. They should take the ESB Easy Pay offer and save 67.15. 8.
Options Option 1 Bank Loan Option 2 Hire Purchase Option 3 Bank Loan Cost of each option workings 9,000 + interest 2,970 = 11,970 500 + instalments 9,720 = 10,220 9,000 + interest 2,700 = 11,700
Option 3 is the best value.
Chapter 16 Insurance
1. People need insurance because they are afraid of risks occurring which would make them worse off and they may not be able to recover from these losses, e.g. fire burning down their house, car crashing into someone else. 2. Insurance operates as follows. People who fear possible losses can share these fears with others by paying premiums to an insurer, who in turn agrees to pay compensations should these losses occur. 3. (a) Ann Smyth might purchase any or all of the following: Flat and contents insurance; motor insurance; health insurance; salary protection insurance; travel insurance. (b) The Mulligan family might purchase any or all of the following: House and contents insurance; motor insurance; health insurance; boat insurance; travel insurance. 4. (a) With insurance there is only a possibility that some loss will occur, but with life assurance there is a certainty that the loss will occur. Insurance is purchased on an annual basis whereas life assurance has to be purchased for a number of years. (b) With whole life assurance the insurer will pay out when the insured dies but with endowment assurance the insurer will pay out on death or the insured reaching a certain age, whichever comes first. 5. Car insurance is required by law because a motorist is driving on public roads, which are built by the government, and may injure another party (third party). 6. One starts with finding out what cover is required. A proposal form is then completed. On being accepted, a premium is paid and an insurance policy or certificate is given by the insurer to the insured. 7. The two principles of insurance that apply to purchasing insurance are: Insurable Interest you can only insure something that you benefit from or from whose loss you will suffer. Utmost Good Faith when completing an insurance proposal form all questions must be answered truthfully and accurately.
19
Chapter 17 Premium Calculation and Estimating Compensation

1. Patrick Kiernan
Basic Premium Add loadings Working abroad Dangerous hobby Basic plus loadings Less loadings Non-smoker Total Premium 60 1,140 100 100 200 1,200 1,000
2. Geraldine Lally
Basic Premium Add loadings Medical condition Living abroad Dangerous hobby Basic plus loadings Less loadings Non-drinker Non-smoker Total Premium 87 87 174 1,566 180 180 180 540 1,740 1,200
3. Inform the Garda and the insurer of the loss; obtain estimates for the loss; complete a claims form; an insurance assessor estimates damage; compensation is paid if necessary. 4. (a) (i) Shane should complete a claims form. (ii) 7,900 (8,000 100). (b) (i) Annual Cost= 146 (Building 100 + Contents 36 + Loading premium 10). (ii) Renewal date the date when the premium is due for payment. Proposal form A form completed by the person seeking insurance. Loading An additional premium charged when the risk is higher. Premium The fee paid by the insured to the insurer when purchasing insurance. (iii) Yes because: (a) The broker is independent of any insurance company, (b) The broker is arranging better cover than the agent. (iv) An insurance agent sells the policies of only one insurance company. An insurance broker on the other hand, being independent, can select from a number of insurance companies.
Chapter 18 Economic Framework

1. People have to make choices because their income is limited, but they want to obtain the most satisfaction possible from their available income. 2. Choices made by student: Reasons for choices included: 3. (a) The financial cost is 20 (b) The opportunity cost is a CD and a football
20
4. (a) The four factors of production are: Land anything provided by nature used in the production of goods/services. Labour the human effort used in the production of goods/services. Capital money and man-made goods used in the production of goods/services. Enterprise the taking of a risk in bringing the other factors together for a profit. (b) Combinations of these factors are needed because no factor can operate on its own, e.g. land without labour will produce nothing. 5. (a) The purpose of an economic system is to decide: What goods and services will be produced; how production will take place; who will receive the goods and services produced; how fast the economy will grow. (b) Ireland has a mixed economy. 6. (a) Economic growth is 40% (b) Economic growth is 2.27% (c) Economic growth is 1.79% 7. (a) Rate of inflation is 8% (b) Rate of inflation is 4% (d) Rate of inflation is 1%
Chapter 19 Budgeting The National Budget

1. Certain services require a level of investment that only the government can provide. Some services are non profit-making and will therefore not be provided by the private sector. Certain services are too important to leave to private individuals e.g. an Garda Sochna, the Army. 2. The main services provided by the government are education; healthcare; transport; postal services; electricity. 3. National government lays down guidelines on how the country as a whole should be run it is responsible for trains, electricity, postal services etc. Local government is responsible for services and decisions on a county or big town-basis. It is responsible for local roads, water, housing, sewage etc. 4. The government provides services through government departments e.g. Department of Education and Science; Department of Health and Children; semi state bodies e.g. An Post, ESB; local government agencies e.g. County Councils and Urban Councils. 5.
Income Income Tax VAT Customs and excise duty Corporation tax Capital tax EU and other receipts Deficit
National Budget
millions 3,500 2,800 2,100 350 150 3,200 770 12,870 Expenditure Social welfare National debt Security Education Health Agriculture Other millions 3,500 2,900 880 1,400 1,550 340 2,300 12,870
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6.
Income Income Tax VAT Customs duties Capital tax EU receipts
National Budget
millions 3,100 2,750 2,900 240 3,800 12,790 Expenditure Education Agriculture Health Social welfare Security Surplus millions 1,550 570 1,950 2,800 670 5,250 12,790
(a) The biggest source of income is EU receipts, the biggest source of expenditure is Social Welfare. (b) The percentage of total expenditure spent on social welfare is 37.14%. (c) Capital tax is 1.88% of total income. (d) Revised National Budget
Income Income Tax VAT Customs duties Capital tax EU receipts millions 3,100 2,475 2,900 240 3,800 12,515 Expenditure Education Agriculture Health Social welfare Security Surplus millions 1,627.50 602.49 2,047.50 3,220 703.50 4,314.01 12,515
7. (a)
Income Income Tax EU and other receipts VAT Customs and excise Corporation tax Capital tax Other receipts Deficit
National Budget 2001

millions 3,200 2,100 2,100 1,900 500 100 1,000 500 11,400 11,400 Expenditure Security Social welfare Education Health Agriculture Debit services Miscellaneous millions 800 3,000 1,368 1,400 400 2,432 2,000
(b) This budget was a deficit of 500m. (i) The main source of government income was income tax. (ii) The percentage spent on education was 12%. (iii) Garda, Army. (c) Increase corporation tax by 150m. Reason: the employees are paying too much tax and the businesses are paying too little. Decrease Miscellaneous by 350m. Reason: savings could be found in each department to ensure that there would be a balanced budget.
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(d) Total expenditure would be up by 570 (5% of 11,400) to 11,970. Total income would be down by 210 (10% of VAT 2,100) to 10,690. The overall budget deficit would be 1,280m. (e) An increase in the level of unemployment would increase the social welfare payments and decrease the income tax receipts.
Chapter 20 Foreign Trade

1. Ireland engages in foreign trade for the following reasons: The Irish market is too small; creation of more employment by selling to larger markets; Ireland does not possess certain raw materials; Irish people like to have a greater choice of goods. 2.
(a) Cars Germany (b) Newspapers England (c) Oil USA (d) Coal Poland (e) Shoes Italy (f) Bananas Israel
3.
(a) Butter England (b) Cattle Egypt (c) Computer parts USA (d) Irish Water Spain (e) CDs Japan
4. Enterprise Ireland. It provides information about foreign markets and introduces Irish businesses to foreign buyers. 5.
Amount in millions a b c d e f 15 70 25 30 120 10 Surplus/Deficit Surplus Surplus Deficit Deficit Surplus Deficit
6. Balance of trade is a surplus of 100m. (400m300m). 7. (a) Balance of trade deficit is 20m. Balance of payments deficit is 230m. (b) Balance of trade surplus is 140m. Balance of payments is in balance, i.e. receipts are equal to expenditure. 8. (a and b)
EU Country Belgium Denmark France Hungary Italy Poland Danish French Hungarian Italian Polish Language Flemish/French Euro Krone Euro Forint Euro Zloty Currency
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9. (a and b)
Country Currency UK Pound Sterling Sweden Krona Denmark Krone
Note: any of the ten new countries would also be correct answers. 10. (a) 280 (1 = 1.56 is equal to 1 = 0.64. 0.64 450 = 280) (b) 703.13 (1 = 1.56 is equal to 1 = 0.64. 450 0.64 = 703.125) 11. (a) 122,400 (d) 820.90 (b) 5 (e) $65,000 (c) 694.44
Chapter 21 Forms of Ownership

1.
Form of Ownership Sole Trader Characteristic 1 Characteristic 2 One person puts up the One person makes all investment the decisions Owed by between 1 and 50 shareholders Control over who can buy the shares Characteristic 3 One person takes all the profit or suffers all the loss Must have the word limited after its name
Private Limited Company Co-operative
Owed by eight or more Each member has only Each member has an members one vote equal say in the running of the co-operative Owned by the government Government makes top management appointments Profits are reinvested or taken by the government
State-owned business
2.
Form of Ownership Advantage 1 Sole Trader Easy to set up Private Limited Company Co-operative Limited liability Limited liability Advantage 2 Takes all the profits Disadvantage 1 Unlimited liability Disadvantage 2 Lacks continuity Costly to set up Often too small to develop
Can have up to 50 A lot of legalities shareholders when setting up Together everyone One vote per achieves more member success (TEAMS) Provides employment
State-owned business
Provides extra revenue if profitable
Losses have to be Too dependent on borne by the tax government for payer capital
3.
Form of Ownership Sole Trader Private Limited Company Co-operatives State-owned business 1 150 8 plus Government Ownership Liability Unlimited Limited Limited Unlimited Profitability Owner takes all Shared between shareholders Shared between members Reinvested or taken by government
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4. (a)
(b) State ownership has been used in Ireland because no one invests in non profit-making businesses. Employment had to be created. Co-operatives were used to process the milk produced by farmers. Some workers formed co-operatives, to give themselves employment when their businesses closed down. 5. (a) (b) (c) (d) A state-owned or semi-state company is a business owned by the government. A sole trader is a business owned and run by one person. A co-operative is a business owned and controlled by the workers or members. A private limited company is a business owned by between 1 and 50 people and managed by a board of directors. (e) The owners of a private limited company have limited liability and are called shareholders.
6. (a) (a) Sentences written out correctly: (a) The VHI provides insurance for people's health. (b) RTE provides a television service for the country. (c) Bord Filte promotes the tourist industry in Ireland. (d) An Post delivers letters every morning. (e) Aer Lingus provides an air transport service. (f) The ESB provides power for light and heat. (g) The ACC Bank provides finance for farmers. (h) Iarnrd ireann runs the railways in Ireland. (i) Bord na Mna provides turf and briquettes. (j) Telecom ireann provides telephone and fax services. Note: Bord Filte, Telecom ireann and ACC have changed since this Q7 was asked in 1995. Bord Filte is now Filte Ireland and Telecom and ACC are no longer state-owned companies. (b) FS provides training for unemployed people. Bus ireann provides a national road transport service.
Chapter 22 Private Limited Company

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Chapter 23 Chain of Production

1. (a) The channels of distribution are the means by which goods and services are passed from the producers to the final consumers. (b) 1. Manufacturer Consumer Example: Shipbuilding 2. Manufacturer Retailer Consumer Example: Groceries (e.g. Tesco) 3. Manufacturer Wholesaler Retailer Consumer Example: Bread, Milk 2. For the manufacturer, the wholesaler pays cash immediately and stores the goods. For the retailer, the wholesaler provides a variety of goods and sells in small quantities. 3. To sell goods and services in convenient locations; to sell wide variety of goods; to provide advice for consumers. 4. In-store banking; growth in international retailers; greater use of technology e.g. bar code scanners; buying and selling via the internet. 5. Unit shops: independent shops convenient to customers. Voluntary groups: independent shops which come together to buy in bulk. Shopping centres: one-stop shopping areas containing a wide variety of shops with car parking. Vending machines: use of machines to provide 24-hour sale of selected goods. Multiple shops: shops, owned by one owner, with a similar look and design. 6. (a) Sentences written out correctly: Primary Production is where raw materials are produced. Secondary Production is where raw materials are turned into finished goods. The Services Industry is where teachers, nurses and hairdressers are employed. The Wholesaler is a person who buys in bulk (large amounts) from the Manufacturer. A Department Store is one shop divided into many sections. A Shopping Centre is a covered area where there are many shops. A Chain Store is a retailer with branches around the country. A Vending Machine is a slot machine where you can buy cans of orange. A Travel Agency is a shop that sells airline tickets. A Newsagent is a shop that sells newspapers. (b) Supermarkets sell groceries on a self-service basis. Greengrocers sell fruit and vegetables.
Chapter 24 People at Work

1. Three rights: An employee is entitled to receive a minimum wage; have a safe and healthy workplace; be treated in an equal way. Three responsibilities: An employee is responsible for doing an honest days work; protecting their employers property; providing honest information when applying for a job.
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2. Two reasons for unemployment include businesses downsizing and increase in numbers doing part-time work. 3.
Products used in Ireland Motor cars Clothes Petrol Coal No Yes No No Yes/No
4. Two rewards of being self-employed include: Making ones own decisions; keeping all the profit made. Two risks of being self-employed include: Losing everything if the business fails; using up all ones savings to start up business. 5.
6. (a and b)
Department Finance Production Marketing Work Recording income and expenditure Designing and making goods Researching the market; advertising and selling goods Skills required Bookkeeping, accuracy Creative, engineering Good communication skills
Chapter 25 Being an Employer

1. Three rights of employers include: Set up a business; select suitable staff; dismiss dishonest staff. Three responsibilities of an employer include: Provide safe working conditions; pay the agreed wage; keep proper employment records. 2. The procedure for employing staff includes: Finding out what staff is required; Preparing job descriptions; Advertising the job; Short-listing applicants; Interviewing and appointing applicants.
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3. Caretaker required for St Veronicas College, Cork Qualifications: Experience: Hours of work: Rate of pay: Holidays: FS certificate in caretaker studies Four years 48-hour week, flexi-work 25 per hour 34 days per year
Apply to Chairperson, BOM, St Veronicas College, Cork Closing date for applications 25 August 2008 St Veronicas College is an equal opportunities employer 4. Basic week 40 hours @ 8 = Overtime 9 hours @ 12 = Gross wage 5. Basic wage Overtime Gross wage 6. Basic wage Bonus Gross wage 7. Basic wage Commission Gross wage 8. Basic wage Commission Gross wage 9. Gross income 43,000 First 29,400 Remainder 13,600 Gross tax due Less tax credits (1,580 + 1,270) Actual tax due PRSI Calculation 7.5% of 43,000 @ 20% @ 42% 10 rolls @ 7 per roll 5 rolls @ 8 per roll 70 40 110 125 2,100 2,225 250 70.50 15 320.50 335.50 5,880 5,712 11,592 2,850 8,742 3,225 320 108 428 150 120 400 270 670
40 hours @ 10 10 hours @ 15 per hour 6 hours @ 20 per hour
6 policies @ 350
250 copies @ 1 47 copies @ 1.50
Net Wage: Gross Wage (43,000) PAYE (8,742) PRSI (3,225) = 31,033
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10. Gross income 63,000 First 29,400 Remainder 33,600 Gross tax due Less tax credits (1,580 + 1,270) Actual tax due PRSI: Calculation 7.5% of 63,000
@ 20% @ 42%
5,880 14,114 19,992 2,850 17,140 4,725
Net Wage Gross Wage (63,000) PAYE (17,140) PRSI (4,725) = 41,135 11. Gross income 62,000 First 29,400 Remainder 32,600 Gross tax due Less tax credits (1,580 + 1,270) Actual tax due PRSI: Calculation 7.5% of 62,000 @ 20% @ 42% 5,880 13,440 19,320 2,850 16,470 4,650
Net Wage: Gross Wage (62,000) PAYE (16,470) PRSI (4,650) BUPA (600) Union Fee (1,350) = 38,930
Chapter 26 Industrial Relations

1. Good industrial relations are important because disputes over wages, working conditions etc., can be settled without a strike taking place. 2. Trade unions: Negotiate wage increases for their members; Protect their members against unfair dismissal; Represent their members in discussions with employers and government on matters such as taxation and employment. 3.
Union Type Craft Union White Collar Union Industrial Union General Union Explanation Represents workers who have served an apprenticeship Represents workers who have professional qualification Represents workers who work in the same industry Represents workers who are not in any of the other three unions Example NUJ ASTI INO SIPTU
4. Industrial disputes arise when:
Working conditions are dangerous; Pay should be increased because of extra work done.
5. Industrial disputes can be settled by: Workers discussing the problem with their supervisor; The shop steward discussing the problem with the manager; An acceptable third party bringing the two sides in dispute together.
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6. (a) (i) Line graph showing number of strikes for the period 19901994
(ii) 44.2 strikes. (iii) 1992 and 1994. (b) (i) Breach of agreement on the employment of temporary staff. (ii) Department of Agriculture and members of the CPSU. (iii) Ban on overtime, refusal to perform duties of higher grades, ban on telephone and public enquiries. (iv) Both sides going to conciliation or arbitration. 7. (a) Strikes take place because: Workers are seeking higher wages; Poor working conditions; Demarcation disputes over who does what work. (b) (i) Suspension by An Post of staff at its Dublin mail centre in Clondalkin. (ii) An Post and the CWU (postal workers). (iii) Reinstatement of suspended staff and the restoration of the postal service. An Post wanted the union to deliver work changes that had already been paid for. (iv) Members of the public who could not get any post; charities, e.g. Concern, who would not get donations that were sent in the post. (v) The Labour Relations Commission (LRC).
Chapter 27 Finance for Business

1. It is important to distinguish between short-, medium- and long-term needs because each one has a different time period and will require a different type of finance. E.g. a long-term need would require a source of finance to be paid back after at least five years.
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2.
Short-Term Source Creditors Expenses due Bank overdraft Explanation This is where a business buys goods from a supplier and pays for them at a later date. This where certain expenses are incurred and paid for later, e.g. electricity and telephone. This where a person has a current account and has permission from the bank to take out more money than is in the account.
3.
External Source Hire Purchase Explanation This is a source of finance where the business that requires the three vans, pays a number of instalments and becomes the eventual owner when the last instalment is paid. This is a source of finance where the business that wants the use but not ownership of the three vans, pays a finance company for the use of them.
Leasing
4.
Long-Term Source Reserves Grants Long-term loan Explanation This an internal source of finance that is available to a profitable business that has set some of its profit aside for use at a later stage. This is an external source of finance, which is obtained from the EU or government, to start or expand a business, if certain conditions are met. This is an external source of finance that is obtained from a financial institution for the purchase of land, buildings and machinery. The business must be creditworthy, be able to repay the loan and have security.
5. Killoe, Co. Longford. Title: Suitable Sources of Finance for Kennedy Ltd. Date:___________________ Kennedy Ltd, College Park, Longford. I was asked by you to advise on suitable sources of finance for your business. As your needs are both long and medium term, I advise the following: Extension of the factory should be financed by investing extra capital in the business and using up the available reserves. The purchase of suitable equipment should be financed by a four-year bank loan. I am available to discuss this report if necessary. Thomas Mahon. Financial Consultant.
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Chapter 28 Preparation of a Business Plan

1. (i) (ii) (iii) (iv) (v) The business background giving details of the owners and a history of the business; A description of the product or service; Market research details of customers and competitors; How the product or service will be promoted; The sources of finance that will be used, both internal and external. = 122,000 = 86,000 36,000
2. Total cost of project (60,000 + 30,000 + 18,000 + 14,000) Less Finance Available (56,000 + 30,000) Finance Required:
3. Total cost of project (80,000 + 40,000 + 60,000 + 20,000 + 10,000) = 210,000 Less Finance Available (62,500 + 35,000) = 97,500 Finance Required: 112,500
Chapter 29 Business Loan Applications

1. The business history; purpose of the loan; amount of the loan; time period of the loan; proof of ability to repay the loan; details of security available in case the loan is not paid back. 2. Total cost of project (150,000 + 140,000) Less finance available (80,000 + 50,000) Loan required: = 290,000 = 130,000 160,000
Chapter 30 Banking for Business

1.
Service Money transmission Lending Night-safe facilities Paypath International services Explanation This involves moving money from one business to another e.g. cheques, credit transfers etc Banks provide loans for different periods as well as overdrafts Banks provide a safe place to keep business money overnight Banks will transfer money to an employees account Banks will make payments to foreign businesses on behalf of their account holders
2. A private limited company must provide memorandum of association; articles of association; written agreement of directors to open an account; signatures of persons permitted to sign cheques.
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3. The directors of the company, having completed an application form and provided necessary details, open the account; Money is lodged to the account using lodgement slips, credit transfers, standing orders etc; Payments are made from the account by way of cheques signed by authorised people, by standing orders, direct debits, credit transfers etc; The account is checked against the bank statement. 4.
Date 2005 31/7 Balance b/d Credit transfer Standing order Direct debit Bank charges 3,000 2,400 4,500 350 Details
Adjusted Bank Account

Debit Credit Balance 17,000 20,000 17,600 13,100 12,750
Bank Reconciliation Statement as on 31/7/2005 Balance as per bank statement Add lodgements not credited Less cheques not yet presented (4,600 + 6,000) Balance as per adjusted bank account 5.
Date 2007 31/5 Balance b/d Credit transfer Details
12,750 10,600 23,350 10,600 12,750

Total 12,900 2,400 15,300 Balance b/d 13,960 Date 2007 31/5 Standing order Bank charges Balance c/d Details Total 1,300 40 13,960 15,300
Bank Reconciliation Statement as on 31/5/2007 Balance as per bank statement Add lodgements not credited Less cheques not yet presented (1,300 + 600 + 1,450) Balance as per adjusted bank account 6.
9,810 7,500 17,310 3,350 13,960
Adjusted bank account

Total 16,740 2,780 19,520 Balance b/d 17,630 Date 2007 31/3 Direct debit Bank charges Balance c/d Details Total 1,790 100 17,630 19,520
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Bank Reconciliation Statement as on 31/3/2007 Balance as per bank statement Add lodgements not credited Less cheques not yet presented (950 + 4,360 + 3,550) Balance as per adjusted bank account 7. (a)
Date 2004 1/5 3/5 31/5 Balance b/d Lodgement Lodgement Details Total 1,500 3,500 12,400
14,890 11,600 26,490 17,630
8,860
Bank Account
Date 2004 7/5 10/5 14/5 19/5 27/5 31/5 17,400 Martin Ltd Bruton Ltd Cash withdrawal Kenny Ltd Harney Ltd Balance c/d 1 2 ATM 3 4 Details Ch. no./ATM Total 1,700 4,500 600 2,780 1,900 5,920 17,400
1/6
Balance b/d
5,920
(b)

Total 5,920 10,000 15,920 12,345 Date 2004 Direct debit Bank fees Balance c/d Details Total 3,400 175 12,345 15,920
(c) Bank Reconciliation Statement as on 31/5/2004 Balance as per bank statement Add lodgements not credited Less cheques not yet presented (4,500 + 1,900) Balance as per adjusted bank account 6,345 12,400 18,745 6,400 12,345
Chapter 31 Business Insurance

1.
Types of Insurance Third party motor insurance Theft insurance Cash in transit Employers liability Product liability Explanation Required by law in case damage is caused by its motor vehicles In case goods or equipment is stolen In case money is stolen on the way to the bank In case workers get injured at work In case consumers get injured using the product
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2. (a) Hayes Ltd is required by law to have third party motor insurance, and to pay its share of PRSI. (b) Hayes Ltd should also take out: Fire insurance in case fire causes damage to furniture, premises or equipment; Theft insurance in case furniture or equipment is stolen; Employers liability in case any of its five workers are injured at work. (c) Hayes Ltd may be unable to insure against losses due to bad management or furniture going out of date. (d) Hayes Ltd should have adequate insurance so that all possible risks are insured for the correct amounts. (e) Hayes Ltd should consult an insurance broker because the broker will be independent and experienced.
Chapter 32 Delivery Systems

1. An efficient delivery system is important in the chain of distribution because: Raw materials have to be transported to manufacturers; Finished goods have to be transported to retailers; Workers have to be transported to their places of work; Consumers have to be transported to the retailers. 2. Cost the cost of transport adds to the cost of the goods so it must be as low as possible. Reliability the system must be punctual and meet deadlines. Speed speed is very important for delivery of many goods e.g. fish, fruit etc. Convenience the system should be available as and when required. 3. Road transport is very popular and is suitable for fast deliveries of non-bulky goods. Air transport is very quick and is suitable for transporting people and high-value non-bulky goods. 4.
Delivery System Road Rail Sea Air Speed Fast over short distances Very fast Slow Very fast Cost Expensive Cheaper than road Cheaper than air Very expensive Reliability Very reliable Very reliable Dependent on weather Dependent on weather Good transported Non-bulky Bulky Bulky Non-bulky
5. Dublin Port Tunnel, which allows trucks to bypass Dublin city on the way to Dublin Port. 6. A business can transport goods as and when it needs to and is not tied to timetables. It can also advertise its goods on the side of its trucks. 7. (a) 178 km (b) 206 km (c) 188 km (d) 164 km 8. (a) 325 km (b) 326 km 9. (a) 10.14 am (b) 11.30 am 10. (a) 5.55 am (b) 5.36 am
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11. (a) Cost of diesel: 168 = 6.72 litres @ 0.60 = 4.03 25 Driver wages: 100 Annual costs: 1,500 + 600 + 1,100 320 Total costs: 114.03 = 10
(b) Cost of diesel: 168 = 6.72 litres @ 0.60 = 4.03 25 Driver wages: 120 Annual costs: 1,350 + 750 + 1,200 = 11 300 Total costs: 135.03 12. (a) Cost of diesel: 472 = 18.88 litres @ 0.60 = 11.33 25 Driver wages: 11@ 8 + 11 @ 3 = 121 Annual costs: 900 + 520 + 3,000 295 Total costs: 147.31 (b) 1.46%. 13. Cost of diesel: 460 = 28,75 litres @ 0.60 = 17.25 16 Driver wages: 98 Annual costs: 580 + 1,500 + 750 283 Total costs: 125.25 = 10 = 14.98
Chapter 33 Marketing
1. Market means the exchange of goods or services for payment. Examples include: market for labour; transport; money; education. 2. Carrying out market research; Production of a product or service; Deciding on a place to sell the product or service; Deciding on the price at which to sell the product or service; Deciding on how to promote the product or service; Carry out further market research to get customer feedback. 3.
Product/Service Target Market
Farmers Journal Business people Farmers

Conrad Hotel
Sky Sports Business Studies Books Sports Junior Certificate Students
Doc Martens boots Teenagers
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4. Sample layout
Four Ps Product Price Promotion Place Product chosen: school bag Available in ten colours and five sizes Range from 12.50 to 28.60 Send fliers to schools. Television advertisements in August Available in all sports and school bookshops
5. Market research is important because it provides details of customers and competitors. This helps identify the target market. 6. A business would first use desk research, which involves studying existing information on the market. It would then use field studies to get additional information that is not available from desk research. This involves using questionnaires, interviews etc. 7. A business advertises to inform customers about its products or services, to persuade customers to buy only its products or services and also to highlight the difference between its products or services and those of its competitors. 8. Who is the target market; The type of product or service; The cost. 9. Be careful with the number of words used because that determines the price of newspaper advertisements. Example: Dont dry up, Quench your thirst with Irish Rain. Available NOW in retail stores nationwide! 10. To launch a new Finance and Consumer TV Show. Example: Youve seen the rest Now watch the best Get it all off your chest With the new Finance and Consumer test. 11. Students to suggest answer. 12.
Product/Service Media Smarties Television Swimwear Colour magazine Festival Posters Circus Fliers Bank Radio
13. Students to suggest answers. 14. Must have, Cant live without it, Be ahead of the pack.
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Chapter 34 Financial Recording and Filing

1. To know how much you have; To know how much you owe; To know how much you are owed; To know if you are making a profit or a loss. 2. Complete documents; Record data in Books of First Entry; Post data to the Ledger; Extract a Trial Balance; Prepare Final Accounts and Balance Sheet. 3. Double entry bookkeeping is the recording of the giving and the receiving aspects of a transaction. 4. Debtors Ledger is used to record the names of people who owe the business money. Creditors Ledger is used to record the names of people to whom the business owes money. General Ledger is used to record all transactions that cannot be recorded in the Debtors or Creditors Ledgers.
Chapter 35 Business Documents I

1. Effective purchasing means purchasing the right quantity and quality of goods at the right price and time. 2. Letter, phone or e-mail. 3. Quality; price; method of payment; delivery; discounts. 4.
Providers Hardware Stores Ltd, Cavan. (049) 23246. VAT Reg. No. 6311141H _______________________ The Sales Department, Crown Paints Ltd, Dublin. Dear Sir/Madam, Please send me the best terms and conditions under which you can supply me with the following: 50 10 litre drums of white emulsion; 30 5 litre tins of cream paint; 60 5 litre tins of white ceiling paint; 15 1 litre tins of brown gloss paint for exterior use. Yours faithfully, _____________________________ Purchasing Manager.
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5.
All Sports Ltd, Cork Rd., Dublin. (01) 7734218. VAT Reg. No. 4812641S ________________________ Connolly Sportswear Manufacturers Ltd, Tuam Rd., Galway. Dear Sir/Madam, Please send me the best terms and conditions under which you can supply me with the following: 4 Sets of Leitrim Jerseys (Senior size); 60 Hurling Helmets varying sizes; 30 Tracksuits with Leitrim crest; 120 Hurleys varying sizes. Yours faithfully, _______________________ Purchasing Manager.
6. C 556.20 7.
(A = 565.25
B = 580.30
C = 556.20)
Term CWO Ex Works Trade Discount 30% 5% in 10 days otherwise net Subject to VAT @21%
Explanation Cash must be sent with the order Price does not include delivery. If goods have to be delivered they will cost more Retailers will receive a 30% reduction in the price to encourage them to sell the goods If payment is made within 10 days of receiving the goods a further reduction of 5% will be given, otherwise the normal price applies Value Added Tax at 21% has to be added to the price of the goods
8. A business can check the credit ratings of a customer by: Checking the existing records to see if the customer paid up in the past; Asking for a bank reference to see if the bank would recommend the customer; Asking for a trade reference to see if another business would recommend the customer. 9. (a) Gross Profit 200 10. (a) 20% 11. (a) 50 12. 25% (b) 16.67% (b) 40% (b) Mark up % = 50%. Margin % = 33 13 %
Chapter 36 Business Documents II

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Chapter 37 Recording Credit Transactions

1.
Sales Book (p1) Date 2006 11/10 13/10 15/10 Coyne Ltd Hynes Ltd Lyons Ltd 54 55 56 DL DL DL Details Inv. no. F Net 32,000 28,000 16,000 76,000 Debtors Ledger Date 2006 11/10 Sales SB Details F Total Date Details F Total 2006 Coyne Ltd A/C 36,320 Hynes Ltd A/C 13/10 Sales SB 31,780 Lyons Ltd A/C 15/10 Sales SB 18,160 General Ledger Sales A/C 15/10 Vat A/C 15/10 Credit sales SB 10,260 Total debtors SB 76,000 VAT 4,320 3,780 2,160 10,260 Total 36,320 31,780 18,160 86,260
Trial Balance as on 15/10/2006 Coyne Ltd Hynes Ltd Lyons Ltd Sales VAT 86,260 36,320 31,780 18,160 76,000 10,260 86,260
2.
Sales Book (p1) Date 2006 17/4 18/4 20/4 Foley Ltd Roley Ltd Poley Ltd 34 35 36 DL DL DL Details Inv. no. F Net 11,000 19,000 52,000 82,000 VAT 1,485 2,565 7,020 11,070 Total 12,485 21,565 59,020 93,070
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Debtors Ledger Date 2006 17/4 Sales SB Details F Total Date Details F Total 2006 Foley Ltd A/C 12,485 Roley Ltd A/C 18/4 Sales SB 21,565 Poley Ltd A/C 20/4 Sales SB 59,020 General Ledger Sales A/C 20/4 VAT A/C 20/4 Credit sales SB 11,070 Total debtors SB 82,000
Trial Balance as on 20/4/2006 Foley Ltd Roley Ltd Poley Ltd Sales VAT 93,070 12,485 21,565 59,020 82,000 11,070 93,070
3.
Sales Book (p1) Date 2007 12/5 14/5 15/5 Mark Ltd Dark Ltd Park Ltd 67 68 69 DL DL DL Details Inv. no. F Net 27,000 10,400 38,400 75,800 VAT 3,645 1,404 5,184 10,233 Total 30,645 11,804 43,584 86,033
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Debtors Ledger Date 2007 12/5 Sales SB Details F Total Date Details F Total 2007 Mark Ltd A/C 30,645 Dark Ltd A/C 14/5 Sales SB 11,804 Park Ltd A/C 15/5 Sales SB 43,584 General Ledger Sales A/C 15/5 VAT A/C 15/5 Credit sales SB 10,233 Total debtors SB 75,800
Trial Balance as on 15/5/2007 Mark Ltd Dark Ltd Park Ltd Sales VAT 86,033 30,645 11,804 43,584 75,800 10,233 86,033
4.
Sales Book (p1) Date 2007 23/9 24/9 26/9 Brown Ltd White Ltd Green Ltd 45 46 47 DL DL DL Details Inv. no. F Net 21,000 50,000 16,000 87,000 VAT 4,410 10,500 3,360 18,270 Total 25,410 60,500 19,360 105,270
42
Debtors Ledger Date 2007 23/9 Sales SB Details F Total Date Details F Total 2007 Brown Ltd A/C 25,410 White Ltd A/C 24/9 Sales SB 60,500 Green Ltd A/C 26/9 Sales SB 19,360 General Ledger Sales A/C 26/9 VAT A/C 26/9 Credit sales SB 18,270 Total debtors SB 87,000
Trial Balance as on 26/9/2007 Brown Ltd White Ltd Green Ltd Sales VAT 105,270 25,410 60,500 19,360 87,000 18,270 105,270
5.
Purchases Book (p1) Date 2007 3/4 5/4 8/4 PM Ltd ET Ltd AA Ltd 4 2 1 CL CL CL Details Inv. no. F Net 18,000 8,000 12,000 38,000 VAT 3,780 1,680 2,520 7,980 Total 21,780 9,680 14,520 45,980
43
Creditors Ledger Date 2007 Details F Total Date Details F Total Purchases PB 21,780 2007 PM Ltd A/C 3/4 ET Ltd A/C 5/4 AA Ltd A/C 8/4 General Ledger Purchases A/C 8/4 Total creditors PB 38,000 VAT A/C 8/4 Credit purchases PB 7,890 Purchases PB 14,520 Purchases PB 9,680
Trial Balance as on 8/4/2007 PM Ltd ET Ltd AA Ltd Purchases VAT 38,000 7,890 45,790 45,790 21,780 9,680 14,520
6.
Purchases Book (p1) Date 2007 17/9 19/9 23/9 BC Ltd MP Ltd CC Ltd 7 5 3 CL CL CL Details Inv. no. F Net 36,000 4,000 54,000 94,000 VAT 7,560 840 11,340 19,740 Total 43,560 4,840 65,340 113,740
44
Creditors Ledger Date 2007 Details F Total Date Details F Total Purchases PB 43,560 2007 BC Ltd A/C 17/9 MP Ltd A/C 19/9 CC Ltd A/C 23/9 General Ledger Purchases A/C 23/9 Total purchases PB 94,000 VAT A/C 23/9 Credit purchases PB 19,740 Purchases PB 65,340 Purchases PB 4,840
Trial Balance as on 23/9/2007 BC Ltd MP Ltd CC Ltd Purchases VAT 94,000 19,740 113,740 113,740 43,560 4,840 65,340
7.
Purchases Book (p1) Date 2007 29/5 30/5 31/5 PP Ltd DJ Ltd FI Ltd 9 8 7 CL CL CL Details Inv. no. F Net 64,000 48,000 96,000 208,000 VAT 8,640 6,480 12,960 28,080 Total 72,640 54,480 108,960 236,080
45
Creditors Ledger Date 2007 Details F Total Date Details F Total Purchases PB 72,640 2007 PP Ltd A/C 29/5 DJ Ltd A/C 30/5 FI Ltd A/C 31/5 General Ledger Purchases A/C 31/5 Total creditors PB 208,000 VAT A/C 31/5 Credit purchases PB 28,080 Purchases PB 108,960 Purchases PB 54,480
Trial Balance as on 31/5/2007 PP Ltd DJ Ltd FI Ltd Purchases VAT 208,000 28,080 236,080 236,080 72,640 54,480 108,960
8.
Purchases Book (p1) Date 2007 14/7 16/7 18/7 PJ Ltd SM Ltd JC 7 2 4 CL CL CL Details Inv. no. F Net 16,000 44,000 36,000 96,000 VAT 2,160 5,940 4,860 12,960 Total 18,160 49,940 40,860 108,960
46
Creditors Ledger Date 2007 Details F Total Date Details F Total Purchases PB 18,160 2007 PJ Ltd A/C 14/7 SM Ltd A/C 16/7 JC Ltd A/C 18/7 General Ledger Purchases A/C 18/7 Total creditors PB 96,000 VAT A/C 18/7 Credit purchases PB 12,960 Purchases PB 40,860 Purchases PB 49,940
Trial Balance as on 18/7/2007 PJ Ltd SM Ltd JC Ltd Purchases VAT 96,000 12,960 108,960 108,960 18,160 49,940 40,860
9.
Sales Returns Book (p1) Date 2006 20/4 23/4 Bun Ltd Gun Ltd 67 68 DL DL Details Credit note no. F Net 1,300 600 1,900 VAT 273 126 399 Total 1,573 726 2,299
47
Debtors Ledger Date 2006 Details F Total Date Details F Total Sales returns SRB 1,573 2006 Bun Ltd A/C 20/4 Gun Ltd A/C 23/4 General Ledger Sales Returns A/C 20/4 Total debtors SRB 1,900 VAT A/C 20/4 Sales returns SRB 399 Sales returns SRB 726
Trial Balance as on 20/4/2007 Bun Ltd Gun Ltd Sales returns VAT 1,900 399 2,299 2,299 1,573 726
10.
Sales Returns Book (p1) Date 2006 12/1 14/1 Bob Ltd Rob Ltd 45 46 DL DL Details Credit note no. F Net 3,000 1,600 4,600 VAT 405 216 621 Total 3,405 1,816 5,221
48
Debtors Ledger Date 2006 Details F Total Date Details F Total Sales returns SRB 3,405 2006 Bob Ltd A/C 12/1 Rob Ltd A/C 14/1 General Ledger Sales Returns A/C 14/1 Total debtors SRB 4,600 VAT A/C 14/1 Sales returns SRB 621 Sales returns SRB 1,816
Trial Balance as on 14/1/2006 Bob Ltd Rob Ltd Sales returns VAT 4,600 621 5,221 5,221 3,405 1,816
11.
Sales Returns Book (p1) Date 2006 24/9 26/9 Joe Ltd Coe Ltd 78 79 DL DL Details Credit note no. F Net 2,400 5,600 8,000 VAT 324 756 1,080 Total 2,724 6,356 9,080
Debtors Ledger Date 2006 Details F Total Date Details F Total Sales returns SRB 2,724 2006 Joe Ltd A/C 24/9 Coe Ltd A/C 26/9 General Ledger Sales Returns A/C 26/9 Total debtors SRB 8,000 VAT A/C 26/9 Sales returns SRB 1,080 Sales returns SRB 6,356
49
Trial Balance as on 26/9/2006 Joe Ltd Coe Ltd Sales returns VAT 8,000 1,080 9,080 9,080 2,724 6,356
12.
Purchases Returns Book (p1) Date 2007 7/3 8/3 Mike Ltd Alma Ltd 56 12 CL CL Details Credit note no. F Net 3,600 1,400 5,000 VAT 486 189 675 Total 4,086 1,589 5,675
Creditors Ledger Date 2007 7/3 Purchases returns PRB Details F Total Date Details F Total 2007 Mike Ltd A/C 4,086 Alma Ltd A/C 8/3 Purchases returns PRB 1,589
Purchases Returns A/C 8/3 VAT A/C 8/3 Purchases returns PRB 675 Total creditors PRB 5,000
Trial Balance as on 8/3/2007 Mike Ltd Alma Ltd Purchases returns VAT 5,675 4,086 1,589 5,000 675 5,675
50
13.
Purchases Returns Book (p1) Date 2007 23/1 25/1 Vicki Ltd Steve Ltd 34 5 CL CL Details Credit note no. F Net 2,800 800 3,600 VAT 378 108 486 Total 3,178 908 4,086
Creditors Ledger Date 2007 23/1 Purchases returns PRB Details F Total Date Details F Total 2007 Vickie Ltd A/C 3,178 Steve Ltd A/C 25/1 Purchases returns PRB 908 General Ledger Purchases Returns A/C 25/1 VAT A/C 25/1 Purchases returns PRB 486 Total creditors PRB 3,600
Trial Balance as on 25/1/2007 Vickie Ltd Steve Ltd Purchase returns VAT 4,086 3,178 908 3,600 486 4,086
14.
Purchases Returns Book (p1) Date 2007 16/2 18/2 Vera Ltd Jack Ltd 14 67 CL CL Details Credit note no. F Net 3,400 2,800 6,200 VAT 714 588 1,302 Total 4,114 3,388 7,502
51
Creditors Ledger Date 2007 16/2 Purchases returns PRB Details F Total Date Details F Total 2007 Vera Ltd A/C 4,114 Jack Ltd A/C 18/2 Purchases returns PRB 3,388 General Ledger Purchases Returns A/C 18/2 VAT A/C 18/2 Purchase returns PRB 1,302 Total creditors PRB 6,200
Trial Balance as on 18/2/2007 Vera Ltd Jack Ltd Purchase returns VAT 7,502 4,114 3,388 6,200 1,302 7,502
15.
Sales Book (p1) Date 2008 3/4 5/4 Smyth Ltd Smart Ltd 43 44 DL DL Details Invoice no. F Net 20,000 15,500 35,500 VAT 4,200 3,255 7,455 Total 24,200 18,755 42,955
Sales Returns Book (p1) Date 2008 8/4 9/4 Smyth Ltd Smart Ltd 12 13 DL DL Details Credit note no. F Net 4,500 3,200 7,700 VAT 945 672 1,617 Total 5,445 3,872 9,317
52
Debtors Ledger Date 2008 3/4 Sales SB Details F Total Date Details F Total Sales returns Balance c/d SRB 5,445 18,755 24,200 2008 Smyth Ltd A/C 24,200 24,200 10/4 5/4 Balance b/d Sales SB 18,755 Smart Ltd A/C 18,755 18,755 10/2 Balance b/d 14,883 General Ledger Sales A/C 9/4 Sales Returns A/C 9/4 Total debtors SRB 7,700 VAT A/C 9/4 9/4 Sales returns Balance c/d SRB 1,617 5,838 7,455 10/4 Balance b/d 7,455 5,838 9/4 Credit sales SB 7,455 Total debtors SB 35,500 9/4 9/4 Sales returns Balance c/d SRB 3,872 14,883 18,755 8/4 9/4
Trial Balance as on 9/4/2008 Smyth Ltd Smart Ltd Sales Sales returns VAT 41,338 7,700 5,838 41,338 18,755 14,883 35,500
16.
Sales Book (p1) Date 2008 13/2 14/2 Harry Ltd Helen Ltd 67 68 DL DL Details Invoice no. F Net 35,000 24,000 59,000 VAT 4,725 3,240 7,965 Total 39,725 27,240 66,965
53
Sales Returns Book (p1) Date 2008 16/2 18/2 Harry Ltd Helen Ltd 56 57 DL DL Details Credit note no. F Net 6,000 2,400 8,400 VAT 810 324 1,134 Total 6,810 2,724 9,534
Debtors Ledger Date 2008 13/2 Sales SB Details F Total Date Details F Total Sales returns Balance c/d SRB 6,810 32,915 39,725 2008 Harry Ltd A/C 39,725 39,725 19/2 14/2 Balance b/d Sales SB 32,915 Helen Ltd A/C 27,240 27,240 19/2 Balance b/d 24,516 General Ledger Sales A/C 18/2 Sales Returns A/C 18/2 Total debtors SRB 8,400 VAT A/C 18/2 18/2 Sales returns Balance c/d SRB 1,134 6,831 7,965 19/2 Balance b/d 7,965 6,831 18/2 Credit sales SB 7,965 Total debtors SB 59,000 18/2 Sales returns Balance c/d SRB 2,724 24,516 27,240 16/2 18/2
Trial Balance as on 18/2/2008 Harry Ltd Helen Ltd Sales Sales returns VAT 65,831 8,400 6,831 65,831 32,915 24,516 59,000
54
17.
Sales Book (p1) Date 2008 25/6 26/6 Glass Ltd Task Ltd 78 79 DL DL Details Invoice no. F Net 45,000 78,000 123,000 VAT 9,450 16,380 25,830 Total 54,450 94,380 148,830
Sales Returns Book (p1) Date 2008 27/6 Glass Ltd 32 DL Details Credit note no. F Net 7,600 VAT 1,596 Total 9,196
Debtors Ledger Date 2008 25/6 Sales SB Details F Total Date Details F Total Sales returns Balance c/d SRB 9,196 45,254 54,450 2008 Glass Ltd A/C 54,450 54,450 28/6 26/6 Balance b/d Sales SB 45,254 Task Ltd A/C 94,380 General Ledger Sales A/C 27/6 Sales Returns A/C 27/6 Total debtors SRB 7,600 VAT A/C 27/6 27/6 Sales returns Balance c/d SRB 1,596 24,234 25,830 28/6 Balance b/d 25,830 24,234 27/6 Credit sales SB 25,830 Total debtors SB 123,000 27/6 27/6
Trial Balance as on 27/6/2008 Glass Ltd Task Ltd Sales Sales returns VAT 147,234 7,600 24,234 147,234 45,254 94,380 123,000
55
18.
Purchases Book (p1) Date 2006 10/4 12/4 Dinny Ltd Tesie Ltd 32 56 CL CL Details Invoice no. F Net 39,400 76,900 116,300 Purchases Returns Book (p1) Date 2006 14/4 16/4 Dinny Ltd Tesie Ltd 21 89 CL CL Details Credit note no. F Net 6,400 3,500 9,900 Creditors Ledger Date 2006 14/4 16/4 Purchase returns Balance c/d PRB Details F Total Date Details F Total Purchases PB 47,674 47,674 Balance b/d Purchases PB 39,930 93,049 93,049 Balance b/d 88,814 2006 Dinny Ltd A/C 7,744 39,930 47,674 17/4 Tesie Ltd A/C 16/4 16/4 Purchases returns Balance c/d PRB 4,235 88,814 93,049 17/4 General Ledger Purchases A/C 16/4 Total creditors PB 116,300 Purchase Returns A/C 16/4 VAT A/C 16/4 Credit purchases PB 24,423 24,423 17/4 Balance b/d 22,344 Trial Balance as on 16/4/2008 Dinny Ltd Tesie Ltd Purchases Purchases returns VAT 22,344 138,644
56
VAT 8,274 16,149 24,423
Total 47,674 93,049 140,723
VAT 1,344 735 2,079
Total 7,744 4,235 11,979
10/4
12/4
Total creditor
PRB
9,900
16/4 16/4
Purchases ret. Balance c/d
2,079 22,344 24,423
39,930 88,814 116,300 9,900 138,644
19.
Purchases Book (p1) Date 2006 13/5 25/5 Miley Ltd Biddy 43 12 CL CL Details Invoice no. F Net 76,000 56,600 132,600 Purchases Returns Book (p1) Date 2006 26/5 28/5 Miley Ltd Biddy Ltd 34 56 CL CL Details Credit note no. F Net 7,200 3,600 10,800 Creditors Ledger Date 2006 26/5 27/5 Purchases returns Balance c/d PRB Details F Total Date Details F Total Purchases PB 86,260 86,260 Balance b/d Purchases PB 78,088 64,241 64,241 Balance b/d 60,155 2006 Miley Ltd A/C 8,172 78,088 86,260 28/5 Biddy Ltd A/C 28/5 28/5 Purchases returns Balance c/d PRB 4,086 60,155 64,241 29/5 General Ledger Purchases A/C 28/5 Total creditors PB 132,600 Purchases Returns A/C 28/5 VAT A/C 28/5 Credit purchases PB 17,901 17,901 29/5 Balance b/d 16,443 Trial Balance as on 28/5/2006 Miley Ltd Biddy Ltd Purchases Purchases returns VAT 16,443 149,043 149,043
57
VAT 10,260 7,641 17,901
Total 86,260 64,241 150,501
VAT 972 486 1,458
Total 8,172 4,086 12,258
13/5
25/5
Total creditors
PRB
10,800
28/5 28/5
Purchases ret. Balance c/d
PRB
1,458 16,443 17,901
78,088 60,155 132,600 10,800
20.
Purchases Book (p1) Date 2006 17/8 19/8 Nora Ltd Brian Ltd 13 92 CL CL Details Invoice no. F Net 46,400 56,600 103,000 VAT 6,264 7,641 13,905 Total 52,664 64,241 116,905
Purchases Returns Book (p1) Date 2006 20/8 22/8 Nora Ltd Brian Ltd 14 86 CL CL Details Credit note no. F Net 2,200 2,600 4,800 VAT 297 351 648 Total 2,497 2,951 5,448
Creditors Ledger Date 2006 20/8 22/8 Purchases returns Balance c/d PRB Details F Total Date Details F Total Purchases PB 52,664 52,664 23/8 Brian Ltd A/C 22/8 22/8 Purchase returns Balance c/d PRB 2,951 61,290 64,241 23/8 General Ledger Purchases A/C 22/8 Total creditors PB 103,000 Purchases Returns A/C 22/8 VAT A/C 22/8 Credit purchases PB 13,905 13,905 23/8 Balance b/d 13,257 22/8 22/8 Purchases ret. Balance c/d PRB 648 13,257 13,905 Total creditors PRB 4,800 Balance b/d 64,241 61,290 19/8 Purchases PB 64,241 Balance b/d 50,167 2006 Nora Ltd A/C 2,497 50,167 52,664 17/8
58
Trial Balance as on 22/8/2006 Nora Ltd Brian Ltd Purchases Purchases returns VAT 13,257 116,257 116,257 103,000 4,800 50,167 61,290
21.
Purchases Book (p1) Date 1/7/2006 Details Fagan Ltd Invoice no. 6 F CL Net 14,000 VAT 1,890 Total 15,890
Purchases Returns Book (p1) Date 6/7/2006 Details Fagan Ltd Credit note no. 61 F CL Net 2,400 VAT 324 Total 2,724
Sales Book (p1) Date 4/7/2006 Details Turner Ltd Invoice no. 17 F DL Net 4,800 VAT 648 Total 5,448
Sales Returns Book (p1) Date 8/7/2006 Details Turner Ltd Credit note no. 42 F DL Net 1,600 VAT 216 Total 1,816
59
Creditors Ledger Date 2006 6/7 8/7 Purchases returns PRB Balance c/d Details F Total Date Details F Total Purchases PB 15,890 15,890 9/7 Debtors Ledger Turner Ltd 4/7 Sales SB 5,448 5,448 9/7 Balance b/d 3,632 General Ledger Purchases A/C 8/7 Total creditors PB 14,000 Purchases Returns A/C 8/7 Sales A/C 8/7 Sales Returns A/C 8/7
Total debtors
2006 Fagan Ltd A/C 2,724 13,166 15,890 Balance b/d 1/7
13,166
8/7 8/7
Sales returns Balance c/d
SRB
1,816 3,632 5,448
Total creditors
PRB
2,400
Total debtors
SB
4,800
SRB
1,600 VAT A/C
8/7 8/7
Credit purchases Sales returns
PB SRB
1,890 216 2,106
8/7 8/7 8/7
Credit sales Purchases returns Balance c/d
SB PRB
648 324 1,134 2,106
9/7
Balance b/d
1,134
60
Trial Balance as on 9/7/2006 Fagan Ltd Turner Ltd Purchases Purchases returns Sales Sales returns VAT 1,600 1,134 20,366 20,366 3,632 14,000 2,400 4,800 13,166
22.
Purchases Book (p1) Date 1/4/2006 Details CB Ltd Invoice no. 50 F CL Net 36,000 VAT 7,560 Total 43,560
Purchases Returns Book (p1) Date 4/4/2006 Details CB Ltd Credit note no. 16 F CL Net 10,000 VAT 2,100 Total 12,100
Sales Book (p1) Date 5/4/2006 Details Rice Ltd Invoice no. 92 F DL Net 56,000 VAT 11,760 Total 67,760
Sales Returns Book (p1) Date 8/4/2006 Details Rice Ltd Credit note no. 71 F DL Net 8,600 VAT 1,806 Total 10,406
61
Creditors Ledger Date 2006 5/4 8/4 Purchases returns Balance c/d PRB Details F Total CB Ltd 12,100 31,460 43,560 9/4 Debtors Ledger Rice Ltd A/C 5/4 Sales SB 67,760 67,760 9/4 57,354 General Ledger Purchases A/C 8/4 Total creditors PB 36,000 Purchases Returns A/C 8/4 Sales A/C 8/4 Sales Returns A/C 8/4 Total debtors SRB 8,600 VAT A/C 8/4 8/4 8/4 Credit purchases Sales returns Balance c/d PB SRB 7,560 1,806 4,494 13,860 9/4 Balance b/d 13,860 4,494 8/4 8/4 Credit sales Purchases returns SB 11,760 2,100 Total debtors SB 56,000 Total creditors PRB 10,000 8/4 8/4 Sales returns Balance c/d SRB 10,406 57,354 67,760 Balance b/d 43,560 31,460 1/4 Purchases PB 43,560 Date 2006 Details F Total
62
Trial Balance as on 9/4/2006 CB Ltd Rice Ltd Purchases Purchases returns Sales Sales returns VAT 101,954 8,600 4,494 101,954 57,354 36,000 10,000 56,000 31,460
23.
Purchases Book (p1) Date 6/1/2007 Details FX Ltd Invoice no. 23 F CL Net 28,000 VAT 5,880 Total 33,880
Purchases Returns Book (p1) Date 9/1/2007 Details FX Ltd Credit note no. 40 F CL Net 3,400 VAT 714 Total 4,114
Sales Book (p1) Date 1/1/2007 Details Dolan Ltd Invoice no. 78 F DL Net 72,000 VAT 15,120 Total 87,120
Sales Returns Book (p1) Date 4/1/2007 Details Dolan Ltd Credit note no. 9 F DL Net 4,000 VAT 840 Total 4,840
63
Creditors Ledger Date 2007 9/1 9/1 Purchases returns Balance c/d PRB Details F Total Date Details F Total Purchases PB 33,880 33,880 10/1 Debtors Ledger Dolan Ltd A/C 1/1 Sales SB 87,120 87,120 10/1 Balance b/d 82,280 General Ledger Purchases A/C 9/1 Total creditors PB 28,000 Purchases Returns A/C 9/1 Sales A/C 9/1 Sales Returns A/C 9/1 Total debtors SRB 4,000 VAT A/C 9/1 9/1 9/1 Credit purchases Sales returns Balance c/d PB SRB 5,880 840 9,114 15,834 10/1 Balance b/d 15,834 9,114 9/1 9/1 Credit sales SB 15,120 714 Purchases returns PRB Total debtors SB 72,000 Total creditors PRB 3,400 4/1 9/1 Sales returns Balance c/d SRB 4,840 82,280 87,120 Balance b/d 29,766 2007 FX Ltd A/C 4,114 29,766 33,880 6/1
64
Trial Balance as on 9/1/2007 FX Ltd Dolan Ltd Purchases Purchases returns Sales Sales returns VAT 114,280 4,000 9,114 114,280 82,280 28,000 3,400 72,000 29,766
24.
Purchases Book (p1) Date 6/11/2007 Details DL Ltd Invoice no. 6 F CL Net 38,000 VAT 5,130 Total 43,130
Purchases Returns Book (p1) Date 9/11/2007 Details DL Ltd Credit note no. 18 F CL Net 5,400 VAT 729 Total 6,129
Sales Book (p1) Date 1/11/2007 Details Glynn Ltd Invoice no. 3 F DL Net 16,000 VAT 2,160 Total 18,160
Sales Returns Book (p1) Date 7/11/2007 Details Glynn Ltd Credit note no. 8 F DL Net 1,400 VAT 189 Total 1,589
65
Creditors Ledger Date 2007 9/11 9/11 Purchases returns Balance c/d PRB Details F Total Date Details F Total Purchases PB 43,130 43,130 10/11 Debtors Ledger Glynn Ltd A/C 1/11 Sales SB 18,160 18,160 10/11 16,571 General Ledger Purchases A/C 9/11 Total creditors PB 38,000 Purchases Returns A/C 9/11 Sales A/C 9/11 Sales Returns A/C 9/11 Total debtors SRB 1,400 VAT A/C 9/11 9/11 Credit purchases Sales returns PB SRB 5,130 189 5,319 10/11 Balance b/d 2,430 9/11 9/11 9/11 Credit sales Purchases returns Balance c/d SB PRB 2,160 729 2,430 5,319 Total debtors SB 16,000 Total creditors PRB 5,400 7/11 9/11 Sales returns Balance c/d SRB 1,589 16,571 18,160 Balance b/d 37,001 2007 DL Ltd A/C 6,129 37,001 43,130 6/11
66
Trial Balance as on 9/11/07 DL Ltd Glynn Ltd Purchases Purchases returns Sales Sales returns VAT 1,400 2,430 58,401 58,401 16,571 38,000 5,400 16,000 37,001
25.
Purchases Book (p1) Date 3/6/2007 Details KC Ltd Invoice no. 94 F CL Net 35,000 VAT 4,725 Total 39,725
Purchases Returns Book (p1) Date 8/6/2007 Details KC Ltd Credit note no. 17 F CL Net 5,000 VAT 675 Total 5,675
Sales Book (p1) Date 1/6/2007 Details Adams Ltd Invoice no. 4 F DL Net 46,000 VAT 6,210 Total 52,210
Sales Returns Book (p1) Date 9/6/2007 Details Adams Ltd Credit note no. 38 F DL Net 12,000 VAT 1,620 Total 13,620
67
Creditors Ledger Date 2007 8/6 9/6 Purchases returns Balance c/d PRB Details F Total Date Details F Total Purchases PB 39,725 39,725 10/6 Debtors Ledger Adams Ltd A/C 1/6 Sales SB 52,210 52,210 10/6 Balance b/d 38,590 General Ledger Purchases A/C 9/6 Total creditors PB 35,000 Purchases Returns A/C 9/6 Sales A/C 9/6 Sales Returns A/C 9/6 Total debtors SRB 12,000 VAT A/C 9/6 9/6 9/6 Credit purchases Sales returns Balance c/d PB SRB 4,725 1,620 540 6,885 10/6 Balance b/d 6,885 540 9/6 9/6 Credit sales SB 6,210 675 Purchases returns PRB Total debtors SB 46,000 Total creditors PRB 5,000 9/6 9/6 Sales returns Balance c/d SRB 13,620 38,590 52,210 Balance b/d 34,050 2007 KC Ltd A/C 5,675 34,050 39,725 3/6
68
Trial Balance as on 9/6/2007 KC Ltd Adams Ltd Purchases Purchases returns Sales Sales returns VAT 85,590 12,000 540 85,590 38,590 35,000 5,000 46,000 34,050
26.
Purchases Book (p1) Date 3/3/2007 Details MG Ltd Invoice no. 64 F CL Net 14,000 VAT 2,940 Total 16,940
Purchases Returns Book (p1) Date 8/3/2007 Details MG Ltd Credit note no. 15 F CL Net 1,200 VAT 252 Total 1,452
Sales Book (p1) Date 1/3/2007 Details Keenan Ltd Invoice no. 10 F DL Net 34,000 VAT 7,140 Total 41,140
Sales Returns Book (p1) Date 9/3/2007 Details Keenan Ltd Credit note no. 57 F DL Net 1,400 VAT 294 Total 1,694
69
Creditors Ledger Date 2007 8/3 9/3 Purchases returns Balance c/d PRB Details F Total Date Details F Total Purchases PB 16,940 16,940 10/3 Debtors Ledger Keenan Ltd A/C 1/3 Sales SB 41,140 41,140 10/3 Balance b/d 39,446 General Ledger Purchases A/C 9/3 Total creditors PB 14,000 Purchases Returns A/C 9/3 Sales A/C 9/3 Sales Returns A/C 9/3 Total debtors SRB 1,400 VAT A/C 9/3 9/3 9/3 Credit purchases Sales returns Balance c/d PB SRB 2,940 294 4,158 7,392 10/3 Balance b/d 7,392 4,158 9/3 9/3 Credit sales SB 7,140 252 Purchases returns PRB Total debtors SB 34,000 Total creditors PRB 1,200 9/3 9/3 Sales returns Balance c/d SRB 1,694 39,446 41,140 Balance c/d 15,488 2007 MG Ltd A/C 1,452 15,488 16,940 3/3
70
Trial Balance as on 9/3/2007 MG Ltd Keenan Ltd Purchases Purchases returns Sales Sales returns VAT 54,846 1,400 4,158 54,846 39,446 14,000 1,200 34,000 15,488
Chapter 38 Continuous Balancing Ledgers and Statements

