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Business Studies
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JC Business TM Contents for textbook and workbook Chapter Textbook Workbook1 Communications 1 182 2 Communications in Action 2 182 3 Introduction to Record Keeping 5 183 4 Household Accounts 7 185 5 Income 9 186 6 Expenditure 11 189 7 The Budget 12 192 8 The Good Consumer 13 230 9 Protecting the Consumer 13 230 10 Making a complaint 14 232 11 Money and Banking I No exercises 233 12 Money and Banking II 16 234 13 Money and Banking III No exercises 234 14 Bank Accounts 16 238 15 Personal Borrowing 18 246 16 Insurance 19 249 17 Premium Calculation and Estimating
Compensation 20 252
18 Economic Framework 20 256 Budgeting - the National Budget 21 258
20 Foreign Trade 23 260 21 Forms of Ownership 24 263 22 Private Limited Company No exercises 264 23 Chain of Production 26 267 24 People at Work 26 267 25 Being an Employer 27 269 26 Industrial Relations 29 275 27 Finance for Business 30 276 28 Preparation of a Business Plan 32 277 29 Business Loan Applications 32 283 30 Banking for Business 32 287 31 Business Insurance 34 287 32 Delivery Systems 35 290 33 Marketing 36 295 34 Financial Recording and Filing 38 297 35 Business Documents I 38 302 36 Business Documents II No exercises 305 37 Recording Credit Transactions 40 310 38 Continuous Balancing Ledgers and
Statements No exercises 317
39 Analysed Cash Books I 71 324 40 Analysed Cash Books II Monitoring
Overheads 80 325
41 General Journal 84 329