Chapter 39 Analysed Cash Books I

1.
Date 2006 1/1 4/1 6/1 Details Analysed Cash Book (Debit Side) p1 Rec. no. F Total Bank Sales GL GL GL 20,430 63,560 50,000 133,990 8/1 Balance b/d 95,468 74,000 9,990 18,000 56,000 VAT 2,430 7,560 50,000 50,000 Other
Sales Sales Shareholders
Analysed Cash Book (Credit Side) p1 Date 2006 2/1 3/1 4/1 5/1 7/1 7/1 Details Purchases Advertising Insurance Purchases Carriage Balance c/d Cheque no. 1 2 3 4 5 GL F GL GL GL Total Bank Purchases 13,620 3,200 2,750 17,252 1,700 95,468 133,990 27,200 3,672 7,650 15,200 2,052 1,700 12,000 VAT 1,620 3,200 2,750 Other
71
Date 2006
Details
General Ledger Total Date 2006 Sales A/C 7/1 Purchases A/C Bank
Details
Total
ACB
74,000
7/1
Bank
ACB
27,200 VAT A/C
7/1 7/1
Purchases Balance c/d
ACB
3,672 6,318 9,990
7/1
Sales
ACB
9,990 9,990 6,318
Share Capital A/C 6/1 Advertising A/C 3/1 Bank ACB 3,200 Insurance A/C 4/1 Bank ACB 2,750 Carriage A/C 7/1 Bank ACB 1,700 Bank ACB 50,000
Trial Balance as on 7/1/2006 Sales Purchases VAT Share capital Advertising Insurance Carriage Bank 3,200 2,750 1,700 95,468 130,318 130,318 27,200 6,318 50,000 74,000
2.
Date 2006 1/2 4/2 6/2 Sales Sales Shareholders GL GL GL Details Analysed Cash Book (Debit Side) p1 Rec. no. F Total Bank Sales 38,720 58,080 175,000 271,800 10/2
72
VAT 6,720 10,080
Other
32,000 48,000 80,000
175,000 16,800 175,000
Balance b/d
190,206
Date 2006 2/2 3/2 4/2 5/2 9/2 9/2
Details Purchases Rent Wages Purchases Machinery Balance c/d
Analysed Cash Book (Credit Side) p1 Cheque no. F Total Bank Purchases 21 22 23 24 25 GL GL GL GL GL 21,780 2,200 6,400 16,214 35,000 190,206 271,800 31,400 13,400 18,000
VAT 3,780
Other 2,200 6,400
2,814 35,000 6,594 43,600
Date 2006
Details
Details
Total
ACB
80,000
9/2
Bank
ACB
31,400 VAT A/C
9/2 9/2
Purchases Balance c/d
ACB
6,594 10,206 16,800
9/2
Sales
ACB
16,800 16,800
10/2 Share Capital A/C 6/2 Rent A/C 3/2 Bank ACB 2,200 Wages A/C 4/2 Bank ACB 6,400 Machinery A/C 9/2 Bank ACB 35,000
Balance b/d
10,206
Bank
ACB
175,000
Trial Balance as on 9/2/2006 Sales Purchases VAT Share capital Rent Wages Machinery Bank 2,200 6,400 35,000 190,206 265,206 265,206
73
80,000 31,400 10,206 175,000
3.
Date 2007 1/4 6/4 6/4 Sales Shareholders Sales GL GL GL Details Analysed Cash Book (Debit Side) p1 Rec. no. F Total Bank Sales 87,120 110,000 72,600 269,720 9/4 Balance b/d 194,866 Analysed Cash Book (Credit Side) p1 Date 2007 3/4 3/4 4/4 7/4 8/4 8/4 Light and heat Purchases Equipment Purchases Repairs Balance c/d 34 35 36 37 38 GL GL GL GL GL Details Cheque no. F Total Bank Purchases 900 15,004 20,000 30,250 8,700 194,866 269,720 General Ledger Total Date 2007 Sales A/C 8/4 Purchases A/C 8/4 Bank ACB 37,400 VAT A/C 8/4 8/4 Purchases Balance c/d ACB 7,854 19,866 27,720 9/4 Share Capital A/C 6/4 Light and Heat A/C 3/4 Bank ACB 900 Equipment A/C 4/4 Bank ACB 20,000 Repairs A/C 8/4 Bank ACB 8,700 Bank ACB 110,000 Balance b/d 27,720 19,866 8/4 Sales ACB 27,720 Bank 37,400 7,854 29,600 25,000 5,250 8,700 12,400 2,604 20,000 VAT Other 900 60,000 132,000 12,600 27,720 110,000 72,000 VAT 15,120 110,000 Other
Date 2007
Details
Details
Total
ACB 132,000
74
Trial Balance as on 8/4/2007 Sales Purchases VAT Share capital Light and heat Equipment Repairs Bank 900 20,000 8,700 194,866 261,866 261,866 37,400 19,866 110,000 132,000
4.
Date 2006 12/5 16/5 19/5 19/5 Sales Shareholders Sales Balance c/d GL GL GL Details Analysed Cash Book (Debit Side) p1 Rec. no. F Total Bank Sales 54,480 80,000 36,320 22,270 193,070 80,000 10,800 80,000 32,000 4,320 48,000 VAT 6,480 80,000 Other
Analysed Cash Book (Credit Side) p1 Date 2007 13/5 14/5 17/5 18/5 19/5 Purchases Insurance Equipment Purchases Advertising 78 79 80 81 82 GL GL GL GL GL Details Cheque no. F Total Bank Purchases 40,860 2,400 95,000 52,210 2,600 193,070 20/5 Balance b/d 22,270 82,000 11,070 46,000 6,210 2,600 100,000 36,000 VAT 4,860 2,400 95,000 Other
75
Date 2007
Details
Details
Total
ACB
80,000
19/5
Bank
ACB
82,000 VAT A/C
19/5
Purchases
ACB
11,070 11,070
19/5 19/5
Sales Balance c/d
ACB
10,800 270 11,070
20/5
Balance c/d
270 Shareholders A/C 16/5 Insurance A/C Bank ACB 80,000
14/5
Bank
ACB
2,400 Equipment A/C
17/5
Bank
ACB
95,000 Advertising A/C
19/5
Bank
ACB
2,600
Trial Balance as on 19/5/2007 Sales Purchases VAT Shareholders Insurance Equipment Advertising Bank 182,270 2,400 95,000 2,600 22,270 182,270 82,000 270 80,000 80,000
5.
Date 2007 1/3 1/3 4/3 4/3 Balance b/d Sales Sales Fahey Ltd GL GL DL Details Analysed Cash Book (Debit Side) p1 Rec. no. F Total Bank Sales 2,400 72,640 90,800 4,500 170,340 7/3
76
VAT 8,640 10,800
Debtors
Other
64,000 80,000 144,000
4,500 19,440 4,500
Balance b/d
76,680
Analysed Cash Book (Credit Side) p1 Date 2007 2/3 3/3 4/3 6/3 6/3 Purchases Insurance Motor vehicle Duffy Ltd Balance c/d 6 7 8 9 GL GL GL CL Details Cheque no. F Total Bank Purchases 63,560 4,200 21,000 4,900 76,680 170,340 56,000 7,560 4,900 25,200 4,900 56,000 VAT 7,560 4,200 21,000 Creditors Other
General Ledger Date 2007 Details F Total Date 2007 Sales A/C 6/3 Purchases A/C 6/3 Bank ACB 56,000 VAT A/C 6/3 6/3 Purchases Balance c/d ACB 7,560 11,880 19,440 7/3 Insurance InsuranceA/C A/C 3/3 Bank ACB 4,200 MotorVehicles Vehicles A/C A/C Motor 4/3 Bank ACB 21,000 Debtors Ledger Debtors Ledger Fahey Ltd A/C 1/3 Balance b/d 4,500 4/3 Bank ACB 4,500 Balance c/d 19,440 11,880 6/3 Sales ACB 19,440 Bank ACB 144,00 Details F Total
Creditors Ledger Creditors Ledger Duffy Duffy Ltd Ltd A/C A/C 6/3 6/3 Bank Balance c/d ACB 4,900 2,000 6,900 7/3 Balance b/d 6,900 2,000 1/3 Balance b/d 6,900
77
Trial Balance as on 7/3/2007 Sales Purchases VAT Insurance Motor vehicle Duffy Ltd Bank 76,680 157,880 157,880 4,200 21,000 2,000 56,000 11,880 144,000
6.
Date 2008 1/6 2/6 6/6 8/6 Sales Fallon Ltd Shareholders Balance b/d 34 GL DL GL Details Analysed Cash Book (Debit Side) p1 Rec. no. F Total Bank Sales 67,760 10,000 45,000 122,760 25,680 56,000 11,760 10,000 56,000 VAT 11,760 Debtors 10,000 45,000 45,000 Other
Analysed Cash Book (Credit Side) p1 Date 2008 1/6 3/6 4/6 5/6 7/6 7/6 Balance b/d Purchases Rent Hayden Ltd Purchases Balance c/d 23 24 25 26 GL GL CL GL Details Cheque no. F Total Bank Purchases 4,500 27,830 2,800 7,500 54,450 25,680 122,760 68,000 14,280 7,500 2,800 45,000 9,450 7,500 23,000 VAT 4,830 2,800 Creditors Other
78
General Ledger Date 2007 Details F Total Date Details F Total Bank ACB 56,000 2007 Sales SalesA/C A/C 7/6 Purchases Purchases A/C A/C 7/6 Bank ACB 68,000 VAT A/C A/C VAT 7/6 Purchases ACB 14,280 14,280 8/6 Balance b/d 2,520 Shareholders Shareholders A/C A/C 6/6 Rent A/C 4/6 Bank ACB 2,800 Debtors Ledger Debtors Ledger Fallon Ltd A/C 1/6 Balance c/d 12,000 12,000 8/6 Balance b/d 2,000 Creditors Ledger Creditors Ledger Hayden Ltd A/C 5/6 Bank ACB 7,500 1/6 Balance b/d 7,500 2/6 7/6 Bank Balance c/d ACB 10,000 2,000 12,000 Bank ACB 45,000 7/6 7/6 Bank Balance c/d ACB 11,760 2,520 14,280
Trial Balance as on 7/6/2007 Sales Purchases VAT Shareholders Rent Fallon Ltd Bank 2,800 2,000 25,680 101,000 101,000 68,000 2,520 45,000 56,000
79
Chapter 40 Analysed Cash Book II Monitoring Overheads

1.
Date 2005 1/4 Bank Details Total 60 Date 2005 1/4 2/4 2/4 3/4 3/4 4/4 5/4 6/4 6/4 Cleaning Taxi Stamps Disks Raffle Parcel Cleaning Tippex Bus fare 23 24 25 26 27 28 29 30 31 Petty Cash Book (p1) Details V. no. Total Post Clean. Stat. Travel Other 5 6 4 8 7 5 7 3 8 53 6/4 60 7/4 7/4 Balance Bank 7 53 60 Balance c/d 7 60 9 12 11 5 7 3 8 14 7 4 8 7 5 6
Date 2005 6/4
Details
General Ledger Total Date 2005 Postage A/C 9 Cleaning A/C
Details
Total
Petty cash
PC
6/4
Petty cash
PC
12 Stationery Stationery A/C A/C
6/4
Petty cash
PC
11 Travel A/C
6/4
Petty cash
PC
14 Other Other A/C A/C
6/4
Petty cash
PC
7 Bank A/C 7/4 Petty cash PC 53
80
2.
Date 2005 1/6 Bank Details Total 70 Date 2005 1/6 2/6 3/6 3/6 4/6 5/6 6/6 Stamps Flower Cleaning Pens Taxi Disks Parcel 12 13 14 15 17 18 19 Petty Cash Book (p1) Details V. no. Total Post Clean. Stat. Travel Other 7 6 8 3 12 10 11 57 6/6 70 7/6 7/6 Balance Bank 13 57 70 Balance c/d 13 70 11 18 8 13 6 12 10 8 3 12 7 6
Date 2005 7/6
Details
General Ledger Total Date 2005 Postage A/C 18 Cleaning A/C
Details
Total
Petty cash
PC
7/6
Petty cash
PC
8 Stationery A/C A/C Stationery
7/6
Petty cash
PC
13 Office A/C
7/6
Petty cash
PC
6 Other A/C A/C Other
7/6
Petty cash
PC
81
3.
Date 2005 1/7 Details Bank Total 60 Date 2005 1/7 2/7 3/7 4/7 5/7 6/7 6/7 6/7 Petty Cash Book (p1) Details V. no. Total Post Repairs Stat. Travel Other Stamps 2 9 9 Taxi Tippex Repairs Donation M/B Cleaning Parcel 3 4 5 6 7 8 9 6 4 11 10 3 6 7 56 6/7 60 7/7 7/7 Balance Bank 4 54 60 Balance c/d 4 60 7 16 11 4 6 19 11 10 3 6 4 6
Date 2005 6/7
Details
General Ledger Total Date 2005 Postage Postage A/C A/C 16 Repairs A/C
Details
Total
Petty cash
PC
6/7
Petty cash
PC
11 Stationery Stationery A/C A/C
6/7
Petty cash
PC
4 Travel A/C
6/7
Petty cash
PC
6 Other Other A/C A/C
6/7
Petty cash
PC
82
4.
Date 2005 1/8 Details Bank Total 85 Date 2005 1/8 2/8 3/8 4/8 4/8 5/8 6/8 7/8 Petty Cash Book (p1) Details V. no. Total Post Clean. Stat. Travel Other Bus fare 33 8 8 Cleaning Stamps Folders T/S/M Raffle Taxi Parcel 34 35 36 37 38 39 40 10 14 13 7 10 9 14 85 7/8 85 7/8 7/8 Balance Bank 00 85 85 Balance c/d 00 85 14 28 10 13 17 17 9 14 13 7 10 10
Date 2005 7/8
Details
General Ledger Total Date 2005 Postage A/C 28 Cleaning Cleaning A/C A/C
Details
Total
Petty cash
PC
7/8
Petty cash
PC
10 Stationery A/C A/C Stationery
7/8
Petty cash
PC
13 Travel A/C
7/8
Petty cash
PC
17 Other A/C A/C Other
7/8
Petty cash
PC
5. (a) Wages; light and heat; telephone; electricity; advertising. (b) Overheads can be monitored by preparing overhead budgets; checking all invoices/ statements before payment is made.
83
(c) (i) and (ii)

Greater than budgeted figures Insurance Advertising Repairs Carriage Outwards Less than budgeted figures Possible reason for difference Increase in risks leading to increased premiums Incorrect estimates in budgeted figures Employees were more careful with equipment etc Less deliveries had to be made
Chapter 41 General Journal

1.
General Journal (p1) Date 2005 1/5 Machinery Stock Bank overdraft King Ltd Ordinary share capital Assets, liabilities of company on 1/5/2005 56,000 Details F GL GL ACB CL DR 45,000 11,000 1,000 15,000 40,000 56,000 CR
Date 2005 1/5
Details
General Ledger Total Date 2005 Machinery A/C
Details
Total
Balance
GJ
45,000 Stock A/C
1/5
Balance
GJ Bank Bank A/C A/C 1/5 Balance GJ 1,000
Ordinary Share Capital A/C Ordinary Share Capital A/C 1/5 Creditors Ledger Creditors Ledger A/C King Ltd A/C 1/5 Balance GJ 15,000 Balance GJ 40,000
84
2.
General Journal (p1) Date 2005 1/6 Details Buildings Stock Debtors: Toolin Ltd Kelly Ltd Bank loan Ordinary share capital Assets, liabilities of company on 1/6/2005 78,000 F GL GL DL CL GL DR 60,000 6,000 12,000 17,000 30,000 31,000 78,000 CR
Date 2005 1/6
Details
General Ledger Total Date 2005 Buildings A/C
Details
Total
Balance
GJ
60,000 Stock A/C
1/6
Balance
GJ
6,000 Bank Loan Loan A/C A/C Bank 1/6 Balance GJ 30,000
Ordinary Share Capital A/C Ordinary Share Capital A/C 1/6 Creditors Ledger Creditors Ledger A/C Kelly Ltd A/C 1/6 Debtors Ledger A/C Debtors Ledger Toolin Toolin Ltd Ltd A/C A/C 1/6 Balance GK 12,000 Balance GJ 17,000 Balance GJ 31,000
3.
General Journal (p1) Date 2006 1/7 Details Premises Machinery Bank Debtors: Reynolds Ltd Creditors: Farrell Ltd Giles Ltd Ordinary share capital Assets, liabilities of company on 1/7/2006 154,000 F GL GL ACB DL CL CL DR 90,000 40,000 4,000 20,000 16,000 24,000 114,000 154,000 CR
85
Date 2006 1/7
Details
General Ledger Total Date 2006 Premises A/C
Details
Total
Balance
GJ
90,000 Machinery A/C
1/7
Balance
GJ
40,000 Bank A/C
1/7
Balance
GJ
4,000
Ordinary Share Capital A/C Ordinary Share Capital A/C 1/7 Creditors Ledger Giles Giles Ltd Ltd A/C A/C 1/7 Farrell Ltd A/C 1/7 Debtors DebtorsLedger Ledger Reynolds ReynoldsLtd LtdA/C A/C 1/7 Balance GJ 20,000 Balance GJ 16,000 Balance GJ 24,000 Balance GJ 114,000
4.
General Journal (p1) Date 2006 1/8 Details Land Buildings Bank Stock Debtors: Prunty Ltd Creditors: Mitchell Ltd Long-term loan Ordinary share capital Assets, liabilities of company on 1/8/2006 F GL GL ACB GL DL CL GL GL 141,500 DR 75,000 55,000 3,500 2,000 6,000 14,000 90,000 37,500 141,500 CR
86
Date 2006 1/8
Details
General Ledger Total Date 2006 Land A/C
Details
Total
Balance
GJ
75,000 Stock A/C
1/8
Balance
GJ
2,000 Buildings A/C A/C Buildings
1/8
Balance
GJ
55,000 Bank A/C A/C Bank
1/8
Balance
GJ
3,500 Long-Term Long-TermLoan LoanA/C A/C 1/8 Balance GJ 90,000
Ordinary Share Capital A/C Ordinary Share Capital A/C 1/8 Creditors Ledger Mitchell Ltd A/C 1/8 DebtorsLedger Ledger Debtors Prunty Ltd A/C 1/8 Balance GJ 6,000 Balance GJ 14,000 Balance GJ 37,500
5.
Date 2005 23/7 General Journal (p1) of Pat the Baker Ltd Details F DR DL 9,000 GL CR 9,000
A. Murphy Van
Sale of second-hand van on credit
Date 2005
Details
General Ledger Total Date 2005 Van A/C 23/7 Debtors Ledger (p1) A. A.Murphy Murphy A/C A/C
Details
Total
A. Murphy
GJ
9,000
23/7
Van
GJ
9,000
87
6.
Date 2005 6/10 General Journal (p1) of Oak Ltd Furniture Manufacturers Details F DR Butler Ltd DL 18,000 Electric saw Sale of electric saw on credit GL CR 18,000
Date 2005
Details
General Ledger Total Date 2005 Electric Electric Saw Saw A/C A/C 6/10 Debtors Ledger
Details
Total
Butler Ltd
GJ
18,000
6/10
Electric saw
GJ
18,000
7.
Date 2006 1/6 General Journal (p1) of Mels Ltd Educational Consultants Details F DR Computer system GL 600,000 Info Tec Ltd Purchase of computer system on credit CL CR 600,000
Date 2006 1/6
Details
General Ledger Total Date ComputerSystem SystemA/C A/C Computer
Details
Total
Info Tec Ltd
GJ
600,000 Creditors Ledger Info Tec Ltd A/C 1/6 Computer system GJ 600,000
8.
Date 2006 7/8 General Journal (p1) of John Joe Ltd Painting Specialists Details F DR GL 35,000 CL CR 35,000
Van
Tom Cunningham Ltd Purchase of van on credit
88
Date 2006 7/8
Details
General Ledger Total Date 2006 VanA/C A/C Van
Details
Total
Tom Cunningham Ltd
GJ
35,000 Creditors Ledger 7/8 Van GJ 35,000
9.
General Journal (p1) Date 2005 4/11 Details Bad debts Donlon Ltd Donlon Ltd was written off as a bad debt F GL DL DR 4,000 CR 4,000
Date 2005 4/11
Details
General Ledger Total Date 2005 Bad Debts debts A/C
Details
Total
Donlon Ltd
GJ
4,000 Debtors Ledger Donlon Ltd A/C
4/11
Balance b/d
4,000
4/11
Bad Debts
GJ
4,000
10.
General Journal (p1) Date 2005 7/5 Details Cash Bad debts Tully Ltd Tully Ltd goes bankrupt, pays 25 cent in the 1 F GL GL DL DR 1,250 3,750 5,000 CR
89
Date 2005 7/5
Details
General Ledger Total Date 2005 CashA/C A/C Cash
Details
Total
Tully Ltd
GJ
1,250 BadDebts DebtsA/C A/C Bad
7/5
Tully Ltd
GJ
3,750 Debtors Ledger Tully Ltd A/C
7/5
Balance b/d
5,000 5,000
7/5 7/5
Cash Bad debts
GJ GJ
1,250 3,750 5,000
11.
General Journal (p1) Date 2006 9/4 Details Cash Bad debts Kilbride Ltd Kilbride Ltd goes bankrupt, pays 50 cent in the 1 F GL GL DL DR 10,000 10,000 20,000 CR
Date 2006 9/4
Details
General Ledger Total Date 2006 CashA/C A/C Cash
Details
Total
Kilbride Ltd
GJ
10,000 Bad BadDebts DebtsA/C A/C
9/4 9/4
Kilbride Ltd Balance b/d
GJ
10,000 Debtors Ledger 20,000 20,000 9/4 9/4 Cash Bad debts GJ GJ 10,000 10,000 20,000
12.
General Journal (p1) Date 2006 6/6 Details Cash Bad debts Gallagher Ltd Gallagher Ltd goes bankrupt, pays 75 cent in the 1 F GL GL DL DR 24,000 8,000 32,000 CR
90
Date 2006 6/6
Details
General Ledger Total Date 2006 Cash CashA/C A/C
Details
Total
Gallagher Ltd
GJ
24,000 BadDebts DebtsA/C A/C Bad
6/6
Gallagher Ltd
GJ
8,000 Debtors Ledger Gallagher Ltd Ltd Gallagher
6/6
Balance b/d
32,000 32,000
6/6 6/6
Cash Bad debts
GJ GJ
24,000 8,000 32,000
Chapter 42 Combined Books of First Entry and Ledger Questions

1.
Date 2005 12/3 13/3 McGrath Ltd Smyth Ltd 10 34 CL CL Details Purchases Book (p1) Inv. no. F Net 24,000 20,000 44,000 VAT 5,040 4,200 9,240 Total 29,040 24,200 53,240
Date 2005 16/3
Details Murray Ltd
Sales Book (p1) Inv. no. F 2 DL
Net 50,000
VAT 10,500
Total 60,500
Date 2005 1/3 28/3
Details Sales Murray Ltd
Analysed Cash Book (Debit Side) p1 Rec. no. F Total Bank Sales GL 31,460 26,000 23 DL 60,500 91,960 26,000
VAT 5,460 5,460
Debtors 60,500 60,500
29/3
Balance b/d
45,630 Analysed Cash Book (Credit Side) p1 Cheque F Total Purchases VAT no. Bank 3 CL 15,000 4 5 GL GL 27,830 3,500 45,630 91,960 23,000 4,830 15,000 3,500 23,000 4,830 3,500
Date 2005 3/3 5/3 16/3 28/3
Details
Creditors 15,000
Other
McGrath Purchases Insurance Balance c/d
91
Date 2005
Details
General Ledger Total Date 2005 Sales A/C Sales A/C 28/3 28/3 PurchasesA/C A/C Purchases
Details
Total
Total debtors Bank
SB ACB
50,000 26,000 76,000
28/3 28/3
Total creditors Bank
PB ACB
44,000 23,000 67,000 VAT A/C
28/3 28/3 28/3
Credit purchases Cash purchases Balance c/d
PB ACB
9,240 4,830 1,890 15,960
28/3 28/3
Credit sales Cash sales
SB ACB
10,500 5,460 15,960
29/3 Insurance A/C A/C Insurance 16/3 Bank ACB 3,500 Debtors Ledger Murray Ltd Ltd A/C A/C Murray 16/3 Sales SB 60,500 28/3
Balance b/d
1,890
Bank
ACB
60,500
Creditors Creditors Ledger Ledger McGrath Ltd A/C 3/3 28/3 Bank Balance c/d ACB 15,000 14,040 29,040 29/3 Smyth SmythLtd LtdA/C A/C 13/3 Purchases PB 24,200 Balance b/d 29,040 14,040 1/3 Purchases PB 29,040
Trial Balance as on 28/3/2005 Sales Purchases VAT Insurance McGrath Ltd Smyth Ltd Bank 45,630 116,130 116,130 3,500 14,040 24,200 67,000 1,890 76,000
92
2.
Date 2005 2/5 6/5 Details Mona Ltd Ton Ltd Purchases Book (p1) Inv. no. F Net 56 CL 32,000 67 CL 46,000 78,000 VAT 4,320 6,210 10,530 Total 36,320 52,210 88,530
Date 2005 4/5
Details Maloney Ltd
Sales Book (p1) Inv. no. F 23 DL
Net 40,000
VAT 5,400
Total 45,400
Date 2005 8/5 9/5
Details Sales Maloney Ltd
Analysed Cash Book (Debit Side) p1 Rec. no. F Total Bank Sales GL 63,560 56,000 4 DL 40,000 103,560 56,000
VAT 7,560 7,560
Debtors 40,000 40,000
9/5
Balance b/d
45,080
Date 2005 3/5 4/5 6/5 9/5
Details
Analysed Cash Book (Credit Side) p1 Cheque F Total Purchases VAT no. Bank 45 46 47 GL GL CL 1,700 31,780 25,000 45,080 103,560 28,000 3,780 28,000 3,780
Creditors
Other 1,700
Wages Purchases Mona Ltd Balance c/d
25,000 25,000 1,700
93
Date 2005
Details
General Ledger Total Date 2005 Sales A/C Sales A/C 9/5 9/5
Details
Total
Total debtors Bank
SB ACB
40,000 56,000 96,000
PurchasesA/C A/C Purchases 9/5 4/5 Total creditors Bank PB ACB 78,000 28,000 106,000 VAT A/C 9/5 9/5 Credit purchases Cash purchases PB ACB 10,530 3,780 14,310 1,350 Wages A/C 3/5 Bank ACB 1,700 Debtors Ledger Maloney Ltd Ltd A/C A/C Maloney 4/5 Sales SB 45,400 45,400 10/5 Balance b/d 5,400 Creditors Creditors Ledger Ledger Mona Mona Ltd Ltd A/C A/C 6/5 9/5 Bank Balance c/d ACB 25,000 11,320 36,320 10/5 Ton TonLtd LtdA/C A/C 6/5 Purchases PB 52,210 Balance b/d 36,320 11,320 2/5 Purchases PB 36,320 9/5 9/5 Bank Balance c/d ACB 40,000 5,400 45,400 9/5 9/5 9/5 Credit sales Cash sales Balance c/d SB ACB 5,400 7,560 1,350 14,310
Trial Balance as on 9/5/2005 Sales Purchases VAT Wages Maloney Ltd Mona Ltd Ton Ltd Bank 96,000 106,000 1,350 1,700 5,400 11,320 52,210 45,080 159,530 159,530
94
3.
Date 2006 4/7 5/7 Details Tony Ltd Pony Ltd Purchases Book (p1) Inv. no. F Net 3 CL 32,000 9 CL 13,000 45,000 VAT 6,720 2,730 9,450 Total 38,720 15,730 54,450
Date 2006 7/7
Details Tony Ltd
Purchases Returns Book (p1) Credit note no. F Net 23 CL 7,500
VAT 1,575
Total 9,075
Date 2006 2/7 7/7
Details Sales Sales
Analysed Cash Book (Debit Side) p1 Rec. no. F Total Bank GL 62,920 GL 58,080 121,000
Sales 52,000 48,000 100,000
VAT 10,920 10,080 21,000
8/7
Balance c/d
93,520
Date 2006 3/7 5/7 8/7 8/7
Details
Analysed Cash Book (Credit Side) p1 Cheque F Total Purchases VAT no. Bank 23 24 25 GL GL CL 21,780 700 5,000 93,520 121,000 18,000 3,780 18,000 3,780
Creditors
Other 700
Purchases Electricity Pony Ltd Balance c/d
5,000 5,000 700
95
Date 2006
Details
General Ledger Total Date 2006 Sales A/C Sales A/C 8/7 Purchases A/C Purchases A/C Bank
Details
Total
ACB
100,000
8/7 8/7
Credit purchases Cash purchases
PB ACB
45,000 18,000 63,000 Purchases Returns A/C Purchases Returns A/C 8/7 VAT VATA/C A/C Total creditors PRB 7,500
8/7 8/7 8/7
PB ACB
9,450 3,780 9,345 22,575
8/7 8/7
Cash sales
ACB
21,000 1,575 22,575
Purchases returned PRB
9/7 Electricity A/C Electricity A/C 5/7 Bank ACB 700 Creditors Ledger Creditors Ledger Tony Ltd Ltd A/C A/C Tony 7/7 8/7 Purchases returns Balance c/d PRB 9,075 29,645 38,720 9/7 PonyLtd LtdA/C A/C Pony 8/7 8/7 Bank Balance c/d ACB 5,000 10,730 15,730 9/7 5/7 4/7
Balance b/d
9,345
Purchases
PB
38,720 38,720
Balance b/d
29,645
Purchases
PB
15,730 15,730
Balance b/d
10,730
Trial Balance as on 8/7/2006 Sales Purchases Purchases returns VAT Electricity Pony Ltd Tony Ltd Bank 93,520 157,220 157,220 700 10,730 29,645 63,000 7,500 9,345 100,000
96
4.
Date 2005 2/9 6/9 Details Norm Ltd Form Ltd Purchases Book (p1) Inv. no. F Net 12 CL 36,000 57 CL 44,000 80,000 VAT 4,860 5,940 10,800 Total 40,860 49,940 90,800
Date 2005 7/9
Details
Purchases Returns Book (p1) Credit F Net note no. 67 CL 10,000
VAT 1,350
Total 11,350
Norm Ltd
Date 2005 3/9 9/9
Details Sales Balance c/d
Analysed Cash Book (Debit Side p1) Rec. no. F Total Bank GL 36,320 24,930 61,250
Sales 32,000 32,000
VAT 4,320 4,320
Date 2006 2/9 8/9 9/9 9/9
Details
Analysed Cash Book (Credit Side p1) Cheque F Total Purchases VAT no. Bank 34 35 36 37 GL GL GL CL 1,500 27,240 3,000 29,510 61,250 24,000 3,240 24,000 3,240
Creditors
Other 1,500 3,000
Insurance Purchases Rent Norm Ltd
29,510 29,510 4,500
10/9
Balance b/d
24,930
97
Date 2006
Details
Details
Total
ACB
32,000
9/9 9/9
PB ACB
80,000 24,000 104,000 PurchasesReturns ReturnsA/C A/C Purchases 9/9 VAT A/C Total creditors PRB 10,000
9/9 9/9
Credit purchases Cash purchases
PB ACB
10,800 3,240 14,040
9/9 9/9 9/9
Cash sales Balance c/d
ACB
4,320 1,350 8,370 14,040
Purchases returns PRB
10/9
Balance b/d
8,370 InsuranceA/C A/C Insurance
2/9
Bank
ACB
1,500 RentA/C A/C Rent
9/9
Bank
ACB
3,000 Creditors Ledger Creditors Ledger Form Ltd A/C 6/9 Norm NormLtd LtdA/C A/C Purchases PB 49,940
7/9 9/9
Purchases returns Bank
PRB ACB
11,350 29,510 40,860
2/9
Purchases
PB
40,860 40,860
Trial Balance as on 9/9/2006 Sales Purchases Purchases returns VAT Insurance Rent Form Ltd Bank 116,870 8,370 1,500 3,000 49,940 24,930 116,870 104,000 10,000 32,000
98
5.
Date 2006 12/1 14/1 Details Mel Ltd Del Ltd Purchases Book (p1) Inv. no. F Net 3 CL 25,000 26 CL 34,000 59,000 VAT 5,250 7,140 12,390 Total 30,250 41,140 71,390
Date 2006 17/1
Details
Purchases Returns Book (p1) Credit F Net note no. 97 CL 4,800
VAT 1,008
Total 5,808
Del Ltd
Date 2006 10/1 21/1
Details Sales Sales
Analysed Cash Book (Debit Side) p1 Rec. no. F Total Bank GL 72,600 GL 70,180 142,780
Sales 60,000 58,000 118,000
VAT 12,600 12,180 24,780
22/1
Balance b/d
87,950
Date 2006 13/1

15/1 18/1 21/1
Details
Creditors
Other 7,000
Wages Purchases Mel Ltd Balance c/d
20,000
20,000
7,000
99
Date 2006
Details
Details
Total
ACB
118,000
21/1 21/1
PB ACB
59,000 23,000 82,000 PurchasesReturns ReturnsA/C A/C Purchases 21/1 VAT A/C Total creditors PRB 4,800
21/1 21/1 21/1
PB ACB
12,390 4,830 8,568 25,788
21/1 21/1
Cash sales
ACB
24,780 1,008 25,788
Purchases returns PRB
21/1 Wages A/C A/C Wages 13/1 Bank ACB 7,000 Creditors Ledger Creditors Ledger MelLtd LtdA/C A/C Mel 18/1 21/1 Bank Balance c/d ACB 20,000 10,250 30,250 22/1 Del Ltd A/C 17/1 21/1 Purchases returns Balance c/d PRB 5,808 35,332 41,140 22/1 14/1 12/1
Balance b/d
8,768
Purchases
PB
30,250 30,250
Balance b/d
10,250
Purchases
PB
41,140 41,140
Balance b/d
35,332
100
Trial Balance as on 21/1/2006 Sales Purchases Purchases returns VAT Wages Mel Ltd Del Ltd Bank 87,950 176,950 176,950 7,000 10,250 35,332 82,000 4,800 8,568 118,000
6.
Date 2006 1/4 2/4 9/4 Details Balance b/d Sales Share capital Analysed Cash Book (Debit Side) p1 Rec. no. F Total Bank Sales 14,000 GL GL 56,750 50,000 120,750 10/4 Balance b/d 81,374 50,000 6,750 50,000 VAT 6,750 50,000 50,000 Other
Date 2006 4/4 6/4 7/4 9/4
Details
Creditors
Other 3,000
Purchases Insurance Morrissey Ltd Balance c/d
14,755 14,755 3,000
101
Date 2006 1/4
Details
General Ledger Total Date 2006 Buildings A/C Buildings A/C
Details
Total
Balance
GJ
60,000
Ordinary Ordinary Share Share Capital Capital A/C A/C 1/4 9/4 Balance Bank GJ ACB 74,000 50,000 124,000 Purchases A/C Purchases A/C 19/4 19/4 Total creditors Bank PB ACB 34,000 19,000 53,000 PurchasesReturns ReturnsA/C A/C Purchases 19/4 Sales Sales A/C A/C 19/4 VAT A/C 19/4 19/4 Credit purchases Cash purchases PB ACB 4,590 2,565 7,155 InsuranceA/C A/C Insurance 6/4 Bank ACB 3,000 CreditorsLedger Ledger Creditors 9/4 9/4 Purchases Bank PRB ACB Morrissey Ltd A/C Morrissey Ltd A/C 3,405 3/4 14,755 18,160 ShanleyLtd LtdA/C A/C Shanley 5/4 Purchases PB 20,430 18,160 Purchases PB 18,160 19/4 19/4 Cash sales SB 6,750 405 7,155 Purchases returns PRB
Bank
Total creditors
PRB
3,000
ACB
50,000
102
Trial Balance as on 9/4/2006 Buildings Ordinary share capital Purchases Purchases returns Sales Insurance Shanley Ltd Bank 81,430 197,430 197,430 3,000 20,430 53,000 3,000 50,000 60,000 124,000
7.
Date 2006 1/5 2/5 17/5 Details Balance b/d Sales Murtagh Ltd 8 Analysed Cash Book (Debit Side) p1 Rec. no. F Total Bank Sales 13,500 GL DL 60,500 27,830 101,830 19/5 Balance b/d 49,830 50,000 10,500 50,000 VAT 10,500 27,830 27,830 Other
Date 2006 4/5 6/5 9/5 9/5
Details
Analysed Cash Book (Credit Side) p1 Cheque F Total Purchases no. Bank 1 2 3 GL GL GL 22,990 4,000 25,000 49,840 101,830 19,000 19,000
VAT 3,990
Other 4,000 25,000
Purchases Wages Machinery Balance c/d
3,990
29,000
103
Date 2006 1/5 9/5
Details
General Ledger Total Date Machinery A/C Machinery A/C 2006
Details
Total
Balance Bank
GJ ACB
40,500 25,000 65,500
Ordinary Share Share Capital Capital A/C A/C Ordinary 1/5 Sales A/C A/C Sales 19/5 19/5 Total debtors Bank SB ACB 64,000 50,000 114,000 SalesReturns ReturnsA/C A/C Sales 19/5 Total debtors PRB 3,000 PurchasesA/C A/C Purchases 19/5 Bank ACB 19,000 Wages Wages A/C A/C 6/5 Bank ACB 4,000 VAT A/C 19/5 19/5 19/5 Cash purchases Sales returns Balance c/d ACB SRB 3,990 630 19,230 23,900 20/5 Debtors Ledger 2/5 Sales SB Murtagh Ltd Ltd A/C A/C Murtagh 31,460 9/5 17/5 31,460 Lyons Ltd A/C Lyons Ltd A/C 3/5 Sales SB 45,980 Sales returns Bank SRB ACB 3,630 27,830 31,460 Balance b/d 23,900 19,230 19/5 19/5 Credit sales Cash sales SB ACB 13,400 10,500 Balance GJ 54,000
104
Trial Balance as on 19/5/2006 Machinery Ordinary share capital Sales Sales returns Purchases Wages VAT Lyons Ltd Bank 45,980 49,840 187,320 187,320 3,000 19,000 4,000 19,320 65,500 54,000 114,000
8.
General Journal Date 1/6/2006 Buildings Bank Ordinary share capital Assets and share capital of company Details F GL ACB GL 68,000 DR 45,000 23,000 68,000 68,000 CR
Date 2006 1/6 3/6 8/6
Details Balance Sales Carey Ltd
Analysed Cash Book (Debit Side) p1 Rec. no. F Total Bank Sales GJ 23,000 GL 45 DL 63,560 54,480 141,040 56,000 56,000
VAT 7,560
Other
54,480 7,560 54,480
10/6
Balance b/d
35,460
Date 2006 4/6 6/6 7/6 9/6 9/6
Details
Analysed Cash Book (Credit Side) p1 Cheque F Total Purchases VAT no. Bank 3 4 5 6 CL GL GL CL 25,000 31,780 3,400 45,400 35,460 141,040 28,000 3,780 28,000 3,780
Creditors 25,000
Other
Brennan Ltd Purchases Advertising Neary Ltd Balance c/d
3,400 45,400 25,000 48,800
105
Date 2006 1/6
Details
General Ledger Total Date Buildings A/C Buildings A/C 2006
Details
Total
Balance
GJ
45,000
Ordinary Share Share Capital Capital A/C A/C Ordinary 1/6 Sales SalesA/C A/C 9/6 9/6 Total debtors Bank SB ACB 48,000 56,000 104,000 PurchasesA/C A/C Purchases 9/6 9/6 Total creditors Bank PB ACB 72,000 28,000 100,000 Advertising A/C Advertising A/C 7/6 Bank ACB 3,400 VAT A/C 9/6 9/6 9/6 Credit purchases Cash purchases Balance c/d PB ACB 9,720 3,780 540 14,040 10/6 Debtors Ledger CareyLtd LtdA/C A/C Carey 2/6 Sales SB 54,480 8/6 Bank ACB 54,480 Balance b/d 14,040 540 9/6 9/6 Credit sales Cash sales SB ACB 6,480 7,560 Balance GJ 68,000
CreditorsLedger Ledger Creditors Neary Ltd Ltd A/C A/C Neary 9/6 Bank ACB 45,400 1/6 Purchases PB 45,400
Brennan Ltd A/C Brennan Ltd A/C 4/6 9/6 Bank Balance c/d ACB 25,000 11,320 36,320 10/6 Balance b/d 36,320 11,320 3/6 Purchases PB 36,320
106
Trial Balance as on 9/6/2006 Buildings Ordinary share capital Sales Purchases VAT Advertising Brennan Ltd Bank 35,460 183,860 183,860 3,400 11,320 100,000 540 45,000 68,000 104,000
9.
General Journal Date 1/9/2006 Machinery Stock Ordinary share capital Assets, ordinary share capital of the company Details F GL GL GL 52,000 DR 39,000 13,000 52,000 52,000 CR
Date 2006 2/9 8/9 9/9
Details Sales Dardis Ltd Tobin Ltd
Analysed Cash Book (Debit Side) p1 Rec. no. F Total Bank Sales GL 101,640 84,000 35 36 DL DL 26,862 33,000 161,502 84,000
VAT 17,640
Other 26,862 33,000
17,640
59,862
10/9
Balance b/d
109,502
Date 2006 6/9 7/9 7/9 9/9
Details
Cheque no. 1 2 3
Total Bank 5,000 38,720 8,400 109,382 161,502
Purchases 32,000
VAT 6,720
Other 5,000 8,400
Insurance Purchases Rent Balance c/d
GL GL GL
32,000
6,720
13,400
107
Date 2006 1/9
Details
General Ledger Total Date 2006 Machinery A/C Machinery A/C
Details
Total
Balance
GJ
39,000 Stock A/C
1/9
Balance
GJ
13,000
Ordinary Ordinary Share Share Capital Capital A/C A/C 1/9 Sales SalesA/C A/C 1/9 9/9 Total debtors Bank SB ACB 60,000 84,000 144,000 Purchases PurchasesA/C A/C 9/9 Bank ACB 32,000 SalesReturns ReturnsA/C A/C Sales 9/9 Total debtors SRB 4,800 VAT A/C 9/9 9/9 9/9 Cash purchases Sales returns Balance c/d ACB SRB 6,720 1,008 22,512 30,240 10.90 InsuranceA/C A/C Insurance 6/9 Bank ACB 5,000 RentA/C A/C Rent 7/9 Bank ACB 8,400 Debtors Ledger Dardis Dardis Ltd Ltd A/C A/C 1/9 Sales SB 32,670 32,670 TobinLtd LtdA/C A/C Tobin 3/9 Sales SB 39,930 39,930 10/9 Balance b/d 6,930 9/9 9/9 Bank Balance c/d ACB 33,000 6,930 39,930 2/9 8/9 Sales returns Bank SRB ACB 5,808 26,862 32,670 Balance b/d 30,240 22,512 9/9 9/9 Credit sales Cash sales SB ACB 12,600 17,640 Balance GJ 52,000
108
Trial Balance as on 9/9/2006 Machinery Stock Ordinary share capital Sales Sales returns Purchases VAT Insurance Rent Tobin Ltd Bank 5,000 8,400 6,930 109,382 218,512 218,512 4,800 32,000 22,512 39,000 13,000 52,000 144,000
Chapter 43 Control Accounts

1. Main control procedures used by a business
Control Procedure Trial balance Bank reconciliation statement Control accounts Explanation This checks that the double entry process has been followed correctly This checks the accuracy of the bank account and the bank statement These check the accuracy of the debtors and creditors ledger accounts
Chapter 44 Trading Account

1. Trading period ends on: (a) 31 December 2006 (b) 29 February 2007 (c) 6 May 2008 (d) 8 October 2008 (e) 22 April 2008 2. Cost of sales 57,000 (60,000 15,000 + 12,000) 3. Cost of sales 52,000 (70,000 17,000 + 10,000 + 4,000 15,000) 4. Cost of sales 94,000 (16,000 + 96,000 16,000 + 11,000 + 5,500 18,500) 5.
Trading Account for year ending 31/5/2006 2006 Sales Less cost of sales Purchases Less closing stock Cost of actual sales Gross profit 160,000 30,000 130,000 170,000 300,000
109
6.
2005 Sales Less cost of sales Purchases Less purchases returns Cost of actual sales Gross profit
Trading Account for year ending 31/5/2005 270,000
145,000 85,000 60,000 210,000
7.
Trading Account for year ending 31/12/2006 2006 Sales Less sales returns Less cost of sales Purchases Less purchases returns Add carriage inwards Cost of goods available for sale Less closing stock Cost of actual sales Gross profit 72,000 8,000 64,000
70,000 17,000
53,000 10,000 63,000 15,000 48,000 16,000
8.
2005 Sales
Trading Account for year ending 20/6/2005 180,000 20,000 16,000 96,000 16,000 80,000 5,500 101,500 18,500 83,000 77,000 160,000
Less sales returns Less cost of sales Opening stock Purchases Less purchases returns Import duty Cost of goods available for sale Less closing stock Cost of actual sales Gross profit
9.
Trading Account for year ending 31/3/2007 2007 Sales 270,000 Less sales returns 30,000 Less cost of sales Opening stock 36,000 Purchases 200,000 Less purchases returns 10,000 190,000 Add carriage inwards 19,000 Add import duty 12,000 Cost of goods available for sale 257,000 Less closing stock 7,000 Cost of actual sales Gross loss
240,000
250,000 (10,000)
110
10. (a) To see if the stock records are correct (have any goods been stolen); to find closing stock; to identify slow moving or damaged stock. (b) Place stock in its correct place. Use two-person teams. One person counts while the other records. Identify slow-moving or damaged goods. Complete stock sheets and prepare a stock report. 11. Students to do this in class.
Chapter 45 Profit and Loss Account

1.
Profit and Loss Account for the year ending 31/5/2005 Gross profit Add gains Rent receivable Less expenses Wages Insurance Light and heat Advertising Interest paid Net profit 24,000 8,000 9,000 6,500 8,000 55,500 24,500 15,000 80,000 65.000
2.
Profit and Loss Account for the year ending 31/5/2006 Gross profit Add gains Rent receivable Interest receivable Less expenses Wages Insurance Bad debts Advertising Net profit 34,000 6,000 8,000 8,500 56,500 84,500 12,000 9,000 21,000 141,000 120,000
111
3.
Profit and Loss Account for the year ending 1/5/2006 Gross profit Add gains Commission receivable Rent receivable Less expenses Wages Advertising Bad debts Interest paid Net profit 75,000 11,000 16,700 8,000 110,700 84,800 20,000 14,500 34,500 195,500 230,000
4.
Trading, Profit and Loss Account for year ending 31/5/2006 Sales Less sales returns Less cost of sales Opening stock Purchases Carriage inwards Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Rent receivable Less expenses Wages Advertising Bad debts Net profit 45,000 13,900 9,000 67,900 95,100 19,000 163,000 17,000 56,000 3,000 76,000 23,000 53,000 144,000 220,000 23,000 197,000
112
5.
Trading, Profit and Loss Account for year ending 31/7/2005 Sales Less sales returns Less cost of sales Opening stock Purchases Import duty Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Interest receivable Less expenses Wages Carriage outwards Light and heat Net profit 56,000 8,000 5,400 69,400 90,600 6,000 160,000 45,000 67,000 4,000 116,000 32,000 84,000 154,000 250,000 12,000 238,000
6.
Trading, Profit and Loss Account for year ending 31/5/2005 Sales Less cost of sales Opening stock Purchases Less purchases returns Carriage inwards Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Commission receivable Less expenses Wages Advertising Rent paid Net profit 75,000 15,300 17,000 107,300 164,700 25,000 272,000 96,000 14,000 82,000 7,000 116,000 23,000 93,000 247,000 27,000 340,000
113
7.
Trading, Profit and Loss Account for year ending 31/5/2005 Sales Less cost of sales Opening stock Purchases Less purchases returns Import duty Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Rent receivable Less expenses Wages Carriage outwards Bad debts Net profit 93,000 6,000 12,500 111,500 235,500 12,000 347,000 85,000 22,000 63,000 5,000 133,000 32,000 101,000 359,000 65,000 460,000
8. (a) Net profit 100% Net sales Net profit 100% Net sales Net profit 100% Net sales 21,000 100% 140,000 24,050 100% 185,000 39,100 100% 230,000 = 15%
(b)
= 13%
(c)
= 17%
Chapter 46 Profit and Loss Appropriation Account

1. Directors face three choices: to retain all the profit; to give all the profit out in dividends; to retain some profit and give out some profit in dividends. 2. Dividends are calculated as a percentage of issued share capital, i.e. if the issued share is 200,000 and the directors declare a 20% dividend, then the dividends are 40,000. 3. (a) 20,000 ( of 80,000) (b) 4,000 ( of 16,000) 4. (a) 25% (30,000 is of 120,000) (b) 70,000 (40,000 + 30,000)
114
5. Erratum. Year ended 30 November, not 31 November.

Profit and Loss Appropriation Account for year ended 30/11/ 2006 Net profit Less dividends Reserves 95,000 30,000 65,000
6.
Profit and Loss Appropriation Account for year ended 30/8/2006 Net profit Less dividends Reserves 105,000 75,000 30,000
7.
8.
Profit and Loss Appropriation Account for year ended 30/5/2006 Net profit Less dividends Add opening balance Reserves 180,000 60,000 120,000 50,000 170,000
9.
Date 2006
Details
Total Date 2006 Dividends Dividends A/C A/C 30/5 Reserves A/C A/C Reserves 30/5
Details
Total 60,000
Profit and loss app.
Profit and loss app.
35,000
115
10. (a) 2,500. (b) The company retains some of the profit for use in future expansion.
____________________ ____________________ ____________________ ____________________ Ms Mary Furey, Main St, Cavan. Dear Ms Furey, I refer to your questions re (i) the amount of dividends you will receive and (ii) why the company retains some of its profits. (i) You will receive 2,500 in dividends, i.e. 20% of what you invested in shares (20% of 12,000). (ii) The company retains some of its profits for future expansion, e.g. purchase of new equipment, buildings etc. I attach a pie chart showing how the profit is divided. If I can be of any further help please contact me. Yours faithfully, _________________ Financial Consultant.
11.
Trading, Profit and Loss Appropriation Account for year ended 31/5/2006 Sales Less cost of sales 1/6/05 Opening stock Purchases Less purchases returns Carriage inwards Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Commission receivable Less expenses Wages Advertising Net profit Less dividends Reserves
116
290,000
37,000 76,000 19,000 57,000 7,000 101,000 28,000 73,000 217,000 28,000 245,000 75,000 13,300 88,300 156,700 30,000 126,700
12.
Trading, Profit and Loss Appropriation Account for year ended 31/5/2006 Sales Less cost of sales 1/6/2005 Opening stock Purchases Less purchases returns Import duty Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Interest receivable Less expenses Wages Bad debts Net profit Less dividends Reserves 73,000 15,500 88,500 376,500 45,000 331,500 16,000 465,000 95,000 20,000 75,000 15,000 155,000 44,000 111,000 449,000 65,000 560,000
13.
Trading, Profit and Loss Appropriation Account for year ended 31/5/2006 Sales Less sales returns Less cost of sales 1/6/2005 Opening stock Purchases Import duty Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Rent receivable Less expenses Wages Insurance Net profit Less dividends Add opening balance Reserves 65,000 14,600 79,600 185,400 18,000 167,400 10,000 177,400 19,000 265,000 29,000 107,000 8,000 144,000 34,000 110,000 246,000 390,000 34,000 356,000
117
14.
Trading, Profit and Loss Appropriation Account for year ended 31/5/2006 Sales Less sales returns Less cost of sales Opening stock Purchases Carriage inwards Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Interest receivable Less expenses Wages Carriage outwards Net profit Less dividends Add opening balance Reserves 86,000 8,000 94,000 154,000 50,000 104,000 24,000 128,000 6,000 248,000 59,000 120,000 9,000 188,000 9,000 179,000 242,000 450,000 29,000 421,000
Chapter 47 Balance Sheet

1.
Balance Sheet as on 31/5/2005 Fixed Assets Buildings Machinery Total fixed assets Current assets Closing stock Debtors Cash Less current liabilities Creditors Bank overdraft Working capital Total net assets Financed by 200,000 1 ordinary shares Reserves Capital employed Authorised 200,000 Issued 180,000 10,000 190,000 39,000 5,000 44,000 (20,000) 190,000 12,000 10,000 2,000 24,000 Cost 150,000 60,000 210,000 Depreciation NBV 150,000 60,000 210,000
118
2.
Balance Sheet as on 31/5/2005 Fixed Assets Land Equipment Total fixed assets Current assets Closing stock Debtors Bank Less current liabilities Creditors Dividends due Working capital Total net assets Financed by 300,000 1 ordinary shares Reserves Capital employed Authorised 300,000 Issued 200,000 45,000 245,000 19,000 30,000 49,000 23,000 245,000 24,000 35,000 13,000 72,000 Cost 150,000 72,000 222,000 Depreciation NBV 150,000 72,000 222,000
3.
Balance Sheet as on 31/5/2006 Fixed Assets Buildings Motor vehicles Total fixed assets Current assets Closing stock Debtors Cash Less current liabilities Creditors Dividends due Bank overdraft Working capital Total net assets Financed by 400,000 1 ordinary shares Reserves Capital employed Authorised 400,000 Issued 200,000 8,000 208,000 16,000 20,000 5,000 41,000 18,000 208,000 12,000 40,000 7,000 59,000 Cost 150,000 40,000 190,000 Depreciation NBV 150,000 40,000 190,000
119
4.
Balance Sheet as on 31/5/2006 Fixed Assets Land Machinery Total fixed assets Current assets Closing stock Debtors Bank Less current liabilities Creditors Dividends due Working capital Total net assets Financed by 250,000 1 ordinary share capital Reserves Long-term liabilities 10-year loan Capital employed 50,000 225,000 Authorised 250,000 Issued 160,000 15,000 175,000 19,000 16,000 35,000 17,000 225,000 16,000 27,000 9,000 52,000 Cost 150,000 58,000 208,000 Depreciation NBV 150,000 58,000 208,000
5.
Balance Sheet as on 31/5/2006 Fixed Assets Buildings Machinery Total fixed assets Current assets Closing stock Debtors Cash Less current liabilities Creditors Dividends due Bank overdraft Working capital Total net assets Financed by 300,000 1 ordinary shares Long-term liabilities 20-year loan Capital employed 60,000 160,000 Authorised 300,000 Issued 100,000 20,000 35,000 5,000 60,000 (30,000) 160,000 8,000 20,000 2,000 30,000 Cost 150,000 40,000 190,000 Depreciation NBV 150,000 40,000 190,000
120
6.
Balance Sheet as on 31/5/2006 Fixed Assets Land Equipment Total fixed assets Current assets Closing stock Debtors Cash Less current liabilities Creditors Dividends due Bank overdraft Working capital Total net assets Financed by 450,000 1 ordinary shares Long-term liabilities 12-year loan Capital employed 90,000 190,000 Authorised 450,000 Issued 100,000 39,000 10,000 17,000 66,000 (32,000) 190,000 15,000 15,000 4,000 34,000 Cost 170,000 52,000 222,000 Depreciation NBV 170,000 52,000 222,000
7. (a)
Trading, Profit and Loss Appropriation Account for year ending 31/5/2005 Sales Less sales returns Less cost of sales Opening stock 1/6/2004 Purchases Carriage inwards Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Commission receivable Less expenses Wages Light and heat Advertising Carriage outwards Bad debts Less dividends Reserves 25,000 6,000 8,000 6,000 10,000 55,000 94,000 18,400 75,600 16,000 149,000 14,000 130,000 3,000 147,000 25,000 122,000 133,000 260,000 5,000 255,000
121
Balance Sheet as on 31/5/2005 Fixed Assets Buildings Machinery Total fixed assets Current assets Closing stock Debtors Bank Cash Less current liabilities Creditors Dividends due Working capital Total net assets Financed by 250,000 1 ordinary shares Reserves Capital employed Authorised 250,000 Issued 184,000 75,600 259,600 20,000 18,400 38,400 39,600 259,600 25,000 40,000 12,000 1,000 78,000 Cost 100,000 120,000 220,000 Depreciation NBV 100,000 120,000 220,000
(b) Goods are faulty; goods are not as ordered. 8. (a)

Trading, Profit and Loss Appropriation Account for year ending 31/5/2006 Sales Less sales returns Less cost of sales Opening stock 1/6/2005 Purchases Import duty Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Interest receivable Less expenses Wages Light and heat Advertising Carriage outwards Bad debts Net profit Less dividends Reserves 40,000 7,000 8,000 9,000 13,000 77,000 82,000 33,000 49,000 20,000 159,000 34,000 140,000 12,000 186,000 30,000 156,000 139,000 300,000 5,000 295,000
122
Balance Sheet as on 31/5/2006 Fixed Assets Buildings Machinery Current assets Closing stock Debtors Bank Cash Less current liabilities Creditors Dividends due Working capital Total net assets Financed by 450,000 1 ordinary shares Reserves Capital employed Authorised 450,000 Issued 220,000 49,000 269,000 17,000 33,000 50,000 44,000 269,000 30,000 47,000 10,000 7,000 94,000 Cost 110,000 115,000 225,000 Depreciation NBV 110,000 115,000 225,000
(b). Radio; television; newspapers. 9. (a)

Trading, Profit and Loss Appropriation Account for year ending 31/3/2006 Sales Less cost of sales Opening stock 1/4/2005 Purchases Less purchases returns Carriage inwards Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Commission receivable Less expenses Wages Light and heat Insurance Carriage outwards Rent Net profit Less dividends Reserves 10,000 6,000 10,000 8,000 10,000 44,000 190,000 17,500 172,500 4,000 234,000 200,000 15,000 185,000 3,000 202,000 22,000 180,000 230,000 14,000 410,000
123
Balance Sheet as on 31/3/2006 Fixed Assets Land and buildings Machinery Total fixed assets Current assets Closing stock Debtors Cash Less current liabilities Creditors Bank overdraft Dividends due Working capital Total net assets Financed by 500,000 1 ordinary shares Reserves Capital employed Authorised 500,000 Issued 175,000 172,500 347,500 30,000 8,000 17,500 55,500 24,500 348,500 22,000 55,000 3,000 80,000 Cost 200,000 123,000 323,000 Depreciation NBV 200,000 123,000 323,000
(b) Hourly rate and piece rate 10. (a) Erratum. Date should be 31/5/2006 not 29/5/2006
Trading, Profit and Loss Appropriation Account for year ending 31/5/2006 Sales Less sales returns Less cost of sales Opening stock 1/6/2005 Purchases Carriage inwards Cost of goods available for sale Less closing stock Cost of goods actually sold Gross profit Add gains Rent receivable Less expenses Wages Insurance Advertising Net profit Less dividends Reserves 55,000 9,000 21,000 85,000 124,000 19,000 105,000 19,000 209,000 34,000 160,000 6,000 200,000 25,000 175,000 190,000 370,000 5,000 365,000
124
Balance Sheet as on 31/5/2006 Fixed Assets Equipment Buildings Total fixed assets Current assets Closing stock Debtors Bank Cash Less current liabilities Creditors Working capital Total net assets Financed by 320,000 1 ordinary shares Reserves Long-term liabilities 10-year loan Capital employed 80,000 375,000 Authorised 320,000 Issued 190,000 105,000 295,000 10,000 75,000 375,000 25,000 40,000 19,000 1,000 85,000 Cost 120,000 180,000 300,000 Depreciation NBV 120,000 180,000 300,000
(b) Motor insurance; fire and theft; employers liability. 11.

Trading, Profit and Loss Appropriation Account for year ending 30/4/2007 Sales Less sales returns Less cost of sales Opening stock 1/5/2006 Purchases Carriage inwards Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Rent receivable Less expenses Wages Light and heat Advertising Carriage outwards Repairs Net profit Less dividends Reserves 21,000 4,000 4,000 7,000 7,000 43,000 88,000 20,000 68,000 10,000 131,000 11,000 100,000 2,000 113,000 45,000 68,000 121,000 190,000 1,000 189,000
125
Balance Sheet as on 30/4/2007 Fixed Assets Buildings Equipment Total fixed assets Current assets Closing stock Debtors Bank Cash Less current liabilities Creditors Dividends due Working capital Total net assets Financed by 450,000 1 ordinary shares Reserves Capital employed Authorised 450,000 Issued 160,000 68,000 228,000 16,000 20,000 36,000 40,000 228,000 45,000 20,000 10,000 1,000 76,000 Cost 112,000 76,000 188,000 Depreciation NBV 112,000 76,000 188,000
(b) Monark Ltd could raise a further 290,000 by issuing shares. 12. (a)
Trading, Profit and Loss Appropriation Account for year ending 30/4/2007 Sales Less sales returns Less cost of sales Opening stock 1/6/2006 Purchases Less purchases returns Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Commission receivable Less expenses Advertising Wages Light and heat Bank interest Net profit Less dividends Reserves 8,000 55,000 6,000 10,000 79,000 143,000 37,500 105,500 12,000 222,000 210,000 15,000 195,000 209,000 42,000 167,000 210,000 14,000 390,000 13,000 377,000
126
Balance Sheet as on 30/4/2007 Fixed Assets Buildings Motor vehicles Total fixed assets Current assets Closing stock Debtors Cash Less current liabilities Creditors Bank overdraft Working capital Total net assets Financed by 500,000 1 ordinary shares Reserves Capital employed Authorised 500,000 Issued 300,000 105,500 405,500 20,000 45,000 65,000 25,500 405,500 42,000 44,500 4,000 90,500 Cost 200,000 180,000 380,000 Depreciation NBV 200,000 180,000 380,000
(b) Rate of dividend paid is 12%.
Chapter 48 Adjustments to Final Accounts

1.
Date 2006 1/6 Bank Details F General Ledger Total Date 2006 Insurance InsuranceA/C A/C ACB 1,200 1,200 1/1 Balance b/d 600 31/12 31/12 Profit and loss Balance c/d 600 600 1,200 Details F Total
Profit and Loss Account for year ending 31/12/2006 Less expenses Insurance (1,200 600) 600
Balance Sheet as on 31/12/2006 Current assets Insurance prepaid 600
2.
Date 2006 1/4 Bank Details F Total 3,200 3,200 1/5 Balance b/d 800 Date 2006 31/12 31/12 Details F Total 2,400 800 3,200
Rent A/C ACB Profit and loss Balance c/d
127
Profit and Loss Account for year ending 31/12/2006 Less expenses Rent (3,200 800) 2,400
Balance Sheet as on 31/12/2006 Current assets Rent prepaid 800
3.
Date 2006 31/5 Bank ACB Details F
General Ledger Total Date 2006 Statioery A/C Stationery 1,900 1,900 31/5 31/5
Details
Total
Profit and loss Balance c/d
1,450 450 1,900
1/6
Balance b/d
450
Profit and Loss Account for year ending 31/5/2006 Less expenses Stationery (1,900 450) 1,450
Profit and Loss Account for year ending 31/5/2006 Current assets Stationery on hand 450
4.
Date Details F General Ledger Total Date Wages WagesA/C A/C Bank 31/12/2006 Balance c/d ACB 27,000 2,500 29,500 1/1/2007 29,500 2,500 31/12/2006 Profit and loss Details F Total 29,500
Profit and Loss Account for year ending 31/12/2006 Less expenses Wages (27,000 + 2,500) 29,500
Balance Sheet as on 31/12/2006 Current liabilities Wages due 2,500
128
5.
Date Details F General Ledger Total Date Electricity A/C Bank 31/12/2005 Balance c/d ACB 6,000 1,500 7,500 1/1/2006 Balance b/d 7,500 1,500 31/12/2005 Profit and loss Details F Total 7,500
Profit and Loss Account for year ending 31/12/2005 Less expenses Electricity (6,000+1,500) 7,500
Balance Sheet as on 31/12/2005 Current liabilities Electricity due 1,500
6.
Date Details F
General Ledger Total Date Interest receivable A/C Interest receivable A/C
Details
Total 1,800
31/12/2006 Profit and loss 1/1/2007 Balance b/d
1,800 1,800
31/12/2006 Balance c/d
Profit and Loss Account for year ending 31/12/2006 Add gains Interest receivable Balance Sheet as on 31/12/2006 Current assets Interest receivable due 1,800 1,800
7.
Date 2006 1/1 Details F General Ledger Total Date 2006 MachineryA/C A/C Machinery Bank ACB 12,000 BankA/C A/C Bank 1/1 Machinery ACB 12,000 Details F Total
Provision for depreciation A/C Provision for depreciation A/C 31/12 Profit and loss 1,200
129
Profit and Loss Account for year ending 31/12/2006 Less expenses Depreciation: Machinery 1,200
Balance Sheet as on 31/12/2006 Fixed Assets Machinery Cost 12,000 Depreciation 1,200 NBV 10,800
8.
General Ledger Date Details F Total Date Details F Total Motor Vans A/C 1/1/2005 Bank ACB 60,000 Bank A/C 1/1/2005 Motor vans ACB 60,000
Provision for depreciation A/C 31/12/2005 31/12/2006 Balance c/d Balance c/d 12,000 24,000 24,000 1/1/2007 Balance b/d 31/12/2005 1/1/2006 31/12/2006 Profit and loss Balance b/d Profit and loss 12,000 12,000 12,000 24,000
Profit and Loss Account for year ending 31/12/2005 Less expenses Depreciation: Motor vans 12,000
Balance Sheet as on 31/12/2005 Fixed Assets Motor vans Cost 60,000 Depreciation 12,000 NBV 48,000
130
9.
General Ledger Date Details F Total Date Details F Total Equipment A/C 1/1/2005 Bank ACB 30,000 Bank A/C 1/1/2005 Equipment ACB 30,000
Provision for depreciation A/C 31/12/2005 31/12/2006 Balance c/d Balance c/d 4,400 8,800 8,800 1/1/2007 Balance b/d 31/12/2005 1/1/2006 31/12/2006 Profit and loss Balance b/d Profit and loss 4,400 4,400 4,400 8,800 8,800
Profit and Loss Account for year ending 31/12/2005 Less expenses Depreciation: Equipment Profit and Loss Account for year ending 31/12/2006 Less expenses Depreciation: Equipment Balance Sheet as on 31/12/2005 Fixed Assets Equipment Cost 30,000 Balance Sheet as on 31/12/2005 Fixed Assets Equipment Cost 30,000 Depreciation 8,800 NBV 21,200 Depreciation 4,400 NBV 25,600 8,800 8,800
10.
General Ledger Date Details F Total Date Details F Total Motor Vans A/C 1/9/2006 Bank ACB 40,000 Bank A/C 1/1/2006 Machinery ACB 40,000
Provision for depreciation A/C 31/12/2006 31/12/2007 Balance c/d Balance c/d 8,000 16,000 16,000 31/12/2007 Balance b/d 31/12/2006 1/1/2007 31/12/2007 Profit and loss Balance b/d Profit and loss 8,000 8,000 8,000 16,000 16,000
131
Chapter 49 Final Accounts and Balance Sheet with Adjustments

1. (a)
Trading, Profit and Loss Appropriation Account of Niall Ltd for year ending 31/5/2005 Sales (365,000 24,000) Less cost of sales Opening stock 1/6/2004 Purchases Import duty Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Commission receivable (25,000 + 2,500) Less expenses Insurances Wages (56,000 + 4,600) Light and heat Depreciation: Motor vehicles Buildings Net profit Less dividends Add opening balance Reserves 12,300 3,600 15,900 99,770 40,730 30,000 10,730 24,000 34,730 9,870 60,600 13,400 25,000 27,500 140,500 37,000 210,000 11,000 258,000 30,000 228,000 113,000 341,000
132
Balance Sheet of Niall Ltd as on 31/5/2005 Fixed assets Buildings Motor vehicles Total fixed assets Current assets Closing stock Debtors Commission receivable Cash Less current liabilities Creditors Bank overdraft Wages due Dividends due Working capital Total net assets Financed by 360,000 1 ordinary shares Reserves Authorised 360,000 Issued 250,000 34,730 284,730 63,000 17,600 4,600 30,000 115,200 (2,370) 284,730 30,000 78,000 2,500 2,330 112,830 Cost 180,000 123,000 303,000 Depreciation 3,600 12,300 15,900 NBV 176,400 110,700 287,100
(b) Profit is retained for future expansion or losses. 2. (a)

Trading, Profit and Loss Appropriation Account of Adrian Ltd for year ending 31/5/2005 Sales (275,000 19,000) Less cost of sales Opening stock 1/6/2004 Purchases (165,000 2,000) Carriage inwards Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Interest receivable (18,000 + 6,000) Less expenses Insurance Bad debts Repairs (16,000 + 2,900) Advertising Depreciation: Delivery van Machinery Net profit Less dividends Reserves 27,312 11,600 38,912 83,912 33,288 12,750 20,538 8,600 10,900 18,900 6,600 24,000 117,200 13,000 163,000 6,800 182,800 20,000 162,800 93,200 256,000
133
Balance Sheet of Adrian Ltd as on 31/5/2005 Fixed assets Delivery vans Machinery Total fixed assets Current assets Closing stock Debtors Bank Interest receivable due Less current liabilities Creditors Repairs due Dividends due Working capital Total net assets Financed by 500,000 1 ordinary shares Reserves Long-term liabilities 12-year loan Capital employed 40,000 315,538 Authorised 500,000 Issued 255,000 20,538 275,538 15,600 2,900 12,750 31,250 38,750 315,538 20,000 34,000 10,000 6,000 70,000 Cost 170,700 145,000 315,700 Depreciation 27,312 11,600 38,912 NBV 143,388 133,400 276,788
(b) Bad debts constitute one third of the debtors. This means that one third of credit sales will not be paid for. 3. (a)
Trading, Profit and Loss Appropriation Account of Richard Ltd for year ending 31/7/2005 Sales (312,000 8,000) Less cost of sales Opening stock 1/8/2004 Purchases Import duty Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains None Less expenses Light and heat (18,000 + 2,500) Insurances (8,900 600) Wages and salaries Depreciation: Premises Machinery Net profit Less dividends Add opening balance Reserves
134
304,000
17,000 120,000 11,600 148,600 27,000 121,600 182,400 000000 182,400 20,500 8,300 38,600 5,500 11,200 16,700 84,100 98,300 17,100 81,200 25,000 106,200
Balance Sheet of Richard Ltd as on 31/7/2005 Fixed assets Premises Machinery Total fixed assets Current assets Closing stock Debtors Insurance prepaid Cash Less current liabilities Creditors Bank overdraft Light and heat due Working capital Total net assets Financed by 600,000 1 ordinary shares Reserves Capital employed Authorised 600,000 Issued 190,000 106,200 296,000 45,000 6,400 2,500 53,900 12,900 296,200 27,000 34,000 600 5,200 66,800 Cost 220,000 80,000 300,000 Depreciation 5,500 11,200 16,700 NBV 214,500 68,800 283,300
(b) Goods sold can be returned because they are not as ordered or are faulty. 4. (a)
Trading, Profit and Loss Appropriation Account of Darra Ltd for the year ending 30/4/2005 Sales (298,000 18,000) Less cost of sales Opening stock 1/5/2004 Purchases (140,000 6,000) Cost of goods available for sales Less closing stock Cost of goods actually sold Gross profit Add gains Rent receivable (24,900 5,500) Less expenses Advertising (25,000 + 860) Petty cash expenses Loan interest Depreciation: Motor vehicles Net profit Less dividends Add opening balance Reserves 25,860 4,000 2,800 21,120 53,780 134,620 36,000 98,620 25,000 123,620 19,400 188,400 17,000 134,000 151,000 40,000 111,000 169,000 280,000
135
Balance Sheet of Darra Ltd as on 30/4/2005 Fixed assets Motor vehicles Land Total fixed assets Current assets Closing stock Debtors Bank Cash Less current liabilities Creditors Interest receivable prepaid Advertising due Dividends due Working capital Total net assets Financed by 200,000 1 ordinary shares Reserves Long-term liability 7-year loan Capital employed Cost 132,000 196,000 328,000 40,000 64,000 14,100 2,000 46,000 5,500 860 36,000 Depreciation 21,120 21,120 NBV 110,880 196,000 306,880
120,100
88,360 31,740 338,620
Authorised 200,000
Issued 180,000 123,620
303,620 35,000 338,620
(b) The source document for purchases returns is a credit note received and for petty cash expenses is a petty cash voucher. 5. (a)
Trading, Profit and Loss Appropriation Account of James Ltd for the year ending 30/6/2005 Sales (272,000 18,000) Less cost of sales Opening stock 1/7/2004 Purchases Import duty Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Commission receivable (35,000 + 4,750) Less expenses Insurance Carriage outwards Repairs (13,400 + 2,600) Depreciation: Motor vehicles Equipment Net profit Less dividends Add opening balance Reserves
136
254,000
23,000 120,000 7,000 150,000 27,900 122,100 131,900 39,750 171,650 13,700 17,500 16,000 16,548 26,950 43,498 90,698 80,952 39,000 41,952 20,000 61,952
Balance Sheet of James Ltd as on 30/6/2005 Fixed assets Equipment Motor vehicles Current assets Closing stock Debtors Commission receivable due Cash Less current liabilities Creditors Repairs due Bank overdraft Dividends due Working capital Total net assets Financed by 400,000 1 ordinary shares Reserves Capital employed Authorised 400,000 Issued 260,000 61,952 31,952 12,000 2,600 12,900 39,000 66,500 2,250 321,952 27,900 34,000 4,750 2,100 68,750 Cost 245,000 118,200 363,200 Depreciation 26,950 16,548 43,498 NBV 218,050 101,652 319,702
(b) James Ltd can raise a further 140,000 ordinary shares. 6. (a)
Trading, Profit and Loss Appropriation Account of Conor Ltd for year ending 31/5/2005 Sales Less cost of sales Opening stock 1/6/2004 Purchases (120,000 12,000) Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Rent receivable (25,000 + 2,500) Less expenses Wages Insurance (3,800 600) Bad debts Advertising Depreciation: Motor vehicles Machinery Net profit Less dividends Add opening balance Reserves 7,760 15,840 23,600 100,300 32,200 28,000 4,200 45,000 49,200
137
214,000
31,000 108,000 139,000 30,000 109,000 105,000 27,500 132,500 56,000 3,200 5,700 11,800
Balance Sheet of Conor Ltd as on 31/5/2005 Fixed assets Motor vehicles Machinery Current assets Closing stock Debtors Rent receivable Insurance prepaid Cash Bank Less current liabilities Creditors Dividends due Working capital Total net assets Financed by 200,000 1 ordinary shares Reserves Capital employed Authorised 200,000 Issued 140,000 49,200 189,200 56,000 28,000 84,000 (16,200) 189,200 30,000 33,000 2,500 600 300 1,400 67,800 Cost 97,000 132,000 229,000 Depreciation 7,760 15,840 23,600 NBV 89,240 116,160 205,400
(b) Closing stock should be valued at the lower price of: cost price, market price or replacement cost. 7. (a)
Trading, Profit and Loss Appropriation Account of Enda Ltd for year ending 31/3/2005 Sales (230,000 5,000) Less cost of sales Opening stock Purchases (89,000 1,200) Import duty Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Interest receivable (13,750 4,500) Less expenses Advertising (8,000 1,370) Insurance Repairs Depreciation: Premises Machinery Net profit Less dividends Reserves 4,000 21,120 25,120 43,250 111,750 14,000 97,350 6,630 4,600 6,900 18,250 155,000 13,000 87,800 4,450 105,250 17,000 88,250 136,750 225,000
138
Balance Sheet of Enda Ltd as on 31/3/2005 Fixed assets Premises Machinery Total fixed assets Current assets Closing stock Debtors Cash Advertising prepaid Interest receivable due Current liabilities Creditors Bank overdraft Dividends due Working capital Financed by 400,000 1 ordinary shares Reserves Long-term liabilities 20-year loan Capital employed 45,000 322,350 Authorised 400,000 Issued 180,000 97,350 277,350 14,000 6,000 14,400 34,400 15,470 322,350 17,000 24,000 3,000 1,370 4,500 49,870 Cost 200,000 132,000 332,000 Depreciation 4,000 21,120 25,120 NBV 196,000 110,880 306,880
(b) TV, cinema, colour magazines. 8. (a)

Trading, Profit and Loss Appropriation Account of Andrew Ltd for year ending 30/4/2006 Sales (460,000 13,000) Less cost of sales Opening stock 1/5/2005 Purchases (290,000 3,600) Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Rent receivable (19,700 + 2,500) Less expenses Loan interest Insurance (14,800 900) Bad debts Carriage outwards (4,300 + 3,500) Depreciation: Motor vehicles Machinery Net profit Less dividends Reserves 11,040 49,000 60,040 99,740 87,060 39,100 47,960
139
447,000
17,000 286,400 303,400 21,000 282,400 164,600 22,200 186,800 8,000 13,900 10,000 7,800
Balance Sheet of Andrew Ltd as on 30/4/2006 Fixed assets Motor vehicles Machinery Total fixed assets Current assets Closing stock Debtors Insurance prepaid Rent receivable due Cash Less current liabilities Creditors Carriage outwards due Working capital Total net assets Financed by 400,000 1 ordinary shares Reserves Long-term liabilities 10-year loan Capital employed 40,000 317,960 Authorised 400,000 Issued 230,000 47,960 277,960 47,000 3,500 50,500 22,600 317,960 21,000 29,700 900 2,500 19,000 73,100 Cost 110,400 245,000 355,400 Depreciation 11,040 49,000 60,040 NBV 99,360 196,000 295,360
(b) 17% (Dividend Issued shares 100%) 9. (a)

Trading, Profit and Loss Appropriation Account of Burns Ltd for year ending 31/5/2005 Sales Less cost of sales Opening stock 1/6/2004 Purchases (110,000 15,000) Carriage inwards Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Interest receivable (12,000 + 8,000) Less expenses Light and heat Wages (47,500 + 2,500) Bad debts Depreciation: Machinery Delivery van Net profit Less dividends Add opening balance Reserves
140
200,000
42,000 95,000 8,000 145,000 68,000 77,000 123,000 20,000 143,000 7,500 50,000 6,700 30,000 12,000 42,000 106,200 36,800 34,800 2,000 22,000 24,000
Balance Sheet of Burns Ltd as on 31/5/2005 Fixed assets Machinery Delivery vans Total fixed assets Current assets Closing stock Debtors Cash Interest receivable due Less current liabilities Creditors Bank overdraft Wages due Dividends due Working capital Total net assets Financed by 350,000 1 ordinary shares Reserves Long-term liabilities 15-year loan Capital employed 35,000 349,000 Authorised 350,000 Issued 290,000 24,000 314,000 13,000 13,000 2,500 34,800 63,300 71,000 349,000 68,000 54,000 4,300 8,000 134,300 Cost 200,000 120,000 320,000 Depreciation 30,000 12,000 42,000 NBV 170,000 108,000 278,000
(b) 55,000 (42,000 + 68,000 2) 10. (a)

Trading, Profit and Loss Appropriation Account of Balfe Ltd for year ending 31/3/2006 Sales (270,000 7,500) Less cost of sales Opening stock 1/4/2005 Purchases Import duty Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Commission receivable (16,000 + 4,000) Interest receivable Less expenses Advertising (14,000 3,000) Wages Depreciation: Equipment Delivery vans Net profit Less dividends Add opening balance Reserves 262,500
23,000 130,000 11,800 164,800 40,000 124,800 137,700 20,000 8,000 165,700 11,000 32,000 25,600 22,000 47,600 90,600 75,100 30,000 45,100 68,000 113,100
141
Balance Sheet of Balfe Ltd as on 31/3/2006 Fixed assets Buildings Equipment Delivery vans Total fixed assets Current assets Closing stock Debtors Advertising prepaid Commission receivable due Cash Less current liabilities Creditors Bank overdraft Dividends due Working capital Total net assets Financed by 400,000 1 ordinary shares Reserves Capital employed Authorised 400,000 Issued 300,000 113,100 413,100 43,000 14,000 30,000 87,000 (9,300) 413,100 40,000 28,000 3,000 4,000 2,700 77,700 Cost 200,000 160,000 110,000 270,000 25,600 22,000 47,600 Depreciation NBV 200,000 134,400 88,000 422,400
(b) 3.96 times (124,800 31,500) 11.(a)

Trading, Profit and Loss Appropriation Account of Carr Ltd for year ending 31/5/2007 Sales Less cost of sales Opening stock Purchases (160,000 13,000) Carriage inwards Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Rent receivable (8,600 + 4,400) Less expenses Insurance (7,800 1,200) Wages Bad debts Depreciation: Machinery Delivery vans Net profit Less dividends Add opening balance Reserves
142
270,000
23,000 147,000 5,600 175,600 22,000 153,600 116,400 13,000 129,400 6,600 32,800 5,600 10,400 23,400 33,800 78,800 50,600 26,000 24,600 15,000 39,600
Balance Sheet of Carr Ltd as on 31/5/2007 Fixed assets Machinery Delivery vans Total fixed assets Current assets Closing stock Debtors Rent receivable due Cash Insurance prepaid Bank Less current liabilities Creditors Dividends due Working capital Total net assets Financed by 300,000 1 ordinary shares Reserves Long-term liability 12-year loan Capital employed 25,000 324,600 Authorised 300,000 Issued 260,000 39,600 299,600 30,000 26,000 56,000 33,400 324,600 22,000 49,500 4,400 1,300 1,200 11,000 89,400 Cost 130,000 195,000 325,000 Depreciation 10,400 23,400 33,800 NBV 119,600 171,600 291,200
(b) Carr Ltd should have motor insurance; employers liability insurance; product liability and should pay its share of PRSI. 12. (a)
Trading, Profit and Loss Appropriation Account of Keogh Ltd for year ending 31/5/2008 Sales (310,000 12,000) Less cost of sales Opening stock (1/6/2007) Purchases Import duty Cost of goods available for sale Less closing stock Cost of goods actually sold Gross profit Add gains Interest receivable Less expenses Rent (8,800 1,200) Wages (40,000 + 6,000) Depreciation: Machinery Delivery vans Net profit Less dividends Add balances Reserves 298,000
20,000 168,000 4,600 192,600 18,000 174,600 123,400 3,500 126,900 7,600 46,000 9,600 18,000 27,600 81,200 45,700 36,000 9,700 16,700 26,400
143
Balance Sheet for Keogh Ltd as on 31/5/2008 Fixed assets Buildings Machinery Delivery vans Total fixed assets Current assets Closing stock Debtors Cash Rent prepaid Less current liabilities Creditors Bank overdraft Dividends due Wages due Working capital Total net assets Financed by 500,000 1 ordinary shares Reserves Long-term liabilities 10-year loan Capital employed Cost 200,000 160,000 150,000 510,000 18,000 32,000 3,400 1,200 21,000 15,600 36,000 6,000 Depreciation 9,600 18,000 27,600 NBV 200,000 150,400 132,000 482,400
54,600
78,600 (24,000) 458,400
Authorised 500,000
Issued 400,000 26,400
426,400 32,000 458,400
(b) Keogh Ltd can raise 100,000 from issuing the remaining shares. 13. (a)
Trading, Profit and Loss Appropriation Account of Kirby Ltd for year ending 31/3/2008 Sales Less cost of sales Opening stock (1/4/2007) Purchases Carriage inwards Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Rent receivable (5,600 1,800) Less expenses Loan interest due (2,500 + 500) Wages (57,000 + 3,000) Bad debts Depreciation: Equipment Delivery vans Net profit Less dividends Add opening balance Reserves
144
340,000
12,000 125,000 8,000 145,000 14,000 131,000 209,000 3,800 212,800 3,000 60,000 2,400 21,600 15,000 36,600 102,000 110,800 34,000 76,800 32,000 108,800
Balance Sheet of Kirby Ltd as on 31/3/2008 Fixed assets Equipment Delivery van Total fixed assets Current assets Closing stock Debtors Cash Bank Less current liabilities Creditors Rent receivable prepaid Wages due Loan interest due Working capital Total net assets Financed by 300,000 1 ordinary shares Reserves Long-term liabilities 6-year loan Capital employed Cost 180,000 150,000 330,000 14,000 54,000 2,100 5,600 40,000 1,800 3,000 500 Depreciation 21,600 15,000 36,600 NBV 158,400 135,000 293,400
75,700
45,300 30,400 323,800
Authorised 300,000
Issued 200,000 108,800
308,800 15,000 323,800
(b) Kirby Ltd can reduce its bad debts by not selling on credit, checking the credit worthiness of its debtors and giving incentives for prompt payment. 14. (a)
Trading, Profit and Loss Appropriation Account of Moore Ltd for year ending 31/5/2007 Sales Less cost of sales Opening stock (1/6/2006) Purchases Import duty Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Commission receivable (12,400 + 1,600) Rent receivable Less expenses Wages (28,400 + 600) Carriage outwards (6,600 + 2,200) Depreciation: Machinery Delivery vans Net profit Less dividends Add opening balance Reserves 330,000
15,000 145,000 3,400 163,400 18,000 145,400 184,600 14,000 12,000 210,600 29,000 8,800 24,000 26,000 50,000 87,800 122,800 32,000 90,800 35,000 125,800
145
Balance Sheet of Moore Ltd as on 31/5/2007 Fixed assets Machinery Delivery vans Total fixed assets Current assets Closing stock Debtors Cash Bank Commission receivable due Less current liabilities Creditors Wages due Carriage outwards due Working capital Total net assets Financed by 350,000 1 ordinary shares Reserves Long-term liabilities 20-year loan Capital employed Cost 200,000 190,000 390,000 18,000 80,000 2,000 20,000 1,600 13,000 600 2,200 Depreciation 24,000 26,000 50,000 NBV 176,000 164,000 340,000
121,600
15,800 105,800 445,800
Authorised 350,000
Issued 280,000 125,800
405,800 40,000 445,800
(b) 11.43% 15. (a)

Trading, Profit and Loss Appropriation Account of Joyce Ltd for year ending 31/5/2007 Sales Less cost of sales Opening stock (1/6/2006) Purchases (140,000 4,000) Import duty Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Interest receivable (10,000 + 4,000) Less expenses Carriage outwards Wages (48,400 + 1,600) Bad debts Depreciation: Machinery Delivery vans Net profit Less dividends Add opening balance Reserves
146
320,000
22,000 136,000 8,000 166,000 16,000 150,000 170,000 14,000 184,000 5,600 50,000 4,000 12,000 12,900 24,900 84,500 99,500 30,000 69,500 26,000 95,500
Balance Sheet of Joyce Ltd as on 31/5/2007 Fixed assets Buildings Machinery Delivery vans Total fixed assets Current assets Closing stock Debtors Cash Bank Interest receivable due Less current liabilities Creditors Dividends due Wages due Total net assets Financed by 400,000 1 ordinary shares Reserves Capital employed Authorised 400,000 Issued 300,000 95,500 395,500 12,000 30,000 1,600 43,600 14,400 395,500 16,000 30,000 2,300 5,700 4,000 58,000 Cost 200,000 120,000 86,000 406,000 12,000 12,900 24,900 Depreciation NBV 200,000 108,000 73,100 381,100
(b) 1.33 : 1 (58,000 : 43,600) 16. (a)

Trading, Profit and Loss Appropriation Account of Nevin Ltd for year ending 31/5/2008
Sales Less cost of sales Opening stock (1/6/2007) Purchases (175,000 5,000) Carriage inwards Cost of goods available for sale Less closing stock Cost of actual sales Gross profit Add gains Commission receivable (6,600 + 1,800) Less expenses Insurance (4,800 900) Wages Bad debts Depreciation: Equipment Delivery vans Net profit Less dividends Add opening balance Reserves 18,720 8,450
390,000
14,500 170,000 5,500 190,000 22,000 168,000 222,000 8,400 230,400 3,900 32,200 8,000 27,170 71,270 159,130 25,600 133,530 34,400 167,930
147
Balance Sheet of Nevin Ltd as on 31/5/2008 Fixed assets Buildings Equipment Delivery vans Total fixed assets Current assets Closing stock Debtors Cash Insurance prepaid Commission receivable due Less current liabilities Creditors Dividends due Bank overdraft Working capital Total net assets Financed by 400,000 1 ordinary shares Reserves Capital employed Authorised 400,000 Issued 320,000 167,930 487,930 20,000 25,600 15,000 60,600 (5,900) 487,930 22,000 28,000 2,000 900 1,800 54,700 Cost 300,000 156,000 65,000 521,000 18,720 8,450 27,170 Depreciation NBV 300,000 137,280 56,550 493,830
(b) 56.92% (222,000 100%) 390,000
Chapter 50 Assessing a Business

1. They only measure things that can be expressed in monetary terms; They only provide information for a given year or day; They do not take into account factors such as good industrial relations, staff morale etc. 2.
Name of Formula Gross profit margin Gross profit margin Gross profit margin Gross profit margin Formula Gross profit 100% Sales Gross profit 100% Sales Gross profit 100% Sales Gross profit 100% Sales Workings 25,000 x 100% 100,000 30,000 x 100% 120,000 24,000 x 100% 96,000 15,000 x 100% 65,000 Answer 25% 25% 25% 23.08%
148
3.
Name of Formula Net profit margin Net profit margin Net profit margin Net profit margin Formula Net profit 100% Sales Net profit 100% Sales Net profit 100% Sales Net profit 100% Sales Workings 10,000 x 100% 100,000 15,000 x 100% 120,000 12,000 x 100% 96,000 5,000 x 100% 65,000 Answer 10% 12.5% 12.5% 7.69%
4.
Name of Formula Return on capital employed Return on capital employed Return on capital employed Return on capital employed Formula Net profit 100% Capital employed Net profit 100% Capital employed Net profit 100% Capital employed Net profit 100% Capital employed Workings 10,000 x 100% 300,000 15,000 x 100% 450,000 12,000 x 100% 360,000 5,000 x 100% 250,000 Answer 3.33% 3.33% 3.33% 2%
5.
Ratio Gross profit % Net profit % Return on capital employed 2005 30% 20% 6.67% 2006 40% 12% 12% 2007 35% 17% 6.89% 2008 29.5% 20.49% 12.18%
Burns Ltd got the highest overall returns in 2008. 6. (a) Stock turnover is 4 times (120,000 30,000) (b) Stock turnover is 10 times (150,000 12,000 + 18,000) 2 7.
Ratio Rate of stock turnover A 15 times B 16 times C 7.38
8.
Name of Ratio Current Ratio Current Ratio Current Ratio Current Ratio Formula Current Assets: Current Liabilities Current Assets: Current Liabilities Current Assets: Current Liabilities Current Assets: Current Liabilities Workings 50,000 : 25,000 54,000 : 32,000 35,000 : 45,000 38,000 : 56,000 Answer 2 :1 1.69 : 1 0.78 : 1 0.68 : 1
149
9.
Name of Ratio Acid Test Ratio Acid Test Ratio Acid Test Ratio Acid Test Ratio Formula Current Assets Closing stock: Current Liabilities Current Assets Closing stock: Current Liabilities Current Assets Closing stock: Current Liabilities Current Assets Closing stock: Current Liabilities Workings 50,000 15,000 : 25,000 54,000 17,000 : 32,000 35,000 15,000 : 45,000 38,000 12,000 : 56,000 Answer 1.4 : 1 1.16 : 1 0.44 : 1 0.46 : 1
10. Workings for report

Ratio Current Ratio Acid Test Ratio Hilary Ltd 1.25 : 1 0.88 : 1 Louise Ltd 0.50 : 1 0.37 : 1 Helen Ltd 2.06 : 1 1.37 : 1 Aisling Ltd 1.98 : 1 1.69 : 1
Louise Ltd has the greatest liquidity problem.

1. Liquidity Consultants Ltd, Anytown, Longford. Liquidity problems of Louise Ltd _______________________ The Directors of Louise Ltd, Anytown, Longford. I was asked by the directors to examine the liquidity situation of the company and make recommendations. I used both the Current and Acid Test ratios in my examination. My findings are set out below. Louise Ltd has a Current ratio of 0.5 : 1. This is below the recommended ratio of 2 : 1. The Acid Test ratio is 0.37 : 1. This is below the recommended ratio of 1 : 1. I recommend the following: Louise Ltd must obtain extra finance to pay off its liabilities. It must also reduce its liabilities by buying less on credit, by keeping the bank overdraft down to a minimum or by paying less in dividends. I am available to discuss this report if required.
2. 3. 4.
5.
6.
7. 8. 9.
Patricia Cooney.
Liquidity Consultant.
11. A company is solvent if Total Assets are greater than External Debts and vice versa. Cork Bus Ltd has Total Assets of 204,000 and External Liabilities of 54,000. It is therefore solvent. Workings for report
Assets External Liabilities Buildings 80,000 + Buses 74,000 + Equipment 40,000 + Debtors 8,000 + Cash 2,000 Wages due 5,000m + Creditors 2,000 + Bank overdraft 7,000 + 15-year loan 40,000
150
1. 2. 3. 4. 5.
Financial Consultants Ltd, Cork. Solvency of Cork Bus Ltd ___________________ The Shareholders of Cork Bus Ltd, Cork. I was asked by the shareholders to examine the solvency position of the company. I deducted the Total External Liabilities of the company from the Total Assets. My findings are as follows. Cork Bus Ltd is solvent as its Total Assets of 204,000 exceeds its Total External Liabilities of 54,000. I am available to discuss this report if required.
6. 7. 8. 9.
Mary Smyth.
Financial Consultant.
12. (a) (i) Overtrading means that a business is over-relying on current liabilities instead of obtaining additional capital. (ii) Solvent means having more assets than external liabilities. (b) Workings for report
Ratios 2004 Gross profit % Net profit % Return on capital employed % Acid test ratio 1. Management Consultants Ltd, Suspense Street, Waterford. Report on the Performance of Bridge Ltd for years 2004 and 2005 ______________________ The Directors of Bridge Ltd, Main Street, Cork. I was asked by the shareholders to examine the performance of the company. I used a number of ratios. My findings are as follows. On the profitability side, 2005 has been an improvement on 2004. Gross Profit % increased from 41.67% to 54.90%, which is an increase of 13.23%. Net Profit % increased from 20.83% to 35.29%, which is an increase of 14.46%. Return on Capital Employed increased from 19.23% to 31.03%, which is an increase of 11.8%. The Acid Test ratio however fell from 2 : 1 to 0.95 : 1. Although the company is very profitable, the liquidity position must be monitored. I am available to discuss this report if required. 41.67% 20.83% 19.23% 2:1 Answers 2005 54.90% 35.29% 31.03% 0.95 : 1
2. 3. 4.
5. 6.
7. 8. 9.
Kevin Scully.
Management Consultant.
151
13. (a) A company would compare the interest paid on a long term loan with the return of Capital Employed because there is no point in paying more interest on a loan than the company is making from using the loan. If the loan cost 12% per year and the Return on Capital is 7%, then the company is paying 5% more on the loan than it is able to make from using the loan. (b) Workings for report
Ratios 2005 Gross profit % Net profit % Return on capital employed % Current ratio 1. Management Consultants Ltd, News Road, Wicklow. Report on the Performance of Chess Ltd _______________________ The Directors of Chess Ltd, Main Street, Cork I was asked by the directors to examine the performance of the company. I used a number of ratios. My findings are as follows. There is a decrease in the level of profitability and liquidity in 2006. Gross Profit % fell from 48.48% to 42.62%, which is a decrease of 5.86%. Net Profit % decreased from 21.21% to 14.75%, which is a decrease of 6.46%. Return on Capital Employed decreased from 24.1% to 12.8%, a decrease of 11.29. Return is now less than the cost of the loan at 15%, which means the company is losing 2.15% on the loan. The Current Ratio decreased from 2.6 : 1 (greater than the recommended ratio of 2:1) to 1.35 : 1. This trend is worrying. I am available to discuss this report if required. 48.48% 21.21% 24.14% 2.6 : 1 Answers 2006 42.62% 14.75% 12.86% 1.35 : 1
2. 3. 4.
5. 6.
7. 8. 9.
George Lee.
Management Consultant.
Chapter 51 Club Accounts

1.
Functions of Treasurer Collect membership Make all club payments Prepare accounts Report on clubs finances at AGM Explanation Issue receipts and record membership received Write cheques and pay all club expenses Prepare Income and Expenditure and Balance Sheet for club Inform members of the club's finances at the AGM
152
2.
Date 2005 7/1 8/1 9/1 11/1 13/1 17/1 24/1 25/1 Details Balance c/d Subscriptions Lotto tickets Disco receipts Subscriptions Lotto tickets Lotto tickets Disco receipts Analysed Cash Book Total Subs Disco Lotto Date Details 2005 Lotto 460 12/1 prizes 65 170 250 85 135 190 300 1,655 1/2 Balance b/d 1,075 150 300 550 495 85 135 190 250 65 170 14/1 Rent 15/1 19/1 26/1 Disco posters Lotto prizes Lotto prizes Total 100 55 20 80 150 120 55 1,075 1,655 110 140 330 55 120 55 20 80 150 Rent Disco Lotto 100
27/1 DJ 28/1 Rent 31/1 Balance
3.
Analysed Cash Book Date 2005 1/5 2/5 6/5 14/5 20/5 26/5 Balance b/d Subscriptions Competition fees Subscriptions Competition fees Disco receipts Details Total Subs Disco Com. Date 225 40 35 65 60 160 160 65 60 40 35 2005 5/5 Competition prizes Details Total 25 30 100 10 45 100 275 585 200 40 70 100 100 10 45 30 Wage Disco Com. 25
12/5 DJ Caretakers wages Disco 16/5 posters 15/5 19/5 Prizes Caretakers wages Balance 29/5 c/d 29/5 95
585 30/5 Balance b/d 275
105
160
153
4.
Analysed Cash Book Date 2006 3/3 7/3 Grant Bar sales Details Total Subs. Bank 6,000 2,700 2,700 Bar Oth. Date 2006 Details Ch. no Total Bank 350 2,100 2,100 Bar Trvl. DanOth. ce 350
Insur6,000 13/3 6 ance 17/3 Purch7 ases Clean8 ing
Loan 10/3 receiv- 10,000 ed Sub19/3 scriptions 26/3 Bar sales 3,500 3,500
10,000 23/3
130
130
28/3 Travel 9 Dance 10 exp. Balance c/d
870
870
1,780
1,780
31/3
320
320
Dance 31/3 receipts
1,790
1,790 31/3
22,000 25,770 2,230 870 320 350
25,770 3,500 4,480 17,790 1/4 Balan22,000 ce b/d
5.
Analysed Cash Book Date 2006 8/4 Subscriptions Details Total Subs. Bank Bar Oth. Date Details 2006 5/4 Bar purchases 1 Ch. Total no Bank Bar Trvl. Dance Oth.
2,400 2,400
4,600 4,600
Dance 10/4 receipts Grant 26/4 received 29/4 Bar sales
3,750
Dance 3,750 14/4 expenses 3,000 18/4 Advertising
750
750
3,000
500
500
2,100
2,100
Bar 21/4 expenses Affiliation 30/4 Travel Clean30/4 ing Balan30/4 ce c/d 28/4
980
980
5 6 7
450 400 100 3,470 11,250 5,580 400 750 400
450
100
11,250 2,400 2,100 6,750 1/5 Balance c/d 3,470
1,050
154
6.
Analysed Cash Book Date Details 2006 1/5 3/5 Balance b/d Subscriptions Loan received Sale of land Dance receipts Grant received Total bank 1,400 3,800 3,800 Subs. Dance Oth. Date Details 2006 5/5 7/5 Equipment Drinks 1 2 Ch. Total no. Bank 2,600 285 Ins. Dance Oth. 2,600 285
9/5
12,000
12,000
Dance 17/5 expenses 19/5 24/5 Insurance Affiliation
1,455
1,455
11/5 15/5 31/5
30,000 4,300 7,000 4,300
30,000
4 5 6
675 675 2,200 430 50,855 2,200 430
7,000
27/5 ESB
58,500 1/6 Balance b/d 50,855
3,800 4,300
49,000
31/5
Balance b/d
58,500 675 1,455 5,515
7.
Analysed Cash Book Date 2006 5/6 Dance receipts Grant received Details Total bank 4,600 Subs. Dance 4,600 Oth. Date 2006 1/6 Balance b/d ESB 2 Details Ch. Total no. Bank 2,000 Ins. Dance Oth.
8/6
10,000
10,000 3/6
300
300
Sub10/6 scriptions 23/6 Lotto win
3,655
3,655
14/6
Minibus
11,300
11,300
15,000
15,000 16/6
Dance 4 expences Equipment 5
1,325
1,325
Spon29/6 sored walk
5,500
5,500
18/6 26/6
4,660 1,700 675 16,795 675
4,660 1,700
Affiliation 6
30/6 Insurance 7 30/6 38,755 1/7 Balan16,795 ce b/d 3,655 4,600 30,050 Balance c/d
38,755 675 1,325 17,960
155
8.
Date 2005 1/5/04 Receipts and Payments Account for Details Total Bank Date 2005 Balance b/d 3,200 Subscriptions 4,500 Grant 2,500 Raffle receipts 1,565 Competition receipts 6,455 30/4 18,220 Balance b/d 10,210 year ended 30/4/2005 Details Raffle expenses Equipment Insurance Postage and stationery Rent Balance c/d Total Bank 650 3,500 1,440 1,565 855 10,210 18,220
1/5
Income and Expenditure Account for year ended 30/4/2005 Income Subscriptions Raffle profit (1,565 650) Competition receipts Less expenses Insurance Postage and telephone Rent Surplus (excess income over expenditure) 1,440 1,565 855 3,860 8,010 4,500 915 6,455 11,870
9.
Date 2005 Receipts and Payment Account Details Total Bank Date 2005 Subscriptions 12,400 1/7 Dance receipts 3,500 Sale of refreshments 6,895 Loan received 15,000 for year ended 30/6/2006 Details Balance Dance expenses Light and heat Travel Loan repayment Purchase of refreshments Balance c/d Total Bank 500 1,155 1,890 2,345 5,000 2,565 24,340 37,795
30/6 37,795 1/7 Balance b/d 24,340
Income and Expenditure Account for year ended 30/6/2005 Income Subscriptions Profit on dance (3,500 1,155) Profit on refreshments (6,895 2,565) Less expenses Light and heat Travel Surplus (excess income over expenditure) 1,890 2,345 4,235 14,840 12,400 2,345 4,330 19,075
156
Note to teachers: loan repayments are not revenue expenditure and are therefore not treated as an expense. If the exercise stated loan interest, then this would be treated as an expense. 10.
Receipts and Payment Account for year ended 30/4/2006 Date 2005 Details Total Bank Date 2005 1/5 Dance receipts Membership fees Lotto win Sale of machinery 5,605 4,550 50,000 6,895 30/4 67,050 1/5 Balance b/d 28,545 Balance b/d Dance expenses Purchases of machinery Insurance Purchase of minibus Light and heat Balance c/d Details Total Bank 1,400 1,950 12,450 2,450 17,800 2,455 28,545 67,050
Income and Expenditure Account for year ended 30/4/2005 Income Profit on dance (5,605 1,950) Membership fees Less expenses Insurance Light and heat Surplus (excess income over expenditure) 2,450 2,455 4,905 3,300 3,655 4,550 8,205
11.
Date 2005 1/7 Receipts and Payment Account for year ended 31/7/2005 Details Total Bank Date Details 2005 Balance b/d 650 Competition expenses Subscriptions 26,865 Light and heat Competition receipts 670 Caretaker's wages Green fees 12,900 Purchase of roller Rent of club car park 3,600 Telephone 30/6 Balance c/d 44,685 Balance b/d 24,925 Income and Expenditure Account for year ended 31/7/2005 Income Subscriptions Profit on competition (670 125) Green fees Rent of club car park Less expenses Light and heat Caretakers wages Telephone Surplus (excess income over expenditure) 1,670 10,900 4,500 17,070 26,840
157
Total Bank 125 1,670 10,900 2,565 4,500 24,925 44,685
1/7
26,865 545 12,900 3,600 43,910
12.
Accumulated Fund Statement as on 1/1/2006 Assets Cash Bank Stock bar supplies Clubhouse Less liabilities Bank loan Accumulated fund 40,000 43,000 300 2,000 700 80,000 83,000
13.
Accumulated Fund Statement as on 1/1/2006 Assets Buildings Equipment Cash Less liabilities Bank overdraft Bank loan Accumulated fund 2,600 60,000 62,600 213,300 200,000 75,000 900 275,900
14.
Balance Sheet as on 31/8/2006 Fixed assets Premises and track Equipment Minibus Total fixed assets Current assets Cash Less current liabilities Bank overdraft Working capital Total net assets Financed by Accumulated fund Long-term liabilities Bank loan Capital employed 46,000 111,000 65,000 2,000 (1,800) 111,000 200 Cost 90,000 4,500 18,300 112,800 NBV 90,000 4,500 18,300 112,800
158
15.
Balance Sheet of Athenry Gun Club as on 31/12/2005 Fixed assets Buildings Equipment Total fixed assets Current assets Cash Bank Stock of rain gear Less current liabilities Working capital Total net assets Financed by Accumulated fund Long-term liabilities Bank loan Capital employed Cost 50,000 3,200 53,200 25 1,700 400 NBV 50,000 3,200 53,200
2,125 0000 2,125 55,325 33,325 22,000 55,325
16.
1. Financial Consultants Ltd, Euro Avenue, Cavan. Report on ways of raising finance for new den _______________________________ The Members of Cavan Girl Guides, Main Street, Cavan. I was asked by the members for advice on methods of raising 70,000 for a new den. I researched different methods. My findings are as follows.
2. 3. 4.
5. 6.
70,000 is a substantial amount of money to raise and will require a number of

methods. Here are some suggestions: Apply to the government for Lotto funds; Look for local sponsorship; Organise a Ms and Mr Cavan Festival; Organise a Cavan mini-marathon with the help of Caterina McKiernan; Organise some discos or other social events.
7. 8. 9.
I am available to discuss this report if required.
Margaret Murray.
Financial Consultant.
159
17.
1. Disco Consultants Ltd, Roscrea, Co. Tipperary. Report on the organisation of a disco _______________________ The Members of Roscrea Youth Club, Roscrea, Co. Tipperary. I was asked by the members to outline how to organise a disco to raise club funds. I contacted a number of clubs and I outline my findings below. Organising a disco is time-consuming and requires many helpers. The following factors have to be considered: Selection of a venue; Have adults available to assist; Purchase insurance; Hire a DJ and bouncers; Advertise the disco; Get tickets printed. Wages of bouncers; Insurance premium; Hire of hall; Cost of tickets; Cost of DJ; Cost of advertising.
2. 3. 4.
5. 6.
The following are some of the expenses that the club may have:
The entrance fee will depend on the number that might attend, the costs involved and the profit you want to make. E.g. if the attendance will be 400, charge between 8 and 10. 7. 8. 9. I am available to discuss this report if required.
John Murphy.
Disco Consultant.
18. (a)
Analysed Cash Book (Debit Side) Date 2001 15/2 19/3 21/6 15/8 19/10 10/12 Membership fees Gate receipts Church collection Membership fees Gate receipts Flag day Details Total Bank Membership Fees Games Receipts 1,500 516 2,347 500 1,200 849 6,912 1/1/02 Balance b/d 888 2,000 1,716 500 1,200 849 3,196 1,500 516 2,347 Collection
160
Analysed Cash Book (Credit Side) Date 2001 1/1 Balance b/d 8/1 Calidonian Ltd 7/3 Sportswear Ltd 13/4 Caretaker 9/3 Bus ireann 4/7 Hurleys 3/9 Cleaner 6/11 Bus ireann 31/12 Balance c/d 70 71 72 73 74 75 76 Details Ch. no. Total Bank 781 1,648 700 240 325 470 160 1,700 888 6,912 2,025 1,648 1,170 400 1,700 325 470 160 Travel Insurance Equipment 1,648 700 240 Wages
(b)
Receipts and Payment Account for year ended 31/12/2001 Date 2001 Membership fees Game receipts Collection Details 2,000 1,716 3,196 Date 2001 1/1 Balance b/d Travel Insurance Equipment Wages 31/12 2002 1/1 Balance b/d 6,912 888 Balance c/d Details 781 2,025 1,658 1,170 400 888 6,912
(c) (i) Treasurer. (ii) Receipts and Payments Account; Income and Expenditure Account; Balance Sheet.
Chapter 52 Club Accounts with Adjustments

1.
Bar Trading Account for year ending 31/12/2006 Bar sales Less cost of sales Opening stock 1/1/2006 Bar purchases Less closing stock Gross profit Less bar wages Bar net profit (add to income in the I & E account) 6,000 16,000 22,000 4,000 18,000 40,000 7,000 33,000 58,000
161
2.
Canteen Trading Account for year ending 30/6/2006 Sales Less cost of sales Opening stock 1/7/05 Canteen purchases Less closing stock Gross profit Less canteen wages Add wages due Canteen net profit (add to income in I & E account) 42,000
2,000 20,000 22,000 3,000 17,000 2,000
19,000 23,000 19,000 4,000
3.
Disco Account for year ending 31/12/2006 Disco receipts Less expenses Hire of hall DJ Add due to DJ Tickets Insurance Less prepaid Advertising Add advertising due Loss on disco (add to expenditure in I & E account) 140 50 120 40 160 850 (150) 90 250 50 300 100 200 700
4. (a)
Accumulated Fund Statement as on 1/3/2005 Assets Clubhouse Equipment Bank Less liabilities Accumulated fund Income and Expenditure Account for year ending 28/2/2006 Income Subscriptions (1,900 + 1,700) Profit on dinner dance (3,400 2,500) Less expenses Loss on light and heat (4,300 2,400) Cleaners wages Travel Insurance (1,700 300) Playing gear Prizes Depreciation of equipment Deficit (excess expenditure over income)
162
70,000 5,000 1,700
76,700 000000 76,700
3,600 900 4,500
1,900 4,500 950 1,400 400 600 600 10,350 (5,850)
Balance Sheet as on 28/2/2006 Fixed assets Clubhouse Equipment Total fixed assets Current assets Bank (receipts + opening bank balance payments) Insurance prepaid Subscriptions due Less current liabilities Working capital Total net assets Financed by Accumulated fund Less deficit Add Lottery grant Capital employed 76,700 (5,850) 70,850 6,000 76,850 450 300 1,700 2,450 0000 2,450 76,850 Cost 70,000 5,000 75,000 600 600 Depreciation NBV 70,000 4,400 74,400
(b)
1. Membership Consultant, Mullingar, Co. Westmeath. Report on members not paying membership ____________________________ Members of Leinster Ladies Squash Club, Mullingar, Co. Westmeath. I was asked by the members to report on the problem of members not paying their subscriptions. I contacted different clubs to see how they deal with this situation. My findings are as follows. The club can do one or other of the following to improve the situation: 7. 8. 9. Impose a levy on members; Ban members who are behind in membership payments, from playing; Set clear deadlines for payment each year; Non-paid up members have no vote at meetings; Appoint a new treasurer.
2. 3. 4.
5.
6.
I am available to discuss this report if required.
Sarah Walshe.
Membership Consultant.
5. (i)
Accumulated Fund Statement as on 1/5/2004 Assets Land and buildings Equipment Bar stock Bank Less liabilities Bank loan Accumulated fund 50,000 98,600 140,000 1,600 3,000 4,000 148,600
163
(ii)
Bar Trading Account for year ending 30/4/2005 Bar sales Less cost of sales Opening stock 1/5/2004 Bar purchases Less closing stock Gross profit Less expenses Bar wages (5,500 + 500) Bar net profit (add to income in I & E account) 6,000 28,000 3,000 29,000 32,000 9,000 23,000 34,000 57,000
(iii)
Income and Expenditure for year ending 30/4/2005 Income Bar net profit Subscriptions (6,000 + 300 900) Profit on disco (17,000 9,000) Less expenditure Insurance Travel Surplus (excess income over expenditure) 1,800 3,600 5,400 36,000 28,000 5,400 8,000 41,400
(iv)
Balance Sheet as on 30/4/2005 Fixed assets Land and buildings Equipment Total fixed assets Current assets Bank Bar closing stock Subscriptions due Less current liabilities Subscriptions prepaid Wages due Working capital Total net assets Financed by Accumulated fund Add surplus Long-term liabilities Long-term loan Capital employed 50,000 185,600 98,600 36,000 134,600 900 500 1,400 43,000 184,600 35,100 9,000 300 44,400 Cost 140,000 1,600 141,600 Depreciation NBV 140,000 1,600 141,600
164
6.
Income and Expenditure Account for year ending 30/11/2004 Income Subscriptions (17,000 + 6,000 100) Dance profits Less expenditure Insurance Rent Light and heat (2,800 + 250) Stationery (1,500 300) Depreciation: Equipment Minibus Surplus (excess of income over expenditure) 22,900 6,000 28,900
950 3,000 3,050 1,200 2,160 2,700 4,860 13,060 15,840
Balance Sheet as on 30/11/2004 Fixed assets Equipment Minibus Total net assets Current assets Cash Subscriptions due Stationery Less current liabilities Subscriptions prepaid Light and heat due Bank overdraft Working capital Total net assets Financed by Accumulated fund Add surplus Capital employed Cost 18,000 18,000 36,000 200 6,000 300 100 250 2,500 Depreciation 2,160 2,700 4,860 NBV 15,840 15,300 31,140
6,500
2,850 3,650 34,790 18,950 15,840 34,790
7.
Income and Expenditure Account for year ended 31/12/2005 Income Raffle income Subscriptions (9,300 800) Dance income (6,430 + 860) Less expenditure Wages Telephone (635 + 147) Catering Insurance Light Depreciation: Premises Surplus (excess of income over expenditure) 7,198 8,500 7,290 22,988
12,500 782 2,466 2,700 1,597 800
20,845 2,143
165
Chapter 53 Farm Accounts

1.
Analysed Cash Book (Debit Side) p1 Date 2006 1/5 3/5 8/5 16/5 1/6 Balance b/d Milk receipts Cattle sales EU grant Balance b/d Details Total Bank 750 900 1,900 7,000 10,550 2,200 Analysed Cash Book (Credit Side) p1 Date 2006 5/5 7/5 9/5 14/5 18/5 24/5 29/5 29/5 30/5 31/5 31/5 Electricity Tractor diesel Wages Fertiliser Builder IFA membership Calves Seeds Wages Tractor repairs Balance c/d 4 5 6 7 8 9 10 11 12 13 Details Ch. no. Total Bank 250 400 200 600 5,000 80 1,200 300 200 120 2,200 10,550 250 600 520 1,200 5,780 120 1,200 300 200 600 5,000 80 Electr. 250 Fertilisers Tractor 400 200 Livest. Other 900 1,900 Milk 900 1,900 7,000 7,000 Cattle Other
2.
Analysed Cash Book (Debit Side) p1 Date 2006 1/9 1/9 7/9 15/9 19/9 30/9 Balance b/d Sale of cattle Sale of hay Loan EU grant Balance c/d Details Total Bank 1,300 1,600 300 12,000 8,000 1,530 24,730 1,600 20,000 300 12,000 8,000 Livestock 1,600 300 Grants/Loans Other
166
Analysed Cash Book (Credit Side) p1 Date 2006 1/9 5/9 5/9 7/9 9/9 9/9 15/9 19/9 22/9 22/9 26/9 26/9 26/9 30/9 Purchase of calves Feedstuff Fertiliser Silage contractor Electricity Telephone Fencing Land reclamation Drawings Insurance Vet Diesel Interest on loan Balance b/d 23 24 25 16 17 17 18 19 20 21 22 Details Ch. no. Total Bank 800 280 550 800 180 240 140 20,000 700 500 70 320 150 24,730 1,530 180 280 700 800 700 500 70 320 150 22,770 180 240 140 20,000 Electricity Feeds 280 550 800 Drawings Livestock 800 Other
3. Ordinary Level
Income and Expenditure Account of Farmer Conway for year ended 31/12/2005 Income Milk Cattle Sheep Less expenditure Wages Light and heat Rent Tractor repairs Fertiliser and seed Silage contractor Insurance Surplus (excess of income over expenditure) 14,500 3,500 2,750 1,950 2,670 6,500 1,750 33,620 45,380 45,000 25,000 9,000 79,000
167
Higher Level
Income and Expenditure Account of Farmer Conway for year ended 31/12/2005 Income Milk Cattle Sheep Less expenditure Wages Light and heat (3,500 + 500) Rent Tractor repairs Fertiliser and seed (2,670 230) Silage contractor Insurance Depreciation: Tractor Surplus (excess of income over expenditure) 14,500 4,000 2,750 1,950 2,440 6,500 1,750 3,200 37,090 41,910 45,000 25,000 9,000 79,000
4. Ordinary Level
Income and Expenditure Account of Farmer Campbell for year ended 31/12/2005 Income Cattle Crops Pigs Less expenditure Fertiliser and seed Repairs to machinery Wages Vet fees Bank interest Light and telephone Insurance Surplus (excess of income over expenditure) 7,400 3,100 17,400 1,950 1,900 4,200 2,400 38,350 26,150 38,500 17,500 8,500 64,500
168
Higher Level
Income and Expenditure Account of Farmer Campbell for year ended 31/12/2005 Income Cattle Crops Pigs Less expenditure Fertiliser and seed Repairs to machinery Wages (17,400 + 1,600) Vet fees Bank interest Light and telephone Insurance (2,400 600) Depreciation: Equipment Surplus (excess of income over expenditure) 7,400 3,100 19,000 1,950 1,900 4,200 1,800 1,500 40,850 23,650 38,500 17,500 8,500 64,500
5. Ordinary Level
Income and Expenditure Account of Farmer Ward for year ended 31/5/2006 Income Crops Interest on deposit account Poultry Less expenditure Repairs Wages Fertiliser Telephone Packaging Surplus (excess of income over expenditure) 3,400 14,600 2,785 1,895 5,675 28,355 24,845 36,800 2,500 13,900 53,200
Higher Level
Income and Expenditure Account of Farmer Ward for year ended 31/5/2006 Income Crops Interest on deposit account Poultry Less expenditure Repairs Wages (14,600 + 1,400) Fertiliser Telephone Packaging (5,675 900) Depreciation: Equipment Surplus (excess of income over expenditure) 3,400 16,000 2,785 1,895 4,775 1,400 30,255 22,945 36,800 2,500 13,900 53,200
169
6. Ordinary Level
Income and Expenditure Account of Farmer Slevin for year ended 31/5/2006 Income Cattle Milk Sheep Less expenditure Loan interest Feed Transport Insurance Light and heat Surplus (excess of income over expenditure) 5,000 3,900 6,500 2,765 4,300 22,465 64,990 45,000 29,000 13,455 87,455
Higher Level
Income and Expenditure Account of Farmer Slevin for year ended 31/5/2006 Income Cattle Milk Sheep Less expenditure Loan interest (5,000 + 700) Feed Transport Insurance (2,765 500) Light and heat Depreciation: Tractor Surplus (excess of income over expenditure) 5,700 3,900 6,500 3,265 4,300 1,900 25,565 61,890 45,000 29,000 13,455 87,455
170
Note: EU grant is treated as annual income. 7.

Income and Expenditure Account of Farmer J. Flood for year ending 31/12/2006 Ordinary Level Income Sale of cattle Sale of milk EU grant Less expenditure Wages Light and heat Feed Loan interest Repairs Surplus (excess of income over expenditure) 13,400 3,600 7,800 4,500 3,200 Income 45,600 Sale of cattle 67,800 Sale of milk 20,000 EU grant 133,400 Less expenditure Wages Light and heat Feed (7,800 2,200) Loan interest (4,500 + 1,000) 32,500 Repairs Depreciation: Machinery 100,900 Surplus (excess of income over expenditure) 13,400 3,600 5,600 5,500 3,200 6,576 37,876 95,524 Higher Level 45,600 67,800 20,000 133,400
Balance Sheet of Farmer J. Flood as on 31/12/2006 Ordinary Level Fixed assets Land and buildings Machinery Current assets Cash Less current liabilities Working capital Total net assets Financed by Capital Add surplus Long-term liabilities 20-year loan Capital employed 55,000 241,000 85,100 100,900 186,000 1,200 ------1,200 241,000 Cost 185,000 54,800 239,800 NBV 185,000 54,800 239,800 Current assets Cash Stock of feed on hand Less current liabilities Loan interest due Working capital Total net assets Financed by Capital Add surplus Long-term liabilities 20-year loan Capital employed 55,000 235,624 85,100 95,524 180,624 1,000 2,400 235,624 1,200 2,200 3,400 Fixed assets Land and buildings Machinery Higher Level Cost Depr. NBV 185,000 54,800 239,800 ------6,576 6,576 185,000 48,224 233,224
171
8.
Income and Expenditure Account of Farmer J. Flood for year ending 31/12/2006 Ordinary Level Income Sale of sheep Sale of cattle REP grant Less expenditure Contractors fees Wages Loan interest Insurance Feed and fertiliser Surplus (excess of income over expenditure 6,500 14,300 3,600 3,200 13,300 40,900 14,500 67,900 10,000 92,400 Less expenditure Contractors fees Wages (14,300 + 700) Loan interest Insurance (3,200 400) Feed and fertiliser Depreciation 51,500 Surplus (excess of income over expenditure) 6,500 15,000 3,600 2,800 13,300 3,450 44,650 47,750 Higher Level Income Sale of sheep Sale of cattle REP grant 14,500 67,900 10,000 92,400
Balance Sheet of Farmer B. Hay as on 31/12/2006 Ordinary Level Fixed assets Land and buildings Tractor Cost 23,000 NBV Fixed assets Land and buildings Higher Level Cost 245,000 23,000 268,000 Current assets 12,000 Bank Insurance prepaid Less current liabilities -------Less current liabilities Wages due Working capital Total net assets Financed by Capital Add surplus Long-term liabilities 10-year loan Capital employed 188,500 51,500 240,000 12,000 Working capital 280,000 Total net assets Financed by Capital Add surplus Long-term liabilities 40,000 10 year loan 280,000 Capital employed 40,000 276,250 188,500 47,750 236,250 700 11,700 276,250 12,000 400 12,400 3,450 3,450 Depr. NBV 245,000 19,550 264,550
245,000 245,000
23,000 Tractor
268,000 268,000 Current assets Bank
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Chapter 54 Service Firms

1.
Analysed Cash Book of Quinns Travel (Debit Side) p1 Date 2006 1/5 2/5 4/5 12/5 16/5 24/5 31/5 Balance Holidays in France Holidays in Russia Holiday in Kerry Holidays in USA Holidays in Greece Balance b/d GL GL GL GL GL 1 2 3 4 5 Details F Rec. no. Total Bank 20 1,600 3,000 700 2,800 2,000 10,120 8,525 700 2,000 3,600 5,800 700 2,800 1,600 3,000 Ireland EU Rest of world
Analysed Cash Book of Quinns Travel (Credit Side) p1 Date 2006 7/5 18/5 21/5 28/5 30/5 30/5 Advertising Electricity Telephone Wages Window cleaner Balance c/d GL GL GL GL GL 75 76 77 78 79 Details F Ch. no. Total Bank 300 180 600 500 15 8,525 10,120 500 180 600 300 15 500 15 Wages L&H 180 600 Teleph. Advert. 300 Other
2.
Analysed Cash Book of Insure all (Debit Side) p1 Date 2006 4/6 6/6 9/6 16/6 22/6 26/6 27/6 House insurance Car insurance Bar insurance House insurance Life assurance Life assurance Balance b/d GL GL GL GL GL GL 5 6 7 8 9 10 Details F Rec. no. Total Bank 140 500 550 160 50 300 1,700 1,035 50 300 350 500 300 550 160 Life Car 500 550 House 140 Business
173
Analysed Cash Book of Insure all (Credit Side) p1 Date 2006 3/6 6/6 12/6 18/6 26/6 Rent Wages Eircom Office stationery Balance c/d GL GL GL GL 50 51 52 53 Details F Ch. no. Total Bank 160 200 230 75 1,035 1,700 200 160 230 75 Wages 200 230 75 Rent 160 Telepho ne Stationery
3.
Analysed Cash Book of Spring Cleaners (Debit Side) p1 Date 2007 1/7 4/7 5/7 11/7 24/7 27/7 28/7 Balance b/d Window cleaning Butler Ltd Willis Oil Ltd Dunnes Stores Mrs Kane Balance b/d DL DL DL DL DL 1 2 3 4 5 Details F Rec. no. Total Bank 50 160 120 350 400 60 1,140 40 60 320 870 Households 160 120 350 400 Business
Analysed Cash Book of Spring Cleaners (Credit Side) p1 Date 2007 6/7 10/7 14/7 18/7 21/7 27/7 Petrol Ladders Wages Vacuum cleaner Car insurance Balance c/d GL GL GL GL GL 89 90 91 92 93 Details F Ch. no. Total Bank 40 240 180 280 360 40 1,140 180 520 400 180 280 360 Wages Equipment 240 Transport 40
4.
Analysed Cash Book of Big T Taxi (Debit Side) p1 Date 2008 1/4 3/4 4/4 9/4 16/4 29/4 1/5 Routine hire Routine hire Wedding hire HSE HSE Wedding hire Balance b/d GL GL GL GL GL GL 1 2 3 4 5 6 Details F Rec. no. Total Bank 700 580 420 400 600 340 3,040 740 1,280 340 760 1,000 Routine 700 580 420 400 600 Weddings HSE
174
Analysed Cash Book of Big T Taxi (Credit Side) p1 Date 2008 7/4 12/4 18/4 30/4 30/4 Wages Car taxes Car service Wages Balance c/d GL GL GL GL 60 61 62 63 Details F Ch. no. Total Bank 600 900 200 600 740 3,040 1,200 1,100 600 Wages 600 Transport 900 200
5.
Income and Expenditure Account for year ended 31/5/2006 Income Sales income Less expenditure Wages Telephone Surplus (net profit) Balance Sheet as on 31/5/2006 Fixed assets Buildings Machinery Total fixed assets Current assets Cash Debtors Less current liabilities Bank overdraft Working capital Total net assets Financed by Share capital Add surplus Long-term liabilities 15-year loan Capital employed 25,000 155,600 83,500 47,100 130,600 5,600 12,600 155,600 3,600 14,600 18,200 Cost 98,000 45,000 143,000 Depreciation ------------------------------------------------NBV 98,000 45,000 143,000 13,400 4,500 17,900 47,100 65,000
6.
Income and Expenditure Account for year ended 31/7/2006 Income Fees earned Commission receivable Less expenditure Insurance Rent Surplus (net profit) 4,300 6,600 10,900 77,500 75,900 12,500 88,400
175
Balance Sheet as on 31/7/2006 Fixed assets Equipment Vans Total fixed assets Current assets Cash Less current liabilities Bank overdraft Creditors Working capital Total net assets Financed by Share capital Add surplus Capital employed 29,800 77,500 107,300 3,300 11,340 14,640 (11,700) 107,300 2,940 Cost 34,500 84,500 119,000 Depreciation -------------------------------------------------NBV 34,500 84,500 119,000
7.
Income and Expenditure Account for year ended 31/12/2006 Income Income from fees Commissionable receivable Less expenditure Wages Rent Insurance Surplus (net profit) Balance Sheet as on 31/12/2006 Fixed assets Delivery vans Total fixed assets Current assets Cash Bank Debtors Less current liabilities Working capital Total net assets Financed by Share capital Add surplus Long-term liabilities 10-year loan Capital employed 30,000 117,400 43,300 44,100 87,400 3,400 34,500 14,500 52,400 -------52,400 117,400 Cost 65,000 65,000 Depreciation --------------------------------NBV 65,000 65,000 17,500 12,000 2,400 31,900 44,100 55,000 21,000 76,000
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8.
Income and Expenditure Account for year ended 31/5/2006 Income Sale of services Interest receivable Less expenditure Wages Advertising Light and heat Surplus (net profit) Balance Sheet as on 31/5/2006 Fixed assets Buildings Machinery Total fixed assets Current assets Bank Debtors Less current liabilities Creditors Working capital Total net assets Financed by Share capital Add surplus 129,500 65,400 194,900 19,000 6,900 194,900 12,400 13,500 25,900 Cost 120,000 68,000 188,000 Depreciation ------------------------------------------NBV 120,000 68,000 188,000 23,400 6,500 6,700 36,600 65,400 98,600 3,400 102,000
Chapter 55 Information Technology

1.
Software Programs Word processing Spreadsheet Database Computer Aided Design Explanation This program allows the user to type letter/reports, make corrections on screen before printing them or sending them by email. This program allows the user perform mathematical calculations, keep financial records and prepare budgets. This is a computerised filing system. It allows the user keep computerised records, which can be sorted and linked to letters. This program allows the user produce drawings and plans for designing houses, equipment clothes etc.
2. Computers are used in the home to: Send messages via the internet; purchase items like travel tickets via the internet; keep files on education results and medical records, prepare CVs; operate alarms. Computers are used in business to: Send messages to customers and suppliers; advertise via the internet; monitor and order stock; keep employee records; prepare accounts and cash budgets; operate alarms and machinery; design and manufacture goods.
177
3. Computers are used in banks to: Send messages to customers; lodge and withdraw money; prepare statements of banking records; keep customer files; prepare accounts and cash budgets; advertise. Computers are used in communications to: Enable people/businesses to contact each other via the internet; provide up-to-theminute information on what is happening around the world, by publishing news bulletins on the internet. 4. Some factors to be considered when purchasing a computer system for a household/ business are: Is it necessary? What is the intended use of the computer? Is the size of memory important? How much does it cost? Is it complicated to use? Additional points for businesses include: Do the workers need training to use the new system? Will workers be replaced by the computer? 5.
General Ledger Date 2006 1/2 Bank ACB Details F Total Date 2006 Details F Total Computer A/C (p1) 8,500 Bank A/C (p2) 1/2 Computer GL 8,500
6.
General Ledger Date 2006 1/7 Bank ACB Details F Total Date Details F Total 2006 Computer A/C (p1) 7,700 Bank A/C ( p2) 1/7 Computer GL 7,700
7.
General Journal (p1) Date 2006 1/9 Computer MBI Ltd Purchase of computer on credit GL CL Details F Dr 11,400 Cr 11,400
178
Date 2006
Details
Total
Date
Details
Total
2006 General Ledger Computer A/C (p1) MBI Ltd GJ 11,400 Creditors Ledger MBI LTD A/C (p2) 1/9 Computer GJ
1/9
11,400
8. (a) P = Monitor (VDU); Q = Scanner; R = Keyboard; S = Mouse; T = Central Processing Unit (CPU). (b) (i) Hard disk = a permanent internal storage disk in the computer. (ii) Modem = a device which enables one computer communicate with another computer via the telephone line. (iii) Hard copy = a computer printout on paper. (iv) Networking = linking computers within an organisation together. (c) (i) Will she have use for it; will her staff require training; size of RAM (memory); is it upgradeable. (ii) The purpose of the loan; capacity to repay the loan; security available in the event that the loan is not repaid; credit-worthiness of the borrower. 9. (a) (i) Prepare accounts for their business, keep control of stock, design notices for their discos. (ii) Philip can do research, download notes from his lecturers, type his assignments. (iii) Send messages via the internet; purchase items like travel tickets via the internet; keep files on education results and medical records, prepare CVs; operate alarms etc. (b) Monitor: This displays the work of the computer to the user. Megabytes: The size of the computer memory is stated in megabytes. The greater the number of megabytes, the bigger the memory. Keyboard: This is an input device that allows the user enter (type in) instructions into the computer. Mouse: This is a hand-operated electronic device that controls the movement of the cursor (pointer) on the computer screen. Word processing: This is a computer program which allows the user type letter/reports, make corrections on screen before printing them or sending them by email. Database: This is a computer program which acts as a computerised filing system. It allows the user keep computerised records, which can be sorted and linked to letters.
179
Junior Certificate
Business Studies
for Households and Enterprises
WORKBOOK TEACHERS MANUAL

Matt Hynes
Matt Hynes 2005 ISBN 1-84131-703-9 Folens Publishers, Hibernian Industrial Estate, Greenhills Road, Tallaght, Dublin 24. Editor: Fiona Dunne Design and Layout: Compuscript Produced in Ireland by Folens Publishers All rights reserved. The publisher reserves the right to change, without notice, at any time the specification of this product.
FOLENS
Junior Certificate Business Studies Workbook Teachers Manual
Chapter 1 Communication
1. Tick the most appropriate box to show which of the following methods of communication are internal or external means of communication.
Methods of Communication Letter Memo Notice Board Staff Meeting Internal External
2. Complete the sentences below showing which of the following methods of communication are oral, written or visual. (i) A memo is a form of (ii) The intercom is a form of (iii) An e-mail is a form of (iv) A chart is a form of (v) A report is a form of (vi) A notice board is a form of (vii) A committee meeting is a form of written oral written visual written written oral communication. communication. communication. communication. communication. communication. communication.
Chapter 2 Communications in Action

1. Place the following customers names in alphabetical order: Malcolm Reilly; Mary Roche; Graham Reilly; Peggy Rafter.
(a) Peggy Rafter (b) Graham Reilly (c) Malcolm Reilly (d) Mary Roche
2. Place the following customers names in alphabetical order: Stephen Kelly; Sean Kirwan; Shane Victory; James Mulligan.
(a) Stephen Kelly (b) Sean Kirwan (c) James Mulligan (d) Shane Victory
3. Place the following customers names in alphabetical order: Mary Mahon; Mona Campbell; Nora Kennedy; Deirdre Warde.
(a) Mona Campbell (b) Nora Kennedy (c) Mary Mahon (d) Deirdre Warde
4. (a) Complete the memo, dated 2 September 2005, sent by the PE teacher Ms V. Fit to your Business Studies teacher Mr Money to remind his class that athletics trials will take place in the sports field at 12.30 pm on 10 September 2005. Assume you are Ms V. Fit.
Memo To: From: Date: Subject: Message:
Mr Money, Business Studies Teacher Ms V Fit, PE Teacher 2 September 2005 Athletic Trials Trials will take place in the sports field at 12.30 pm on 10 September 2005
Signed:
V. Fit
(b) A memo is a form of
written
communication.
182
5. Complete the memo, on todays date, that your IT teacher might send to your Business Studies teacher regarding the use of the computer room at lunchtime. The computer room is available to the Business Studies class from 12.30 pm to 1 pm on Monday and Wednesday.
Ms Fiona Dunne, Business Studies Teacher Mr William Web, IT Teacher Use of Computer Room The computer room is available to the Business Studies class from 12.30 pm to 1 pm on Monday and Wednesday
Signed:
William Web
Additional memo for practice.

Signed:
6. Complete the notice of meeting for the Mullingar Golf Club AGM which will be held in the clubhouse at 3.30 pm on 20 November 2006.
Notice of Meeting Mullingar Golf Club Notice is hereby given that the AGM of , will take place in the club house 20 November 2006 , at 3.30 pm on the . All members are welcome to attend.
Chapter 3 Introduction to Record Keeping

In questions 1 to 4 you are required to complete the sentences by inserting the correct words. debit side of the Cash Account. 1. Money received is entered on the _________ credit 2. Money paid out is entered on the _________ side of the Cash Account. who gave you 3. The details column shows the money or the money to. who you gave day month 4. The date column should show the _______ , ____________ and year. 5. Group the words below under Left Hand Side or Right Hand Side of the Cash Account: In; Out; Give; Receive; Debit Side; Balance; Credit Side. One word does not belong.
Cash Account Left Hand Side 1. In 2. Receive 3. Debit side 1. Out 2. Give 3. Credit side Right Hand Side
183
6. Balance the following Cash Account and bring down the balance to the next day.
Cash Account Date 2006 1/1/ 3/1/ Balance b/d Pocket money 230 65 Details Total Date 2006 2/1/ 5/1/ New bicycle Mobile phone credit 212 30 Details Total
5/1/ 295 6/1/ Balance b/d 53
Balance c/d
53 295
Cash Account Date 2007 1/4/ 6/4/ Balance b/d Part-time work 195 120 Details Total Date 2007 3/4/ 9/4/ CDs New shoes 45 97 Details Total
9/4/ 315 10/4/ Balance b/d 173
Balance c/d
173 315
Cash Account Date 2008 1/7/ 7/7/ Balance b/d Pocket money 13 142 Details Total Date 2008 1/7/ 8/7/ Mobile phone credit New clothes 10 143 Details Total
8/7/ 155 9/7/ Balance b/d 2
Balance c/d
2 155
9. (a) Record the following details in the blank Cash Account below: 2006 1/1/ 6/1/ 7/1/ 8/1/ Received pocket money Won raffle prize Paid for new trainers Paid for lunch
Cash Account Date 2006 Details Total Date 2006 Details Total
25 200 70 8
(b) Balance the Cash Account on 8 January 2006.
1/1/
Pocket money Raffle prize
25 200 225
7/1/ 8/1/ 8/1/
Trainers Lunch Balance c/d
70 8 147 225
9/1/
Balance b/d
147
184
10. (a) Record the following details in the blank Cash Account below: 2007 1/4/ Received pocket money 10 2/4/ Received wages from part-time job 60 4/4/ Paid for school trip 30 7/4/ Paid for cinema 12 (b) Balance the Cash Account on 7 April 2007.
1/4/ 2/4/
Pocket money Wages
10 60 70
4/4/ 7/4/ 7/4/
School trip Cinema Balance c/d
30 12 28 70
8/4/
Balance b/d
28
11. (a) Record the following details in the blank Cash Account below: 2008 1/5/ Cash on hand (balance) 45 3/5/ Received wages from part-time job 100 5/5/ Paid for cosmetics 34 9/5/ Paid hairdresser 43 (b) Balance the Cash Account on 9 May 2008.
1/5/ 3/5/
Balance b/d Wages
45 100 145
5/5/ 9/5/ 9/5/
Cosmetics Hairdresser Balance c/d
34 43 68 145
10/5/
Balance b/d
68
Chapter 4 Household Accounts

1. Total the Analysed Columns and balance the Cash and Bank columns and bring down the balances on 8 January 2006.
Analysed Cash Book Date 2006 1/1/ 5/1/ 8/1/ Balance b/d Child Ben. Wages 20 260 700 200 Details Cash Bank Date 2006 3/1/ 5/1/ 8/1/ ESB Groceries Car tax 160 450 300 160 450 300 Details Cash Bank HK L & H Other
8/1/ Balance c/d 120 280 9/1/ Balance b/d 120 900 150 280
150 900 160 300 450
185
3. Total the Analysed Columns and balance the Cash and Bank columns and bring down the balances on 7 February 2007.
Analysed Cash Book Date 2007 1/2/ 2/2/ 7/2/ Balance b/d Child Ben. Wages 90 390 1,900 Details Cash Bank Date 2007 1/2/ 2/2/ 5/2/ 7/2/ Balance b/d Groceries Car Insurance New tyres 190 600 300 200 190 600 300 Details Cash Bank HK Car
190 1,100 7/2/ 480 8/2/ Balance b/d 290 1,900 800 Balance c/d 290 800 480 1,900
190
900
4. Total the Analysed Columns and balance the Cash and Bank columns and bring down the balances on 7 April 2008.
Analysed Cash Book Date 2008 1/4/ 4/4/ 7/4/ Balance b/d Child Ben. Wages 240 260 1,200 Details Cash Bank Date 2008 1/4/ 3/4/ 6/4/ 6/4/ Balance b/d Groceries School trip Exam fee 220 700 240 90 220 700 240 Details Cash Bank HK School
220 7/4/ 500 8/4/ Balance b/d 280 1,200 170 Balance c/d 280 500
1,030 220 170 1,200
940
Chapter 5 Income
1. Only one statement in each group of three statements set out below is correct. Tick the correct statement. (a) In relation to household income, regular income consists of:
Statement i ii iii Basic wage, bank interest, overtime wages Basic wage and child benefit Basic wage, child benefit, bank interest and lotto win Tick
(b) In a wage slip the net wage is calculated by:

Statement i ii iii Adding deductions to gross wage Subtracting VIVAS payments and PRSI from gross wage Subtracting all deductions from gross wage Tick
186
2. Column 1 is a list of income terms. Column 2 is a list of possible explanations for those terms. Match the two lists by placing the number of the explanation beside the relevant term. One explanation does not match a term. E.g. Explanation no. 4 matches PRSI.
Column 1 Terms PRSI Gross Wage Net Wage Superannuation Statutory Deductions Basic Wage Overtime payment Insert Number No. 4 1. 2. 3. 4. 5. 6. 7. 8. Column 2 Explanations Amount paid for working a normal week Contributions paid towards pension Tax on income paid to government Pay-related social insurance in case of unemployment Compulsory deductions paid to government Payment given for working more than normal hours Amount of wages after all deductions are paid Amount of wages before deductions are made
8 7 2 5 1 6
3. Column 1 is a list of people. Column 2 is a list of different sources of income. Match the two lists by placing the number of the income beside the relevant person. One source of income does not match.
Column 1 People Employee Student Unemployed person Retired person Insert Number No. 1. 2. 3. 4. 5. Column 2 Source of Income Pension PAYE Pocket money Wages Social welfare assistances
4 3 5 1
4. (a) Calculate the net wage for Sean Kirwin, employee No. 246 for week No. 1, who supplied the following information: Basic wage 200; overtime 160; PAYE 60; PRSI 14; BUPA 12; Pension 15. (b) Complete the wage slip below.
Wage Slip Week No. Gross Wage Basic Overtime Total PAYE PRSI Sean Kirwin Employee No: 246 Deductions BUPA Pension Total Net Wage
200
160
360
60
14
12
15
101
259
5. (a) Calculate the net wage for Jamie Mulligan, employee No. 135 for week No. 6, who supplied the following information: Jamie worked 60 hours, basic week 48 hours at 10 per hour, overtime at time and half for all additional hours worked. Tax credit 50; Rate of tax 40%; PRSI 5% of gross wage; VHI 20; Pension 15; Union 10. (b) Complete the wage slip below.
Wage Slip Week No. Gross Wage Basic Overtime Total PAYE PRSI Jamie Mulligan Employee No: Deductions Union VHI Pension Total Net Wage
480
180
660
214
33
10
20
15
292
368
187
6. (a) Calculate the net wage for Marie Dowler, employee No. 78 for week No. 10, who supplied the following information: Marie worked 56 hours, basic week 39 hours at 12 per hour, overtime at time and half for the first ten hours of overtime and double time thereafter. Tax credit 48; Rate of tax 40%; PRSI 5% of gross wage; VHI 20; Savings 20; Union 10. (b) Complete the wage slip below.
Wage Slip Week No. Gross Wage Basic Overtime Total PAYE PRSI Marie Dowler Employee No: 78 Deductions Union VHI Savings Total Net Wage
10
468
348
816
278.40
40.80
10
20
20
369.20
446.80
7. (a) Calculate the net wage for Cathal Maher, employee No. 188 for week No. 4, who supplied the following information: Cathal worked 66 hours, basic week 48 hours at 10 per hour, overtime at time and half for the first ten hours of overtime and double time thereafter. Tax credit 64; Rate of tax 40%; PRSI 5% of gross wage; VIVAS 23; Savings 30; Pension 12. (b) Complete the wage slip below.
Wage Slip Week No. Gross Wage Basic Overtime Total Cathal Maher Employee No: 188 Deductions PAYE PRSI VIVAS Savings Pension Total Net Wage
480
310
790
252
39.50
23
30
12
356.50
433.50
8. (a) Calculate the net wage for Thomas Madden, employee No. 13 for week No. 30, who supplied the following information: Thomas worked 57 hours, basic week 39 hours at 14 per hour, overtime time and half for the first ten hours of overtime and double time thereafter. Tax credit 65; Rate of tax 40%; PRSI 5% of gross wage; BUPA 25, Savings 30, Union 8. (b) Complete the wage slip below.
Wage Slip Week No. Gross Wage Basic Overtime Total PAYE PRSI Thomas Madden Employee No: 13 Deductions BUPA Savings Union Total Net Wage
30
546
434
980
327
49
25
30
439
541
9. Complete the six-month income record below from the following information: Net basic wage 1,200 per month; Net overtime February 300 and May 500; Child Benefit 399 per month; Interest of bank deposit account 100 in March.
Jan Income Net Basic Wage Net Overtime Child Benefit Bank Interest Total Income Feb March April May June Total
1,200 399 1,599
1,200 300 399 1,899
1,200 399 100 1,699
1,200 399 1,599
1,200 500 399 2,099
1,200 399 1,599
7,200 800 2,394 100 10,494
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10. Complete the six-month income record below from the following information: Net basic wage 1,450 per month; Net overtime August 450 and December 800; Child Benefit 133 per month; Sale of table in November 350.
July Income Net Basic Wage Net Overtime Child Benefit Sale of table Total Income Aug Sept Oct Nov Dec Total
1,450 133 1,583
1,450 450 133 2,033
1,450 133 1,583
1,450 133 1,583
1,450 133 350 1,933
1,450 800 133 2,383
8,700 1,250 798 350 11,098
Chapter 6 Expenditure
1. Write brief notes on: The decision to give up something and choose (a) Opportunity Cost: something else is referred to as the opportunity cost of the things chosen. These are things that are most important or most needed, (b) Priorities: e.g. food, clothing etc. Buying things on the spur of the moment, i.e things (c) Impulse Buying: that are not planned for. 2. Sindy has 1 to spend. She would love to buy a bar of chocolate or a can of orange, but they both cost 1. She decides to buy the bar of chocolate. 1 (a) What is the financial cost of buying the bar of chocolate? (b) The opportunity cost of buying the bar of chocolate is: (tick the correct answer)
Tick
1 paid for the bar of chocolate

The can of orange she did not buy The energy she used up in going to the shop The bar of chocolate she bought
3. Classify the following household expenses under the following headings: Fixed; Irregular; Discretionary. Expenditure: Car insurance; Entertainment; Telephone; Church donation; School fees; Holiday in Greece; House mortgage; Petrol.
Fixed Irregular Discretionary
Car insurance House mortgage
Telephone Petrol School fees
Entertainment Church donation Holiday in Greece
189
4. (a) Complete the six-month expenditure record below from the following data: January: Mortgage 280; groceries 180; entertainment 60; car tax 240; petrol 40; electricity 85. February: Mortgage 280; groceries 165; entertainment 60; telephone 170; clothes 300. March: Mortgage 280; groceries 170; entertainment 40; car insurance 450; petrol 30; electricity 65. April: Mortgage 280; groceries 190; entertainment 50; car repairs 110; petrol 25; telephone 190. May: Mortgage 320; groceries 180; entertainment 50; birthday 90; petrol 25; electricity 60. June: Mortgage 320; groceries 200; entertainment 60; house insurance 120; holiday 800. (b) Calculate the total cost of the car for the six months and insert your answer in the space provided. (Note: annual costs should be divided evenly over the whole year.) (a)
Household Expenditure Record for Six Months Jan Expenditure Feb March April May June Total for Jan to June
Fixed
Mortgage Car Tax Car Insurance House Insurance Subtotal
280 240
280
280 450
280
320
320
1,760 240 450
120 520 280 730 280 320 440
120 2,570
Irregular
Housekeeping Petrol Electricity Telephone Clothes Car Repairs Subtotal
180 40 85
165
170 30 65
190 25 190 110
180 25 60
200 -
1,085 120 210 360 300 110
170 300
305
635
265
515
265
200
2,185
Discretionary
Entertainment Birthday Holidays Subtotal Total Expenditure
60
60
40
50
50 90
60 800
320 90 800 1,210 5,965
60 885
60 975
40 1,035
50 845
140 725
860 1,500
(b) Cost of the car for six months is:
575
190
5. (a) Complete the four-month expenditure record below from the following data: January: Mortgage 340; housekeeping 190; life assurance 80; petrol 40; birthday 70; electricity 100; heating oil 300. February: Mortgage 340; housekeeping 210; life assurance 80; petrol 30; telephone 210; Car tax 240; church 80. March: Mortgage 340; housekeeping 180; life assurance 80; petrol 35; electricity 65; television licence 62; clothes 120. April: Mortgage 340; housekeeping 200; life assurance 80; petrol 45; telephone 220; house decoration 700. (b) If the household wished to save 100 per month how much income would it need to receive each month to meet its expenses and saving? (a)
Household Expenditure Record for Four Months Jan Expenditure Feb March April Total for Jan to April
Fixed
Mortgage Car Tax Life Insurance TV Licence Subtotal
340 80
340 240 80
340 80 62
340 80
1,360 240 320
420
660
482
420
1,982
Irregular
Housekeeping Petrol Electricity Telephone Clothes Heating Oil Subtotal
190 40 100
210 30 210
180 35 65
200 45 220
780 150 165 430 120 300
120 300 630 450 400 465
1,945
Discretionary
House Decoration Birthday Church Subtotal Total Expenditure Amount of income required
700 70 80 70 1,120 1,220 80 1,190 1,290 882 982 700 1,585 1,685
700 70 80 850 4,777
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Chapter 7 The Budget

1. Column 1 is a list of budgeting terms. Column 2 is a list of possible explanations. Match the two lists by placing the letter of the correct explanation under the relevant number in the table below. One explanation does refer to any term.
Column 1 Terms Savings Net Cash Closing Cash Discretionary Expenditure Column 2 Explanations Income equals to expenditure Goods and services that can be done without Income greater than expenditure Not spending income until sometime in the future Net cash plus opening cash
1. 2. 3. 4.
A. B. C. D. E.
1.
2.
3.
4.
2. Complete the budget statement below. Show the Net Cash position for each month and for the total.
Jan
Feb
March
April
May
June
Total
Income Expenditure Net Cash
700 600
700 650
900 850
900 1,100
960 960
960 960
5,120 5,120
100
50
50
(200)
3. Complete the budget statement below. Show the Net Cash position for each month and for the total.
Jan
Feb
March
April
May
June
Total
Income Expenditure Net Cash
1,000 1,400
1,200 1,100
1,400 950
1,300 1,000
1,550 1,150
1,900 1,200
8,350 6,800 1,550
(400)
100
450
300
400
700
4. Complete the budget statement below.

Jan
Feb
March
April
May
June
Total
Income Expenditure Net Cash Opening Cash Closing Cash
1,700 1,400 300 30 330
1,800 1,900 (100) 330 230
2,000 3,200
2,900 2,000
1,800 1,400
1,900 1,500
12,100 11,400 700 30 730
(1,200)
230
900 (970) (70)
400 (70) 330
400 330 730
(970)

Jan
Feb
March
April
May
June
Total
2,200 1,800
2,100 2,300
3,220 2,850
2,850 2,700
2,150 1,950
2,700 2,400
15,220 14,000 1,220 100 1,320
400
100
(200) 500 300
370 300 670
150 670 820
200 820 1,020
300 1,020 1,320
500
192

Jan
Feb
March
April
May
June
Total
1,550 1,980
1,550 890
1,760 1,150
1,850 1,220
2,230 1,650
2,140 3,400
11,080 10,290 790 (150) 640
(430)
(150)
660 (580) 80
610 80 690
630 690 1,320
580 1,320 1,900
(1,260) 1,900 640
(580)

Jan
Feb
March
April
May
June
Total
Income Expenditure Savings Total Expenditure and Savings Net Cash Opening Cash Closing Cash
2,200 1,800 300
2,100 2,300 300
3,220 2,850 400
2,850 2,700 400
2,150 1,950 500
2,700 2,400 500
15,220 14,000 2,400 16,400 (1,180) 100 (1,080)
2,100 100
100
2,600 (500) 200 (300)
3,250 (30) (300) (330)
3,100 (250) (330) (580)
2,450 (300) (580) (880)
2,900 (200) (880) (1,080)
200

Jan
Feb
March
April
May
June
Total
Income Expenditure Savings Total Expenditure and Savings Net Cash Opening Cash Closing Cash
2,200 1,800 150
2,100 2,300 150
3,220 2,850 200
2,850 2,700 200
2,150 1,950 300
2,700 2,400 300
15,220 14,000 1,300 15,300 (80) 100 20
1,950 250
100
2,450 (350) 350
3,050 170 170
2,900 (50) 170 120
2,250 (100) 120 20
2,700 20 20
350
193
9. Opposite is a budget for the Dowd household for four months, January, February, March and April: opening cash in hand was 80. Planned Income Mr Dowd earns 1,000 net per month. Mrs Dowd earns 900 net per month. Child benefit is 40 per month. Expenditure House mortgage is 300 per month. House insurance is 100, payable in April. School fees are 90 in January and 150 in March. Electricity bills are 100 in February and 80 in April. Annual car tax of 250 and car insurance of 550 are paid in March. Life assurance costs 120 per month. The Dowds spend 400 per month on household expenses and they spend 40 per month on entertainment. The Dowds spend 40 per month on diesel. In April they will spend 700 on painting the house. Complete fully the blank household budget form (opposite) using all the above figures.
194
Dowd Household
Jan
Feb
March
April
Total
Planned Income Mr Dowd Salary Mrs Dowd Salary Child Benefit Total Income A. Planned Expenditure
1,000 900 40 1,940
1,000 900 40 1,940
1,000 900 40 1,940
1,000 900 40 1,940
4,000 3,600 160 7,760
Fixed
Mortgage Car Tax Car Insurance Life Assurance House Insurance Subtotal
300
300
300 250 550
300
1,200 250 550
120
120
120
120 100
480 100 2,580
420
420
1,220
520
Irregular
Household Expenses Diesel School Fees Electricity Subtotal Discretionary Entertainment House Decoration Subtotal Total Expenditure B. Net Cash (A B) Opening Cash Closing Cash
400 40 90
400 40
400 40 150
400 40
1,600 160 240
100 530 540 590
80 520
180 2,180
40
40
40
40 700
160 700 860 5,620 2,140 80 2,220
40 990 950 80 1,030
40 1,000 940 1,030 1,970
40 1,850 90 1,970 2,060
740 1,780 160 2,060 2,220
195
10. Opposite is a budget for the Lynch household for four months, January, February, March and April: opening cash in hand was 80. Planned Income R. Lynch earns 800 net per month. M. Lynch earns 650 net per month. Child benefit is 30 per month. Planned Expenditure House mortgage will be 300 per month. Annual car tax 140 due in February. Repayments on car loan (to be fully paid by end of March) will cost 230 per month until then. Annual car insurance 400, due for payment in March. House insurance premium amounts to 120 per year payable monthly from January. Household expenses are usually 450 per month. Car running costs are expected to be 90 per month except in March when the annual garage service to the car will cost an extra 70. Electricity bills for light and heat are expected to amount to 180 in January and 230 in March. Birthdays will cost 90 in February and 50 in April. Entertainment will cost 70 each month. (a) Complete fully the blank household budget form (opposite) using all the above figures. (b) How much will the Lynch household have saved in the four months? (Junior Certificate Ordinary Level 1992 amended for euro)
196
(a)
Lynch Household Jan Feb March April Total
Planned Income R. Lynch Salary M. Lynch Salary Child Benefit Total Income A. Planned Expenditure
800 650 30 1,480
800 650 30 1,480
800 650 30 1,480
800 650 30 1,480
3,200 2,600 120 5,920
Fixed
Mortgage Annual Car Tax Car Loan Annual Car Insurance House Insurance Subtotal
300
300 140
300
300
1,200 140
230
230
230 400
690 400
10 540
10 680
10 940
10 310
40 2,470
Irregular
Household Car Running Costs Electricity Subtotal
450 90 180 720
450 90
450 160 230
450 90
1,800 430 410
540
840
540
2,640
Discretionary
Birthdays Entertainment Subtotal Total Expenditure B. Net Cash (A B) Opening Cash Closing Cash
90 70 70 1,330 150 80 230 70 160 1,380 100 230 330 70 70 1,850 (370) 330 (40)
50 70 120 970 510 (40) 470
140 280 420 5,530 390 80 470
(b) Saved in four months: 390
197
11. Opposite is a budget for the Mullins household for four months, May, June, July and August: opening cash in hand was 240. Planned Income John Mullins earns 1,225 net per month. Brenda Mullins earns 1,250 net per month and expects to receive an increase of 50 in August. Child benefit is 150 per month. Planned Expenditure House mortgage will be 340 per month. House insurance premium, 480 per year, is payable monthly from May. Johns annual car insurance 450. Brendas annual car insurance is 375. Both are payable in June. Household expenses are usually 550 per month except in July, when they are 250 less. Car running costs are expected to be 100 per month for John and 125 a month for Brenda. Irish college for the children will cost 550 in June. Electricity bills for light and heat are expected to amount to 110 in May and 80 in July. The Mullins family has a home telephone and a mobile phone. The home telephone is expected to be 165 in June and 150 in August. The mobile phone bill is expected to be 30 per month. A birthday party will cost 350 in August. The family expects to spend 2,500 on a holiday in July. Entertainment will cost 200 each month except July, when it will cost nothing as the family is on holiday. Complete fully the blank household budget form (opposite) using all the above figures. (Junior Certificate Ordinary Level 1998 Section(B) Q1 amended for euro)
198
Mullins Household Planned Income John Mullins Salary Brenda Mullins Salary Child Benefit Total Income A. Planned Expenditure
May
June
July
Aug
Total
1,225 1,250 150 2,625
1,225 1,250 150 2,625
1,225 1,250 150 2,625
1,225 1,300 150 2,675
4,900 5,050 600 10,550
Fixed
Mortgage House Insurance Car Insurance Subtotal
340 40
340 40 825
340 40
340 40
1,360 160 825
380
1,205
380
380
2,345
Irregular
Household Expenses Car Running Costs Irish College Light and Heat Telephone Costs Subtotal
550 225
550 225 550
300 225
550 225
1,950 900 550
110 30 915 195 1,520
80 30 635 180 955
190 435 4,025
Discretionary
Birthday Parties Holidays Entertainment Subtotal Total Expenditure B. Net Cash (A B) Opening Cash Closing Cash
350 2,500 200 200 1,495 1,130 240 1,370 200 200 2,925 (300) 1,370 1,070 2,500 3,515 (890) 1,070 180 200 550 1,885 790 180 970
350 2,500 600 3,450 9,820 730 240 970
199
12. Opposite is a budget for the Hughes household for January, February, March and April: opening cash in hand was 150. Planned Income Aidan Hughes earns 825 net per month. Fiona Hughes earns 650 net per month and expects to receive an increase of 40 in April. Child benefit is 120 per month. Planned Expenditure House rental is 400 per month but will increase by 50 per month from the beginning of March. House contents insurance premium, 120 per year, is payable monthly from January. The Hughes family pay health insurance of 55 per month to the VHI. This will increase to 60 per month from the beginning of March. Groceries are usually 350 per month. Aidan pays 50 a month and Fiona pays 55 a month on bus and train fares to travel to work. The family expects to spend 600 on clothes in the January sales. Electricity bills for light and heat are expected to amount to 95 in January and 80 in March. A fill of heating oil, costing 220, will be needed in February. A birthday will cost 100 in February. Entertainment will cost 120 each month except March, when it will be 300 extra due to a wedding. The Hughes family hope to buy a new television and video recorder costing 700 in April. Complete fully the blank household budget form (opposite) using all the above figures. (Junior Certificate Ordinary Level 1997 Section (B)QI amended for euro)
200
Hughes Family Planned Income Aidan Hughes Salary Fiona Hughes Salary Child Benefit Total Income A. Planned Expenditure
January
February
March
April
Total
825 650 120 1,595
825 650 120 1,595
825 650 120 1,595
825 690 120 1,635
3,300 2,640 480 6,420
Fixed
House Rental Contents Insurance Health Insurance Subtotal
400 10 55 465
400 10 55 465
450 10 60 520
450 10 60 520
1,700 40 230 1,970
Irregular
Groceries Travel Costs Clothes Light and Heat Subtotal
350 105 600 95 1,150
350 105
350 105
350 105
1,400 420 600
220 675
80 535 455
395 2,815
Discretionary
Birthdays Entertainment TV and Video Subtotal Total Expenditure B. Net Cash (A B) Opening Cash Closing Cash
100 120 120 420 120 700 120 1,735 (140) 150 10 220 1,360 355 10 245 420 1,475 120 245 365 820 1,795 (160) 365 205
100 780 700 1,580 6,365 55 150 205
201
13. Opposite is the budget for the Keane household for the last four months of 2004: opening cash in hand was 880. Planned Income Brian Keane earns 2,500 net per month and expects to receive a bonus of 2,000 net in April. Mary Keane earns 1,950 net per month and expects to receive an Easter bonus of 700 net in April. The family expect to receive interest 900 on a deposit account in March. Planned Expenditure House Mortgage of 950 per month will increase by 50 per month from March 2004. House insurance premium, 720 per year, is payable monthly from January. Repayments on the car loan (to be paid off in full in March) are 240 per month. Household expenses are usually 1,600 per month except March, when they are 300 less. Car running costs will be 295 per month. Marys driving lessons, costing 140 per month, will end in March. ESB bills for light and heat are expected to amount to 640 in January and 570 in March, while gas, costing 300, will be needed in February. Telephone bills for the home are expected to be 350 in February and April. Presents for parents fiftieth wedding anniversary will cost 1,000 in March. Entertainment will cost 600 each month except in April, when it will cost 300 less. (a) Complete fully the blank household budget form (opposite) using all the above figures. (b) Explain what House Insurance means. This is where the owner of a house pays a premium to an insurance company in return for a promise of compensation should damage be done to the house.
(c) State whether tickets for a Britney Spears concert is fixed, irregular or discretionary expenditure. Britney Spears tickets are discretionary.
202
(a)
Keane Family Planned Income Brian Keane Salary Mary Keane Salary Deposit Interest Total Income A. Planned Expenditure Jan Feb March April Total
2,500 1,950
2,500 1,950
2,500 1,950 900
4,500 2,650
12,000 8,500 900
4,450
4,450
5,350
7,150
21,400
Fixed
House Mortgage House Insurance Car Loan Subtotal
950 60 240 1,250
950 60 240 1,250
1,000 60 240 1,300
1,000 60 1,060
3,900 240 720 4,860
Irregular
Household Expenses Car Running Costs Driving Lessons Light and Heat Telephone Costs Subtotal
1,600 295 140 640 2,675
1,600 295 140 300 350 2,685
1,300 295 140 570 2,305
1,600 295 350 2,245
6,100 1,180 420 1,510 700 9,910
Discretionary
Presents Entertainment Subtotal Total Expenditure B. Net Cash (A B) Opening Cash Closing Cash
1,000 600 600 4,525 (75) 880 805 600 600 4,535 (85) 805 720 600 1,600 5,205 145 720 865 300 300 3,605 3,545 865 4,410
1,000 2,100 3,100 17,870 3,530 880 4,410
203
14. Opposite is the budget for the Kelly household for the last four months of 2005: opening cash in hand was 460. Planned Income Noel Kelly earns 1,800 net per month. Nora Kelly earns 1,750 net per month and expects to receive an increase of 200 starting in July. Child Benefit is 280 net per month. Planned Expenditure House Mortgage of 750 per month will decrease by 70 per month from 1 August 2005. House insurance premium, 720 per year, is payable monthly from May. Noels annual car insurance is 480. Noras annual car insurance is 550. Both are payable in June. Household expenses are usually 1,200 per month except in August, when they are 1,000 extra. Car running costs will be 310 per month for Noel and 195 per month for Nora. Irish College fees in July 675. ESB bills for light and heat are expected to amount to 480 in May and 370 in July. Telephone bills for the home are expected to be 250 in June and August, while bills for mobile phones for all the family will be 245 per month. Presents for birthday parties will cost 900 in July. The family will take a holiday in July costing 3,800. (a) Complete fully the blank household budget form (opposite) using all the above figures. (b) Name three examples of car running costs. 1. Petrol 2. Repairs 3. Replacement parts e.g. tyres (c) Name three ways of paying the telephone bill. 1. By direct debit 2. By cheque 3. By credit card
204
(a)
Kelly Family Planned Income Noel Kelly Salary Nora Kelly Salary Child Benefit Total Income A. Planned Expenditure May June July August Total
1,800 1,750 280 3,830
1,800 1,750 280 3,830
1,800 1,950 280 4,030
1,800 1,950 280 4,030
7,200 7,400 1,120 15,720
Fixed
House Mortgage House Insurance Car Insurance Subtotal
750 60
750 60 1,030
750 60
680 60
2,930 240 1,030
810
1,840
810
740
4,200
Irregular
Household Expenses Car Running Costs Irish College Fees Light and Heat Telephone Costs Subtotal
1,200 505
1,200 505
1,200 505 675
2,200 505
5,800 2,020 675 850
480 245 2,430 495 2,200
370 245 2,995 495 3,200
1,480 10,825
Discretionary
Presents Holidays Subtotal Total Expenditure B. Net Cash (A B) Opening Cash Closing Cash
900 3,800 4,700 3,240 590 460 1,050 4,040 (210) 1,050 840 8,505 (4,475) 840 (3,635) 3,940 90 (3,635) (3,545)
900 3,800 4,700 19,725 (4,005) 460 (3,545)
205
15. Opposite is the budget for the Diffley household for the last four months of 2006: opening cash in hand was 5,000. Planned Income Murt Diffley earns 3,600 net per month and expects to go on half pay from October onwards. Agnes Diffley earns 2,450 net per month and expects an increase in salary of 800 net in November. Dividends on shares 5,000 are expected in November. Planned Expenditure House Mortgage of 1,200 per month will increase by 120 per month from 1 October 2006. House insurance premium, 840 per year, is payable monthly from September. Murts annual car insurance is 685. Agness annual car insurance is 580. Both are payable in December. Household expenses are usually 1,500 per month except in December, when they are 200 extra. Car running costs will be 350 per month for Murt and 450 per month for Agnes. Clothes are expected to cost 1,800 in October. ESB bills for light and heat are expected to amount to 640 in September and 870 in November, while a fill of heating oil, costing 1,200, will be needed in November. Telephone bills for the home are expected to be 450 in September and November, while the bill for Agness mobile phone will be 125 per month. Presents for birthday parties will cost 700 in October and 500 in October. Medical bills for the family are expected to cost 2,500 in October and 3,000 in October. Entertainment will cost 400 each month except in November, when it will reduce by half. (a) Complete fully the blank household budget form (opposite) using all the above figures. (b) Advise the Diffleys on ways to cover their medical bills. Join VHI, BUPA or VIVAS; Join the Saturday Hospital Fund; Claim under PRSI.
(c) Give three examples of discretionary expenditure other than those given in the budget above. 1. Holidays 2. Decorations 3. Church donations
206
(a)
Diffley Family Planned Income Murt Diffley Salary Agnes Diffley Salary Share Dividend Total Income A. Planned Expenditure Sept Oct Nov Dec Total
3,600 2,450
1,800 2,450
1,800 3,250 5,000
1,800 3,250
9,000 11,400 5,000
6,050
4,250
10,050
5,050
25,400
Fixed
House Mortgage House Insurance Car Insurance Subtotal
1,200 70
1,320 70
1,320 70
1,320 70 1,265
5,160 280 1,265 6,705
1,270
1,390
1,390
2,655
Irregular
Household Expenses Car Running Costs Clothes Medical Bills Light and Heat Telephone Costs Subtotal
1,500 800
1,500 800 1,800 5,500
1,500 800
1,700 800
6,200 3,200 1,800 5,500
640 575 3,515 125 9,725
2,070 575 4,945 125 2,625
2,710 1,400 20,810
Discretionary
Presents Entertainment Subtotal Total Expenditure B. Net Cash (A B) Opening Cash Closing Cash
1,200 400 400 5,185 865 5,000 5,865 400 1,600 12,715 (8,465) 5,865 (2,600) 200 200 6,535 3,515 (2,600) 915 400 400 5,680 (630) 915 285
1,200 1,400 2,600 30,115 (4,715) 5,000 285
207
Questions on Estimating Budgets 16. Complete the partially completed budget form opposite for the Lynch family by filling in the figures for the Estimate June-December column and the Total for Year column. The following information should be taken into account. T. Lynch will be moving to a new section and is promised a salary increase of 4% from 1 August 2004. P. Lynch is due a salary increase of 6% from 1 June 2004. Child benefit will continue as for other months of 2004. Dividends from investments amounting to 250 are expected in July. The mortgage will be reduced by 50 per month from 1 November 2004. The car loan will be fully repaid by end of June 2004. House insurance per month will continue as for other months of 2004. Housekeeping costs per month are expected to remain the same as for first five months except for December when they will be 580. Car running costs will cost 80 per month until the end of 2004. New tyres will be needed in November, costing 90. The total cost of both electricity and telephone charges for the whole of 2004 are expected to be 1,040 and 780 respectively. Birthdays will cost 80 in November. Entertainment is expected to cost a total of 900 for the whole year 2004.
208
Junior Certificate Business Studies Workbook Teachers Manual Lynch Household Jan Feb March April May Total Jan-May 5,000 4,000 225 Estimate Jun-Dec Total for year
Planned Income T. Lynch Salary P. Lynch Salary Child Benefit Dividends Total Income A. Planned Expenditure
1,000 800 45
1,000 800 45
1,000 800 45
1,000 800 45
1,000 800 45
7,200 5,936 315 250
12,200 9,936 540 250 22,926
1,845
1,845
1,845
1,845
1,845
9,225
13,701
Fixed
Mortgage House Insurance Car Loan Annual Car Tax Annual Car Insurance Subtotal 450 25 310 250 1,035 450 25 310 600 1,385 450 25 310 785 450 25 310 785 450 25 310 785 2,250 125 1,550 250 600 4,775
3,050 175 310 3,535
5,300 300 1,860 250 600 8,310
Irregular
Housekeeping Costs Car Running Costs Telephone Electricity Subtotal 360 80 205 645 360 80 90 530 360 80 190 630 360 180 100 640 360 80 170 610 1,800 500 190 565 3,055
2,740 650 850 215 4,455
4,540 1,150 1,040 780 7,510
Discretionary
Birthdays Entertainment Subtotal Total Expenditure B. Net Cash (A B) Opening Cash Closing Cash 35 60 95 1,775 70 30 100 50 50 1,965 120 100 20 40 40 1,455 390 20 370 30 50 80 1,505 340 370 710 50 50 1,445 400 710 1,100 65 250 315 8,145 1,080 30
80 585 665 8,655 4,046 1,110 6,156
145 835 980 16,800 6,126 30 6,156
1,110
209
17.
Complete the personal budget form (opposite) for the Reidy family by filling in the figures for the Estimate April to December column. The following information should be taken into account. John Reidy is due a salary increase of 5% from 1 July. Mary Reidy expects a special bonus of 320 in December. Child benefit will continue each month as for the first three months of the year. House mortgage is expected to increase by 40 a month from 1 August. House insurance, per month, will continue as for the first three months of the year. Household costs, per month, are expected to remain the same for each month until September and to increase by 30 a month beginning in October. Car running costs are expected to remain at 80 a month with an additional car service cost of 90 in September. Electricity for the 12 months (January-December) is estimated at 1,150. Christmas presents are expected to cost 200 in December. Entertainment is expected to cost 600 for the twelve months (January-December). The family holiday in July is expected to cost 1,400. (Junior Certificate Higher Level 1993 amended for euro)
210
Reidy Family
Jan
Feb
Mar
Total Jan-Mar 1,980 2,100 90 4,170
Estimate Apr-Dec
Total for year Jan-Dec
Planned Income John Reidy Salary Mary Reidy Salary Child Benefit Total Income A. Planned Expenditure
660 700 30 1,390
660 700 30 1,390
660 700 30 1,390
6,138 6,620 270 13,028
8,118 8,720 360 17,198
Fixed
Mortgage Annual Car Tax Annual Car Insurance House Insurance Subtotal 280 240 18 538 280 18 298 280 650 18 948 840 240 650 54 1,784
2,720 162 2,882
3,560 240 650 216 4,666
Irregular
Household Costs Car Running Costs Electricity Subtotal 490 80 190 760 490 80 570 490 80 160 730 1,470 240 350 2,060
4,500 810 800 6,110
5,970 1,050 1,150 8,170
Discretionary
Presents 45 45 1,343 47 75 122 40 60 100 968 422 122 544 55 55 1,733 343 544 201 40 160 200 4,044 126 75 201
200 440 1,400 2,040 11,032 1,996 201 2,197
240 600 1,400 2,240 15,076 2,122 75 2,197
Entertainment Holidays Subtotal Total Expenditure B. Net Cash (A B) Opening Cash Closing Cash
211
18.
(a) Opposite is a partially completed personal budget form for the Keane family for 2004. You are required to complete this form by filling in the figures for the Estimate April to December column, and the Total for year column. The following information should be taken in account. Martin expects to get promotion in September which will increase his salary by 30%. Norah is doing overtime from 1 October and this will result in a 10% increase in her salary from that date. Child benefit will increase to 120 per month from 1 July 2004. The house mortgage will be paid off in full following the August payment. Car insurance is payable quarterly. Household expenses will remain at the same level until the end of September and will increase by 20% beginning in October 2004. Car running costs are expected to remain at 90 a month with an additional cost of 280 in June for new tyres and a car service cost 200 in October 2004. ESB for the 12 months Jan-Dec 2004 is estimated at 840. The telephone is paid every second month and it is estimated that the cost will remain at the same level as at the beginning of the year. A wedding present in June is expected to cost 400. Entertainment will average at 160 per month for the remaining 9 months of the year. A family holiday in July is expected to cost 1,500. House insurance payable monthly will continue as for the first three months of the year. (b) (i) When the mortgage is paid off in August, what would you suggest that the Keane family would do with the 600 per month that they no longer have to pay? The Keane family should save it in an index-linked saving scheme in An Post, ____________________________________________________________________ where fixed amounts are paid in. _____________________________________________________________________ (ii) Name a suitable method that the Keane family could save for their holiday and give a reason for your answer. The Keane family could save 215 per month in a deposit account. ____________________________________________________________________ In seven months they will have saved 1,500. _____________________________________________________________________
212
(a)
Keane Household Jan Feb Mar Total Jan-Mar 3,000 3,300 300 6,600 Estimate Apr-Dec Total for year Jan-Dec
Planned Income Martin Keane Salary Norah Keane Salary Child Benefit Total Income A. Planned Expenditure
1,000 1,100 100 2,200
1,000 1,100 100 2,200
1,000 1,100 100 2,200
10,200 10,230 1,020 21,450
13,200 13,530 1,320 28,050
Fixed
House Mortgage Car Insurance Annual Car Tax House Insurance Subtotal 30 750 30 630 600 120 400 30 1,030 600 600 1,800 120 400 90 2,410
3,000 360 270 3,630
4,800 480 400 360 6,040
Irregular
Household Expenses Car Running Costs Light and Heat Costs Telephone Subtotal 650 100 160 160 1,070 750 650 100 650 100 140 160 1,050 1,950 300 300 320 2,870
6,060 1,290 540 640 8,530
8,010 1,590 840 960 11,400
Discretionary
Presents Entertainment Holidays Subtotal Total Expenditure B. Net Cash (A B) Opening Cash Closing Cash 150 1,970 230 10 240 150 1,530 670 240 910 150 2,230 (30) 910 880 450 5,730 870 10 880 150 150 150 450
400 1,440 1,500 3,340 15,500 5,950 880 6,830
400 1,890 1,500 3,790 21,230 6,820 10 6,830

213
19.
(a) Opposite is a partially completed personal budget form for the Lyons family for 2005. You are required to complete this form by filling in the figures for the Estimate April to December column, and the Total for year column. The following information should be taken in to account. Andrew expects to go on a two-week month from August which will reduce his salary by half. Ilona will take up a second job from 1 July which will earn her an extra 600 per month. The house mortgage will be increased by 150 per month to pay for an extension. Household expenses will remain at the same level until the end of October and will increase by 15% beginning in November 2005. Car running costs are expected to remain at 110 a month with an additional cost of 700 in July for new tyres and a car respray. ESB for the 12 months Jan-Dec 2005 is estimated at 770. The telephone is paid every second month and it is estimated that the cost will remain at the same level as at the beginning of the year. Christmas presents will cost 780 in December. Entertainment will average at 200 per month for the remaining 9 months of the year. The Lyons family plan to save 250 per month starting in July. Car tax payable quarterly will continue as before. (b) (i) Name two examples of car running costs. (a) Petrol (b) Repairs (ii) Why might Andrew have to go on a two-week month? The sales in his job might be slowing down and there is less work available. _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________
214
(a)
Lyons Household Jan Feb Mar Total Jan-Mar 4,800 3,000 400 8,200 Estimate Apr-Dec Total for year Jan-Dec
Planned Income Andrew Salary Ilona Salary Deposit Interest Total Income A. Planned Expenditure
1,600 1,000
1,600 1,000
1,600 1,000 400
10,400 12,600 23,000
15,200 15,600 400 31,200
2,600
2,600
3,000
Fixed
House Mortgage Car Insurance Annual Car Tax House Insurance Subtotal 800 800 800 700 115 550 2,165 800 800 2,400 700 115 550 3,765
8,550 345 8,895
10,950 700 460 550 12,660
Irregular
Household Expenses Car Running Costs Light and Heat Costs Telephone Subtotal 140 1,210 1,220 960 110 960 110 150 140 1,210 960 110 2,880 330 150 280 3,640
8,928 1,690 620 560 11,798
11,808 2,020 770 840 15,438
Discretionary
Presents Entertainment Savings Subtotal Total Expenditure B. Net Cash (AB) Opening Cash Closing Cash 180 2,190 410 300 710 380 3,765 (1,165) 710 (455) 180 2,190 810 (455) 355 740 8,145 55 300 355 180 200 180 180 200 540
780 1,800 1,500 4,080 24,773 1,714 355 1,418
980 2,340 1,500 4,820 32,918 1,718 300 1,418

215
20.
The Egan household have to change their budget because M. Egan has to take a 15% cut in salary. School fees of 200 to be paid in March; house insurance of 20 per month was omitted; bank interest of 400 to be paid to the Egans in March was also omitted. The Egans decided to provide for these changes by cutting entertainment down to 80 per month and reducing decoration costs to 600. All other figures were to remain unchanged. (a) Complete the revised budget form opposite for January-March taking the above into account. (b) Will these reductions in expenditure be enough to cover the changes above? Yes Reason for Answer reduce by 100. They could consider taking out a loan. No The net cash will be 385 and the total expenditure will
(c) What other actions could be considered?
216
Budget Egan Household Planned Income M. Egan Salary N. Egan Salary Child Benefit Bank Interest Total Income A. Planned Expenditure 1,660 1,660 1,660 4,980 Jan 900 700 60 Feb 900 700 60 Mar 900 700 60 Total 2,700 2,100 180 Jan
Revised Budget Feb Mar Total
765 700 60
765 700 60
765 700 60 400
2,295 2,100 180 400 4,975
1,525
1,525
1,925
Fixed
House Mortgage Car Tax Car Insurance House Insurance Subtotal 320 320 320 280 600 320 1,240 320 960 280
320
320 280
320
960 280
20 340
20 620
20 340
60 1,300
Irregular
Housekeeping Car Expenses Telephone School Fees Subtotal 600 440 620 1,660 380 60 160 380 60 380 60 180 1,140 180 340
380 60 160
380 60
380 60 180 200
1,140 180 340 200 1,860
600
440
820
Discretionary
Entertainment House Decorations Birthday Subtotal Savings Total Expenditure B. Net Cash (A B) Opening Cash Closing Cash 60 160 150 1,230 430 20 450 1,000 150 2,190 530 450 80 100 100 900 100 80 180 150 1,270 390 80 310 300 900 140 1,340 450 4,690 290 20 310
80 60 140 150 1,230 295 20 315
80 600
80
240 600
80 680 150 1,890 (365) 315 (50) 160 150 1,470 455 (50) 405
140 980 450 4,590 385 20 405
217
21.
Opposite is a completed budget and a revised budget form for the OMara family from April to June. After preparing the budget for April-June the OMara family were informed that Mr OMara was to go on a three-day week in his employment. This would result in a substantial drop in the familys income. The OMaras decided to revise their budget in view of the changed circumstances. (a) Complete the revised budget form opposite taking the following into account: Mr OMaras wages to be reduced by 40%. They decided to install Cablelink television and rent a video at a monthly cost of 30 to occupy his spare time. Car running costs to be reduced by 20 per month. Telephone expenses to be reduced to 100 per bill. It is decided to omit holiday expenses. Savings plan to be abandoned. All other income and expenses are to remain the same. (b) (i) If Mr OMara had not suffered a drop in income, would you consider the original budget a good one? Yes ____________________ No _____________________ (ii) Give two reasons for your answer. There was an overall net cash of 20 1. _______________________________________________________________ They were able to save each month 2.__________________________________________________________________ (c) What other actions could be considered? Mr OMara could look for a part-time job. The OMaras could pay the car tax quarterly and the car insurance monthly.
(Junior Certificate Higher Level 1996 amended for euro)
218
(a)
Budget Income Planned Income Mr OMara Wage Mrs OMara Wage Child Benefit Total Income A. Planned Expenditure Apr 900 595 25 1,520 May 900 595 25 1,520 Jun 900 595 25 1,520 Total 2,700 1,785 75 4,560 Apr Revised Budget May Jun Total
540 595 25 1,160
540 595 25 1,160
540 595 25 1,160
1,620 1,785 75 3,480
Fixed
Car Loan Car Insurance Car Tax House Insurance Video/T.V. Subtotal 460 315 445 1,220 220 75 240 240 240 205 720 205 220 75
240
240
240 205
720 205 220
220 75 30 490 30 345 30 475
75 90 1,310
Irregular
Housekeeping Car Running Costs Electricity Telephone Subtotal 830 600 125 105 130 855 810 600 125 600 125 85 1,800 375 190 130 2,495
600 105 105
600 105
600 105 85
1,800 315 190 130
130 810 805 790
2,405
Discretionary
Holidays Entertainment Birthdays/Presents Subtotal Savings Total Expenditure B. Net Cash (A B) Opening Cash Closing Cash 135 120 1,545 25 180 155 75 60 75 60 60 195 120 1,485 35 155 190 135 120 1,510 10 190 200 75 60 225 180 60 465 360 4,540 20 180 200
60
60 60
60
180 60
60
120
60
240
1,360 (200) 180 (20)
1,270 (110) (20) (130)
1,325 (165) (130) (295)
3,955 (475) 180 (295)
219
22.
After preparing the budget for January-March Mrs Byrne, who had qualified as an accountant, secured employment. This would result in a substantial increase in the familys income starting in February. The Byrnes decided to revise their budget in view of the changed circumstances. (a) Complete the revised budget form opposite, taking the following into account: Mrs Byrnes annual salary will be 24,000. Mr & Mrs Byrne decided to buy a holiday mobile home by getting a loan. The total cost of the loan including interest will be 36,000 repayable monthly over 4 years beginning in January. The insurance on the mobile home is 480 per annum payable on 1 January. Baby sitting costs will increase by 50%. It is estimated that entertainment will increase by 200 per month. All other income and expenses are to remain the same. (b) (i) Comment on the Byrnes finances before February. The income was less than expenditure. ____________________________________________________________________ ____________________________________________________________________ (ii) If the Byrnes family had not received an increase in income would you consider the original budget a good one? Give reasons for your answer. No. They had a net cash deficit in January and February ___________________________________________________________________ ___________________________________________________________________ (iii) Is their revised budget a good one in their new circumstances? Give reasons for your answer. No. The car insurance should be paid quarterly and the house insurance __________________________________________________________________ and the mobile home insurance should be paid monthly. ___________________________________________________________________
220
Budget Income Planned Income Mr Byrne Salary Mrs Byrne Salary Child Benefit Total Income A. Planned Expenditure 120 1,920 120 1,920 120 1,920 360 5,760 Jan 1,800 Feb 1,800 March 1,800 Total 5,400 Jan
Revised Budget Feb March Total
1,800 120 1,920
1,800 2,000 120 3,920
1,800 2,000 120 3,920
5,400 4,000 360 9,760
Fixed
House Mortgage Mobile Home Loan Car Insurance Car Tax House Insurance Mobile Home Insurance Subtotal 640 1,650 560 2,850 80 140 950 950 80 140 560 560 560 1,680
560 750
560 750 950
560 750
1,680 2,250 950 80
80 140 480 1,870 2,400 1,310
140 480 5,580
Irregular
House Keeping Car Running Costs Tel. & ESB Baby Sitting Subtotal 460 100 200 480 1,240 460 100 90 480 1,130 460 100 80 480 1,120 1,380 300 370 1,440 3,490
460 100 200 720 1,480
460 100 90 720 1,370
460 100 80 720 1,360
1,380 300 370 2,160 4,210
Discretionary
Entertainment Birthdays Subtotal Total Expenditure B. Net Cash (A B) Opening Cash Closing Cash 100 45 145 2,025 (105) 500 395 100 2,880 (960) 395 (565) 100 100 100 200 1,880 40 565 (525) 300 145 445 6,785 (1,025) 500 (525)
300 45 345 3,695 (1,775) 500 (1,275)
300
300 100
900 145 1,045 10,835 (1,075) 500 (575)
300 4,070 (150) (1,275) (1,425)
400 3,070 850 (1,425) (575)
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23.
After preparing the budget for May-July the Lynch family were informed that Mr Lynch was to go on a three-day week. Mrs Lynch who qualified as a nurse, secured employment. This would result in a change in the familys income starting in May. The Lynchs decided to revise their budget in view of the changed circumstances. (a) Complete the revised budget form, taking the following into account: Mr Lynchs wages to be reduced by 30%. Mrs Lynchs annual salary will be 30,000. They decided to enrol their son Patrick in a private school. Deposit of 3,000 is payable in July. A new car was bought by getting a loan. The total cost of the loan including interest will be 24,000, repayable monthly over 4 years beginning in June. Road tax for new car is 360 payable quarterly from May. Car running costs will increase by 40%. The insurance on the new car is 600 per annum payable monthly starting on 1 June. Baby sitting costs will increase by 20%. The planned holiday was cancelled. They reduced savings by 50%. All other income and expenses are to remain the same. (b) (i) Comment on the Lynchs finances before May. Their finances were poor because there was a net cash deficit each month and all their savings were used up. (ii) If the Lynch family had not had a change in circumstances would you consider the original budget a good one? Yes _______ No _______
Give reasons for your answer. They were intending to live beyond their means by planning a holiday even though they could not afford it. (iii) Is their revised budget a good one in their new circumstances? Yes _______ No _______
Give reasons for your answer. They have a net cash surplus in May and June and their closing cash has increased.
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(a)
Original Budget Income Planned Income Mr. Lynch Salary Mrs. Lynch Salary Child Benefit Total Income A. Planned Expenditure May 1,800 140 1,940 June 1,800 140 1,940 July 1,800 140 1,940 Total 5,400 420 5,820 May Revised Budget June July Total
1,260 2,500 140 3,900
1,260 2,500 140 3,900
1,260 2,500 140 3,900
3,780 7,500 420 11,700
Fixed
House Mortgage New Car Loan Car Insurance Car Tax House Insurance School Fees Subtotal 40 840 560 40 1,400 40 840 560 120 3,080 800 800 800 2,400
800
800 500 50
800 500 50
2,400 1,000 100 90
90 40 40 40 3,000 930 1,390 4,390
120 3,000 6,710
Irregular
House keeping Car Running Costs Telephone & ESB Baby Sitting Subtotal 400 100 120 400 1,020 400 100 140 400 1,040 400 100 120 400 1,020 1,200 300 380 1,200 3,080
400 140 120 480 1,140
400 140 140 480 1,160
400 140 120 480 1,140
1,200 420 380 1,440 3,440
Discretionary
Holiday Entertainment Subtotal Savings Total Expenditure B. Net Cash (A B) Opening Cash Closing Cash 100 100 500 2,460 (520) 2,600 2,080 1,500 100 1,600 500 4,540 (2,600) 2,080 (520) 100 100 500 2,460 (520) (520) (1,040) 1,500 300 1,800 1,500 9,460 (3,640) 2,600 (1,040)
100 100 250 2,320 1,580 2,600 4,180
100 100 250 2,800 1,100 4,180 5,280
100 100 250 5,780 (1,880) 5,280 3,400
300 300 750 10,900 800 2,600 3,400
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Comparing the Budget with Actual 24. Study the budgeted and actual figures for March given below. (a) Calculate and enter the differences, if any, between budgeted and actual figures, in the differences column. (b) What are the main reasons for the difference? Wages are less by 90. There was a lotto prize of 500. Most of the expenses were greater than budgeted for. (c) What action should be taken to deal with the differences? Rework the budget, cut back on clothes by 80 and entertainment by 40. Shop around for food and save 20.
Budget Planned Income Wages Child Benefit Deposit Interest Lotto Prize Total Income A. Planned Expenditure 1,170 950 60 160 Actual 860 60 120 500 1,540 Difference
90 40 +500 +370
Fixed
Mortgage Car Insurance House Insurance Subtotal 310 360 670 375 450 180 1,005
+65 +90 +180 +335
Irregular
Food Petrol Clothes Pocket Money Subtotal 240 70 100 20 430 280 55 180 20 535
+40 15 +80 +105
Discretionary
Entertainment Church Subtotal Savings Total Expenditure B. Net Cash (A B) 40 10 50 10 1,160 10 80 80 1,620 80
+40 10 +30 10 +460 70
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25.
The OBrien family keeps a record of all financial transactions in an analysed cash book (bank columns only). On 1 May 2003 they had 110 in the bank. During May they had the following bank transactions.
2003 May 2 May 4 May 5 May 8 May 11 May 15 May 19 May 23 May 26 May 27 May 28 Transaction Paid for shoes by cheque (No. 14) Withdrew cash by ATM for groceries Paid electricity bill by cheque (No. 15) Paid for petrol by cheque (No. 16) Paid for heating oil by cheque (No. 17) Paid for car repairs by cheque (No. 18) Paid for coat by cheque (No. 19) Withdrew cash by ATM for groceries Lodged wages cheque 860 plus child benefit 30 (No. 20) Paid hospital expenses by cheque (No. 21) Lodged cash from sale of old furniture 35 93 87 26 100 65 73 102 890 415 125
(a) Enter the above transactions in the analysed cash book (blank columns only) in your copybook, using the following money column headings: Debit (Receipts) side: Total; wages; child benefit; other. Credit (Payments) side: Total; groceries; light and heat; shoes and clothes; car; other.
Analysed Cash Book Debit side (Summary) Total 1,125 Wages 860 Child Benefit 30 Other 125
Analysed Cash Book Credit side (Summary) Total 996 Groceries 195 L&H 187 Shoe/clothes 108 Car 91 Other 415
(b) Using the Budget Comparison Statement provided enter the appropriate figures, from the analysed cash book you have prepared, into the Actual column. Then show the differences between the actual and budget figures, by completing the column marked Difference. Use a plus + or minus sign in front of each figure in that column. Budget Comparison Statement of the OBrien Family
Budget Planned Income Wages Child Benefit Other Total Income A. Expenditure Groceries Light and Heat Shoes and Clothes Car Other Total Expenditure B. Net Cash (A B) 840 30 870 195 200 130 50 575 295 Actual Difference
860 30 125 1,015
+20 +125 +145
195 187 108 91 415 996 +19
13 22 +41 +415 +421 276
(c) (i) How much money had the OBriens intended to save in May? 295 (ii) By how much did the OBriens actual income exceed their actual expenditure in May? 19 (iii) By how much did the OBriens actual expenditure exceed their budgeted expenditure in May? 421 (iv) How much money did the OBriens have in their bank account at the end of May? 129 (1,125 996) (Junior Certificate Higher Level 1995 amended for euro) 26. The following information has been obtained from the analysed cash book of the OReilly family for the month of May 2005. Total Receipts: Wages 2,000; child benefit 300; deposit interest 250. Total Payments: Housekeeping 712; car 900; personal 350; other 220. (a) Enter the figures above in the Actual Column in the Budget Comparison Sheet provided and show the difference in the Difference column (place a plus + or a minus in front of each figure in that column). Budget Comparison Sheet of the OReilly Family for May 2005
Planned Income Wages Child Benefit Deposit Interest Total Income A. Expenditure Housekeeping Personal Car Other Total Expenditure B. Net Cash (A B) 650 500 390 120 1,660 390 Budget 1,500 250 300 2,050 Actual Difference
2,000 300 250 2,550 712 350 900 220 2,182 368
+500 +50 50 +500 +62 150 +510 +100 +522 22
(b) (i) Suggest one reason why the actual figures are not as budgeted. Additional wages from overtime. Increase in child benefit. Repairs to car that were not planned. (ii) What advice would you give to the OReilly family when preparing their budget for June 2005 and onwards? When planning the budget, dont leave out any possible income, such as overtime. Dont leave out possible expenses, such as car repairs. (iii) Should the annual deposit interest be included in the June budget? Yes __ No __ Give a reason for your answer. The interest is payable in May so it can only be included in the May budget.
226
27.
The Crilly family keeps a record of all financial transactions in an analysed cash book. On 1 May 2004 they had 300 in the bank. During the month of May 2004 they had the following transactions.
2004 1 May 3 May 5 May 7 May 9 May 13 May 15 May 18 May 23 May 27 May 30 May Lodged wages in bank Paid for repairs to car cheque (No. 2) Lodged child benefit Paid for school trip cheque (No. 3) Paid meat bill cheque (No. 4) Paid BUPA membership cheque (No. 5) Paid for petrol cheque (No. 6) Lodged Lotto win Withdrew cash by ATM for clothes Paid for new school uniform cheque (No. 7) Transaction Purchased groceries by cheque (No. 1) 80 1,800 300 240 400 130 800 70 5,000 700 120
(a) Record the above transactions in the analysed cash book in your copybook using the following money column headings: Debit (Receipts) Side: Bank; wages; child benefit; other. Credit (Payments) Side: Bank; groceries; school; car; other.
Analysed Cash Book (Debit Side) Summary
Bank 7,340
Wages 1,800
Child Benefit 240
Other 5,000
Analysed Cash Book (Credit Side) Summary
Bank 2,600
Geoceries 210
School 520
Car 370
Other 1,500
(b) Enter the appropriate figures from the above analysed cash book in the Actual column in the Budget Comparison Sheet below and show the difference in the Difference column (place a plus + or minus sign in front of each figure in that column). Budget Comparison Sheet of the Crilly Family for May 2004
Planned Income Wages Child Benefit Other Total Income A. Expenditure Groceries School Car Other Total Expenditure B. Net Cash (A B) 180 400 450 800 1,830 10 Budget 1,600 240 1,840 Actual Difference
1,800 240 5,000 7,040 210 520 370 1,500 2,600 4,440
+200 +5,000 +5,200 +30 +120 80 +700 +770 +4430
(c) (i) How much money did the Crilly family hope to have at the end of May? 10 (ii) How much money did the Crilly family have in the bank at the end of May? 4,740 (7,340 + 2,600)
227
(iii) Was the Crillys family budget a good one? Yes_____ No ____ Give a reason for your answer: They planned to have a surplus budget.
28.
When the Doyle family checked their analysed cash book at the end of December 2000, they found that their actual income and expenditure for the 12 months January to December differed from the budgeted figures (contained in the Budget Comparison Statement opposite) due to the following: Their salaries had increased by 10% from 1 July. Child benefit had increased by 10 per month from 1 April for each of the two children in the family. The actual interest received was 37 less than budgeted. They had won a prize of a holiday in the USA which they did not wish to use and sold it for 1,200. The mortgage had increased by 55 per month from 1 March and by another 25 per month from 1 November. They had lost their No Claims Bonus of 240 on their car insurance due to a car crash during the year. House insurance costs were 20% higher than budgeted. Household costs were 12% less than budgeted. The cost of shoes and clothes amounted to 1,635. They had changed their car so that car costs had increased by 4,270 over those budgeted. A saving of 8% had been made in the light and heat budget. The only medical expense for the year had resulted from monthly medication costs of 25 for the last three months of the year. Entertainment costs had averaged 60 per month. Gifts were 20 less than budgeted. (Junior Certificate Higher Level 2001 Paper I(B) Q1 amended) (a) Using the Budget Comparison Statement provided opposite enter the appropriate figures into the Actual column. Then show the difference between the actual and the budget figures by completing the column marked difference. Place a plus + or minus sign in front of each figure in that column. Note: Use plus sign if the actual is GREATER than the budget figure. Use minus sign if the actual is LESS than the budget figure. Example
Budget 430 780 Total 1,210 Actual 480 710 1,190 Difference +50 70 20
228
(a) Budget Comparison Statement for the Doyle Family for the year 2000
Budget Jan-Dec Actual Jan-Dec Difference
Income Salaries Child Benefit Interest Other Total Income A. Expenditure 18,000 960 150 19,110
18,900 1,140 113 1,200 21,353
+900 +180 37 +1,200 +2,243
Fixed
Mortgage Car Insurance House Insurance Subtotal 4,320 397 170 4,887 7,504 1,740 1,800 200 11,244 1,000 200 1,200 17,331 1,779
4,920 637 204 5,761 6,566 1,635 6,070 75 14,346 720 180 900 21,007 +346
+600 +240 +34 +874 938 105 +4,270 125 3,102 280 20 300 +3,676 1,433
Irregular
Household Costs Shoes and Clothes Car Costs Medical Expenses Subtotal
Discretionary
Entertainment Gifts Subtotal Total Expenditure B. Net Cash (A B)
(b) (i) Did the Doyle family have a surplus or deficit at the end of the year? Surplus What was this figure? 346 (ii) How much money had the Doyles intended to save during the year? 1,779 (iii) By how much did they exceed their budgeted expenditure? 3,676
(iv) If the Doyles had an opening cash balance of 2,000 on 1 January 2000, what was their actual closing cash balance at the end of the year? 2,346
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Chapter 8 The Good Consumer

1. Complete the following sentences. (a) A consumer is a person who buys goods and services. (b) An informed consumer is 2. a person who chooses goods and services wisely.
Complete the receipt below from the following data: Received 240 by cheque from Mary Mulligan, Mohill, Co. Leitrim on todays date. Assume you are Andrea Flynn.
RECEIPT Flynns Furniture Stores Ltd, Sligo Date: RECEIVED FROM: No: 20
Mary Mulligan, Mohill, Co Leitrim
THE SUM OF:
Two hundred and forty euro
240
With Thanks
Signed: Andrea Flynn (Accounts Department)
3.
Complete the receipt below from the following data: Received 500 cash from Francis King, Oranmore, Co. Galway on todays date. Assume you are Darren Walsh.
RECEIPT Walsh Concrete, Oranmore, Co. Galway Date: RECEIVED FROM: No: 475
Francis King, Oranmore, Co. Galway
THE SUM OF:
Five hundred euro
500
With Thanks
Signed: Darren Walsh (Accounts Department)
Chapter 9 Protecting the Consumer

1. The following sign was displayed in a shop.
No Cheques Accepted Under Any Circumstances
Is this sign legal? Yes
. Give a reason for your answer.
Cheques are not regarded as legal tender and do not have to be accepted.
230
2.
Complete the following sentences by choosing the appropriate term below. One term does not fit. order. (a) Ingredients on a label must be stated in descending (b) Giving misleading information breaks the Consumer Information Act. (c) The Ombudsman investigates complaints against state agencies. (d) A contract exists when goods or services are bought by a consumer. (e) A receipt is written proof of payment for goods or services.
Contract, Ombudsman, Consumer Information, Descending, Small Claims, Receipt
3.
Crunchy Corn Flakes can be purchased in two packet sizes, each a different weight and price.
Size Small Large Weight 500 grams 1,000 grams Price 0.93 1.90
Which size is the best value? Show your workings. The best value is: Small 4. Bubbles Washing Up Liquid comes in two sizes.
Size 100ml 280ml Price 0.25 0.89 Workings
Two small 500 grams cost only 1.86
Which size is the best value? Show your workings. The best value is: 100 ml 5. Munch Cereal comes in three sizes.
Size 450 grams 528 grams 600 grams Price 1.26 1.52 2.03 Workings Per ml 100 = 0.00250 280 = 0.00318
Which size is the best value? Show your workings. The best value is: 450 grams
Workings Per gram 450 = 0.0028 528 = 0.00289 600 = 0.00338
231
Chapter 10 Making a Complaint

1. Complete the Credit Note below from the following data: Issue credit note to Joan Morris, Mill Street, Cork, for return of five boxes of unused tiles at 50 per box. Use todays date and assume you are Mary Black.
CREDIT NOTE Cork Tiles Ltd, Marble Arch, Cork To: No. 490 Tel No: 021-2213345 e-mail: info@corktiles.com VAT Reg. IE234345 Date _________________ Unit Price Total
Morris _Joan ___________________ Mill Street ____________________ Cork ____________________

Quantity Description
5
Reason
Tiles
50
250
Unused Signed Mary Black ________________________________________________ Manager
Total
250
2. Complete the Credit Note below from the following data: Issue credit note to Bernard Cronin, Maynooth, Co. Kildare for return of two microwaves received as unwanted wedding present, value 150 each. Use todays date and assume you are Siobhan OFarrell.
CREDIT NOTE Murphys Stores, Nass, Co. Kildare To: ____________________ Bernard Cronin No. 371 Tel No: 045-777503 e-mail: murphys@naas.com VAT Reg. IE786543 Date _________________ Unit Price Total
Maynooth ____________________
____________________ Co. Kildare Quantity Description
2
Reason
Microwaves Unwanted wedding present
150
300
Signed Siobhan OFarrell ________________________________________________ Manager
Total
300
3. Complete the Credit Note provided from the following data: Issue credit note to Michael Daly, Cork Street, Carlow, for return of five cans of unopened paint at 45 per tin. Use todays date and assume you are Patricia Cooney.
232
To:
CREDIT NOTE No. 124 McGraths Paints Ltd, High St, Carlow Tel No: 0503-12543 Michael Daly ____________________ e-mail: mcgrathpaint@eircom.net ____________________ Cork Street VAT Reg. IE234345 Date _____________ Unit Price Total
Carlow ____________________
Quantity Description
5
Reason
Paint Unopened paint
45
225
Signed Patricia Cooney ________________________________________________ Manager
Total
225
Chapter 11 Money and Banking I

1. Column 1 is a list of money and banking terms. Column 2 is a list of possible explanations. Match the two lists by placing the letter of the correct explanation under the relevant number in the table below. (One explanation does not refer to any term.)
Column 1 Terms 1. 2. 3. 4. Money Barter Twenty-four hours banking Credit Union Column 2 Explanations (a) Financial co-operatives owned and run by members (b) A clock in a bank which gives the time of a bank transaction (c) Exchanging goods for other goods (d) Accepted by people in exchange for goods or services (e) Carrying out bank transactions with an ATM card 2. 3. 4.
1.
2. State what the following initials stand for. Automated Teller Machine ___________________________________________________________ ATM ___________________________________________________________ Personal Identity Number PIN Allied Irish Bank AIB ___________________________________________________________ Educational Building Society EBS ___________________________________________________________ Agricultural Credit Corporation ___________________________________________________________ ACC 3. Name four banks operating in Ireland. Bank of Ireland 1. ___________________________________________________________ Allied Irish Bank 2. 3. ___________________________________________________________ Ulster Bank 4. ___________________________________________________________ Permanent TSB
233
Chapter 12 Money and Banking II

1. Indicate with a tick which of the following are true or false. State a reason for your answer.
True False
(a) Only banks lend money (b) It is safe to send cash in the post (c) A person can pay some bills with an ATM card (d) Standing Orders are for once-off payments (e) DIRT is only paid by businesses 2. You wish to pay your club membership by twelve equal monthly payments. Indicate the most suitable method, from the list below, by placing a tick in the box. (a) (b) (c) (d) Standing Order Credit Card Bank Overdraft Direct Debit
3. Apart from banks, name two other financial agencies where people can save their money. Credit Union An Post 2. ____________________________ 1. ____________________________ 4. Assume you are Mary Hannifin, Aherne Lane, Dublin 4. Make a credit transfer of 230 cash to BUPA which has an account no. 99876723 in the Bank of Ireland, Abbey Street, Dublin. Complete the blank Credit Transfer form below on todays date.
Chapter 13 Money and Banking III

1. John Monaghan paid a cheque to Olive Heslin. Answer the following question by selecting the correct term from the following list: Drawer; Drawee; Payee. payee Olive is known as the ______________ of that cheque. (Write the answer in the space provided.)
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2. Complete the following sentences: (a) Endorsing a cheque means __________________________________________ the payee passes on the cheque by signing it on the back. (b) A dishonourable cheque is __________________________________________ a cheque that the bank refuses to accept. 3. List four methods by which a current account holder can make payments from a current account. Withdrawal slip (a) _____________________________ ATM (c) _____________________________ (b) ____________________________ Cheque (d) ____________________________ Standing order
4. You make a lodgment to your personal account in your local bank. The bank official gives you back the counterfoil of the lodgment slip. What does the bank official do to this counterfoil before handing it back to you? Explain your answer. The bank official stamps it and intials it. This is proof of the lodgment.
5. The following information is given on the counterfoil of current account lodgment slips.
Cheques are accepted subject to examination and verification and are transmitted for collection at the customers risk. Though credited when paid in, they should not be drawn against until clear.
Explain its significance to the current account holder. The cheques lodged by the account holder have to be cleared before the account holder can withdraw money.
6. Column 1 is a list of cheque terms. Column 2 is a list of possible explanations. Match the two lists by placing the letter of the correct explanation under the relevant number in the table below. (One explanation does not refer to any term.)
Column 1 Terms 1. 2. 3. 4. Endorsed cheque Stopped cheque Open cheque Blank cheque (a) (b) (c) (d) (e) 1. 2. Column 2 Explanations A cheque which the drawer informs the bank not to honour A cheque with two parallel lines on the face of it A cheque which is signed on the back by the payee A cheque which is not crossed A cheque with some of the details missing 3. 4.
7. Assume you are Kerry Holmes, Olympic Avenue, Greek Road, Carlow. Your date of birth is 7 September 1974 and you work as a fitness coach in the Glen Eagle Hotel, Killarney, Co. Kerry. Your gross pay is 4,400 per month. (a) Complete the partially completed application form supplied on 12 September 2006. (b) Lodge 850 (Cheques 690, Notes 133 and Coin 27) to your current account 15008004, on 16 September 2006, using the lodgment form supplied.
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(a)
CURRENT ACCOUNT APPLICATION FORM Personal Details Mr/Mrs/Miss/Ms Address Surname Holmes Forename Kerry
Olympic Avenue, Greek Road, Carlow ....................................................................................................................... .......................................................................................................................

Home:
Tel.
066 740211
Single Ages Tenant
Work: 066 74852 Married Other
Date of Birth 7/9/1974 Status: Dependant Children Are You Employment Details: Occupation Fitness Coach Employers Name: Address: No. 0 Homeowner:
With Parents
Gross Pay
4,400 per month
Glen Eagle Hotel ...................................................................................................................... Killarney ...................................................................................................................... Co, Kerry ......................................................................................................................
Bank/Other/Details If account elsewhere
......................................................................................................................
Yes
No
Name of Agency
An Post
Kerry Holmes Signature: .....................................................................................
12/9/2006 Date: ........................................
(b)
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8. Complete the following cheques and counterfoils supplied from the following data. Make the cheques as safe as possible. (a) Pauline Murphy paid Ryanair 250 on 14 November 2005.
SPECIMEN
on ly
(b) Richie Ryan paid ESB 240 on 10 December 2006.

SPECIMEN
on ly
(c) Gertie Barrett paid Brown Thomas 3,200 on 16 April 2006.

SPECIMEN
pa ye e A/ C on ly
A/ C
pa ye e
A/ C
pa ye e
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(d) Jack Burns paid Trinity College 4,500 on 5 October 2006.

SPECIMEN
on ly
Chapter 14 Bank Accounts

1. The following initials can appear in a bank statement. Write them out in full below. (i) OD Over Drawn (iii) DD Direct Debit (ii) SO Standing Order (iv) CT Credit Transfer
2. Compare the balance in Ann Hannons bank account below with that of the bank statement and update it as necessary. Prepare a Bank Reconciliation Statement in your copybook as on 31 May 2005.
Date 2005 1/5/ 31/5/ Balance Lodgment Details Amount 1,680 820 Date 2/5/ 4/5/ 7/5/ 11/5/ 22/5/ 31/5/ 2,500 31/5/ Balance B/D 930 Details Eircom Rent Dr ORourke ESB Cash Balance C/D Cheque No./ATM 20 21 22 23 ATM Amount 300 340 300 310 320 930 2,500 Bank A/C 2005
Current Account Bank Statement NO. 11 Date 2006 1/5/ 2/5/ 4/5/ 11/5/ 17/5/ 19/5/ 22/5/ 24/5/ 30/5/ Balance Cheque (No. 20) Cheque (No. 21) Credit Transfer Cheque (No. 23) Standing Order ATM Withdrawal Direct Debit Current Account Fees 310 600 320 200 50 300 340 600 1,680 1,380 1,040 1,640 1,330 730 410 210 160 Details Debit Credit Balance
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A/ C
pa ye e
Updated Bank A/C 31/5/05 Balance b/d C/T 930 600 SO OD Fees Balance c/d 1,530 Balance b/d 680 600 200 50 680 1,530
Bank Reconciliation Statement Balance as per bank statement Add lodgments not credited Less cheques not yet cashed Balance as per updated Bank A/C 160 820 980 300 680
3. Compare the balance in Andrew Lyons bank account with that of the bank statement and update it as necessary. Prepare a Bank Reconciliation Statement in your copybook as on 31 May 2006.
Date 2006 1/5/ 6/5/ 21/5/ 31/5/ Balance B/D Lodgment Lodgment Lodgment Details Amount 1,000 900 2,000 1,100 Date 1/5/ 5/5/ 9/5/ 12/5/ 17/5/ 21/5/ 31/5/ 5,000 31/5/ Balance B/D 210 Current Account Bank Statement NO. 50 Date 2006 1/5/ 4/5/ 5/5/ 6/5/ 12/5/ 16/5/ 18/5/ 21/5/ 22/5/ 26/5/ 31/5/ Balance Cheque (No. 1) ATM Cash Withdrawal Lodgment ATM Cash Withdrawal Cheque (No. 2) Credit Transfer Standing Order Lodgment Direct Debit Bank Interest and Charges 200 105 480 2,000 250 540 700 700 400 900 1,000 300 100 OD 800 550 10 710 230 2,230 2,030 1,925 Details Debit Details Insurance Cash Car Tax Cash Carpet Furniture Balance C/D Cheque No./ATM 1 ATM 2 ATM 3 4 Amount 700 400 540 250 700 2,200 210 5,000 Bank A/C 2006
Credit
Balance
OD = Overdrawn
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Updated Bank A/C 31/5/05 Balance b/d C/T 210 700 DD SO Charges Balance c/d 910 Balance b/d 125 200 480 105 125 910
Bank Reconciliation Statement Balance as per bank statement Add lodgments not credited Less cheques not cashed Balance as per updated Bank A/C 1,925 1,100 3,025 2,900 125
4. Compare the balance in Donal Clarkes bank account with that of the bank statement and update it as necessary. Prepare a Bank Reconciliation Statement in your copybook as on 31 May 2006.
Date 2006 5/9/ 31/5/ Lodgment Lodgment Details Amount 650 200 Date 1/5/ 2/5/ 7/5/ 9/5/ 17/5/ 24/5/ 31/5/ 850 31/5/ Balance B/D 285 Details Balance Groceries Petrol Clothes Cash Clothes Balance C/D 1 2 3 ATM 4 Cheque No./ATM Amount 200 40 25 70 30 200 285 850 Bank A/C 2006
Date 2006 1/5/ 5/5/ 9/5/ 10/5/ 13/5/ 16/5/ 17/5 21/5/ 31/5/ 31/5/ Balance Lodgment
Current Account Bank Statement NO. 32 Details Debit Credit
Balance 200 OD
650 40 150 300 70 30 600 85 45
450 410 260 560 490 460 140 OD 225 OD 270 OD
Cheque (No. 1) Standing Order Credit Transfer Cheque (No. 3) ATM Withdrawal Direct Debit Bank Charges and Interest Bank Interest
OD = Overdrawn
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Updated Bank A/C 31/5/05 Balance b/d C/T 285 300 SO DD Charges Interest Balance c/d 295 880 Balance B/D Bank Reconciliation Statement Balance as per bank statement Add lodgments not credited Less cheques not cashed Balance as per updated Bank A/C 270 OD 200 70 OD 225 295 OD 880 295 150 600 85 45
5. Compare the balance in Duffy Ltds bank account with that of the bank statement and update it as necessary. Prepare a Bank Reconciliation Statement in your copybook as on 31 May 2005.
Date 2005 1/5/ 16/5/ 28/5/ 31/5/ Balance B/D Sales Lodgment Sales Details Amount 700 1,600 1,700 1,450 Date 2/5/ 6/5/ 9/5/ 11/5/ 19/5/ 30/5/ 31/5/ 5,450 31/5/ Balance B/D 2,060 Details Suppliers Purchases ESB Insurance Jones Ltd Eircom Balance C/D Cheque No./ATM 1 2 3 4 5 6 Amount 550 360 140 120 1,900 320 2,060 5,450 Bank A/C 2005
Date 2005 1/5/ 5/5/ 10/5/ 14/5/ 16/5/ 18/5/ 24/5/ 26/5/ 28/5/ 30/5/ Balance
Balance 700
Cheque (No. 1) Cheque (No. 3) Cheque (No. 4) Lodgment Cheque (No. 2) Standing Order Credit Transfer Lodgment Current Account fees
550 140 120 1,600 360 400 550 1,700 25
150 10 110 OD 1,490 1,130 730 1,280 2,980 2,955
OD = Overdrawn
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Updated Bank A/C 31/5/05 Balance b/d C/T 2,060 550 SO Fees Balance c/d 2,610 Balance b/d 2,185 400 25 2,185 2,610
Bank Reconciliation Statement Balance as per bank statement Add lodgments not credited Less cheques not cashed Balance as per updated Bank A/C 2,955 1,450 4,405 2,220 2,185
6. Compare the balance in Carey Ltds bank account with that of the bank statement and update it as necessary. Prepare a Bank Reconciliation Statement in your copybook as on 31 May 2005.
Date 2005 1/6/ 12/6/ 31/6/ Balance B/D Lodgment Lodgment Details Amount 12,450 12,000 8,000 Date 4/6/ 4/6/ 17/6/ 23/6/ 30/6/ 30/6/ 32,450 30/6/ Balance B/d 16,800 Details Butter Ltd Jam Ltd Honey Ltd Flora Ltd Marg Ltd Balance C/D Cheque No./ATM 1 2 3 4 5 Amount 550 2,500 3,600 4,000 5,000 16,800 32,450 Bank A/C 2005
Date 2005 1/6/ 8/6/ 12/6/ 14/6/ 17/6/ 21/6/ 24/6/ 27/6/ 30/6/ Balance
Balance 12,450
Cheque (No. 2) Lodgment Standing Order Cheque (No. 1) Credit Transfer Direct Debit Cheque (No. 4) Bank Interest and Charges
2,500 12,000 2,200 550 5,500 3,800 4,000 270
9,950 21,950 19,750 19,200 24,700 20,900 16,900 16,630
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30/6/05
Balance b/d C/T
Updated Bank A/C 16,800 SO 5,500 DD Charges Balance c/d 22,300
2,200 3,800 270 16,030 22,300
Balance b/d
16,030
7. Prepare Murphy Ltds bank account and calculate the closing bank balance from the data supplied. Compare the balance in Murphy Ltds bank account with that of the bank statement and update it as necessary. Prepare a Bank Reconciliation Statement in your copybook as on 31 May 2005.
2005 1/5/ 2/5/ 6/5/ 11/5/ 15/5/ 18/5/ 26/5/ 31/5/ Transactions Balance in bank Lodged to bank Paid Lynam Ltd cheque (No. 1) Paid Dolan Ltd cheque (No. 2) ATM withdrawal Paid Lynch Ltd cheque (No. 3) Paid Tobin Ltd cheque (No. 4) Lodged to bank 1,200 3,200 1,400 4,200 300 2,480 1,000 12,100
Date 2005
Details
Amount
Date
Details
Cheque No./ATM
Amount
Bank A/C 2005
1/5/ 2/5/ 31/5/
Balance b/d Lodgment Lodgment
1,200 3,200 12,100
6/5/ 11/5/ 15/5 18/5/ 26/5/ 31/5/
Lynam Ltd Dolan Ltd Cash Lynch Ltd Tobin Ltd Balance c/d
1 2 ATM 3 4
1,400 4,200 300 2,480 1,000 7,120 16,500
16,500 31/5/ Balance b/d 7,120
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Date 2005 1/5/ 2/5/ 10/5/ 13/5/ 15/5/ 18/5/ 26/5/ 31/5/ Balance Lodgment
Balance 1,200
3,200 1,400 4,000 300 12,000 2,480 150
4,400 3,000 1,000 OD 1,300 OD 10,700 8,220 8,070
Cheque (No. 1) Direct Debit ATM withdrawal Credit Transfer Cheque (No. 3) Bank Interest and Charges
OD = Overdrawn
Updated Bank A/C 31/5/05 Balance b/d C/T 7,120 12,000 DD Charges Balance c/d 19,120 Balance b/d 14,970 4,000 150 14,970 19,120
8. Prepare Bannon Ltds bank account and calculate the closing bank balance from the data supplied. Compare the balance in Bannon Ltds bank account with that of the bank statement and update it as necessary. Prepare a Bank Reconciliation Statement in your copybook as on 31 May 2006.
2006 1/5/ 3/5/ 5/5/ 11/5/ 15/5/ 20/5/ 24/5/ 31/5/ Balance in bank Paid Mitchell Ltd cheque (No. 1) Paid Glennon Ltd cheque (No. 2) Lodged to bank Paid Nolan Ltd cheque (No. 3) ATM withdrawal Paid Barry Ltd cheque (No. 4) Lodged to bank Transactions 1,900 OD 4,100 2,350 3,100 2,950 850 5,200 9,600
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Date 2006
Details
Amount
Date
Details
Cheque No./ATM
Amount
Bank A/C 2005
11/05 31/05
Lodgment Lodgment
3,100 9,600
1/5/ 3/5/ 5/5/ 15/5/ 20/5/
Balance b/d Mitchell Ltd Glennon Ltd Nolan Ltd Cash Barry Ltd 1 2 3 ATM 4
1,900 4,100 2,350 2,950 850 5,200 17,350
31/5/
Balance c/d
4,650 17,350
24/5/
Balance b/d
4,650
Date 2006 1/5/ 3/5/ 8/5/ 11/5/ 14/5/ 19/5/ 20/5/ 25/5/ 31/5/ Balance
Balance 1,900 OD
Standing Order Cheque (No. 1) Lodgment Direct Debit Credit Transfer ATM Withdrawal Cheque (No. 3) Bank Interest and Charges
900 4,100 3,100 1,700 12,700 850 2,950 340
2,800 OD 6,900 OD 3,800 OD 5,500 OD 7,200 6,350 3,400 3,060
OD = Overdrawn
Updated Bank A/C 31/5/06 C/T 12,700 Balance b/d SD DD Charges Balance c/d 12,700 Balance b/d 5,110 4,650 900 1,700 340 5,110 12,700
Bank Reconcilation Statement Balance as per bank statement Add lodgments not credited Less cheques not cashed Balance as per updated Bank A/C 3,060 9,600 12,660 7,550 5,110
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Chapter 15 Personal Borrowing

1. Explain how the following methods of purchasing goods operate: (a) Credit purchase The seller gives the buyer a period of time to pay, e.g. Eircom gives customers two months credit. (b) Hire purchase The customer obtains immediate use by paying installments and owns the item on paying the last installment. 2. Complete the following sentences: (a) Being creditworthy means being trusted to pay all money owing on time.
(b) Collateral means some form of security which the lender can take if the loan is not paid back. (c) A person is declared bankrupt when a court declares that money owed cannot be paid back. 3. Select suitable forms of borrowing for each of the following: (a) House purchase of 250,000 (b) Payment of two monthly ESB bills (c) Payment of annual car tax (e) Purchase of TV 780 (f) Purchase of a new car 23,500 4. (d) Payment of annual school fees of 5,000 Hire purchase Term loan Long-term loan (mortgage) Overdraft Budget account Budget account
Cheap finance available only 12% per annum
(a) Comment on the legality of this advertisement: This advertisement is illegal because it does not show the APR, the cash price, the number of instalments or the total credit price.
Easy Credit 120 deposit plus 25 monthly for three years
(b) Comment on the legality of this advertisement: This advertisement is illegal because it does not show the APR, the cash price or the total credit price.
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5. Complete the partially completed National Irish Bank Loan Application supplied for Nora Jones, Piano Keys, Waterford on todays date. Nora requires a loan of 13,000 for five years to buy a new piano. She owns her own house valued at 350,000. She works as a concert pianist with RTE, Dublin 4 and earns 3,500 gross per month. She has 25,000 saved in the National Irish Bank and 5,000 in An Post. Her current account number is 23233232.
PERSONAL LOAN APPLICATION FORM National Irish Bank
Nora Jones Name(s) ________________________________ Ms Mr, Mrs, Ms _____________________________ Piano Keys Address(es) _____________________________ Waterford __________________________________________
__________________________________________ __________________________________________ Number of years at this address 7 years
LOAN REQUIRED
13,000 Amount ____________________________

Purpose _____________________________ Purchase of piano
5 years How long do you want the loan for? ________
BANK DETAILS (for existing customers) Time with bank 8 years__________________ Current Account Yes No
Owned Owned or Rented _________________________

Telephone 051-3456651____________________ Date of Birth 3/1/1980______________________ Mortgage amount (if any) 200,000_________ Annual repayments on mortgage 8,600____ Mortgage borrowed from EBS_______________ EMPLOYMENT DETAILS
23233232 Account No. ____________________________
Details of savings Bank/Other ______________________________ Yes
_______________________________________ _______________________________________
Pianist Occupation ________________________________

Employers Name & Address _______________ RTE
NIB and An Post Name _________________________________

Amount _ ____________________________________ 25,000
Dublin 4 __________________________________________
__________________________________________ Gross pay per month ______________________ 3,500 No. of years in your present employment 6 years
5,000 _ ____________________________________
SIGNATURE ___________________________ Nora Jones DATE __________________________________
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6. Rhona King lives at 56 Banks Road, Cork, in a house which she purchased in 1995 with the help of a mortgage of 59,000 from the Startup Building Society and to whom she repays 250 per month. She is single. Her telephone number is 021-134567. Rhonda is employed as a legal secretary with Smart & Keane, Solicitors, Airport Road, Cork, where she started work in 1991. She earns a Gross Salary of 2,400 per month, out of which she pays income tax and PRSI totalling 826. Rhonda wishes to buy a new car for her next birthday. She will be 35 years old on 14 August 2005. In order to buy the car, she needs to borrow 12,500 which she hopes to repay in monthly instalments of 290 over the next four years. She is already paying the Cork Credit Union 64 per month for a loan which she obtained in 2004. She gets a Loan Application Form from her local branch of AIB. (a) Complete Rhonas Loan Application Form supplied, on todays date.
PERSONAL LOAN APPLICATION FORM AIB
Rhona King Name(s) _____________________________ Ms Mr, Mrs, Ms _____________________________

Address(es) _____________________________ 56 Banks Road _________________________________________ Cork _________________________________________ _________________________________________
LOAN REQUIRED
12,500 Amount _______________________________ Purchase of car Purpose ________________________________ 4 years How long do you want the loan for? ________
How much can you repay each month? ______________________________________ 290
10 years Number of years at this address ___________ Owned Owned or Rented ________________________
Telephone ______________________________ 021-134567 Date of Birth ____________________________ 14/8/1970 Details of existing loans Lender _________________________________ Cork Credit Union _________________________________________ Amount
59,000 Mortgage amount (if any) ________________ 3,000 Annual repayments on mortgage _________
Mortgage borrowed from __________________ Startup Building Society EMPLOYMENT DETAILS
64 per month ______________________________________

Annual repayments
768 ______________________________________
_________________________________________
Legal secretary Occupation ______________________________

Employers Name & Address_______________
Smart and Keane Solicitors, _________________________________________

_________________________________________ Airport Road, Cork Net pay per month ______________________ 1,574 No. of years in your present employment
14
SIGNATURE ________ Rhona King DATE ___________________________________
(b) If the bank grants Rhona the loan for the car at 290 per month, how much interest will 1,420 she have paid after four years? _________________________ Show your workings in the space provided.
Total repaid 13,920 less loan 12,500 = 1,420
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(c) Explain the following terms: (i) Mortgage This is a long-term loan which is used to purchase or build a house. (ii) Debtor This is a person who owes money to another person. (iii) Bankruptcy This is where the court declares publicly that a person cannot pay money owing.
Chapter 16 Insurance
1. (a) Explain the following insurance terms: (i) Premium This is payment made to an insurance company when insurance is purchased. (ii) Adequate Insurance This insures all possible risks for the correct amount.
(iii) All Risks Insurance This covers any accidental loss or damage to selected household items anywhere in Ireland or Europe.
(iv) Proposal Form This is an application form that has to be completed when purchasing insurance.
(b) What conditions must be present before a risk is insurable? (i) There must be an insurable risk (ii) There must be a large number of similar risks insured (iii) All losses must be accidental (iv) It must be possible to calculate the risk of a loss occuring 2. Indicate with a tick which of the following are true or false.
True False
(a) A premium is paid by the insurer to the insured (b) The principle of Utmost Good Faith applies to the completion of a proposal form (c) Comprehensive car insurance is required by law (d) The VHI is an example of an insurance company (e) Endowment assurance is the same as whole life assurance
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3. Name and explain the two principles of insurance that apply to the purchasing of insurance/ assurance. Insurable interest 1. Name: Explanation: The insured must gain from the existence of the item insured and suffer from its loss. 2. Name: Utmost Good Faith Explanation: All questions asked must be answered truthfully. 4. Martin Keane, aged 27 and single, of 12 Roy Lane, Waterford, is a carpenter. He wishes to purchase an endowment policy of 100,000 on his life. He likes to go mountain climbing and is hoping to get his helicopter licence next year. Martin does not drink or smoke and is in good health. He will pay his monthly premium by standing order. Assume that you are Martin Keane, complete the partially completed life assurance proposal form below on todays date.
EUROLIFE INSURANCE LTD Life Assurance Proposal Form Please answer all questions fully to the best of your knowledge. Failure to do so may result in all or part of the benefits under this policy being cancelled. Please use BLOCK CAPITALS. 1. Name Address
MARTIN KEANE 12, ROY LANE, WATERFORD 28
Please tick Single Occupation Sum to be insured Married
Age Next Birthday
CARPENTER 100,000
2. Type of Policy ENDOWMENT Premiums to be paid monthly Method of Payment
STANDING ORDER
Please tick Yes No No HELICOPTER PILOT No
3. Have you ever had Life Assurance
4. Are you likely to: (a) Fly other than as a fare paying passenger Please tick Yes If Yes give details
(b) Engage in a hazardous occupation or hobby 5. Are you in good health
Please tick Yes If Yes give details
MOUNTAIN CLIMBING
Please tick Yes If No give details No
6. Do you smoke 7. Do you consume alcohol
Please tick Yes No If Yes state how many Please tick Yes No If Yes state average daily consumption
Declaration I declare that the above statements are true and complete, and I agree that these statements, together with the statements to be made to a doctor, if required, shall form the basis of the contract between me and the Insurance Company. Date Signature of Proposer
Martin Keane
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5. Why might a person purchase comprehensive insurance for their new car? Comprehensive insurance will give third party, fire and theft cover as well as covering accidental damage to the insureds own car.
6. Mary Mulligan, born in 13 May 1981 and single, lives in MBNA View, Carrick-on-Shannon, Co. Leitrim. Mary works as an accountant in a local credit card company and wishes to purchase comprehensive insurance on her car, a Nissan Micra Reg. No. 05LM612, valued at 19,600. Mary obtained a full licence in 2004 and has no driving convictions. This is her first insurance. Complete the partially completed car insurance proposal form from the following details.
XA INSURANCE LTD CAR INSURANCE PROPOSAL FORM Please answer all questions fully to the best of your knowledge. Failure to do so may result in all or part of the benefits under this policy being cancelled. Please use BLOCK CAPITALS. THE PROPOSER Name and Address
MARY MULLIGAN
MBNA VIEW, CARRICK-ON-SHANNON, CO. LEITRIM

Date of Birth
13/5/1981 AT THE ABOVE ADDRESS ACCOUNTANT
Address where car is usually kept Occupation THE CAR Make and Model Engine Type 1400cc
NISSAN MICRA
Year of Manufacture Registration No. Value COVER Type of policy required Use of car 19,600
2005 05 LM 612
Please tick Comprehensive Pleasure Third Part Fire and Theft Business
OTHER INFORMATION Have you passed your driving test Will the car be driven by anyone under twenty-five Have you had any accidents in the last four years Have you or anyone who will drive this car had any driving convictions in the last five years Please tick Yes No Please tick Yes No If Yes state when BY MYSELF Please tick Please tick Yes Yes No No
DECLARATION I declare that I am the owner of the vehicle, that the above statements or any other written statements by me are true and that they and this proposal shall be the basis of the contract between me and the Insurance Company. Date / / Proposers Signature
Mary Mulligan
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Chapter 17 Premium Calculation and Estimating Compensation

1. Column 1 is a list of insurance terms. Column 2 is a list of possible explanations. Match the two lists by placing the letter of the correct explanation under the relevant number in the table below. (One explanation does not refer to any term.)
Column 1 Terms 1. 2. 3. 4. Underinsurance Loadings Actuary Principle of Contribution (a) (b) (c) (d) (e) Column 2 Explanations Calculates the amount of the premium Applies in cases where something is insured by more than one insurer Additional premiums charged due to higher risks Calculates the amount of compensation to be paid out Applies in cases of partial loss
1.
2.
3.
4.
2. The Mahon family wish to insure their house for 300,000 and their contents for 100,000. They have a burglar alarm and are members of the Killoe Neighbourhood Watch scheme. They were given the following quotation: House insurance 2.5 per 1,000 and contents 7.5 per 1,000. They will receive deductions on contents insurance of 10% for having an alarm and being a member of a neighbour watch scheme. (a) Calculate their total premium. (b) Assume you are Theresa Mahon, complete the cheque No. 102, payable to Ross Insurers, on 1/5/2006. (a)
Details Calculations
House 300,000 Contents 100,000 Less deductions Alarm system Neighbour watch scheme Total Premium
2.5 per 1,000 7.5 per 1,000 10% of 750 10% of 750
Premium 750 750
50
600 1,350
(b)
SPECIMEN
1/5/06 Ross Insurers 1,350 Thirteen hundred and fifty euro 1,350
Ross Insurers
1/5/2006
Theresa Mahon
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3. The Slevin family wish to insure their house for 200,000 and their contents for 50,000. They are members of the Newtown Neighbourhood Watch scheme and have an approved alarm system. They carry on the family business from their house. The Slevins were given the following quotation: House insurance 2 per 1,000 and contents 8 per 1,000. There will be a loading of 20% on both house and contents for carrying on the business from home. They will receive deductions on contents insurance of 10% of basic plus loadings for having an alarm and being a member of a neighbour watch scheme. (a) Calculate their total premium. (b) Assume you are Geraldine Slevin, complete the cheque No. 678, payable to Conway Insurers, on 1/5/2007. (a)
Details
House 200,000 Contents 50,000 Add loadings Less deductions Total Premium
Calculations 2 per 1,000
Premium 400 400 800 160 960 96 864
8 per 1,000 20% of 800 20% of 480
(b)
SPECIMEN
4. Complete the partially completed claims form provided from the following details. On 25 May 2005 at 22.45 pm Maura Smith, 15 Downs Avenue, Mullingar, Co. Westmeath returned home to find her house broken into. Missing were her new Dell Laptop which she had purchased ten days earlier for 1,400 and a Cannon camera purchased in 2003 for 600. She reported the theft to her local garda station. She estimated that her camera was worth 500.
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EAT INSURERS LTD LOSS / DAMAGE CLAIMS FORM Name Address Policy No. Occupation Details of Loss / Damage Reported at Garda Station Description of Items Lost / Damaged Dell Laptop
Maura Smith 15, Downs Avenue, Mullingar, Co. Westmeath P 2312 Bus ireann driver Time: 22.45 pm Date 25 May 2005
Name: Mullingar Garda: Joan Kelly Deduction for Date of Purchase Cost Price Amount Claimed Use / Wear/ Tear 1,400 15/5/2005 1,400 0 2003 600 500 100
Cannon camera
I declare that the above statements are true to the best of my knowledge
Smith Signed Maura _____________________ Date: ______________ 26 May 2005
5. Complete the partially completed claims form provided from the following details. On 5 May 2006 at 02.30 am Paddy Neary, 46 Doran Road, Waterford had his 2005 Micra 05 WD 796 stolen from outside his house. He had purchased the car in March 2005 for 19,500 and he estimated that it was worth 16,000. He reported the theft to his local garda station. His policy number was P1167L.
WAT INSURERS LTD LOSS / DAMAGE CLAIMS FORM Name Address Policy No. Occupation Details of Loss/Damage Reported at Garda Station Description of Items Lost / Damaged
Paddy Neary 46, Doran Road, Waterford P 1167L Factory Worker Time: 2.30 am
Date 5 May 2006 Deduction for Amount Claimed Use / Wear / Tear 3,500 16,000
Name: Ballybricken Garda: J.P. Rock Date of Purchase Cost Price 19,500
Micra 05 WD 796
March 2005
I declare that the above statements are true to the best of my knowledge Signed Paddy Neary Date: 6 May 2006
6. A house was fully insured for 100,000. Fire caused 20,000. How much compensation should be paid? 20,000
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7. A house was insured for 300,000 with A Ltd and for 300,000 with B Ltd. The house was burned. How much compensation can the insured expect to receive? Give a reason for your answer.
Calculations 150,000 from A Ltd and 150,000 from B Reason: The Principle of Contribution Applies - cannot gain Answer 300,000
8. A person who had his car stolen was compensated fully by an insurance company. The thief who stole the car was eventually caught. Who has the right to sue the thief?
The insurer, as the principle of subrogation applies.
9. A house with a market value of 250,000 was insured for 200,000. Fire caused 50,000 damage. How much compensation should be paid? Give a reason for your answer.
Calculations 4/5 of 50,000 Reason: The house was underinsured by 1/5 of its value Answer 40,000
10. Contents valued 40,000 were insured for 30,000. A thief stole 20,000 worth. How much compensation should be paid? Give a reason for your answer.
Calculations 3/4 of 20,000 Reason: The contents were underinsured by 1/4 of their value Answer 15,000
11. Martins car insurance policy had an excess clause of 500. An accident caused 1,400 damage. How much compensation can he expect to receive? Give a reason for your answer.
Calculations 1,400 less 500 Reason: Martin had agreed to pay the first 500 of a loss Answer 900
12. Name and explain the three insurance principles that apply to the estimation and payment of compensation.
Name 1. Indemnity Explanation
This states that the insured cannot gain from insurance
2. Contribution
When two or more insurers insure some item, they share the compensation
3. Subrogation
When an insurer pays compensation, it takes over the legal rights of the insured
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Chapter 18 Economic framework

1. Complete the following sentences: (a) Enterprise is the factor of production that brings together land, labour and capital. (b) Resources are things that are used in the production of goods and services. (c) The term GNP means Gross National Production. 2. To which factors of production do the following refer? Lorries, lorry drivers, engineers, trees, machinery, shopkeeper, bank loan, farmer, hairdresser, rivers.
Land Labour Capital Enterprise
Trees Rivers
Lorry drivers Engineers Hairdresser
Lorries Machinery Bank loan
Shopkeeper Farmer
3. To a teenager in Ireland, which of the following are needs and which are wants? Place a tick in the appropriate box in each case and give a brief explanation for your answer.
Items Clothes Computer games Food School Books Wants Needs Explanation
You need to wear clothes You can do without computer games You need food to survive You need books to be educated
4. Sen has 20. He can buy one CD, a football or a school tie. He chooses to buy a school tie. (i) What is the financial cost of buying the school tie? 20 (ii) What is the opportunity cost of his decision? A CD and a football 5. Rose has 30. She can buy cosmetics, a mobile phone credit or join the supporters club of her favourite football team. She joins the supporters club. (i) What is the financial cost of joining the supporters club? 30 (ii) What is the opportunity cost of her decision? Cosmetics and mobile phone credit 6. Complete the following chart naming the four factors of production and giving two examples of each.
Factors of Production 1. Land 2. Labour 3. Capital 4. Enterprise Example 1 Example 2
Fields Engineer Buildings Denis OBrien
Mines Block layer Loans Michael OLeary
7. Answer the following questions on employment and unemployment. (a) The labour force consists of: people who are able and available to work. (b) The implications for the government of high unemployment are: less income from taxation and more social welfare payments.
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8. Calculate the rate of economic growth from the following information. (i) (ii) (iii) (iv) Production of goods and services in Year 1 23,000 and Year 2 24,610 Production of goods and services in Year 3 28,000 and Year 4 29,400 Production of goods and services in Year 5 32,000 and Year 6 33,600 Production of goods and services in Year 7 36,000 and Year 8 38,880
Formula (i) (ii) (iii) (iv) Workings Answer
Difference 100 Original amount Difference 100 Original amount Difference 100 Original amount Difference 100 Original amount
1,610 100 23,000 1,400 100 28,000 1,600 100 32,000 2,880 100 36,000
7% 5% 5% 8%
9. Calculate the rate of inflation from the following information. (i) (ii) (iii) (iv) Cost of living in Year 1 2,000 and Year 2 2,120 Cost of living in Year 3 1,800 and Year 4 1,872 Cost of living in Year 3 1,950 and Year 4 2,028 Cost of living in Year 3 3,500 and Year 4 3,745
Formula (i) (ii) (iii) (iv) Workings Answer
Difference 100 Original amount Difference 100 Original amount Difference 100 Original amount Difference 100 Original amount
120 100 2,000 72 100 1,800 78 100 1,950 245 100 3,500
6% 4% 4% 7%
10. (a) Explain the term economic growth This is the increase in the production of goods and services from one year to the next. (b) Name two consequences of economic growth Higher standard of living. More money to create employment. (c) Name two consequences of high inflation Workers will look for more wages. Irish goods and services will be too expensive.
257
Chapter 19 Budgeting: The National Budget

1. Indicate with a tick which of the following are true or false.
True False
(a) A budget deficit is where income is greater than expenditure (b) FS is an example of a government department (c) The national debt is money owed to the government (d) Roads and school buildings are examples of capital expenditure (e) The Minister for Education and Science presents the budget to Dil ireann in December each year 2. Complete the following sentences: (a) Current expenditure includes spending on wages of teachers and nurses as well as supplies for hospitals. (b) An increase in unemployment can effect the budget in two ways: There will be less income tax received and more social welfare payments to be made.
3. Tick the correct answer. When governmentplanned expenditure is greater than planned spending the budget is a: (a) Surplus Budget (b) Balanced Budget (c) Deficit Budget 4. Tick the correct answer. An increase in government income without any changes in spending will: (a) Decrease the budget deficit (b) Increase the budget deficit (c) Have no effect on the budget deficit 5. List four examples of spending on social welfare by the Minister of Social, Community and Family Affairs. (a) Old age pension (c) Free school books (b) Unemployment assistance (d) Disability payments
258
6. The following figures were produced by a Minister of Finance on Budget Day as projections for the year 2003.
Main Item of Revenue and Expenditure Health and Children PAYE Education and Science Excise Duty VRT Environment VAT Debt Servicing Justice and Law Reform Corporation Tax Social, Family and Community Affairs Estimated figures in millions 350 600 335 80 25 268 385 195 157 198 366
(a) From the above information, draft the National Budget for 2003 in your copybook.
National Budget Income millions PAYE Excise VRT VAT Corporation Tax Balance (Deficit) 600 80 25 385 198 383 1,671 Expenditure millions Health and Children Education and Science Environment Debt Servicing Justice and Law Reform Social, Family 350 335 268 195 157 366 1,671
(b) Is this budget a surplus or deficit budget? Deficit budget of 383m Give one example of current expenditure by: (i) the Department of Justice and Law Reform Wages of judges (ii) the Department of Social, Family and Community Affairs Old age pension (c) Suggest one effect each of the following would have on a National Budget: (i) an increase in VAT: Increase income / Decrease deficit Increase expenditure / Increase deficit (ii) an increase in the number of Garda:
259
7. The following figures were provided by the Minister of Finance on Budget Day as his prediction for the year ahead.
Main Item of Revenue and Expenditure Contributions to EU Social, Family and Community Affairs Corporation Tax Education and Science Income Tax Debt Servicing VAT Health and Children Excise Security Stamp Duty Industry, Farming and Tourism Estimated figures in millions 1,400 10,300 5,100 5,300 9,300 2,500 9,800 8,600 4,900 2,500 2,000 2,900
(a) From the above information, draft the National Budget for the year ahead in your copybook. Show clearly the total income and total expenditure and balance the budget.
National Budget Income millions Corporation Tax Income Tax VAT Excise Stamp duty Balance (Deficit) 5,100 9,300 9,800 4,900 2,000 2,400 Expenditure millions Contributions to EU Social, Family Education and Science Debt Servicing Health and Children Security Industry, Farming, Tourism 33,500 1,400 10,300 5,300 2,500 8,600 2,500 2,900 33,500
(b) (i) Is this budget a surplus or deficit budget?
Deficit of 2,400 million
(ii) Suggest two courses of action which the government can take to rectify a budget deficit. 1. 2. Increase taxation / VAT, Income Tax Reduce spending / Reduce Civil Service
(c) What effect, if any, has a budget surplus on the National Debt of a country? It could be used to reduce the debt. (d) From 2007 Ireland will pay more to the EU than it receives. What effect will this have on the Irish Governments finances? The government will have to find more income from taxes and reduce spending.
Chapter 20 Foreign Trade

1. Which of the following are in the European Union. Tick
The Netherlands Estonia Bulgaria Austria
to indicate membership.
Norway Turkey Russia
260
2. As far as Ireland is concerned, two of the following are invisible imports. Tick 0 which are invisible. Irish fans going to Germany for the World Cup finals Irish lamb sold to France English rugby fans coming to Ireland for a rugby match Robbie Keane being paid a match fee to play for Ireland 3. Complete the following sentences: (a) Import substitution means replacing foreign goods with Irish goods. foreign tourists in Ireland, money earned 0
(b) Examples of invisible exports include by U2 and the Corrs.
4. Tick 0 which of the following are imports or exports. (a) (b) (c) (d) (e) (f) (g) Britney Spears on tour in Ireland Irish mushrooms sold to France Irish tourists in Greece Purchase of clothes on the internet from New York fashions Ryanair flying passengers from Rome to Berlin Purchase of Toyota cars from Japan U2 on a worldwide tour
Exports
Imports
0 0 0 0 0 0 0
5. In the spaces provided, write the names of the currencies of the following countries:
Country United Kingdom Sweden Italy Japan United States Currency
Pound Sterling Krona Euro Yen US Dollar
6. Complete the chart below and state whether the balance of trade is a surplus or deficit in each year.
Year 1 Visible Exports Visible Imports Balance of Trade m 17,300 17,680 Year 2 Visible Exports Visible Imports Balance of Trade m 23,400 21,980
380
1,420
The balance of trade is a _________________________________ deficit in Year 1 and a surplus in Year 2. 7. Complete the chart below and state whether the balance of trade is a surplus or deficit in each year.
Year 3 Visible Exports Visible Imports Balance of Trade m 18,900 18,880 20 Year 4 Visible Exports Visible Imports Balance of Trade m 27,900 29,670 1,770
surplus in Year 3 and a deficit in Year 4. The balance of trade is a ________________________________
261
8. Complete the chart below and state whether the balance of payments is a surplus or a deficit in each year.
Year 1 Total monies coming into Ireland Total monies going out of Ireland Balance of Payments m 76,500 77,540 Year 2 Total monies coming into Ireland Total monies going out of Ireland Balance of Payments m 87,760 86,670
1,040
1,090
deficit in Year 1 and a surplus in Year 2. The balance of payments is a _________________________________ 9. Prepare the balance of payments of a country from the following details, and state whether the balance of payments is a surplus or a deficit: Visible exports 23,000; other monies coming in 15,000; other monies going out 6,000; visible imports 42,000. Complete the blank Balance of Payments Statement below.
Year 1 m
Total monies coming into Ireland Total monies going out of Ireland Balance of payments
38,000 48,000 10,000
deficit. The balance of payments is a _____________________________ 10. Calculate the Balance of Trade and Balance of Payments from the following details and complete the blank statements below and state if the balance of trade is a surplus or a deficit: Visible imports 34,000; other monies coming in 13,200; visible exports 37,430; other monies going out 16,780. Balance of Trade Statement
Year 1 m
Visible exports Visible imports Balance of trade
37,430 34,000 3,430
surplus. The balance of trade is a _____________________________ Balance of Payments Statement

Year 1 m
Total monies coming into Ireland Total monies going out of Ireland Balance of payments
50,630 50,780 150
262
11.
(a) If the rate of exchange is 1 = $1.16, how much would you receive if you converted $1,340 to euro? Answer 1,155.17 Workings 1340 1.16 (b) If the rate of exchange is 1 = 0.66, how much would you receive if you converted 1,250 to euro? Answer 1,893.94 Workings 1250 0.66 (c) If the rate of exchange is 1 = 0.66, how much would you receive if you converted 2,500 to sterling? Answer 1,650 Workings 2500 0.66
Chapter 21 Forms of Ownership

1. Tick 0 the most appropriate answer below. A private company is (a) A business run by one person (b) A business owned by the state (c) A business owned by between one and fifty people
2. Tick 0 the most appropriate answer below. Which of the following state companies is involved in production? (a) An Post (b) An Bord Bia (c) Bord na Mna (d) Filte Ireland 3. Explain: (a) Limited Liability the company. Shareholders in a company can only lose what they invested in 0
(b) Dividend This is a share of the profits made by a company in a given year, paid to the shareholders. 4. Indicate with a tick 0 which of the following are true or false. (a) Private limited companies have unlimited liability (b) RTE is an example of a co-operative (c) State businesses do not charge for their services (d) A shareholder in a co-operative has only one vote (e) A sole trader can keep half of the profits made
True
False
0 0 0 0 0
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5. 6.
The maximum number of shareholders a private limited company can have is
50
shares.
Compare Sole Traders, Co-operatives and Private Limited Companies under these headings: Control, Profits and Number of Owners.
Forms of Ownerships Sole traders Co-operatives Private Limited Company Control Profits Number of Owners
Total control Shared Shared
Keeps all Shared Shared
1 8+ 150
7.
Name and explain five different types of state-owned companies. 1. Name: Bord na Mna Produces peat
Explanation:
2. Name:
ESB Produces electricity
Explanation:
3. Name:
Filte Ireland
Explanation: Encourages people to holiday in Ireland
4. Name: An Post Explanation: Provides a postal delivery service
5. Name:
Bus ireann Provides bus transport throughout Ireland
Explanation:
Chapter 22 Private Limited Company

1. Indicate the correct answer to (a) and (b) with a tick 0. (a) A private limited company has the following letters after its name. PLC STD LTD CPU 0
(b) The document that deals with the internal running of a company is: (i) Memorandum of association (ii) Articles of association 0 2. Indicate the correct answer to the following statement with a tick 0. The document which shows that a company is a legal entity is called: (a) A share certificate (b) Articles of association (c) A certificate of incorporation
264
3.
On 1 July 2006, Tom and Marie Kelly of Hill Top Road, Galway decided to set up a private limited company called Kelly Insurers Ltd. The object of the company was to sell household, personal and business insurance. Their nominal share capital was 200,000 1 ordinary shares (200,000). They each purchased 15,000 1 ordinary shares. They lodged the money invested in shares, in the company bank account. (a) Complete the memorandum of association below.
MEMORANDUM OF ASSOCIATION 1. The name of the Company is: Kelly Insurers Ltd 2. The Objects of the Company are: Sale of household, personal and business insurance 3. The Liability of the shareholders is Limited. 4. The Share Capital of the Company is 200,000 1 Ordinary Shares. divided into 200,000
We the several persons whose names, addresses and descriptions are subscribed wish to be formed into a Company in pursuance of the Memorandum of Association and we agree to take the number of shares in the Capital, of the Company set opposite our names. Name, Address of each Subscriber Number of shares taken by each Subscriber
Tom Kelly Hill Top Road Galway
15,000
Marie Kelly Hill Top Road Galway

Date 1 July 2000
15,000
Signed: Tom Kelly, Marie Kelly Witness to the above signatures:
Martin Jones
(b) Record the issue of shares in the bank and ordinary share capital accounts below.
General Ledger Date Details F Total Date Details F Total
Bank A/C
1/7/06
Share cap.
30,000
Share Capital A/C
1/7/06
Bank
30,000
4. On 1 October 2007, Nora Martin, Ballsbridge, Dublin and Philip Keogh, Dart View, Skerries, Co. Dublin, formed a private limited company called NK Ltd. They completed all the necessary documents and sent them to the Registrar of Companies. The objects of the company are to produce and sell business books and teaching aids. The authorised share capital of NK Ltd is 250,000 1 ordinary shares. On 20 October 2007 Nora and Philip purchased 25,000 1 ordinary shares. The money received from the issue of shares was lodged to the company bank account.
265
(a) Complete the memorandum of association below.

MEMORANDUM OF ASSOCIATION 1. The name of the Company is: NK Ltd 2. The Objects of the Company are: Produce and sell business books and teaching aids 3. The Liability of the shareholders is Limited. 4. The Share Capital of the Company is 250,000 1 Ordinary Shares. divided into
250,000
We the several persons whose names, addresses and descriptions are subscribed wish to be formed into a Company in pursuance of the Memorandum of Association and we agree to take the number of shares in the Capital, of the Company set opposite our names. Name, Address of each Subscriber Number of shares taken by each Subscriber
Nora Martin Ballsbridge Dublin
25,000
Philip Keogh Dart View Skerries Co, Dublin

Date 20/10/2007
25,000
Signed: Nora Martin, Philip Keogh Witness to the above signatures:
Fiona Hyde
(b) (i) Record the issue of shares in the bank and ordinary share capital accounts below. (ii) Show the opening Balance Sheet of NP Ltd on 20 October 2007. (i)
Date Details F General Ledger Total Date Bank A/C
Details
Total
20/10/07
Share cap.
50,000
Share Capital A/C
20/10/07
Bank
50,000
(ii)
Balance Sheet of NK Ltd as on 20 October 2007 Current Assets
Bank
Financed By
50,000 Authorised 250,000 Issued 50,000 50,000
250,000 1 ordinary shares
(c) Name the document that the Registrar of Companies would send to NK Ltd when the company was formed: ______________________________________________________ Certificate of Incorporation
266
Chapter 23 Chain of Production

1. Explain the term Primary Production. Primary production is the extraction of raw materials from land, sea and air.
Two examples of primary production include: Fishing (a) (b)
Mining
2. Indicate with a tick 0 which of the following are examples of primary, secondary and tertiary production.
Good/Service Shoe manufacturer Advertising manufacturer Fisherman Coal mining Credit Union Builder Primary Secondary Tertiary
0 0 0 0
0 0
3. Column 1 is a list of people in the chain of production. Column 2 is a list of possible explanations of the work which they do. Match the two lists by placing the letter of the correct explanation under the relevant number in the table below. One explanation does not refer to any of the people mentioned. (Junior Certificate Ordinary Level 1999 amended for euro)
Column 1 Terms Wholesaler Consumer Retailer Column 2 Explanations (a) Makes goods for the public (b) Sells goods to the shops for resale (c) Sells goods for private use (d) Buys goods for private use 1. b 2. d 3. c
1. 2. 3.
4. Fill in the blank spaces in the two channels of distribution below:

1. (a) Manufacturer (b) Wholesaler (c) Retailer (a) Wholesaler (b) Retailer (c) Consumer 2.
Chapter 24 People at Work

1. Write brief notes on: (a) The live register measures the level of unemployment, i.e. those who are able and willing to work
267
Junior Certificate Business Studies Workbook
(b) Self-employed These are people who work for themselves for payment.
(c) Managing Director The M.D. is appointed by the Board of Directors and is responsible for the day-to-day running of the company. 2. Indicate with a tick 0 which of the following are true or false.
True False
(a) Job sharing means dividing one job between two workers (b) A teacher is an example of a self-employed person (c) An entrepreneur can never make a loss (d) The purchasing department deals with the hiring of workers (e) An employer has rights and responsibilities 3. Show, with four examples, the difference between work and employment.
Example Note taking 1. Cooking a meal 2. Preparing accounts 3. Training a team 4. Painting Work Student taking notes in class
0 0 0 0 0
Employment Reporter taking notes for newspaper
Parents making dinner Student doing accounts Teacher training a school team Jack painting a house
Chef preparing dinners Accountant doing accounts Sir Alex training Man Utd Jack B. Yeats painting a portrait
4. Complete the sentences below by filling the blank spaces from the following list of terms. One term does not match. Labour Force, Responsibilities, Work, Risks, Shareholders, Unemployed, Rewards, Rights, Employment, Managing Director (a) The difference between work and employment labour force unemployed is payment. . .
(b) Those who are available for work are referred to as the (c) People who want to work but can not find a job are called (d) There are risks and rewards
involved in being self employed. Managing Director . .
(e) The Board of Directors appoint the (f) Employees have certain rights
and
responsibilities
268
Chapter 25 Being an Employer

1. Match the following methods of calculating the gross wage for the different type of workers: Hourly rate; Commission; Piece rate.
Workers Car sales person Blocker layer Office worker Garda Insurance sales person Strawberry picker Method of calculating Gross Wage
Commission Piece rate Hourly rate Hourly rate Commission Piece rate
2. Complete the following sentences below by inserting a suitable terms. (a) Equal opportunity employers employ both female workers. (b) A required. (c) Workers on times. of PRSI contract flexitime male and
sets out the work to be done and the qualifications can start and finish work at different employers share gross wage .
(d) The total cost of employing workers is made up of plus
3. Study the job advertisement and explain the terms in bold.

MORGAN INSURANCE BROKERS Ltd General Insurance Clerk required Computer knowledge and bookkeeping skills an advantage Basic Wage 390 gross for a 39 hour week Overtime also a possibility Subsidized canteen and travel Apply in writing to The Human Resources Manager MORGAN INSURANCE BROKERS Ltd, Indemnity Road, Sligo MORGAN INSURANCE BROKERS Ltd is an equal opportunities employer
Basic Wage: Overtime:
This is payment for working normal hours, e.g. a 39-hour week. This is additional payment for working more than 39 hours. These are known as Benefits in Kind and are an extra type The person responsible for employing staff.
Subsidized canteen and travel: of payment. Human Resources Manager:
269
Junior Certificate Business Studies Workbook
4. Study the Contract of Employment given below and answer the questions that follow.
Employer: Employee: Hours of work per week: Job Description: Rates of Pay: Basic: Bonus: Date of commencing work: Holidays: Pension: Company Car: Health Insurance: Signed: Date: 45,600 1% of sales over 25,000 copies 1/5/2006 Four weeks Non-contributory Nissan Micra Vivas premium paid in half Contract of Employment Finn Harps Monthly Journal Mire McGee 38 hours flexi-time Assistant editor
Mire McGee Fergus Healy

30 April 2006
Mire McGee (a) Who is being employed? _______________________________________________ Assistant Editor (b) What job has the employee obtained? _____________________________________ 876.92 (c) What is the basic weekly wage? _______________________________________
car; non-contributory pension (d) What additional benefits will the employee receive? Company _________________________
To show your rights (e) Why is it important to have a contract of employment? _______________________ 5. Tina Clarke is paid 320 for a 40-hour week. This week she works 48 hours. Overtime is paid at the rate of 12 per hour. Her tax credits are 30 per week. Her tax rate is 20%. PRSI is 10% of gross. Other deductions are Union fee 12 and VHI 18. Calculate her Net Wage and complete the wage slip below.
Wage Slip
Tina Clarke Gross Wage Basic O/Time Total PAYE Deductions PRSI VHI Union Total Net Wage Employee No. 1221
320
96
416
53.20
41.60
18
12
124.80
291.20
6.
Andrew Conway earns 890 per week. His standard cut-off point is 565.38 and he has tax credits of 49.23 His tax rates are 20% on the first 565.38 and 42% on the remainder of his income. He pays per week 7.5% PRSI, BUPA 25, Savings 12. (a) Calculate his income tax due, his PRSI due and his Net Wage for week No. 3. (i) Income Tax 200.19 63.75 (ii) PRSI (iii) Net Wage 589.06
270
(b) Complete Andrew Conways wage slip.

Wage Slip
Andrew Conway Gross Wage Week no. Total PAYE PRSI Deductions BUPA Savings Total Net Wage Employee No. 1335
890
200.19
63.75
25
12
300.94
589.06
7.
Sonia Stone earns 1,300 per week. Her standard cut-off point is 565.38 and she has tax credits, Personal Credit 1,520 and Employee Credit of 1,040. Her tax rates are 20% on the first 565.38 and 42% on the remainder of her income. She pays per week 7.5% PRSI, VHI 15, Union 10. (a) Calculate her income tax due, her PRSI due and her Net Wage for week No. 9. (i) Income Tax (ii) PRSI (iii) Net Wage 372.39 97.50 806.37
(b) Complete Sonia Stones wage slip below.

Wage Slip
Sonia Stone Gross Wage Week no. Total PAYE PRSI Deductions VHI Union Total Net Wage Employee No. 5678
1,300
372.39
97.50
15
10
494.89
805.11
8.
(a) Name two rights and responsibilities of an employer. Select suitable staff (i) _____________________________________________________________________ Dismiss dishonest staff (ii) _____________________________________________________________________ (b) Assume you are the principal of St. Marks Secondary School. Draft a suitable job description in your copybook for the position of PE Teacher. The job description should contain four important pieces of information. (c) St. Marks Secondary School has three non-teaching employees who are paid on a weekly basis. William Kenny pays 71 income tax, Brd Moore pays 63 income tax, and Philip Farrell pays 47 income tax. Each employee pays PRSI at the rate of 8%. The employers rate of PRSI is 12%. (i) Complete the Wages Book, for the month of May, 2005, using the partially completed Wages Book provided. (ii) Calculate the total cost of wages for the month of May, 2005.
271
(i)
Date Name Gross Wages PAYE 31/5/2005 31/5/2005 31/5/2005 William Kenny Brd Moore Philip Farrell Total 600 560 400 1,560 71 Deductions PRSI 48 Total 119 Net Wages Employers PRSI 481 72
63 47 181
44.80 32 124.80
107.80 79 305.80
452.20 321 1,254.20
67.20 48 187.20
(ii) Total cost of wages: _________________________________________ 1747.20 (d) Record the total cost of wages for the month of May 2005 in the Wages Account and Analysed Cash Book of St. Marks Secondary School provided.
General Ledger Date Details F Total Date Details F Total Wages A/C
May 2005
Bank
1,747.20
Analysed Cash Book (p1)
Date
Details
Bank
Wages
May 2005
Wages
GL 1
1,747.20
1,747.20
9. (a) Complete the wages book on the 27 February 2005 below from the following data. (b) Calculate the total cost of employing the workers, assuming employers PRSI is 10% of gross wage. Gross wage 360; PAYE 90; PRSI 5% of gross; Union 10; VHI 10; Pension 8. Jackie Mulligan: Gross wage 280; PAYE 72; PRSI 5% of gross; Union 10; VHI 15; Pension 6. Jenny Yorke: Gross wage 450; PAYE 110; PRSI 5% of gross; Union 10; VHI 20; Pension 16. Ryan Martin: (a)
Date Name Gross Wage PAYE Deductions PRSI 18 Pension 8 VHI Union 10 10 Total 136 Net Employer Wage s PRSI 224 36
27/2/05 R. Martin 27/2/05 J. Mulligan 27/2/05 J. Yorke 27/2/05 Total
360 280 450 1,090
90
72 110 272
14 22.50 54.50
6 16 30
15 20 35
10 10 30
117 178.50 431.50
163 271.50 658.50
28 45 109
1,199 (b) Total cost of wages: ___________________________________
272
10.
Answer (a) and (b) below from the following data. Polly Dunne: Gross wage 570; PAYE 190; PRSI 5% of gross; Union 15; Savings 30; Pension 13. Mini McGrath: Gross wage 680; PAYE 230; PRSI 5% of gross; Union 15; Savings 40; Pension 19. Mark Kelly: Gross wage 380; PAYE 90; PRSI 5% of gross; Union 15; Savings 10; Pension 10. (a) Complete the wages book on the 15 March 2006. (b) Calculate the total cost of employing the workers, assuming employers PRSI is 10% of gross wage.
Date 15/5/06 Name Deductions Gross Wage PAYE PRSI Pension Savings Union Total Net Employer Wage s PRSI
(a)
15/5/06 P. Dunne 15/5/06 M. McGrath 15/5/06 M. Kelly 15/5/06 Total
570 680 380 1,630
190 230 90 510
28.50 34 19 81.50
13 19 10 42
30 40 10 80
15 15 15 45
276.50 293.50 338 144 342 236
57 68 38 163
758.50 871.50
(b) Total cost of wages: 11.
1,793
Answer (a) and (b) below from the following data. Total cost of employing ten workers 15,000 plus employer PRSI 1,500. (a) Total cost of wages: 16,500 (b) Show the entries in the Wages Account and Analysed Cash Book and the extract in the Profit and Loss Account below on 31 March 2006.
General Ledger Date Details F Total Date Wages A/C Details F Total
31/3/06
Bank
ACB
16,500
Analysed Cash Book (Credit Side) Date Details Bank Wages
31/3/06
Wages
16,500
16,500
Profit and Loss Account for year ended 31 March 2006 Less Expenses
Wages
16,500
12.
Answer (a) and (b) below from the following data. Total cost of employing workers 16,000 plus employers share of PRSI 10%. (a) Total cost of wages: 17,600 (b) Show the entries in the Wages Account and Analysed Cash Book and the extract in the Profit and Loss Account below on 30 September 2007.
General Ledger Date Details F Total Date Wages A/C Details F Total
30/9/07
Bank
ACB
17,600
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30/9/07
Wages
17,600
17,600
Profit and Loss Account for year ended 30 September 2007 Less Expenses
Wages
17,600
13.
Answer (a) and (b) below from the following data. Total cost of employing ten workers 32,000. (a) Total cost of wages: 32,000 (b) Show the entries in the Wages Account and the Analysed Cash Book and the extract in the Profit and Loss Account below on 31 July 2008.
General Ledger Total Date Wages A/C
Date
Details
Details
Total
31/7/08
Bank
ACB
32,000
31/7/08
Wages
32,000
32,000
Profit and Loss Account for year ended 31 July 2008 Less Expenses
Wages
32,000
14.
(a) List two rights and responsibilities of an employer: Two rights are: 1. Set up business 2. Decide on aims 2. Keep proper records
Two responsibilities are: 1. Pay agreed wage
(b) State two methods of calculating gross wages. 2. Piece rate 1. Hourly rate (c) Oidar Ltd has three employees who are paid on a monthly basis. Each employee pays income tax (PAYE) at the rate of 30% of gross wages. The employers share of PRSI is 12% of gross wages.
274
(i) Complete the Wages book for the month of May 2006.
Date Name Gross Wages 31/5/2006 R. Kenny 31/5/2006 L. Dunne 31/5/2006 T. Doyle Total 1,600 1,400 1,200 Deductions PAYE PRSI 112 98 84 Pension Total 80 70 60 Net Wages Employers PRSI
480 420 360 1,260
672 588 504 1,764
928 812 696 2,436
192 168 144 504
4,200
294
210
4,704 (ii) Total cost of wages for May 2006: _______________________ (d) Record the total cost of wages for the month of May 2006 in the Wages Account and the Analysed Cash Book of Oidar Ltd.
General Ledger Total Date Bank A/C
Date
Details
Details
Total
31/5/06
Wages A/C
Wages
ACB
4,704
31/5/06
ACB
4,704
Analysed Cash Book (p 1)
Date
Details
Bank
Wages
31/5/06
Wages
GL
4,704
4,704
(Junior Certificate Higher Level 1995 Q5 amended for euro)
Chapter 26 Industrial Relations

1. Complete the following sentences. (a) The ASTI and TUI are examples of Unions (b) (c) A Shop Steward (d) The Labour Court is an example of a (e) The use of a third party to end a dispute is called white collar unions.
help their members obtain higher wages. is the local union representative. Third Party . conciliation .
2. Column 1 is a list of industrial relations terms. Column 2 is a list of possible explanations of the work which they do. Match the two lists by placing the letter of the correct explanation under the relevant number in the table below. One explanation does not apply.
275
Column 1 Terms 1. 2. 3. 4. Craft Union Arbitration IBEC Demarcation Dispute
Column 2 Explanations (a) An organisation which represents employers (b) Represents workers in a particular industry (c) Use of a third party to settle a dispute (d) Represents workers who have served an apprenticeship (e) A disagreement over who does what work
1.
2.
3.
4.
3. Explain: (a) Work to rule: Only doing exact work as laid out in the contract. (b) Conciliation: This is where a third party helps both sides in dispute to settle their differences.
Chapter 27 Finance for Business

1. Select a suitable source of finance for each of the following needs of a garage from this list of sources of finance. Creditors, Bank Overdraft, Hire Purchase, Leasing, Term Loan, Share Capital, Reserves, Long Term Loan.
Need Cars Office Equipment Extension to Garage Light and Heat Breakdown Truck Petrol for Resale Suitable Source of Finance
Term loan Leasing Reserves Creditors Long-term loan Creditors
2. Indicate with a tick 0 in the table below which of the following needs of a hairdressing business are short, medium or long term. Suggest a suitable source of finance for each need.
Need Mirrors and Chairs Wages of Staff Buildings Light and Heat Cash Register Advertising Computerised Hairdryer Shampoo Short Medium Long Suitable Source of Finance
0 0 0 0
0 0 0 0
Bank term - loan Bank overdraft Capital Expenses due Hire purchase Creditors Leasing Creditors
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3. Indicate with a tick 0 which of the following statements are true or false.
True False
(a) Term loans are usually repaid in full at the end of the term (b) Leasing is a useful source of long-term finance (c) Creditors are only available to business who buy and sell goods (d) With hire purchase a person will never become the owner of the goods (e) Reserves are only available to profitable businesses
0 0 0 0 0
Chapter 28 Preparation of a Business Plan

1. Explain: (a) Business Plan: This sets out what a business wants to do in the future.
(b) Cash Flow Forecast: This is a statement setting out future income and expenditure. (c) Net Cash: This is the difference between expected income and expected expenditure. 2. List four examples of business receipts and four examples of business payments.
Business Receipts 1. Cash sales 2. Payment by debtors 3. Loans 4. Owners capital Business Payments 1. Cash purchases 2. Payments to creditors 3. Repayment of loans 4. Taxation
3. Indicate with a tick 0 which of the following statements are true or false.
True False
(a) A business plan should include details of the market (b) Fixed costs vary with production (c) Collateral is another name for security (d) Net Cash is cash received less cash paid out (e) Cash flow forecasts are similar to household budgets
0 0 0 0
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4. Complete the blank business plan provided from the following data: Niall Quinn and Monica McCarthy plan to set up a new painting business catering for private customers. They named their company Picture That Ltd. It is located in Centre Forward Drive, Naas, Co. Kildare. Niall is the managing director. Their bank is the permanent TSB. Their market research showed that there were 15,000 potential customers each year. There are five competitors. The average price for painting a house is 3,200. Total costs are 150,000. They have savings of 70,000 and hope to receive a loan of 80,000. They will promote their business by advertising in local radio and newspapers.
BUSINESS PLAN COMPANY DETAILS Name of Company Address of Company
Picture That Ltd Centre Forward Drive Naas Co, Kildare Niall Quinn Monica McCarthy Niall Quinn Permanent TSB
Shareholders/Owners Managing Director Company Bank PRODUCT Description of Product
Painting of private houses
MARKET RESEARCH Size of Market Competition Price per house SALES PROMOTION Methods FINANCE Total Required Amount Available Amount Required SIGNED DATE
15,000 potential customers Five competitors
3,200
Advertisements in local radio and newspapers

(i) (ii)
150,000 70,000 80,000 Niall Quinn Monica McCarthy
278
5. Paul Hughes and Emma Daly hope to set up a secretarial services business called H&D ICT Ltd. The company will be located in Keyboard Avenue, Carrick-on-Shannon, Co. Leitrim. Emma is the managing director. Their market research showed that there was only one other competitor and that there were over 2000 potential private and business customers. The price per A4 sheet printed is 3. Their estimated costs are: Lease of buildings 38,000; purchase of equipment 27,000; day to day running expenses and wages for first two months 18,000. They have savings of 17,500. They will advertise on local radio and in local papers. (a) Calculate the amount of finance they will need to raise to set up the business. H&D ICT will need __________ 65,500
Workings Costs: 38,000 + 27,000 + 18,000 = 83,000 83,000 17,500 = 65,500
(b) Complete the blank business plan provided.

H&D ICT Ltd Keyboard Avenue Carrick-on-Shannon Co. Leitrim
Shareholders/Directors Managing Director Company Bank PRODUCT Description of Product
Paul Hughes Emma Daly Emma Daly AIB
Secretarial Services
MARKET RESEARCH Size of Market Competition Price per A4 Sheet SALES PROMOTION Methods FINANCE Total Required Amount Available Amount Required SIGNED DATE
2,000 potential customers 1 competitor 3 per A4 printed sheet
Advertise on local radio and in local papers

(i) (ii)
83,000 17,5000 65,500 Paul Hughes Emma Daly
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6. HM Ltd is located at Hit Parade Avenue, Kiltamagh, Co. Mayo. It produces and distributes musical t-shirts for the Irish and European market. Its shareholders are Samanta Harte and Michael Joseph Mumba. The managing director is Louise Walshe. HM Ltd has its bank account in the Permanent TSB. It promotes its t-shirts on the internet and in pop magazines and offers a mail order service. Its market research has provided the following information: There are 20 million potential customers; there are five main competitors but none of them offer a mail order service. HM Ltd offers the following financial information for the year ending 31/5/2004: Sales (30,000 t-shirts) 600,000; HM Ltd wishes to expand its company at a total cost of 2,000,000. It has reserves of 300,000 and will receive a grant of 500,000. It hopes to raise the remaining finance by issuing shares to friends of the company. (a) Calculate how much finance it will need to raise through issuing shares. (Show workings clearly.) Workings HM Ltd will need to raise __________ 1,200,000
2,000,000 300,000 500,000 = 1,200,000
(b) Complete the Business Plan below, using todays date. (Junior Certificate Higher level 2004 Q5 amended)
Shareholders/Directors Managing Director Company Bank PRODUCT Description of Product MARKET RESEARCH Size of Market Competitors Price per t-shirt SALES PROMOTION Methods FINANCE Total Required Amount Available Share Investment Required SIGNED DATE
HM Ltd Hit Parade Avenue Kiltamagh Co, Mayo. Samanta Harte Michael Joseph Mumba Louise Walshe Permanent TSB Musical T-shirts for the Irish and European Markets 20 million potential customers 5 main competitors
20 Internet; pop magazines
2,000,000 800,000 1,200,000

(i) (ii)
Samanta Harte Michael Joseph Mumba
280
7. Complete the partially completed cash flow forecast for Queen Ltd.
Cash Flow Forecast of Queen Ltd for the period January to June 2005 Jan A. Total receipts B. Total payments C. Net Cash (AB) D. Opening Cash Closing Cash (C+D) 16,000 13,000 3,000 2,000 5,000 Feb 18,000 24,000 March 19,000 20,000 April 22,000 19,000 Total
75,000 76,000 (1,000) 2,000 1,000
(6,000) 5,000 (1,000)
(1,000) (1,000) (2,000)
3,000 (2,000) 1,000
8. Complete the cash flow forecast for MAC Ltd, for the period January to June of 2006 from the following data. Opening Cash 1,000 Receipts Jan, Feb, March, Cash Sales 16,000 per month. April, May, June Cash Sales 19,000 per month. Ordinary Share Capital 15,000 invested in March. Payments Wages 1,350 per month. Advertising 700 per month. Electricity 180 in February, 160 in April and 140 in June. Telephone 300 in January, 280 in March and 290 in May. Purchase of equipment in April 40,000. Purchased stock in January 3,000 and February 10,000, March 5,000, April 4,000, May 6,000 and June 7,000.
Cash Flow Forecast of MAC Ltd for the period January to June 2006 Jan Receipts Sales Share Capital A. Total Receipts Payments Purchases Advertising Telephone Electricity Wages Equipment B. Total Payments C. Net Cash (AB) D. Opening Cash Closing Cash (C+D) Feb March April May June Total for Jan-June
16,000
16,000
16,000 15,000
19,000
19,000
19,000
105,000 15,000
16,000
16,000
31,000
19,000
19,000
19,000
120,000
3,000 700 300
10,000 700
5,000 700 280
4,000 700
6,000 700 290
7,000 700
35,000 4,200 870
180 1,350 1,350 1,350
160 1,350 40,000 1,350
140 1,350
480 8,100 40,000
5,350 10,650 1,000 11,650
12,230 3,770 11,650 15,420
7,330
46,210
8,340 10,660 11,880 22,540
9,190 9810 22,540 32,350
88,650 31,350 1,000 32,350
23,670 (27,210) 15,420 39,090 39,090 11,880
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9. Complete the partially completed cash flow forecast for King Ltd, from the following data for the months of April, May and June. Sales to increase by 15% beginning in April; bank loan to be obtained in April 20,000; Wages to increase by 5%; Equipment to be purchased in April 50,000; Light and heat expenses to decrease by 12% in June; Loan repayments to begin in May 500 per month; All other payments to remain the same.
Cash Flow Forecast of King Ltd for the period January to June 2006 Jan Receipts Sales Bank Loan A. Total Receipts Payments Purchases Advertising Loan Repayment Light and Heat Wages Equipment B. Total Payments C. Net Cash (AB) D. Opening Cash Closing Cash (C+D) 9,000 500 1,600 8,000 19,100 5,900 100 6,000 8,000 17,500 7,500 6,000 13,500 9,000 500 1,600 8,000 19,100 5,900 13,500 19,400 9,000 500 25,000 25,000 25,000 25,000 25,000 25,000 Feb March April May June Total for Jan-June
28,750 20,000 48,750
28,750
28,750
161,250 20,000
28,750
28,750
181,250
9,000 500
9,000 500 500
9,000 500 500 1,504
54,000 3,000 1,000 4,704 49,200 50,000 161,904 19,346 100 19,446
8,400 50,000 67,900 (19,150)

13,500
8,400 18,400 10,350 250 10,600
8,400 19,904 8,846 10,600 19,446
250
10.
(a) With what should a business compare its cash flow forecast at the end of the year? The cash flow forecast should be compared with the actual figures from the cash book. (b) Complete the partially completed Cash Flow Forecast of YAM Ltd that follows for the months of March, April, May and June, as well as the total columns. The following information should be taken into account: Monthly sales are expected to increase by 20% beginning in May. The shareholders are expected to invest an additional 40,000 in April. Buildings are expected to be sold in June for 100,000. An EU Grant of 100,000 is expected in May. Monthly purchases are expected to increase by 30% in May. Wages and transport costs are expected to remain the same every month. Light and heat expenses are expected to decrease by 25% in the months March and May. New buildings are expected to be purchased in May for 250,000. Shareholders are expected to be paid a dividend of 20,000 in June.
282
(c) YAM Ltd forgot to allow for the purchase of new machinery of 30,000 during this period. Show the new closing cash figure for June in the box provided. (Junior Certificate Higher Level 2003 Paper II Q6 amended for euro) (b)
Cash Flow Forecast of Yam Ltd for the Period January to June 2007 Jan Receipts Sales Share Capital Buildings EU Grant A. Total Receipts Payments Purchases Wages Transport Costs Light and Heat Delivery Vans Equipment Dividend B. Total Payments C. Net Cash (AB) D. Opening Cash Closing Cash (C+D) 39,100 20,900 2,500 23,400 77,500 17,500 23,400 5,900 24,000 7,000 4,500 3,600 24,000 7,000 4,500 42,000 60,000 60,000 60,000 60,000 Feb March April May June Total for Jan-June
60,000
60,000 40,000
72,000
72,000 100,000
384,000 40,000 100,000 624,000
100,000 60,000 100,000 172,000 172,000
24,000 7,000 4,500 2,700
24,000 7,000 4,500
31,200 7,000 4,500 2,700 250,000
31,200 7,000 4,500
158,400 42,000 2,700 9,000 42,000 250,000
20,000 38,200 21,800

5,900
20,000 548,400 75,600 2,500 78,100
35,500
295,400
67,200
64,500 (123,400) 109,300 27,700 92,200 92,200 (31,200) (31,200) 78,100
27,700
(c) Answer 48,100
Workings 78,100 30,000 = 48,100
Chapter 29 Business Loan Applications

1. Explain This is security that is put up in case a loan cannot be repaid. (a) Collateral: _____________________________________________________________ _________________________________________________________________________ This is an independent accountant who checks the accuracy and truthfulness (b) Auditor: _______________________________________________________________ of accounts on behalf of the owners. _________________________________________________________________________
283
2. Complete the loan application form provided from the following data, on todays date. Doreen and John Clarke, directors of Auto Service Ltd, 10 Park Road, Lisdoonvarna, Co. Clare, have been in business for five years, Their garage business has been very profitable, and recently they obtained the agency for Nissan Cars. They are both qualified mechanics. Dooreen also has a business diploma. Their business current account is in the AIB Account No. 56787665. They wish to extend their garage at a cost of 250,000. They have retained earnings of 85,000 on deposit with the AIB, and require a loan for the remainder repayable over ten years. They will put their garage, valued at 650,000, up as collateral. The average profit is 60,000 per year. (a) Calculate the amount of a loan they require. __________ 165,000 (250,000 85,000)
(b) Complete the blank Loan Application Form provided on todays date.
AIB Loan Application Form PERSONAL Name of Business:
Auto Service Ltd

2. John Clarke
Name of Directors: 1. Doreen Clarke Address: 10, Park Road
Lisdoonvarna Co. Clare

BUSINESS HISTORY In business for 5 years Very profitable Recently obtained agency for Nissan Cars QUALIFICATIONS AND EXPERIENCE OF OWNERS 1. Dooreen is a qualified mechanic with a business diploma FINANCIAL INFORMATION Bank Accounts LOAN DETAILS Purpose of Loan: 2. John is a qualified mechanic
Current Account AIB
No. 56787665
Garage extension
250,000 165,000
Total Cost of Project: Amount of Loan Required: Term of Loan:
10 years plus
Ability to Repay Loan: Average profit 60,000 per year Security Available: Garage valued at 650,000 Signed: 1. Doreen Clarke Date: 2. John Clarke
284
3. Dessie and Joan Monaghan, directors of Thermo Glaze, 12 Main Street, Ballina, Co. Mayo, have been in business for twelve years. Dessie has a marketing degree from GMIT and Joan is a qualified glazier. The glazing industry has been very profitable over the last few years due to the boom in the building industry. They wish to expand their factory at a cost of 320,000 and purchase two new pickup trucks costing 34,000 each. They have reserves of 95,000 and will receive a grant of 20% of the total cost. They require a 12 year loan for the remainder. They supply the following additional information: Average profit over the last five years was 75,000 per year. They will put their existing premises valued at 450,000 up as collateral. They have a Current Account in the NIB No. 23456784. (a) Calculate the amount of the loan required. 215,400 (388,000 95,000 77,600) (b) Complete the Loan Application Form provided on todays date.
National Irish Bank Loan Application Form PERSONAL Name of Business: Name of Directors:
Thermo Glaze
1. Dessie Monaghan 2. Joan Monaghan
Address: 12 Main Street
Ballina Co. Mayo In business for 12 years Very profitable
BUSINESS HISTORY
QUALIFICATIONS AND EXPERIENCE OF OWNERS 1. Dessie has a marketing degree for GMIT FINANCIAL INFORMATION Bank Accounts Current Account NIB LOAN DETAILS Purpose of Loan: Expansion of factory Total Cost of Project: Amount of Loan Required: Term of Loan: 12 years Ability to Repay Loan: Average profit 75,000 per year Security Available: Signed: Date: 388,000 215,400 2. Joan is a qualified glazier
No. 23456784
Premises valued 450,000

2. Joan Monaghan
1. Dessie Monaghan
285
4. Finnan Ltd received a loan of 50,000 on 23 March 2007. Record the receipt of this loan in the Bank Account and in the Bank of Ireland Loan Account Finnan Ltd ledger below.
General Ledger of Finnan Ltd Date Details F Amount Date Details F Amount
Bank of Ireland Loan A/C
23/3/07
Bank A/C
Bank
ACB
50,000
23/3/07
B of I loan
GL
50,000
5. Gear Ltd is a sportswear manufacturer operating from Back Four Street, Drogheda, Co. Louth. It has two directors, Ian Harte and Garry Kelly. It owns premises worth 550,000 and has machinery and delivery vans valued 120,000. Gear Ltd has a weekly income of 20,000 and feels that this can be increased to 30,000 by building an extension to the factory costing 100,000 and purchasing new machinery costing 50,000. Gear Ltd has reserves of 45,000 and is eligible for a 30,000 grant. On 1 May 2000 it applied for a seven-year loan, from Ulster Bank, for the remainder. The loan was granted on 10 May 2000. You are required to: (a) Calculate the amount of the loan required. 75,000 (150,000 45,000 30,000) (b) Complete the Loan Application Form below. (c) Record the receipt of the loan in the Ulster Bank loan and Bank accounts below. (Junior Certificate Higher Level 2000 Paper II Q5 amended) (b)
Ulster Bank Loan Application Form Company Details Name: Address:
Gear Ltd Back Four Street Drogheda Co. Louth Garry Kelly Ian Harte Gear Ltd 1,040,000
Names of Directors: Name of Business: Annual Income: Amount of loan required Purpose of Loan: Length Required For: Security Available : Signatures of Directors: Date:
75,000
Factory extension and purchase of new machinery 7 years Premises worth 550,000 __________________________________________________ Garry Kelly Ian Harte 1/5/2000 _____________________
(c)
Date Details F Amount Date Details F Amount
Ulster Bank Loan A/C
10/5/00
Bank A/C
Bank
ACB
75,000
10/5/00
U.B. Loan
GL
75,000
286
Chapter 30 Banking for Business

1. Explain This is a means of taking money from an account (a) ATM cash withdrawal _____________________________________________________ using a special card and a PIN. __________________________________________________________________________ This is where a current account holder takes more money out of their (b) Bank overdraft ___________________________________________________________ current account than they have in it. __________________________________________________________________________ These are the fees which bank customers have to pay when making (c) Bank charges ____________________________________________________________ transactions i.e. lodging and withdrawing money. __________________________________________________________________________ 2. State two reasons for preparing a bank reconciliation statement. To make sure that the bank did not make a mistake in their records. 1. ________________________________________________________________________ __________________________________________________________________________ To identify any mistakes in the customer records in the bank records. 2. ________________________________________________________________________ __________________________________________________________________________
Chapter 31 Business Insurance

1. Match the following types of insurance cover in Column 1 to the different types of business risks in Column 2. One risk does not match. Match the types of cover to the risks by placing the correct number or letter under the relevant number in the table below.
Column 1 Types of Insurance Cover 1 2 3 4 Fidelity insurance Public liability Employers liability Cash in transit A. B. C. D. E. 1 2 Column 2 Types of Business Risks Injury to employees at work Theft of money being transferred Theft by employees Death of owner Injury to customers visiting premises 3 4
2. Complete the following sentence. The payment of an insurance premium by cheque is insurance bank debited in the _______________ account and credited in the _________________ account. 3. Indicate with a tick 0 which of the following amounts of compensation are correct. State a reason for your answer. (a) Burke Ltd insured its premises valued at 240,000 for 180,000. Fire caused 60,000 damage. (i) 240,000___ (ii) 180,000___ (iii) 60,000___ (iv) 45,000___. 0 The reason for my answer is: The premises is only insured for 3/4 of its value, therefore Burke Ltd is only entitled to ________________________________________________________________________ 3/4 of the damage caused by the fire. ________________________________________________________________________ ________________________________________________________________________
287
(b) Martin Ltd insured its buildings valued at 400,000 for 450,000. Fire caused 90,000 damage. Tick 0 the correct answer. (i) 450,000 __(ii) 90,000 __ 0 (iii) 80,000 __. The reason for my answer is: ______________________________________________________________________ The damage was 90,000 and the buildings were over-insured. 4. Jordan Ltd requested an insurance quotation, from Sword Insurers Ltd for the following assets: Buildings 230,000; Equipment 95,000; Four Delivery Vans valued at 30,000 each; Stock 15,000 and Cash in the Office 3,500. Sword Insurers Ltd supplied the following quotation for one years insurance: Insurance for Buildings and Machinery 7 per 1,000 value; Stock Insurance 11 per 1,000 value; Delivery Van comprehensive cover 1,650 per van; Cash insurance 16 per 500. A new business introductory offer 12% off total premium is available. Jordan Ltd accepted the quotation and took out insurance on everything at replacement cost (as stated above) except Equipment which they insured for 60,000. Jordan Ltd paid the premium by cheque on 1 May 2004. (a) Calculate the amount of premium paid by Jordan Ltd on 1 May 2004. (Show workings clearly.) Answer 7,838.16
Workings B
E DV S C 1,610 + 420 + 6,600 +165 + 112 = 8,907. 8,907 1,068.84 = 7,838.16
(b) Assume you are Peter Andrews, complete the cheque No. 100 paid to Sword Insurers Ltd.
SPECIMEN
Sword Insurances Ltd 1/5/04 1/5/2004 Sword Insurance Ltd Seven thousand, eight hundred and thirty eight euro and 7,838.16 sixteen cent Peter Andrews 7,838.16
(c) Record the payment of the premium in the Insurance Account and The Analysed Cash Book provided.
General Ledger of Jordan Ltd Date Details F Amount Date Details F Amount Insurance A/C (p1)
1/5/04
Bank
ACB
7,838.16
Analysed Cash Book of Jordan Ltd Date Details Cheque No. F Bank Insurance
1/5/04
Insurance
100
GL
7,838.16
1,061.84
288
5. Kerry Ltd requested an insurance quotation, from West Insurers Ltd for the following assets: Premises 410,000; Machinery 105,000; Two Motor Vehicles valued at 45,000 each; Stock 13,000 and Cash in the Office 6,000. Kerry Ltd has twenty-four security and CCTV cameras. West Insurers Ltd supplied the following quotation for one years insurance: Insurance for Buildings and Machinery 9 per 1,000 value; Stock Insurance 14 per 1,000 value; Motor Vehicles comprehensive cover 1,650 per vehicle; Cash insurance 11 per 1,200. A reduction of 16% off total premium is available for having good security. Kerry Ltd accepted the quotation and took out insurance on everything at replacement cost (as stated above) except Buildings which they insured for 380,000 and Machinery which they insured for 100,000. Kerry Ltd paid the premium by cheque on 1 May 2005 (a) Calculate the amount of premium paid by Kerry Ltd on 1 May 2005. (Show workings clearly.) Answer 6,599.88 P M MV S C Workings
3,420 + 900 + 3,300 +182 + 55 = 7,857. 7,857 1,257.12 = 6,599.88
(b) Assume you are Louise McFadden, complete the cheque No. 675 paid to West Insurers Ltd.
SPECIMEN
1/5/2005 West Insurers Ltd Six thousand, five hundred and ninety nine euro and 6,599.88 eighty eight cent Louise McFadden 6,599.88
(c) Record the payment of the premium in the Insurance Account and the Analysed Cash Book provided.
General Ledger of Kerry Ltd Date Details F Amount Date Details F Amount Insurance A/C (p1)
West Insurers Ltd
1/5/05
1/5/2005
Bank
ACB
6,599.88
Analysed Cash Book of Kerry Ltd Date Details Cheque No. F Bank
1/5/05
Insurance
675
GL
6,599.88
Insurance 6,637.68
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Chapter 32 Delivery Systems

1. What main form of transport would be most likely to be used to transport the following:
Goods to be transported A. Fresh salmon from Rossaveal (Galway) to Paris B. Industrial diamonds from Limerick to Antwerp C. Bananas from South America D. Coal from Poland to Waterford E. Milk from farm to local creamery Form of transport Air
Air Sea Sea Road
2. Using the distance table below calculate the distance from: Sligo to Ennis Wexford to Galway Limerick to Donegal Belfast to Mullingar 195 254 296 180 kms kms kms kms
3. Using the distance table below calculate the distance of a return journey from: Waterford to Donegal Cavan to Ennis Sligo to Carlow Tralee to Carlow 712 400 460 504 kms kms kms kms
Distance Table (km)
Athlone
225 Belfast 115 250 Carlow 85 140 172 Cavan 220 425 188 300 Cork 185 180 296 110 400 Donegal 125 167 84 112 260 222 Dublin 145 85 172 82 325 158 85 Dundalk 110 340 178 200 142 260 232 256 Ennis 87 305 178 166 210 205 216 238 70 Galway 120 325 142 206 105 296 198 240 37 105 Limerick 48 180 100 64 236 172 82 92 164 144 148 Mullingar
210 330 98 275 208 390 164 246 246 274 210 204 Rosslare 118 245 230 126 336 66 216 168 195 138 232 135 326 Sligo 188 430 252 312 120 350 303 346 94 162 105 254 290 288 Tralee 175 332 74 235 126 356 158 242 164 220 130 170 82 292 210 Waterford 190 310 76 256 188 372 142 228 228 254 190 185 19 306 275 62 Wexford
4. Calculate the cost of diesel (show workings) for one day from the following details provided by Joe Ltd.
The diesel van can travel 25km per litre. The distance travelled in one day is 600km. The cost of diesel is 75 cent per litre. Answer Workings 600 km = 24 litres 25 24 litres @75 cent
18 ___________
290
5. Calculate the cost of diesel (show workings) for one day from the following details provided by Pat Ltd.
The diesel van can travel 30km per litre. The distance travelled in one day is 500km. The cost of diesel is 75 cent per litre. Workings 500 km = 16.67 litres 30 16.67 litres @75 cent
12.50 Answer ___________ 6. Calculate the cost of diesel (show workings) for one day from the following details provided by May Ltd.
The diesel van can travel 30km per litre. The distance travelled in one day is 450km. The cost of diesel is 75 cent per litre. Workings 450 km = 15 litres 30 15 litres @75 cent
11.25 Answer ___________ 7. Joan Ltd supplies the following information on its annual costs. Calculate the annual costs (show workings).
Joan Ltd operates 340 days of the year. Annual motor tax 800. Annual insurance 1,600. Repairs and maintenance 1,200. Workings 800 + 1,600 + 1,200 340
10.59 Answer ___________ 8. Emer Ltd supplies the following information on its annual costs. Calculate the annual costs (show workings).
Emer Ltd operates 290 days of the year. Annual motor tax 700. Annual insurance 3,400. Repairs and maintenance 2,800. Answer Workings 700 + 3,400 + 2,800 290
___________ 29.79
9. Nora Ltd supplies the following information on its annual costs. Calculate the annual costs (show workings).
Nora Ltd operates 312 days of the year. Annual motor tax 600. Annual insurance 2,200. Repairs and maintenance 1,800. Workings 600 + 2,200 + 1,800 312
14.74 Answer ___________ 10. On 1 June 2005 OBrien Ltd purchased a delivery van by cheque No. 51 42,000. Show how this purchase would be recorded in the Analysed Cash Book and the Delivery Van Account of OBrien Ltd below.
Analysed Cash Book of OBrien Ltd (p1) Bank Details Cheque No. F Delivery van 51 GL 42,000
Date
1/6/05
Delivery Van 42,000
291
General Ledger of OBrien Ltd Date Details F Total Date Details F Total
2005 1/6/05 Bank ACB
2005
Delivery Van A/C (p1) 42,000
11.
On 1 June 2005 Keenan Ltd purchased a delivery van by cheque No. 1 30,000. Show how this purchase would be recorded in the Analysed Cash Book and the Delivery Van Account of Keenan Ltd below.
Date Analysed Cash Book of Keenan Ltd (p1) Bank Details Cheque No. F D.van 1 GL 30,000 General Ledger of Keenan Ltd Total Date 2005 Delivery Van A/C (p1) 30,000 Delivary Van 30,000
1/6/05
Date
Details
Details
Total
2005 1/6/05 Bank ACB
12.
On 1 June 2006 Waldron Ltd purchased a delivery van on credit from Shannon Motors Ltd for 37,000. Show how this purchase would be recorded in the General Journal, Delivery Van and Shannon Motors Ltd Accounts of Waldron Ltd below.
General Journal of Waldron Ltd (p1) DR Details F Delivery van GL 37,000
Date
CR
1/6/05 1/6/05
Shannon Motors Ltd Purchase of van on credit
GL
37,000
General Ledger of Waldron Ltd Date Details F Total Date Details F Total
2005 1/6/05 S. Motors Ltd GL 37,000
2005
Delivery Van A/C (p1)
Shannon Motors Ltd (p2)
1/6/
D. van
GL
37,000
292
13.
On 1 June 2006 Davis Ltd purchased a delivery van on credit from Duffy Motors Ltd for 37,000. Show how this purchase would be recorded in the General Journal, Delivery Van and Duffy Motors Ltd Accounts of Davis Ltd below.
Date General Journal of Davis Ltd (p1) Dr Details F Delivery van GL 37,000 CR
1/5/06 1/5/06
Duffy Motors Ltd Purchase of van on credit
GL 37,000
General Ledger of Davis Ltd Date Details F Total Date Details F Total
2006 1/5/06 Duffy Motors GJ 37,000
2006
Duffy Motors Ltd (p2)
1/5/06
GJ
37,000
14. (a) State four factors to be considered when a business is choosing a delivery system. 1. 2. 3. 4. Cost Speed Reliability Convenience
(b) Why should a driver take into account the permitted drop-off time when planning a journey? _____________________________________________________________ If the driver arrives too late they will not be allowed to unload. (c) Calculate the cost of transport (show workings) for one day from the following details provided by CD Ltd: CD Ltd operates 290 working days in the year. The diesel van can travel 25km per litre. The distance travelled in one day is 500km. The cost of diesel is 75 cent per litre. The journey takes 12 hours. The van drivers wages are 20 per hour. The van drivers helpers wages are 8 per hour. The Annual Motor Tax is 560. The Annual Motor Insurance is 1,600. The Annual Repairs are 1,100. 362.24 Answer _____________________________
Workings Diesel 20 litre @75c = 15 wages 240 + 96 = 336 Annual lists = 11.24 Total costs = 362.24
(d) On 1 May 2006 CD Ltd purchased a new delivery van by cheque for 42,000. Record the purchase of this delivery van in the Analysed Cash Book and the Delivery Van Account provided.
Analysed Cash Book of CD Ltd (p1) Details Cheque No. F
Date
1/5/06
Delivery van
GL
Bank 42,000
Delivery Van 42,000
293
General Ledger of CD Ltd Date Details F Total Date Details F Total
2006 1/5/ Bank ACB 42,000
2006
15.
(a) Explain the importance of delivery systems in the chain of distribution. Transports raw materials to the manufacturer; transports finished goods to _______________________________________________________________________ wholesaler/retailer; transports workers to their jobs. _______________________________________________________________________ (b) State where the costs of collecting and delivering goods are entered in the Final Accounts of collecting is in trading account; costs of delivery in profit/loss account. of a business. Costs ___________________________________________________________ (c) Calculate the cost of transport (show workings) for one day (round trip) from Athlone to Waterford and back from the following details provided by MU Ltd: MU Ltd operates 310 working days in the year. The distance from Athlone to Waterford is 175 km. The diesel van can travel 30km per litre. The cost of diesel is 75 cent per litre. The journey takes 9 hours. The van drivers wages are 25 per hour. The van drivers helpers wages are 10 per hour. The Annual Motor Tax is 6300. The Annual Motor Insurance is 2,200. The Annual Repairs are 1,900. 357.30 Answer ________________________________ Workings
Diesel Wages Annual costs Total costs
8.75 315.00 33.55 357.30
(d) On 1 May 2006 MU Ltd purchased a new delivery van on credit from PK Motors Ltd for 42,000. Record the purchase of this delivery van in the General Journal and the Delivery Van and PK Motors Ltd Accounts of CD Ltd below.
General Journal of MU Ltd (p1) Date Details F Dr 1/5/06 Delivery van GL 42,000
CR
1/5/06 PK Motors Ltd Purchase of van on credit
GL
42,000
General Ledger of MU Ltd Date Details F Total Date Details F Total
2006 1/5/06 PK Motors GJ 42,000
s2006
PK Motors Ltd (p2)
1/5/
D. van
GJ
42,000
294
Chapter 33 Marketing
1. A firm wishes to launch a new product. From the following list of activities to be undertaken, indicate by means of a tick 0 which of the following sequences below is the correct one. 1. 2. 3. 4. Sales Promotion Retail Sales Product Development Market Research (a) (b) (c) (d) 3 4 3 4 1 2 4 1 4 1 2 3 2 3 1 2
(Junior Certificate Higher Level Paper I 1998 Section (A)) 2. Complete the following sentences by filling in the blanks from this list of marketing terms. One word does not match.
Field Research Product Development Special Offers Market Desk Research Target Market
market Kelly Ltd was interested in expanding into the EU ___________________________________. It first did some ___________________________________ but later found that it needed desk research field research to do some _____________________________________as well. It decided to choose the French market as its ___________________________________. It launched its goods by using target market special offers ___________________________________. 3. Column 1 is a list of marketing terms. Column 2 is a list of possible explanations of these terms. Match the two lists by placing the letter of the correct explanation under the relevant number below. (One explanations does not apply.)
Column 1 Marketing Terms Column 2 Explanation 1. Marketing A. Responsible for ensuring a business has a good public image. 2. 3. 4. Advertising Public relations Officer Desk Research B. Studying existing information to find out more about a market. C. Researching the market through surveys and questionnaires. D. Production of goods and services wanted by customers. E. Informing potential customers about a product or service. 1 2 3 4
4. Write brief notes on: Bringing in new products to meet the changing needs and (a) Product development ___________________________________________________ habits of customers. ______________________________________________________________________ Use of a logo or name to distinguish one product from another. (b) Branding ____________________________________________________________ ______________________________________________________________________ 5. Name the four Ps of marketing. (i) Product (ii) (iv) Price Place
(iii) Promotion
295
6.
Suggest target markets for the following products or services. Complete the chart below.
Product/Service Mobile Phones Irish Times Farmers Journal Business Studies Texts Possible Target Markets
Teenagers Business people Farmers Business studies students
7.
Complete the marketing mix chart for a pair of trainers of your choice.
Four Ps of Marketing Product Price Promotion Place Name of Product
Trendy trainers all leather Ranges from 17.99 to 65.99 T. V. advertisements All leading shoe shops
8. Complete the marketing mix chart for a product or service of your choice.
Four Ps of Marketing Product Price Promotion Place Name of Product
9. Complete the chart below by giving examples of products or services using each type of advertising.
Type of Advertising Informative Generic Persuasive Competitive Examples of products or services that use this type
Bus ireann bus times Filte Ireland holiday in Ireland Cosmetic companies Car manufacturers
10.
The following chart sets out different methods of advertising products and services. Complete the chart below by giving an example of a product or service using this method and state a reason for your choice.
Methods of Advertising Chart Method Radio Television Cinema Billboards On delivery vans Internet Newspapers Magazines Used to Advertise Reason for choice
Pop songs Food Drink McDonalds Bread Computer upgrades Airlines Clothes
Can play the song Can see colour in the food Encourages audience to drink To attract passing motorists Pat the Baker is nationwide Dedicated audience Wide circulation Use of colours
296
11.
Complete the chart below by giving your own examples of products or services that use the promotional methods.
Method Sales Promotion Branding Sponsorship Merchandising Public Relations Example
Mobile phone companies free credit Levis; Toyota Flancare Longford Town Supermarkets new product displays GAA; Irish Racing Board
12. Murray Ltd paid 23,000 by cheque No. 11, on 12 May 2005, for advertising its services. Show how this expense is recorded in the analysed cash book and advertisement account of Murray Ltd.
Analysed Cash Book (Credit Side) of Murray Ltd (p1) Date Details Cheque No. F Bank Advertising
12/5/05
Advertising
11
GL
23,000
23,000
General Ledger of Murray Ltd Date Details F Total Date Details F Total
2005 12/5/ Bank ACB 23,000
2005
Advertising A/C (p1)
13.
Bannon Ltd paid 23,000 by cheque No. 11, on 12 May 2005, for advertising its services. Show how this expense is recorded in the analysed cash book and advertisement account of Bannon Ltd.
Analysed Cash Book (Credit Side) of Bannon Ltd (p1) Date Details Cheque No. F Bank Advertising
12/5/05
Advertising
11
GL
23,000
23,000
General Ledger of Bannon Ltd Date Details F Total Date Details F Total
2005 12/5/ Bank ACB 23,000
2005
Advertising A/C (p1)
Chapter 34 Financial Recording and Filing

1. Complete the following document sequence charts by inserting the correct document in spaces A and B.
Letter of Enquiry A. B.
Quotation Order
Invoice
297
2. Indicate with a tick 0 which of the following documents would be sent by a seller to a customer who made a complaint.
Invoice Credit Note
Receipt
3. Column 1 is a list of Books of First Entry. Column 2 is a list of possible source documents. Match the lists by placing the letter of the correct document under the number of the relevant book of first entry. (One source document does not apply.)
Column 1 Books of First Entry Analysed Cash Book Sales Returns Book Purchase Book Sales Book Column 2 Source Documents A. Copy of Invoice sent B. Copy of Credit Note sent C. Receipt D. Credit Note received E. Invoice received
1. 2. 3. 4.
4. Indicate with a tick 0 the correct answer to the following: (a) Credit notes received are the source documents for writing up the:
Purchases Returns Book
Sales Returns Book
Purchases Book
(b) Receipts are the source documents for writing up the:

Sales Book Cash Book
Purchases Book
(c) Cheques issued are the source document for writing up the:
General Journal Purchases Book Analysed Cash Book
(d) Invoices received are the source document for writing up the:
Purchases Book
Sales Book
Purchases Returns Book
5. State which accounts are involved in the following transactions by a garage:

Transactions Purchased land by cheque Sold motor van for cash
Put 3,000 into the bank Purchases car parts from Nissan Ltd
9,000
500,000
Land Cash Bank Purchases
Accounts and and and and
Bank Motor van Capital Nissan Ltd
6. State which account is receiving and which account is giving in the following transactions of a grocer.
Transactions Paid an employee 500 by cheque Norah purchased a van on credit from Fast Motors Ltd Sold goods to Carey for Took out Receiving Account Giving Account
Wages Van Cash Cash
Bank Fast Motors Ltd Sales Bank
100 cash from the bank
65 cash
298
7. Record the following transaction in the ledger accounts of John below and extract a Trial Balance as on 1/3/2005: 1/3/2005 John gave Mary 500 cash.
Ledger of John Date Details F Total Cash A/C Date Details F Total
2005
2005 1/3/05
Mary A/C
Mary
GL
500
1/3/
Cash
GL
500
Trial Balance as on ____________________ 1/3/2005 Debit (DR) Credit (CR)
Cash Mary 500 500
500 500
8. Record the following transaction in the ledger accounts of Bernadette below and extract a Trial Balance as on 14/8/2006: 14/8/2006 Bernadette gave Patrick 1,500 cash.
Ledger of Bernadette Date Details F Total Cash A/C Date Details F Total
2006
2006 14/8/06
Patrick A/C
Patrick
GL
1,500
14/8/
Cash
GL
1,500
Cash Patrick 1,500 1,500
1,500 1,500
9. Record the following transaction in the ledger accounts of Josephine below and extract a Trial Balance as on 14/8/2006: 14/8/2006 Martin gave Josephine 3,100 cash.
Ledger of Josephine Date Details F Total Cash A/C Date Details F Total
2006 14/8/ Martin GL 3,100
2006
Martin A/C
14/8/06
Cash
GL
3,100
299
Cash Martin
3,100 3,100 3,100 3,100
10.
Record the following transaction in the ledger accounts of Philip below and extract a Trial Balance as on 7/7/2007: 7/7/2007 Emily gave Philip 1,750 cash.
Ledger of Philip Date Details F Total Cash A/C Date Details F Total
2007 7/7/ Emily GL 1,750
2007
Emily A/C
7/7/
Cash
GL
1,750
Cash Emily
1,750 1,750 1,750 1,750
11.
Record the following transaction in the ledger accounts of Claire below and extract a Trial Balance as on 16/2/2007: 16/2/2007 Graham gave Claire 4,300 cash.
Ledger of Claire Date Details F Total Cash A/C Date Details F Total
2007 16/2/ Graham GL 4,300
2007
Graham A/C
16/2/
Cash
GL
4,300
Cash Graham
4,300 4,300 4,300 4,300
300
12.
Balance the following cash account.

Date 2006 1/6/ 3/8/ 9/6/ Sales Owner Sales Details F Total Cash A/C 700 1,200 1,800 2/6/ 6/6/ Expenses Purchases 660 800 Date 2006 Details F Total
9/6/ 3,700 10/6/ Balance b/d 2,240
Balance c/d
2,240 3,700
13.

Date 2007 1/8/ 3/8/ 6/8/ Owner Sales Sales Details F Total Cash A/C 2,500 1,320 890 2/8/ 4/8/ 8/8/ Purchases Insurance Purchases 2,400 760 1,100 Date 2007 Details F Total
8/8/ 4,710 9/8/ Balance b/d 450
Balance c/d
450 4,710
14.

Date 2007 1/10/ 3/10/ 7/10/ Balance c/d Owner Sales Details F Total Cash A/C 500 3,200 4,444 4/10/ 7/10/ 12/10/ Purchases Machinery Expenses 1,000 5,200 700 Date 2007 Details F Total
12/10/ 8,144 13/10/ Balance b/d 1,244
Balance c/d
1,244 8,144
301
Chapter 35 Business Documents I

1. Order Completion Assume you are Larry Lambe, purchasing manager, of Lambe Footwear Ltd, Drogheda, Co. Louth. Complete the following order form, which he sent to Dubarry Ltd, Ballinasloe, Co. Galway on 1/7/2005. 30 pairs of boots @ 12 a pair. 20 pairs of AV8s @ 32 a pair.
ORDER Lambe Footware LTD Drogheda, Co. Louth Order No. 70 Tel: (041) 232343 Fax: (041) 232 344 e-mail: lambef@eircom.net VAT Reg. IE218450 Date: 1/7/2005
To: Dubarry Ltd
Ballinasloe Co. Galway

Please supply the following goods as per quotation no. 468 the following: QUANTITY DESCRIPTION UNIT PRICE 12 32
30 20
Pairs of boots AV8s
Goods to be delivered to the above address within 10 days. Signature
Larry Lambe
Position
Purchasing Manager
2.
Assume you are Siobhan Kelly, purchasing manager, of Tee Shirts For All Ltd, Ennis, Co. Clare. Complete the order form below, which she sent to Balwin Designs, Coronation Drive, Roscommon. 60 large multi-colour t-shirts @13 each. 100 small training tops @12 each.
ORDER Tee Shirts For All LTD Ennis, Co. Clare Order No. 45 Tel: (065) 20066 Fax: (065) 20067 e-mail: Tshirts4all@eircom.net VAT Reg. IE765672 Date: 1/10/2006
To: Balwin Designs
Coronation Drive Roscommon

Please supply the following goods as per quotation no. 281 QUANTITY DESCRIPTION UNIT PRICE 13 12
60 100
Multicolour t-shirts Small training tops
Goods to be delivered to the above address within 10 days. Signature Siobhan Kelly
302
Position
Purchasing Manager
3.
Winters Stationery Ltd, Lismore, Co. Waterford, ordered the following goods from Leaves Ltd, Branch Avenue, Kildare on 14 May 2007. 200 sets of Business Studies record books @ 1.50 per set. 750 10 pack sets of 42 page copies @ 3.40 per set. Assume you are Kathleen Winters, purchasing manager. Complete the order form below.
ORDER Winters Stationary LTD Lismore, Co. Waterford Order No. 13 Tel: (051) 543217 Fax: (051) 543718 e-mail: winters@eircom.net VAT Reg. IE888653 Date: 14/5/2007
To: Leaves Ltd
Branch Avenue, Kildare

Please supply the following goods as per quotation no. 127 QUANTITY DESCRIPTION UNIT PRICE 1.50 3.40
200 750
Business studies record books 42-page copies
Goods to be delivered to the above address within 10 days. Signature
Kathleen Winters
Position Purchasing Manager
Ordinary Level 4. Maura Burke is the purchasing manager of Mauras Alcohol-Free Drinks Ltd, Ballyjamesduff, Co. Cavan. On 28 March 2007 she orders the following goods from the manager of Soft Drink Wholesaler Ltd, Corrib Industrial Park, Galway. 150 bottles of Cidona @ .0.80 per bottle. 300 bottles of Coco Cola @ 0.45 per bottle. 400 bottles of Fanta Orange @ 0.34 per bottle. Complete the Order no. 345.
ORDER No. 345 Tel: (049) 37625 Fax: (049) 37666 e-mail: Andys@eircom.net MAURAS ALCOHOL FREE DRINKS Ltd. Ballyjamesduff, Co. Cavan Date : 28/5/2007 To: Soft Drink Wholesaler Ltd Corrib Industrial Park VAT Reg. IE7326825
Galway
Please supply the following goods: QUANTITY DESCRIPTION UNIT PRICE
150 300 400

Signature
Bottles of Cidona Bottles of Coco Cola Bottles of Fanta Maura Burke

Position
80 cent 45 cent 34 cent Purchasing Manager
303
Delivery Docket Completion 5. Crown Paints Ltd sold the following goods to JJ Paints Ltd, Newtownforbes, Longford: 300 litres white emulsion. 120 litres exterior varnish. Complete the Delivery Docket below sent by Crown Paints Ltd. Assume you are Stephen Brennan the person who signs the Delivery Docket on behalf of JJ Paints Ltd.
Crown Paints Ltd. Athlone, Co. Westmeath DELIVERY DOCKET No. 2 Order No. 45 To: J.J Paints Ltd Newtown Forbes Longford Quantity Description VAT Reg. IE12367821 Tel: (090) 6452779 Fax: (090) 6452779 e-mail: crown@eircom.net Date:
300 120
Litres white emulsion Litres exterior varnish
Received the above goods in good condition. Signed Stephen Brennan (For Purchaser)
6.
Connolly Sports Ltd sold the following goods to the Kerry County Board, Fitzgerald Stadium, Killarney, Co. Kerry. 300 hurleys. 250 helmets. Complete the Delivery Docket below sent by Connolly Sports Manufacturers Ltd. Assume you are Cooper Quilter, the person who signs the Delivery Docket on behalf of the Kerry County Board.
Connolly Sports Ltd. Oranmore, Co, Galway DELIVERY DOCKET No. 7 Order No. 67 To: Kerry County Board Fitzgerald Stadium Killarney, Co. Kerry VAT Reg. IE12367821G Tel: (091) 4563721 Fax: (091) 4563722 e-mail: connollysp@eircom.net Date : Description
Quantity
300 250
Hurleys Helmets
Received the above goods in good condition. Signed Cooper Quilter (For Purchaser)
304
Chapter 36 Business Documents II

Ordinary Level 1. Techno Supplies Ltd, The Curragh Industrial Estate, Kildare, received an order No. 54 from Digicomp Ltd, Retailers of Computer Equipment, Astral Shopping Centre, Naas, Co. Kildare on 14 May 2006 for the following goods: 30 Clarity Scanners Model SC22 @ 125 each. 20 Viscount VDUs Model VT @ 245 each. 75 Soft Touch Keyboards Model KB48 @ 62 each. Techno Supplies Ltd issued an invoice No. 7621 to Digicomp Ltd on 16 May 2006. Complete the blank invoice provided. Please note that Trade Discount is 10% and VAT is 20% on all goods. (Junior Certificate Ordinary Level 2001 Q5 amended)
Techno Supplies Ltd. The Curragh Industrial Estate, Kildare INVOICE No. 7621 To: Digicomp Ltd Tel: 045-4399221 Fax: 045-4399762 e-mail: techno@comsat.ie VAT Reg. No. IE139868W Date: 16/5/2006
Retailers of Computer Equipment Astral Shopping Centre Naas, Co. Kildare

Order No:
54
Quantity
Description
Model No.
Unit Price
Total
30 20 75
Clarity Scanners Viscount VDUs Soft Touch keyboards
SC22 VT KB48
125 245 62
3,750 4,900 4,650 13,300 1,330 11,970 2,394 14,364
E & OE
Total (Excluding VAT) Trade Discount Subtotal VAT Total (Including VAT)
2. Hardwood Furniture, Forest Lane, Cork, received an order No. 231 from Yorke Home Supplies, Carrick-on-Shannon, Co. Leitrim, on 25 June 2007 for the following goods: 12 Kitchen Tables Model HF2 @ 230 each. 130 Bedroom Lockers Model HF7 @ 20 each. 60 Computer Desks Model HF9 @ 40 each. Hardwood Furniture Ltd issued an invoice No. 3445 to Yorke Home Supplies Ltd on 29 June 2007. Complete the following blank invoice. Please note that Trade Discount is 20% and VAT is 10% on all goods.
305
Hardwood Furniture Ltd Forest Lane, Cork INVOICE No. 3445 To: Yorke Home Supplies Tel: 021-821687 Fax: 021-821688 e-mail: hardwoodfur@comsat.ie VAT Reg. No. IE145673C Date: 25/6/2007
Carrick-on-Shannon Co, Leitrim
Order No:
231
Quantity
Description
Model No.
Unit Price
Total
12 130 60
Kitchen tables Bedroom lockers Computer desks
HF2 HF7 HF9
230 20 40
Total (Excluding VAT) Trade Discount Subtotal VAT Total (Including VAT)
2,760 2,600 2,400 7,760 1,552 6,208 620.80 6,828.80
E & OE
3. Indicate with a tick
which of the following statements are true or false.

True False
(a) VAT is added before trade discount is deducted in an invoice (b) E & OE on an invoice allows mistakes to be corrected (c) The seller sends the buyer a letter of complaint when goods are not right 4. List three procedures used by the seller when issuing invoices. (a) Check the name and address (b) Check the calculations (c) File a copy 5. List three procedures used by the buyer on receiving credit notes. (a) Check the calculations (b) Record in the Purchases Returns Book (c) File the credit note 6. Complete the following sentences. On receiving an order the seller sends the buyer a delivery docket and an The seller records the invoice sent in the Book. of complaint buyer records the credit note received in the When the buyer sends a letter . invoice. Sales .
the seller issues a credit note. The Purchases Returns Book
306
7. On 1 May 2006, Mayo Paints Ltd issued an invoice to DIY Ltd, Dungarvan, Co. Waterford, who ordered (Order No. 23) the following goods: 20 5 litre tins of gloss paint @ 50 per tin (excluding VAT). 50 2 litre tins of varnish @ 10 per tin (excluding VAT). Trade discount was 20% and VAT was 21%. Complete the following blank invoice.
Mayo Paints Ltd. Forest Lane, Cork INVOICE No. 411 To: Tel: 021-537281 Fax: 021-537284 e-mail: mp@eircom.net VAT Reg. No. IE678321 Date: 1/5/2006
DIY Ltd Dungarvan Co, Waterford
Order No:
23
Quantity
Description
Unit Price
Total(Ex VAT)
20 50
5 litre tins of gloss paint 2 litre tins of varnish
50 10
Total (Excluding VAT) Trade Discount Subtotal VAT Total Due
1,000 500 1,500 300 1,200 252 1,452
E & OE
8. On 20 March 2007, Crossan Electric Ltd issued an invoice to Power Electric Ltd, Waterford, who ordered (Order No. 47) the following goods: 10 Solara flat screen televisions @ 550 per set (excluding VAT). 5 Sony DVD players recorders @ 600 per player (excluding VAT). Trade discount was 20% and VAT was 21%. Complete the following blank invoice.
307
Crossan Electric Ltd. Longford INVOICE No. 47 To: Tel: 043-43218 Fax: 043-43219 e-mail: ce@eircom.net VAT Reg. No. IE654453 20/3/2007 Date:
Power Electric Ltd Waterford
Order No:
47
Quantity
Description
Unit Price
Total(Ex VAT)
10 5
Solara Flat TVs Sony DVD Players
550 600
5,500 3,000 8,500 1,700 6,800 1,428 8,228
E & OE
9. On 10 August 2007, Daly Car Parts Ltd issued an invoice to Quilter Service Station, Tralee, Co. Kerry who ordered (Order No. 93) the following goods: 8 HP35 Batteries @ 50 per battery (excluding VAT). 10 ICRX Batteries @ 60 per battery (excluding VAT). Trade discount was 30% and VAT was 21%. Complete the following blank invoice.
Daly Car Parts Ltd. Carlow INVOICE No. 312 To: Tel: 0503-81789 Fax: 0503-81788 e-mail: dcp@eircom.net VAT Reg. No. IE678321 Date: 10/8/2007
Quilter Service Station Tralee Co, Kerry
Order No:
93
Quantity
Description
Unit Price
Total(Ex VAT)
8 10
HP35 Batteries ICRX Batteries
50 60
400 600 1,000 300 700 147 553
E & OE
308
10. On 23 May 2006 Jones Ltd, Dublin Road, Galway issued a credit note No. 23 to Sparks Ltd, Longford, because six faulty TV aerials, unit price 60, were returned. Trade discount is 25% and VAT was 21%. Complete the Credit Note No. 23 provided.
Jones Ltd. Dublin Road, Galway CREDIT NOTE No. 23 To: Sparks Ltd Tel: 091-21355 Fax: 091-2136 e-mail: jo@eircom.net VAT Reg. No. IE790023 23/5/2006 Date:
Longford
Order No:32
Quantity
Description
Unit Price
Total(Ex VAT)
TV Aerials Faulty
60
360 360 90 270 56.70 326.70
E & OE
11. On 17 May 2006 Barry Ltd, Sea Road, Sligo issued a credit note No. 67 to Cavan Stores Ltd, Cavan, because ten broken chairs, unit price 12, were returned. Trade discount is 25% and VAT was 21%. Complete the Credit Note No. 67 provided.
Barry Ltd. Sea Road, Sligo CREDIT NOTE No. 67 To: Tel: 073-32217 Fax: 073-32218 e-mail: Jbarry@eircom.net VAT Reg. No. IE325467 17/5/2006 Date:
Cavan Stores Ltd Cavan
Order No:32
Quantity
Description
Unit Price
Total(Ex VAT)
10
Chairs Broken
12
120 120 30 90 18.90 108.90
E & OE
309
12. On 16 February 2007 Brooks Ltd, Castlebar, Co. Mayo issued a credit note No. 45 to BK Ltd, Cork, because five unordered bicycles, unit price 75, were returned. Trade discount is 25% and VAT was 21%. Complete the Credit Note No. 45 provided.
Brooks Ltd. Castlebar Co. Mayo CREDIT NOTE No. 45 To: Tel: 094-26686 Fax: 094-26785 e-mail: emailbrooks@eircom.net VAT Reg. No. IE325467 Date: 16/2/2007
BK Ltd Cork
Order No:19
Quantity
Description
Unit Price
Total(Ex VAT)
Bicycles Unordered
75
375 375 93.75 281.25 59.06 340.31
E & OE
Chapter 37 Recording Credit Transactions

1. Match the following books of first entry to the source documents. Books of First Entry: Purchases book; General Journal; Sales returns book; Sales book; Purchases returns book. One book does not match.
Source Document Invoice sent Credit Note received Invoice received Credit Note sent Book of First Entry
Sales Book Purchases Returns Book Purchases Book Sales Returns Book
2. Write out the following abbreviations in full: Debit (i) DR (ii) DL (iii) CL
Debtors Ledger Creditors Ledger
(v) CR (vi) GL
Credit General Ledger
(vii) B/D Brought Down
(iv) C/D Carry Down
310
Integrated Invoice Exercises 3. On 16 June 2005, Walshe Ltd, Mallow, Co. Cork sent an Order No. 7 to Morris Electric Ltd, Main Street, Cork, for the following goods: 50 Sony Walkmans @ 110 each excluding VAT. 10 Nut DVDs @ 100 each excluding VAT. The goods ordered are in stock and on 18 June 2005 are delivered by Morris Electric Ltd. An Invoice No. 31 accompanies the goods. Trade discount is 20% and the furniture is subject to VAT at 21%. (a) Outline how Walshe Ltd should treat outgoing orders. (b) From the details provided complete the Invoice No. 31. (c) Record the invoice issued in the sales book of Morris Electric Ltd. (a) Check the name and address; Check stock and credit rating of buyer; File copy of order. (b)
Morris Electric Ltd. Main Street, Cork INVOICE No. 31 To: Tel: 021-826178 Fax: 021-826188 e-mail: morriselec@eircom.net VAT Reg. No. IE333568 18/6/2005 Date:
Walshe Ltd Mallow Co. Cork
Order No:
Quantity
Description
Unit Price
Total(Ex VAT)
50 10
Sony Walkmans Nut DVDs
110 100
5,500 1,000 6,500 1,300 5,200 1,092 6,292
E & OE
(c)
SALES BOOK (p1) Date 18/6/05 Details Walshe Ltd Invoice No F DL Net VAT Total
31
5,200
1,092
6,292
4. On 25 May 2006, Nolan Ltd, Station Road, Kildare, Co. Kildare sent an Order No. 65 to Kelly Tiles Ltd, Cross Street, Carlow, for the following goods: 30 boxes of Ceramic Tiles @ 50 per box excluding VAT. 20 boxes of Floor Tiles @ 100 per box excluding VAT. The tiles ordered are in stock and on 28 May 2006 are delivered by Kelly Tiles Ltd. An Invoice No. 78 accompanies the goods.
311
Trade discount is 20% and the tiles are subject to VAT at 13%. (a) Outline how Kelly Tiles Ltd should treat outgoing orders. (b) From the above details complete the Invoice No. 78. (c) Record the invoice received in the purchases book of Nolan Ltd. (a) Check the name and address; Check stock levels and credit rating of buyer; File copy of order.
(b)
Kelly Tiles Ltd. Cross Street, Carlow INVOICE No. 78 To: Tel: 0503-41658 Fax: 0503-41659 e-mail: kellythiles@eircom.net VAT Reg. No. IE678321 28/5/2006 Date:
Nolan Ltd Station Road Kildare Co. Kildare
Order No:
65
Quantity
Description
Unit Price
Total(Ex VAT)
30 20
Ceramic Tiles Floor Tiles
50 100
1,500 2,000 3,500 700 2,800 378 3,178
E & OE
(c)
PURCHASES BOOK (p1) Date Details Invoice No F Net VAT Total
28/05/06
Kelly Tiles
78
CL
2,800
378
3,178
5. On 13 March 2007, Daly Ltd, Howth, Co. Dublin sent an Order No. 24 to Cronin Paints Ltd, Naas, Co. Kildare, for the following goods: 100 tins of white emulsion @ 20 per tin excluding VAT. 40 tins of wood gloss @ 50 per tin excluding VAT. The paints ordered are in stock and on 15 March 2007 are delivered by Cronin Paints Ltd. An Invoice No. 57 accompanies the goods. Trade discount is 30% and the furniture is subject to VAT at 13%. (a) Outline how Daly Ltd should treat incoming invoices. (b) From the above details complete the Invoice No. 57. (c) Record the invoice issued in the Sales Book of Cronin Paints Ltd. (a) Check the name and address; Check the calculations; Record in Purchases Book.
312
(b)
Cronin Paints Ltd. Naas, Co. Kildare INVOICE No. 57 To: Tel: 045-826178 Fax: 045-826179 e-mail: cronin-paints@eircom.net VAT Reg. No. IE333568 Date: 15/3/2007
Daly Ltd Howth Co. Dublin
Order No:
24
Quantity
Description
Unit Price
Total(Ex VAT)
100 40
White emulsion Wood gloss
20 50
2,000 2,000 4,000 1,200 2,800 378 3,178
E & OE
(c)
SALES BOOK (p1) Date 15/3/07 Details Invoice No F Net VAT Total
Daly Ltd
57
DL
2,800
378
3,178
6. On 28 January 2005, Burke Ltd, Ballina, Co. Mayo sent an Order No. 3 to Shine Jeans Ltd, Centre Street, Sligo, for the following goods: 50 pairs of Levi mens jeans @ 45 per pair excluding VAT. 70 pairs of Kearns mens jeans @ 60 per pair excluding VAT. The jeans ordered are in stock and on 3 February 2005 are delivered by Shine Jeans Ltd. An Invoice No. 87 accompanies the goods. Trade discount is 25% and the jeans are subject to VAT at 21%. (a) Outline how Shine Jeans Ltd should treat outgoing invoices. (b) From the above details complete the Invoice No. 87. (c) Record the invoice received in the purchases book of Burke Ltd. (a) Check the name and address; Check the calculations; Record the invoice in the Sales Book.
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(b)
Shine Jeans Ltd. Centre Street, Sligo INVOICE No. 87 To: Tel: 071-44032 Fax: 071-9144033 e-mail: shinejeans@eircom.net VAT Reg. No. IE545678 28/1/2005 Date:
Burke Ltd Ballina Co. Mayo
Order No: 3
Quantity
Description
Unit Price
Total(Ex VAT)
50 70
Levi mens jeans Kearns mens jeans
45 60
2,250 4,200 6,450 1,612.50 4,837.50 1,015.90 5,853.40
E & OE
(c)
PURCHASES BOOK (p1) Date Details Invoice No F Net VAT Total
28/1/05
Shine Jeans Ltd
87
CL
4,837.50
1,015.90
5,853.40
Integrated Credit Note Exercises 7. On 12 June 2004, East Ltd, Wexford, a computer manufacturer, received a letter of complaint from a customer, Young Ltd, Gate Street, Navan, Co. Meath. In the letter from Young Ltd, it was stated that four printers, which had been delivered, were black instead of coloured. The price per printer was 100 excluding VAT. East Ltd issued a Credit Note, No. 45 on 23 June 2004. Trade Discount was 25% and VAT was 21%. (a) Assume you are Sheila Young, Purchasing Manager for Young Ltd. Write a letter of complaint in your copybook to the Sales Manager of East Ltd stating why you are not satisfied with the printers you received and requesting a reduction in the amount owed.
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(b) Complete the credit note on the blank document sheet provided. (c) Record the credit note received in the purchases returns book of Young Ltd. (a)
Young Ltd, Gate Street, Navan, Co. Meath. 12 June 2004. East Ltd, Wexford. Dear Sales Manager, My company recently purchased a number of printers from you. Unfortunately, I found that four of the printers were black instead of coloured. As these printers are not as ordered, I would like you to collect them and reduce the amount owing. Yours faithfully, Sheila Young. Purchasing Manager
(b)
East Ltd. Wexford. CREDIT NOTE No. 45 To: Young Ltd Tel: 053-2213345 Fax: 053-2213346 e-mail: East2east@eircom.net VAT Reg. No. IE234345 Date: 23 June 2004
Gate Street Navan Co. Meath

Order No: 76
Quantity
Description
Unit Price
Total(Ex VAT)
Computer printers Black instead of colour
100
400 400 100 300 63 363
E & OE
(c)
PURCHASES RETURNS BOOK (p1) Date Details Credit Note No F Net VAT Total
23/6/04
East Ltd
45
CL
300
63
363
8. On 17 May 2004, South Ltd, Waterford, a shoe manufacturer, received a letter of complaint from one of their customers, Foot Ltd, Toe Street, Kinsale, Co. Cork. In the letter from Foot Ltd, it was stated that fifteen pairs of shoes, which had been delivered, were scratched. The price per pair was 50 excluding VAT. South Ltd issued a Credit Note, No. 67 on 23 June 2004. Trade Discount was 20% and VAT was 21%. (a) Set out the procedure, in your copybook, for dealing with credit notes issued. (b) Complete the credit note on the blank document sheet provided. (c) Record the credit note issued in the Sales Returns Book of South Ltd.
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(a)
Check the name and address Check that the details of the complaint are true Check calculations Record in Sales Returns Book
(b)
South Ltd. Waterford CREDIT NOTE No. 67 To: Tel: 051-460383 Fax: 051-460385 e-mail: wrsouthltd@eircom.net VAT Reg. No. IE768545 Date: 23/6/2004
Foot Ltd Toe Street Kinsale Co. Cork
Order No: 100
Quantity
Description
Unit Price
Total(Ex VAT)
15
Pairs of shoes Shoes scratched
50
750 750 150 600 126 726
E & OE
(c)
Sales Return Book (p1) Date Details Credit Note No F Net VAT Total
23/6/04
Foot Ltd
67
DL
600
126
726
9. On 20 June 2004, North Ltd, Donegal, a shirt manufacturer, received a letter of complaint from one of their customers, Back Ltd, Arm Street, Thurles, Co. Tipperary. In the letter from Back Ltd, it was stated that thirty shirts, which had been delivered, were missing buttons. The price per shirt was 40 excluding VAT. North Ltd issued a Credit Note, No. 45 on 23 June 2004. Trade Discount was 25% and VAT was 21%. (a) Set out the procedure, in your copybook, for dealing with incoming credit notes. (b) Complete the credit note on the blank document sheet provided. (c) Record the credit note received in the Purchases Returns Book of Back Ltd.
(a) Check the name and address Check the calculations Record in Purchase Returns Book File credit note
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(b)
North Ltd. Donegal. CREDIT NOTE No. 45 To: Tel: 074-567891 Fax: 074-567892 e-mail: northltd@eircom.net VAT Reg. No. IE990764 Date: 23/6/2004
Back Ltd Arm Street Thurles Co. Tipperary
Order No: 101
Quantity
Description
Unit Price
Total(Ex VAT)
30
Shirts Missing buttons
40
1,200 1,200 300 900 189 1,089
E & OE
(c)
PURCHASES RETURNS BOOK (p1) Date Details Credit Note No F Net VAT Total
23/6/04
North Ltd
45
CL
900
189
1,089
Chapter 38 Continuous Balancing Ledgers and Statements

In Q1-Q6, record the following information using the T Ledger formats and Continuous Balancing Ledger formats provided. Debtors Ledgers 1. Quinn Ltd Account 1/3/2005 Balance (dr) 6/3/2005 Sales returns
Date 2005 Details
12,000 11,500
F
4/3/2005 8/3/2005
T Ledger format Total Date 2005 Quinn Ltd A/C
Sales Sales
Details
65,000 23,500
F Total
1/3/ 4/3/ 8/3/
Balance b/d Sales Sales SB SB
12,000 65,000 23,500 100,500
6/3/ 8/3/
SRB
11,500 89,000 100,500
9/3/
Balance b/d
89,000
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Continuous Balancing Ledger format Quinn Ltd A/C Date 2005 Details F Dr debit Cr credit Balance
1/3/ 4/3/ 6/3/ 8/3/
Balance b/d Sales Sales returns Sales SB SRB SB 23,500 65,000 11,500
12,000 77,000 65,500 89,000
2. Aldemero Ltd Account 1/7/2006 Balance (dr) 8/7/2006 Sales returns

Date 2006 Details
17,300 10,700
F Total
6/7/2006 10/7/2006
T Ledger format Date 2006 Aldemero Ltd A/C
Sales Sales
Details
35,000 54,000
F Total
1/7/ 6/7/ 10/7/
Balance b/d Sales Sales SB SB
17,300 35,000 54,000 106,300
8/7/ 10/7/
SRB
10,700 95,600 106,300
11/7/
Balance b/d
95,600
Continuous Balancing Ledger format Aldemero Ltd A/C
Date 2006
Details
Dr debit
Cr credit
Balance
1/7/ 6/7/ 8/7/ 10/7/
Balance b/d Sales Sales returns Sales SB SRB SB 54,000 35,000 10,700
17,300 52,300 41,600 95,600
Creditors Ledgers 3. Agusto Ltd Account 1/3/2006 Balance (cr) 9/3/2006 Purchases returns
Date 2006 Details F
6,000 9,500
Total
7/3/2006 16/3/2006
Date 2006
Purchases Purchases
Details F
47,000 38,200
Total
T Ledger format
Agusto Ltd A/C
9/3/ 16/3/
Purchase returns Balance c/d
SRB
9,500 81,700 91,200
1/3/ 7/3/ 16/3/
Balance b/d Purchases Purchases PB PB
6,000 47,000 38,200 91,200
17/3/
Balance b/d
81,700
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Continuous Balancing Ledger format Agusto Ltd A/C Date 2006 Details F Dr debit Cr credit Balance
1/3/ 7/3/ 9/3/ 16/3/
Balance b/d Purchases Purchases returns Purchases PB PRB PB 9,500 38,200 47,000
6,000 53,000 43,500 81,700
4. Ryan Ltd Account 1/11/2007 Balance (cr) 19/11/2007 Purchases returns

Date 2007 Details F
17,000 9,500
Total
6/11/2007 27/11/2007
Date 2007
Purchases Purchases
Details F
52,000 34,800
Total
T Ledger format
Ryan Ltd A/C
19/11/ 27/11/
Purchases returns Balance c/d
PRB
9,500 94,300 103,800
1/11/ 6/11/ 27/11/
Balance b/d Purchases Purchases PB PB
17,000 52,000 34,800 103,800
28/11/
Balance b/d
94,300
Continuous Balancing Ledger format Ryan Ltd A/C Date 2007 Details F Dr debit Cr credit Balance
1/11/ 6/11/ 19/11/ 27/11/
Balance b/d Purchases Purchases returns Purchases PB PRB PB 9,500 34,800 52,000
17,000 69,000 59,500 94,300
5. Yorke Ltd Account 1/8/2007 Balance (cr) 16/8/2007 Purchases

Date 2007 Details F
83,600 24,900
Total
11/8/2007 23/8/2007
Date 2007
Purchases returns 52,000 Purchases returns 7,600

Details F Total
T Ledger format
Yorke Ltd A/C
11/8/ 23/8/ 23/8/
Purchases returns Purchases returns Balance c/d
PRB PRB
52,000 7,600 48,900 108,500
1/8/ 16/8/
Balance b/d Purchases PB
83,600 24,900 108,500
24/8/
Balance b/d
48,900
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Continuous Balancing Ledger format Yorke Ltd A/C Date 2007 Details F Dr debit Cr credit Balance
1/8/ 11/8/ 16/8/ 23/8/
Balance b/d Purchases returns Purchases Purchases returns PRB PB PRB 7,600 52,000 24,900
83,600 31,600 56,500 48,900
Statement Completion 6. Complete the statement given below which was sent by Darren Ltd to Farrell Ltd, Reynolds Avenue, Waterford on 31 May 2006. Use the following information.
2006 1/5/ 5/5/ 8/5/ 14/5/ 31/5/ Balance (dr) Invoice No. 5 issued to Farrell Ltd Credit note No. 34 issued to Farrell Ltd Invoice No. 19 issued to Farrell Ltd Credit Note No. 89 issued to Farrell Ltd 12,300 45,000 11,400 33,880 5,600
STATEMENT No. 45 Darren Ltd, Athlone Road, Wexford To :
Farrell Ltd Reynolds Avenue Waterford
Tel : 053-421234 Fax : 053-421235 VAT No. IE768652 Account No. 23 Date: 31/5/2006 Details Debit Credit Balance
Date
1/5/2006 5/5/ 8/5/ 14/5/ 31/5/
Balance b/d Invoice no. 5 Credit note no. 34 Invoice no. 19 Credit note no. 89 33,880 5,600 45,000 11,400
12,300 57,300 45,900 79,780 74,180
7. Complete the statement provided which was sent by Aaron Ltd to Daly Ltd, Cassidy Drive, Sligo on 31 May 2007.
2007 1/5/ 8/5/ 12/5/ 19/5/ 31/5/ Balance (dr) Invoice No. 5 issued to Farrell Ltd Credit note No. 34 issued to Farrell Ltd Invoice No. 19 issued to Farrell Ltd Credit Note No. 89 issued to Farrell Ltd 7,600 78,000 24,100 67,920 24,800
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STATEMENT No. 22 Aaron Ltd, The Square, Donegal To : Daly Ltd Cassidy Drive Sligo Tel : 074-421234 Fax : 074-421233 VAT No. IE332214 Account No. 23 Date: 31/5/2007 Details Debit Credit Balance
Date
1/5/2007 8/5/ 12/5/ 19/5/ 31/5/
Balance b/d Invoice no. 5 Credit note no. 34 Invoice no. 19 Credit note no. 89 67,920 24,800 78,000 24,100
7,600 85,600 61,500 129,420 104,620
8. The following details refer to the sale of goods on credit by Murphy Ltd to McCarthy Ltd, 9 Centre Street, Dublin for the month of May 2006. On 1 May 2006 there was a balance of 376 in McCarthys account in the Debtors Ledger of Murphy Ltd. 4/5/2006 Murphy Ltd sent an invoice no. 8 to McCarthy Ltd 1,800 9/5/2006 Murphy Ltd sent an invoice no. 32 to McCarthy Ltd 16,000 14/5/2006 Murphy Ltd received a cheque from McCarthy Ltd 5,600 18/5/2006 Murphy Ltd sent an invoice no. 78 to McCarthy Ltd 8,200 24/5/2006 Murphy Ltd sent a credit note no. 43 to McCarthy Ltd 4,500 31/5/2006 Murphy Ltd sent an invoice no. 89 to McCarthy Ltd 7,900 (a) List three checks that McCarthy Ltd should carry out on receiving the statement. (b) Complete the following statement No. 70 sent by Murphy Ltd on 31 May 2006 below. (a) (i) (ii) (iii) (b)
STATEMENT No. 70 Murphy Ltd, Carlow View, Kilkenny To : McCarthy Ltd 9 Centre Street Dublin Tel : 056-421234 Fax : 056-421235 VAT No. IE7686524 Account No. 23 Date 31/5/2006 Debit Credit Balance
Check the name and address Check the calculations Check statement details against Creditors Ledger
Date
Details
1/5/2006 4/5/ 9/5/ 14/5/ 18/5/ 24/5/ 31/5/
Balance b/d Invoice no. 8 Invoice no. 32 Cheque Invoice no. 78 Credit note no. 43 Invoice no. 89 8,200 4,500 7,900 1,800 16,000 5,600
376 2,176 18,176 12,576 20,776 16,276 24,176
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9. The following details refer to the sale of goods on credit by Victory Ltd to Lyons Ltd, Shane Road, Longford for the month of May 2007. On 1 May 2004 there was a balance of 250 in Lyons account in the Debtors Ledger of Victory Ltd. 5/5/2007 Victory Ltd sent an invoice no. 4 to Lyons Ltd 2,300 8/5/2007 Victory Ltd sent an invoice no. 29 to Lyons Ltd 13,000 16/5/2007 Victory Ltd received a cheque from Lyons Ltd 9,500 19/5/2007 Victory Ltd sent an invoice no. 46 to Lyons Ltd 9,500 26/5/2007 Victory Ltd sent a credit note no. 12 to Lyons Ltd 2,800 31/5/2007 Victory Ltd sent an invoice no. 57 to Lyons Ltd 8,300 No (a) Should cash sales be entered in the statement? Yes (b) Complete the following statement No. 98 sent by Victory Ltd on 31 May 2007.
STATEMENT No. 98 Victory Ltd, Athlone Road, Galway. To :
Lyons Ltd Shane Road Longford
Tel: 091-444331 Fax: 091-444332 VAT No. IE7686524 Account No. 45 31/5/2007 Date: Details Debit Credit Balance
Date
1/5/2007 5/5/ 8/5/ 16/5/ 19/5/ 26/5/ 31/5/
250 2,550 15,550 6,050 15,550 12,750 21,050
10. The following details refer to the sale of goods on credit by Macken Ltd to Cox Ltd, Tullamore, Co. Offaly for the month of May 2008. On 1 May 2008 there was a balance of 700 in Coxs account in the Debtors Ledger of Macken Ltd. 2/5/2008 Macken Ltd sent an invoice no. 3 to Cox Ltd 2,700 6/5/2008 Macken Ltd sent an invoice no. 54 to Cox Ltd 12,900 11/5/2008 Macken Ltd received a cheque from Cox Ltd 8,500 17/5/2008 Macken Ltd sent an invoice no. 61 to Cox Ltd 7,700 27/5/2008 Macken Ltd sent a credit note no. 21 to Cox Ltd 3,200 31/5/2008 Macken Ltd sent an invoice no. 74 to Cox Ltd 6,100 (a) With what should Cox Ltd compare the statement? Cox Ltd should compare the statement with Macken Ltd account in the Creditors Ledger. (b) Complete the following statement No. 100 sent by Macken Ltd on 31 May 2008.
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STATEMENT No. 100 Macken Ltd, Hanlon Lane, Monaghan. To :
Cox Ltd Tullamore Co. Offaly

Debit
Tel : 047-7729617 Fax : 047-7729618 VAT No. IE7987654 Account No. 123 31/5/2008 Date Details Credit Balance
Date
1/5/2008 2/5/ 6/5/ 11/5/ 17/5/ 27/5/ 31/5/
700 3,400 16,300 7,800 15,500 12,300 18,400
Other Continuous Balancing Ledger Exercises Record the following expense and gains transactions in the Continuous Balancing Ledgers. 11. On 23 January 2007 paid rent by cheque 500.
Rent A/C Date 2007 1/1/ Balance b/d 2,000 Details F Dr debit Cr credit Balance
23/1/
Bank
ACB
500
2,500
12. On 15 May 2007 paid insurance by cheque 1,200.

Insurance A/C Date 2007 1/5/ Balance b/d 200 Details F Dr debit Cr credit Balance
15/5/
Bank
ACB
1,200
1,400
13. On 26 June 2008 received interest from bank 3,200. This was lodged in the bank.
Interest Receivable A/C Date 2008 1/6/ Balance b/d 900 Details F Dr debit Cr credit Balance
26/6/
Bank
ACB
3,200
4,100
14. On 19 August 2008 received commission from Nissan Ireland of 15,500. This was lodged in the bank.
Commission Receivable A/C Date 2008 1/8/ Balance b/d 6,000 Details F Dr debit Cr credit Balance
19/8/
Bank
ACB
15,500
21,500
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Chapter 39 Analysed Cash Books I

1. Please tick the correct answer in each of the following statements.
True False
(a) A receipt is issued by the buyer (b) A cheque is issued by the buyer (c) Payments by cheque are entered on the debit side of the Analysed Cash Book 2. Complete the following statements. (a) A receipt is proof of payment for goods and services received. (b) A cheque is a method of payment where a current account holder instructs its bank to make a payment to another person. Cheque and Counterfoil Completion 3. Assume you are John Joyce. Complete the cheque no. 236 below from the following details: 16/5/2006 Paid Victory Ltd 3,560.
16/5/06
16/5/06 Victory Ltd
Victory Ltd
Three thousand, five hundered and sixty euro 3,560
3,560
John Joyce
4. Assume you are Peggy Shields. Complete the cheque no. 450 below from the following details: 30/6/2007 Paid Holy Ltd 980.
30/6/07
30/6/07 Holy Ltd
Holy Ltd
Nine hundred and eighty euro 980
980
Peggy Shields
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Receipt Completion 5. Assume you are Dara Carriage. Complete the receipt no. 23 on behalf of Bus Ltd below from the following details: Issued a receipt to Dunne Car Repairs Ltd, Four Lane Avenue, Sligo, for 2,112 on 10 March 2006.
Bus Ltd, Castlebar, Co. Mayo Receipt No: 23
10/3/2006 DATE: _________________

Received with thanks
The sum of: Two thousand, one hundred and twelve euro From:
2,112
Dunne Car Repairs Ltd, Four Lane Avenue, Sligo Dara Carriage Signed: Accounts Department
6. Assume you are Mary Car, complete the receipt no. 67 on behalf of Car Ltd below from the following details: Issued a receipt to Fiona Donnelly, Ilona Avenue, Longford, for 14,300 on 20 May 2007.
Car Ltd, Castlebar, Co. Mayo Receipt No: 67
20/5/2007 DATE: _________________

Received with thanks 14,300 The sum of: From:
Fourteen thousand, three hundred euro
Fiona Donnelly, Ilona Avenue, Longford Mary Car Signed: Accounts Department
Chapter 40 Analysed Cash Books II/Monitoring Overheads

1. Complete the following statements. (i) Overheads are also known as Examples of overheads include expenses. wages; light and heat; insurances;
advertising; rent; carriage outwards. (ii) Monitoring overheads involves preparing budgets for each overhead and keeping records of actual overheads. (iii) It is important to monitor overheads because it identifies the main overheads of a business. It allows comparison between actual overheads and budgeted overheads and allows changes to be made. 2. Complete the following statements: (i) The Petty Cash Book is used to record small cash payments made from the petty cash. (ii) A Petty Cash Voucher shows who authorised payment. what the money was spent on, who received it and
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(iii) The Petty Cash Imprest is of each week.
the amount of cash the petty cashier has at the start
3. (i) Complete the partially completed budget comparison sheet provided from the following details. Budget Comparison Sheet for 2005
Actual Overheads Wages Light and Heat Advertising Loan Interest Actual Overheads Wages Light and Heat Advertising Loan Interest Budgeted 76,500 48,000 37,600 11,900 Actual 2005 94,000 34,000 28,000 14,500 Difference
94,000 34,000 28,000 14,500
+ 17,500 14,000 9,600 + 2,600
(ii) Tick the appropriate box to indicate which is greater than or less than. If the actual overheads are less than the budgeted figures, indicate this with a minus sign, eg 3,500. Suggest suitable business reasons why there are differences.
Overheads Wages Light and Heat Advertising Loan Interest Greater Than Less Than Possible Reason
Extra overtime worked Good weather required less heat Change in advertising media Increase in rate of interest
4. (i) Complete the partially completed budget comparison sheet below from the following details.
Actual Overheads Insurance Carriage Outwards Rent Bad Debts 2006 14,800 22,800 56,000 16,500
Budget Comparison Sheet for 2006

Overheads Insurance Carriage Outwards Rent Bad Debts Budgeted 11,600 13,200 42,500 10,000 Actual Difference
14,800 22,800 56,000 16,500
+ 3,200 +9,600 +13,500 + 6,500
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(ii) Tick the appropriate box to indicate which is greater than or less than. If the actual overheads are less than the budgeted figures, indicate this with a minus sign, eg 3,500. Suggest suitable business reasons why there are differences.
Overhead Insurance Carriage Outwards Rent Bad Debts Greater Than Less Than Possible Reason
Increase in insurance premiums Increase in sales to far-away places Changes to new expensive premises Increase in credit sales
5. The following table shows the Budgeted and Actual figures for a businesss overheads for 2007. Business Overheads for 2007
Overheads Wages Telephone Carriage Outwards Postage Advertising Bad Debts Budgeted 67,000 28,400 27,500 17,600 19,000 15,000 Actual 78,000 36,200 41,000 19,860 19,000 13,000
(i) List the overheads whose actual figures are greater than the budgeted figures and give one possible business-related reason for the difference in each case.
Overheads Possible Reasons For Being Greater Than
Wages Telephone Carriage outwards Postage
Extra staff taken on Increased use of telesales Increase in motor insurance and tax Increase in cost of stamps
(ii) List the overheads whose actual figures are less than the budgeted figures and give one possible business-related reason for the difference in each case.
Overheads Possible Reasons For Being Less Than
Bad Debts
Introduced better credit control
6. Complete the petty cash voucher below from the following details. 18/3/2005 Purchase of tea and biscuits for the office by Richard Gervaise: 6.40. Passed by John West.
PETTY CASH VOUCHER Voucher no: 1 For what Required
18/3/2005 Date: _______________ Amount

6.40 Passed by:
Tea and biscuits for the office

Signature:
Richard Gervaise
John West
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7. Complete the petty cash voucher below from the following details. 28/8/2005 Purchase of stationery for the office by Pat Shortt: 11.50. Passed by John Kenny.
28/8/2005 Date: _______________ Amount

11.50 Passed by:
Stationery
Signature:
Pat Shortt
John Kenny
8. Complete the petty cash voucher below from the following details. 11/9/2006 Paid for taxi by Hector Navan: 7.50. Passed by Niall Quinn.
11/9/2006 Date: _______________ Amount

7.50 Passed by:
Taxi
Signature:
Hector Navan
Niall Quinn
9. Complete the petty cash voucher below from the following details. 18/1/2006 Paid window cleaner by Ronan Keating: 10.00 Passed by Louis Walsh.
18/1/2006 Date: _______________ Amount

10 Passed by:
Window cleaner
Signature:
Ronan Keating
Louis Walsh
10. Complete the petty cash voucher below from the following details. 18/3/2007 Purchase of stamps by Tommy Tiernan: 17.42. Passed by Colin Farrell.
PETTY CASH VOUCHER Voucher no: 450 For what Required Date: _______________ 18/3/2007 Amount 17.42 Passed by:
Stamps
Signature:
Tommy Tiernan
Colin Farrell
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Chapter 41 General Journal

1. Only one of the following statements is correct. Tick The General Journal is used to record: the correct one.
(a) The sale of fixed assets and stock on credit (b) Transactions not entered in other books of first entry (c) Purchase of machinery by cheque 2. Complete the following table, by showing which account is debited and which account is credited. Transaction (a) Purchased machinery on credit from Bell Ltd (b) Sold a second-hand computer to Kelly Ltd (c) Lawlor Ltd was written off as a bad debt 3. The following debtors were written off as bad debtors. Tick debt in each case.
A Debit Credit
Machinery Kelly Ltd Bad debt
Bell Ltd Computer Lawlor Ltd
the correct amount of the bad

B 1,920 1,400 525 C 2,400 4,900 1,500
(a) Ward owes 2,400, pays 0.20 in the 1 (b) Smith owes 3,500, pays 0.60 in the 1 (c) Corran owes 2,100, pays 0.25 in the 1
480 2,100 1,575
4. The following entries appeared in the General Journal of a grocer. Complete the General Journal by writing an appropriate narration/explanation.
General Journal Date 21/3/2005 Machinery Crown Machines Ltd Narration: Details F GL CL Dr 50,000 50,000 CR
Purchased machinery on credit
5. The following entries appeared in the General Journal of a business. Complete the General Journal by writing an appropriate narration/explanation.
General Journal Date 14/5/2006 Burns Ltd Equipment Narration: Details F DL GL Dr 17,500 17,500 CR
Sold equipment on credit
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6. The following entries appeared in the General Journal of a business. Complete the General Journal by inserting the appropriate figure opposite Clarke Ltd and an appropriate narration/explanation.
General Journal Date 30/3/2006 Cash Bad Debts Clarke Ltd Narration: Clarke Ltd declared bankrupt, paid 6000 cash Details F ABC GL Dr 6,000 17,000 CR
DL 23,000
23,000 23,000
7. The following entries appeared in the General Journal of a business. Complete the General Journal by inserting the figure for Ordinary Share Capital and an appropriate narration/ explanation.
General Journal Date 1/2/2007 Machinery Bank Overdraft Ordinary Share Capital Narration: Asset, liability and ordinary share capital Details F GL ACB GL Dr 60,000 5,000 CR
55,000 60,000 60,000
8. Record the following in the General Journal of Hynes Ltd below. On 3/10/2006 Kiernan Ltd who owes 44,000 goes bankrupt and pays 0.50 in the euro. The remainder is written off as a bad debt.
General Journal of Hynes Ltd Date Details F Dr CR
3/10/06
Cash Bad debts Kiernan Ltd

Narration: Kiernan Ltd declared bankrupt, paid 50 cent per euro owed
ACB GL DL
22,000 22,000 44,000
9. Record the following in the General Journal of Ryan Ltd below. On 7/7/2007 Connor Ltd who owes 13,000 goes bankrupt and pays 0.20 in the euro. The remainder was written off as a bad debt.
General Journal of Ryan Ltd Date Details F Dr CR
7/7/07
Cash Bad debts Connor Ltd

Narration: Connor Ltd declared bankrupt, paid 20 cent per euro owed
ACB GL DL
2,600 10,400 13,000
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Chapter 42 Combined Books of First Entry and Ledger

1. The following account appeared in the ledger of Given Ltd.
DR Date 2005 12/5/ 18/5/ Details Bank Total Creditors F ACB PB Purchases Account Total 14,500 23,600 Date 2005 Details F CR Total
Complete the sentences below to explain these entries. (a) On 12/5/2005 Given Ltd purchases goods for resale by cheque 14,500. (b) On 18/5/2005 Given Ltd purchased goods for resale on credit 23,600.
2. The following account appeared in the ledger of OShea Ltd.

DR Date 2005 1/5/ 28/5/ Details Balance b/d Bank F Delivery Van Account Total 56,500 Date 2005 Details F CR Total
ACB 28,000
Complete the sentences below to explain these entries. (a) On 1/5/2005 OShea Ltd has delivery vans which cost 56,500.
(b) On 28/5/2005 OShea Ltd purchased a new delivery van by cheque 28,000.
3. The following account appeared in the ledger of Carr Ltd.

DR Date 2006 22/4/ Details Bank F Cunningham Ltd Account Total ACB 14,500 Date 2006 1/4/ Details Balance b/d F CR Total 16,000
Complete the sentences below to explain these entries. (a) On 1/4/2006 Carr Ltd owes Cunningham Ltd 16,000. (b) On 28/4/2006 Carr Ltd paid by cheque 14,500 to Cunningham Ltd.
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4. The following account appeared in the ledger of OBrien Ltd.

DR Date 2006 10/9/ 29/9/ Details Balance b/d Sales F ACB SB Kerr Ltd Account Total 14,500 11,456 Date 2006 Details F CR Total
Complete the sentences below to explain these entries. (a) On 10/9/2006 OBrien Ltd (b) On 29/9/2006 OBrien Ltd is owed 14,500 by Kerr Ltd. sold goods 11,456 on credit to Kerr Ltd.
5. The following account appeared in the ledger of Duff Ltd.

DR Date 2007 12/11/ Details Balance b/d F Roy Ltd Account Total 20,000 Date 2007 30/11/ Details Bad Debt F CR Total GL 20,000
Complete the sentences below to explain these entries. (a) On 12/11/2007 Duff Ltd is owed 20,000 by Roy Ltd. (b) On 30/11/2007 Duff Ltd wrote Roy Ltd off as a bad debt for the full amount owing.
6. The following account appeared in the ledger of Kilbane Ltd.

DR Date 2007 Details F Interest Receivable Account Total Date 2007 13/4/ 30/4/ Details Bank Balance c/d F ACB CR Total 3,500 1,000
Complete the sentences below to explain these entries. (a) On 13/4/2007 Kilbane Ltd received 3,500 in interest and this was lodged in the bank. (b) On 30/4/2007 Kilbane Ltd is owed 1,000 interest from the bank.
332
7. The following account appeared in the ledger of Reid Ltd.

DR Date 2007 12/10/ Details Finnan Ltd F DL Bank Account Total 6,500 Date 2007 1/10/ Details Balance b/d F CR Total 4,400
Complete the sentences below to explain these entries. (a) On 1/10/2007 Reid Ltd has a bank overdraft of 4,400.
(b) On 12/10/2007 Reid Ltd received 6,500 from Finnan Ltd and this was lodged.
Chapter 43 Control Accounts

1. Complete the Debtors Control Account below from the following data. Total credit sales for June 2006 Total sales returns for June 2006 Total cash paid by debtors for June 2006
DR Date 2006 Details F Total 45,000
45,000 3,400 31,000

CR Details F Total 3,400 31,000 10,600 45,000 Date 2006
Debtors Control A/C
30/6/
Sales
SB
30/6/ 30/6/ 30/6/
Sales returns Bank Balance c/d
SBR ACB
45,000 1/7/ Balance b/d 10,600
2. Complete the Creditors Control Account below from the following data. Total credit purchases for August 2006 Total purchases returns for August 2006 Total cash paid to creditors for August 2006
DR Date 2006 Details F Total 7,400
32,000 7,400 21,000

CR Details F Total 32,000 Date 2006
Creditors Control A/C
August August August
Purchase returns PRB Bank Balance c/d ACB
August
Purchases
21,000 3,600 32,000 September Balance b/d 32,000 3,600
3. Complete the Debtors Control Account provided from the following data. Total credit sales for May 2007 Total sales returns for May 2007 Total cash paid by debtors for May 2007 67,000 6,900 53,400
333
Debtors Control A/C Date 1/5/07 Balance b/d Details F Dr debit Cr credit Balance 12,000
31/5/ 31/5/ 31/5/
Sales Sales returns Bank
SB SRB ACB
67,000 6,900 53,400
79,000 72,100 18,700
4. Complete the Creditors Control Account below from the following data. Total credit purchases for March 2007 Total purchases returns for March 2007 Total cash paid to creditors for March 2007
Date 1/5/07 Balance Details F
37,000 2,400 21,900

Dr debit Cr credit Balance 4,500
Creditors Control A/C
31/5/ 31/5/ 31/5/
Purchases Purchases returns Bank
PB PRB ACB 2,400 21,900
37,000
41,500 39,100 17,200
Chapter 44 Trading Account

Calculating the Average Stock 1. Calculate the average stock from the following information. (a) Opening stock 20,000; Closing Stock 40,000.
Answer: 30,000 Workings 20,000 + 40,000 2
(b) Opening stock 16,000; Closing stock 36,000.

Answer: 26,000 Workings 16,000 + 36,000 2
(c) Opening stock 18,000; Closing stock 12,000.

Answer: 15,000 Workings 18,000 + 12,000 2
Calculating the Mark-up on Cost of sales 2. Calculate the gross (profit) mark-up from the following information. (a) Gross Profit 50,000; Cost of sales 250,000.
Answer %: 20% Workings
50,000 x 100 250,000
334
(b) Gross Profit 45,000; Cost of sales 160,000.

Answer %: 28.13% Workings
45,000 x 100 160,000
(c) Gross Profit 45,000; Cost of sales 180,000.

45,000 x 100 180,000
Calculating the Margin on Sales 3. Calculate the gross (profit) margin from the following information. (a) Gross Profit 39,000; Sales 300,000.
39,000 x 100 300,000
(b) Gross Profit 81,000; Sales 450,000.

81,000 x 100 450,000
(c) Gross Profit 82,800; Sales 345,000.

82,800 x 100 345,000
4. Close off the following accounts to the Trading Account in your copybook. Find the Gross Profit or Loss for the year ended 31/3/2006. Complete the Trading Account in your exercise book. Note: Opening Stock is 16,000 and Closing Stock is 14,000.
Date 2006 Details F Total Date 2006 Sales A/C (p1) Details F Total
31/3/
31/3/
Trading
Balance b/d
85,000
35,000
31/3/
Balance
b/d
85,000
Purchases A/C (p2)
31/3/
31/3/
Trading
Balance b/d
35,000
5,000
Purchases Returns A/C (p3)
31/3/
31/3/
Trading
Balance b/d
5,000
5,000
Import Duty A/C (p4)
31/3/
Trading
5,000
Trading account for year ending 31/3/2006 Sales Less cost of sales Opening stock Purchases Less purchases returns Import duty Cost of goods available Less closing stock Cost of actual sales Gross profit 85,000 16,000 35,000 5,000 30,000 5,000 51,000 14,000 37,000 48,000
335
1/6/05
31/5/06
5. Close off the following accounts to the Trading Account in your copybook. Find the Gross Profit or Loss for the year ended 31/5/2007. Complete the Trading Account in your exercise book. Note: Opening Stock is 16,000 and Closing Stock is 14,000.
Date 2007 Details F Total Date 2007 Sales A/C (p1) Details F Total
31/5/
31/5/ 31/5/ 31/5/
Trading
Balance Balance Balance b/d b/d b/d
190,000
43,000 11,000 9,000
31/5/
Balance
b/d
190,000
Purchases A/C (p2)
31/5/ 31/5/ 31/5/
Trading Trading Trading
43,000 11,000 9,000
Sales Returns A/C (p3) Carriage In A/C (p4)
Trading account for year ending 31/5/2007 Sales Less sales returns Less cost of sales Opening stock Purchases Carriage inwards Cost of goods available Less closing stock Cost of actual sales Gross profit 190,000 11,000 179,000 16,000 43,000 9,000 68,000 14,000 54,000 125,000
1/6/06
31/5/07
Chapter 45 Profit and Loss Account

1. Classify the following items of expenditure under capital or revenue expenditure for a bakery: Carriage outwards; Heating oil; Loan interest; Machinery; Wages; Repairs to machinery; Vans; Factory extension; Computer.
Capital Expenditure Revenue Expenditure
Machinery Vans Factory extension Computers
Carriage outwards Heating oil Loan interest Wages Repairs to machinery
2. The Trading, Profit and Loss Account of a company showed a Net Profit of 54,000. It was later realised that sales returns of 500 were omitted. Calculate the correct net profit when the error is corrected.
Answer: 53,500 Calculations
54,000 500
3. The Trading, Profit and Loss Account of a company showed a Net Profit of 102,000. It was later realised that the wages of 40,000 were entered twice. Calculate the correct net profit when the error is corrected.
102,000 + 40,000
336
4. The Trading, Profit and Loss Account of a company showed a Net Loss of 1,500. It was later realised that the following were omitted: Carriage inwards 200; interest receivable 12,000 and depreciation of 3,200. Calculate the correct net profit when the error is corrected.
Answer: 7,100 Net profit Calculations
1,500 + 12,000 200 3,200 = Net profit 7,100
Chapter 46 Profit and Loss Appropriation Account

1. Calculate the dividends paid from the following information: Net Profit 50,000; Issued Share Capital 200,000; Rate of dividend paid 15%.
15% of 200,000 = 30,000
2. Calculate the retained earnings (reserves) from the following information: Net Profit 70,000; Issued Share Capital 180,000; Rate of dividend paid 25%.
25% of 180,000 = 45,000
3. Calculate the dividends paid and the retained earnings from the following information: Net Profit 120,000; Issued Share Capital 300,000; Rate of dividend paid 30%.
Answer: Calculations 90,000 (Dividends) Dividends 30% of 300,000 = 90,000 Retained earnings = 120,000 90,000 = 30,000 (RE)
30,000
4. Calculate the retained earnings at the end of a year from the following information: Opening Retained Earnings Balance on 1/12/2006 50,000; Net Profit for year ending 31/12/2006 130,000; Issued Share capital 400,000; Rate of dividend paid 20%.
Answer: 100,000 Calculations Dividends 20% of 400,000 = 80,000 Retained earnings 130,000 80,000 = 50,000 + 50,000 = 100,000
50,000
5. Complete the following Profit and Loss Appropriation Account for the year ended 31/5/2007 from the following information: Opening Retained Earnings Balance on 1/6/2006 75,000; Net Profit for year ending 31/5/2007 187,000; Dividends paid 77,000. Profit and Loss Appropriation Account for the year ended 31/5/2007
Net Profit Less dividends Add opening RE Retained earnings
187,000
77,000
110,000 75,000 185,000
337
6.
Complete the following Profit and Loss Appropriation Account for the year ended 31/5/2007 from the following information: Opening Retained Earnings Balance on 1/6/2006 36,000; Net Profit for year ending 31/5/2007 210,000; Dividends paid 104,500. Profit and Loss Appropriation Account for the year ended 31/5/2007
Net profit Less dividends Add opening RE Retained earnings
210,000 104,500 105,500 36,000 141,500
Chapter 47 Balance Sheet

1. Indicate with a tick 0 the correct answer to each question. (a) Only one of the following is not a current asset: (i) Machinery (ii) Closing Stock (iii) Debtors (b) Total net assets are the same as: (i) Fixed assets plus working capital (ii) Fixed assets less liabilities (c) Dividends declared but not yet paid is an example of: (i) Current assets (ii) Current liability (iii) Investment (d) Authorised share capital cannot be: (i) Less than issued capital (ii) Equal to issued capital (iii) Greater than issued capital 2.
Classify the following assets and liabilities under their correct headings below: 20 year loan; dividends due; machinery; bank overdraft; cash; creditors; equipment; closing stock.
Long Term Liabilities Current Liabilities 20-year loan Dividends due Fixed Assets Machinery Current Assets Cash
Bank overdraft Creditors
Equipment
Closing stock
338
Chapter 48 Adjustments to Final Accounts

1. Indicate with a tick 0 which of the following statements are true or false. Explain your answer.
True False
(a) Amounts prepaid are always added in the profit and loss account. Explanation They are always deducted as they belong to another trading period.
True
False
(b) Closing stock of stationery is treated as an amount due. Explanation
Closing stock of stationery will be used in another trading period, so its a
prepaid expense.
True False
(c) Amounts due to a firm are treated as current assets. Explanation Amounts due to a firm are owed to the firm (i.e. by debtors).
2.
An annual insurance premium is paid on 1 April 2006. Close off and balance the insurance account for the year ended 31/12/2006. Show clearly the amount to be transferred to the Profit and Loss account.
Date 2006 1/4/ 1/4/ Balance b/d Bank ACB Details F Total Date Details F Total 2006 Insurance A/C 1,600 31/12/ 3,200
P. Loss Account Balance c/d
4,000 800 4,800
31/12/
4,800 1/1/07 Balance b/d 800
3.
A business owed 230 for repairs on the 31/12/2007. Close off and balance the repairs account for the year ended 31/12/2007. Show clearly the amount to be transferred to the profit and loss account.
Date 2007 1/12/ Bank ACB Details F Total Date Details F Total 2007 Repairs A/C 1,800 31/12/
P. Loss Account
2,030 2,030
31/12/
Balance c/d
230 2,030 1/1/08 Balance b/d 230
339
4. A business owed 670 for wages on the 31/12/2007. Close off and balance the wages account for the year ended 31/12/2007. Show clearly the amount to be transferred to the profit and loss account.
Date 2007 1/12/ Bank ACB Details F Total Date Details F Total 2007 Wages A/C 18,500 31/12/
P. Loss Account
19,170 19,170
31/10/
Balance c/d
670 19,170 1/1/08 Balance b/d 670
5.
The following is an extract from the profit and loss account of a business for the year ending December 2007.
Electricity Add electricity due Profit and Loss Account for year ending 31/12/2007 1,200 800 2,000
(a) What is the figure for electricity used during the year? (b) What is the figure for electricity paid for during the year? 6.
2,000 1,200
The following is an extract from the profit and loss account of a business for the year ending March 2007.
Advertising Profit and Loss Account for year ending 31/3/2007 4,200 900 3,300
Less advertising prepaid
(a) What is the figure for advertising used during the year? (b) What is the figure for advertising paid for during the year? 7.
3,300 4,200
The following is an extract from the profit and loss account of a business for the year ending July 2007.
Interest receivable Profit and Loss Account for year ending 31/7/2007 4,500 1,500 6,000
Add interest receivable due
(a) What is the figure for interest used during the year? (b) What is the figure for interest recieved for during the year?
6,000 4,500
340
Chapter 49 Final Accounts and Balance Sheet with Adjustments

1.
Balance Sheet of McGrath Ltd as on 31 May 2006 Fixed Assets Current Assets Less Current Liabilities 75,000 45,000 30,000 230,000 Financed By 400,000 Ordinary Shares Add reserves Long term Liabilities Authorised 400,000 Issued 175,000 35,000 210,000 20,000 230,000 200,000
(a) What is the Working Capital figure of McGrath Ltd? (b) What is the Capital Employed figure of McGrath Ltd? 2.
30,000 230,000
Indicate with a tick 0 where each of the following adjustments are entered in the Trading, Profit and Loss and Appropriation Account (TPLA) and Balance Sheet.
Adjustment Dividends due Wages due Insurance prepaid Interest receivable prepaid Carriage inwards due Rent receivable due Advertising prepaid Interest due Closing stock Added in Subtracted in TPLA TPLA Current Assets in Balance Sheet Current Liabilities in Balance Sheet
0 0 0 0
0 0 0 0 0 0 0 0 0
0 0 0 0 0
3.
Show how the following adjustments are entered in the Trading, Profit and Loss Account and Balance Sheet extracts below. Machinery 300,000, Motor vans 120,000. Depreciation: Machinery 15%; Motor Vans 12%.
Trading, Profit and Loss and Appropriation Account for the year ended 31 May 2006 Less Expenses
Depreciation: machinery motor vans
45,000 15,000 60,000
Balance Sheet as on 31 May 2006 Fixed Assets Cost Deprecation NBV
Machinery Motor vans
300,000 120,000 420,000
45,000 15,000 60,000
255,000 105,000 360,000
341
4.
Enter the following adjustments in the partially completed Trading, Profit and Loss Account and Balance Sheet below. Interest Receivable due 500, Advertising due 1,500, Insurance prepaid 700.
Trading, Profit and Loss and Appropriation Account for the year ended 31 May 2007 Gross Profit 200,000 Add gains Interest Receivable 7,500
Add interest due

Less Expenses Advertising
500
8,000 208,000
12,000
Add advertising due

Insurance
1,500
6,500
13,500 5,800 19,300 188,700
Less insurance prepaid

Net Profit
700
Balance Sheet as on 31 May 2007 Current Assets
Interest receivable due Insurance prepaid

Current Liabilities
500 700 1,200 1,500 (300)
Advertising due Working capital
Chapter 50 Assessing a Business

1. Given a cost price of 150 and a selling price of 200, calculate the percentage mark-up.
Answer: Workings 200 150 = 50 mark-up 50 x 100% = 33.33% 150
33.33 __________%
2. Given a cost price of 200 and a selling price of 250, calculate the percentage margin on sale.
Answer: __________% 20 Workings 250 200 = 50 margin 50 x 100% = 20% 250
3.
A company has a net profit of 250,000 and a capital employed of 500,000. Calculate the return on capital employed.
Answer: __________% 50 Workings 250,000 x 100% = 50% 500,000
4.
A company has a net profit of 60,000 and a capital employed of 240,000. Calculate the return on capital employed.
Answer: Workings 60,000 x 100% = 25% 240,000
25 __________%
342
5.
A company has current assets of 11,000 and current liabilities of 4,650. Calculate the working capital ratio correct to one decimal point.
Answer: 2.37:1 Workings 11,000 : 4,650 2.37 :1
6.
A company has current assets of 47,000 (including closing stock of 12,000) and current liabilities of 17,000. Calculate the acid test ratio correct to two decimal points.
Answer: 2.06:1 Workings (47,000 12,000) : 17,000 35,000 : 17,000 2.06 :1
7.
Calculate the rate of Stock Turnover from the following data. Opening Stock 40,000, Closing Stock 30,000, Cost of Sales 175,000.
Answer: 17.5 times Workings 175,000 40,000 + 30,000
175,000 10,000
= 17.5 times
8. Examine the following balance sheets and state if the companies are solvent or insolvent. Give a reason for your answer in each case.
Balance Sheet of D&D as on 31/5/2006 Fixed Assets Current Assets Less Current Liabilities Total Net Assets Financed By Share Capital Loan Capital Employed Answer: D&D are solvent Reason: Total assets greater than total liabilities 460,000 greater than 110,000 350,000 60,000 410,000 400,000 60,000 50,000 410,000 Fixed Assets Balance Sheet of M&M as on 31/5/2006 300,000 40,000 95,000 245,000 130,000 115,000 245,000
Current Assets Less Current Liabilities Total Net Assets Financed By Share Capital Loan Capital Employed Answer: M&M are solvent
Reason: Total assets greater than total liabilities 340,000 greater than 210,000
9.
(a) Explain the terms: (i) Overtrading This is where a company is operating without enough permanent
capital. It tries to produce more than it is capable of. (ii) Solvent liabilities. A business is solvent if its total assets are greater than its external
343
(b) The directors of Bridge Ltd, Main Street, Cork supplied the following figures for the years 2005 and 2006.
2005 Sales Gross Profit Net Profit Current Assets Current Liabilities Closing Stock Capital Employed 480,000 200,000 100,000 48,000 18,000 12,000 520,000 2006 510,000 280,000 180,000 54,000 39,000 17,000 580,000
Assume you are Kevin Scully, Management Consultant, Suspense Street, Waterford. Prepare a report in your copybook, on todays date, for the directors of Bridge Ltd. Compare and comment on the performance of the business over the two years, 2005 and 2006. Use the following ratios in comparing the performance: Gross Profit Percentage; Net Profit Percentage; Return on Capital Employed; Acid Test Ratio.
Suspense Street, Waterford. Report on the performance of Bridge Ltd for the years 2005 and 2006 Date The Directors of Bridge Ltd, Main Street, Cork. I was asked on your behalf to prepare a report on the performance of the company for the years 2005 and 2006. I used the following ratios: gross profit percentage; net profit precentage; return on capital employed; acid test ratio. My findings are as follows: 2005 41.67% 20.83% 19.23% 2:1 2006 54.90% 35.29% 31.03% 0.95 : 1
Gross profit % Net profit % Return on capital employed Acid test ratio
The profitability of the company is very high and increasing. However, the acid test ratio is falling, which is a cause for concern. I am available to discuss the report if requested. Kevin Scully. Management Consultant
10.
(a) Why would a company compare the interest paid on a long term loan and the return on capital employed? To see if it is costing the company more to borrow the money than it is getting from using the money.
344
(b) The directors of Chess Ltd, Main Street, Cork supplied the following figures for the years 2006 and 2007.
2006 Sales Gross Profit Net Profit Current Assets Current Liabilities Long Term 15% Loan Capital Employed 660,000 320,000 140,000 65,000 25,000 100,000 580,000 2007 610,000 260,000 90,000 58,000 43,000 140,000 700,000
Assume you are George Lee, Management Consultant, News Road, Wicklow. Prepare a report in your copybook, on todays date, for the directors of Chess Ltd. Compare and comment on the performance of the business over the two years, 2006 and 2007. Use the following ratios in comparing the performance: Gross Profit Percentage; Net Profit Percentage; Return on Capital Employed; Current Ratio.
Ratio analysis as follows 2006 Gross profit % Net profit % Return on capital employed Current ratio 48.49% 21.21% 24.14% 2.6:1 2007 42.62% 14.75% 12.86% 1.35:1
The profitability while very good is falling and efforts should be made to investigate same. The current ratio has fallen below the recommended ratio of 2:1 in 2007. Report to be laid out following the nine-point plan, as in Exercise 9.
11.
(a) Why might a company have different mark-ups on its products in different parts of the country? Some of its customers may be able to pay more in other parts of the country. There may be extra costs in getting products to different parts of the country. (b) The directors of Solo Ltd, Main Street, Cork supplied the following figures for the years 2006 and 2007.
2006 Sales Gross Profit Net Profit Current Assets Current Liabilities Share Capital Capital Employed 480,000 200,000 100,000 48,000 18,000 350,000 490,000 2007 510,000 280,000 180,000 54,000 39,000 350,000 534,000
Assume you are Gerry Ryan, Management Consultant, Pop Parade, Mullingar, Co. Westmeath. Prepare a report in your copybook, on todays date, for the directors of Solo Ltd. Compare and comment on the performance of the business over the two years, 2006 and 2007. Use the following ratios in comparing the performance: Gross Profit Percentage; Net Profit Percentage; Return on Capital Employed; Current Ratio.
345
Ratio analysis as follows 2006 Gross profit % Net profit % Return on capital employed Current ratio 41.67% 20.83% 20.41% 2.67 : 1 2007 54.90% 35.29% 33.71% 1.39 : 1
The profitability is increasing and hopefully will continue. The current ratio has fallen below the recommended ratio of 2:1 in 2007. There is a worry that the company is expanding too quickly and may be relying too much on creditors and bank overdrafts i.e., overtrading.
Answer: Dividends paid
42,000
35,000
(12% of 350,000)
(10% of 350,000)
(c) State, in the space provided above, the amount paid out in dividends each year if the rate of dividends is 12% in year 2006 and 10% in 2007.
Chapter 51 Club Accounts

1. Column 1 is a list of club officers of an athletic club. Column 2 is a list of duties performed by these officers. Match the two lists by placing the letter of the correct duty under the relevant number below. (One of the duties does not apply to any of the terms.)
Column 1 Club Officers 1. Treasurer 2. Secretary 3. Chairperson Column 2 Duties A. Controls the meeting B. Records the times of athletes at race meetings C. Collects membership fees D. Records decisions made at meetings 1. 2. 3.
2.
Indicate with a tick 0 where each of the following receipts and expenditures are entered in the accounts of a club.
Receipt/Expenditure Bought a tractor Paid insurance Sold land Received interest on savings Won lotto prize of 500,000 Received membership fees Income and Expenditure Account Receipts and Payments Account
0 0 0
0 0 0 0 0 0
346
Chapter 52 Club Accounts with Adjustments

1. Complete the following sentences. (a) Wages due are entered under in the Income and Expenditure and under the Balance Sheet. Analysed cash book debit side Receipts and payments account debit side (c) The sale for cash of fixed assets is entered in the Receipts and payments account Income and expenditure account 2. Name four possible costs of running a disco. (i) (iv) 3. DJ Insurance (ii) Tickets (iii) Hire of hall . but not in the Expenditure Current Liabilities in
(b) Opening cash and bank balances are entered in the and in the .
Indicate with a tick 0 where each of the following receipts and expenditures are entered in the accounts of a club.
Receipt /Expenditure Bought a tractor Paid insurance Sold land Received interest on savings Won lotto prize of 500,000 Received membership fees Bar Trading Account Income and Expenditure Receipts and Payments Account Account
0 0
0 0 0 0 0
4.
Complete the Bar Trading Account below from the following data. Bar purchases 35,000, Barpersons wages 16,000, Barpersons wages due 3,000, Closing stock of bar supplies 12,000.
Bar Trading Account for the year ended 31/5/2007 Sales 1/6/06 Less cost of sales Opening Stock 11,000 340,000
Bar purchases Barpersons wages Add wages due 31/5/07 Less closing stock Bar profit 16,000 3,000
35,000 19,000 65,000 12,000 53,000 287,000
347
Chapter 53 Farm Accounts

1. List four reasons why farmers should keep accounts. (i) 2. Required for taxes and grants (iii) To manage the farm better Sale of milk Sale of sheep Purchase of land Light and heat (ii) To find out if the farm made a profit (iv) To find out what the farm is worth (ii) Sale of cattle
Name four possible examples of farm income. (i) (iii) (iv) EU grant (ii) Purchase of machinery (ii) Insurance
3.
Name two possible examples of farm capital expenditure (i) (i) and two possible examples of farm revenue expenditure.
Chapter 54 Service Firms

1. Give four examples of service firms. (i) (iii) 2. Banks Decorators (ii) (iv) Insurance companies Hairdressers
List four reasons why service firms should keep accounts. (ii) To manage the business better (i) Required by law (iii) Needed for loan applications (iv) To find out if the business is profitable
3. Name four possible examples of a service firms income. (Depends on type of business, e.g. hairdresser) (i) Wash & blow dry (iii) Style (ii) (iv) Cut Colour
4. Name two possible examples of a service firms capital expenditure. (ii) Equipment (i) Motor vans and two possible examples of a service firms revenue expenditure. (i) Light and heat (ii) Telephone
Chapter 55 Information Technology

1. Place a tick 0 opposite each statement to indicate whether it is true or false. (a) A monitor is another name for a screen (b) A database is an example of hardware (c) A modem links a computer to a telephone 2.
True False
0 0
True
Place a tick 0 opposite each statement to indicate whether it is true or false. (a) A spreadsheet can be used to prepare a cash forecast (b) A computer game is an example of computer software (c) The Internet is a system of networks
False
0 0 0
348
3.
Write the following abbreviations out in full. (a) WWW (b) VDU (c) ROM (d) CAD World Wide Web Visual Display Unit Read Only Memory Computer Aided Design
4.
Tick 0 the correct answer. In relation to information technology a menu is (a) the number of characters a programme can hold (b) a list of choices on screen (c) the order of the keys on a keyboard (d) found on a spread sheet
5.
Tick 0 the correct answer. Which one of the following computer programmes can best be used for filing information and preparing accounts Filing Information (a) Spreadsheets (b) Data base (c) Word Processing (d) Graphics Preparing Accounts
0 0
6.
Purchased a computer system by cheque for 7,450 on 1 May 2006. Record this purchase in the computer and bank accounts below.
Computer A/C (p1)
1/5/2006
Bank
ACB
7,450
Bank A/C (p2)
1/5/2006
Computer
ACB
7,450
7.
Purchased a computer system by cheque for 9,800 on 1 May 2006. Record this purchase in the computer and bank accounts below.
Computer A/C (p1)
1/5/2006
Bank
ACB
9,800
Bank A/C (p2)
1/5/2006
Computer
ACB
9,800
349
7.
Purchased a computer system on credit from PK Computers Ltd for 15,000 on 1 June 2007. Record this purchase in the General Journal, the Computer and PK Computers Ltd accounts below.
General Journal p1 Date 1/6/2007 Details F GL Dr debit 15,000 Cr credit
Computer PK Computers Ltd

Narration: Purchase of computer on credit
15,000
General Ledger Date Details F Total Date Details F Total Computer A/C (p1)
1/6/2007 PK Computers
GJ
15,000
PK Computers Ltd A/C (p2)
1/6/2007
Computer
GJ
15,000
8.
Purchased a computer system on credit from Infocom Ltd for 25,000 on 1 May 2007. Record this purchase in the General Journal, the Computer and Infocom Ltd accounts below.
General Journal p1 Date 1/5/2007 Details F GL Dr debit 25,000 Cr credit
Computer Infocom Ltd

Narration: Purchase of computer on credit
GL
25,000
General Ledger Date Details F Total Date Details F Total Computer A/C (p1)
1/5/2007
Infocom Ltd GJ
25,000
INFOCOM Ltd A/C (p2)
1/5/2007
Computer
GJ
25,000
350

Junior Certificate Business Studies For Households and Enterprises by Matt Hynes

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TEXTBOOK TEACHERS MANUAL

Junior Certificate Business Studies Textbook Teachers Manual

4. See chart at bottom of p4 in the textbook.

Junior Certificate Business Studies Textbook Teachers Manual

Chapter 2 Communications in Action

Junior Certificate Business Studies Textbook Teachers Manual

Monica Grey. President Students Union.

I am available to discuss my findings if required.

Siobhn Gallagher. Mobile Phone Consultant.

Junior Certificate Business Studies Textbook Teachers Manual

I am available to discuss my findings if required.

Ilona Donnelly. Fast Food Consultant.

Mire McGrath. Financial Consultant.

Junior Certificate Business Studies Textbook Teachers Manual

Line graph showing rate of inflation for period 19992004.

Chapter 3 Introduction to Record Keeping

Junior Certificate Business Studies Textbook Teachers Manual

Junior Certificate Business Studies Textbook Teachers Manual

Chapter 4 Household Accounts

10/3 Groceries 12/3 Window clean

11/4 Groceries 13/4 School books

2007 1/2 3/2 4/2 Balance b/d Child Benefit Wages

10/2 Mortgage 12/2 Meat bill

Junior Certificate Business Studies Textbook Teachers Manual

10/3 Doctor 12/3 Electricity

11/4 Milk bill 12/4 Electricity 13/4 School fees

Junior Certificate Business Studies Textbook Teachers Manual

Employee (a) Shelia (b) Paul (c) Breda (d) Conor

Gross Wage 320 320 450 500

Tax before deducting tax credit 64 64 90 100

PRSI 17.50 32.50

Net Wage 312.50 409.50

Junior Certificate Business Studies Textbook Teachers Manual

Net pay = Gross pay less deductions: 30,000 7,759.08 = 22,240.92

Net pay = Gross pay less deductions: 42,000 12,591.08 = 29,408.92

Net pay = Gross pay less deductions: 55,000 18,401.08 = 36,598.92

Net pay = Gross pay less deductions: 37,000 10,623.08 = 26,208.92

Junior Certificate Business Studies Textbook Teachers Manual

Junior Certificate Business Studies Textbook Teachers Manual

Chapter 7 The Budget

Junior Certificate Business Studies Textbook Teachers Manual

Chapter 8 The Good Consumer

2. 3. KM Cycles Ltd, Main Street, Longford.

Chapter 9 Protecting the Consumer

Junior Certificate Business Studies Textbook Teachers Manual

(i) (ii) (iii) (iv) (v)

Chapter 10 Making a complaint

Junior Certificate Business Studies Textbook Teachers Manual

Junior Certificate Business Studies Textbook Teachers Manual

Chapter 11 Money and Banking I

Chapter 12 Money and Banking II

Chapter 13 Money and Banking III

Chapter 14 Bank Accounts

Junior Certificate Business Studies Textbook Teachers Manual

Junior Certificate Business Studies Textbook Teachers Manual

Chapter 15 Personal Borrowing

Junior Certificate Business Studies Textbook Teachers Manual

Option 3 is the best value.

Junior Certificate Business Studies Textbook Teachers Manual

Chapter 17 Premium Calculation and Estimating Compensation

Chapter 18 Economic Framework

Junior Certificate Business Studies Textbook Teachers Manual

Chapter 19 Budgeting The National Budget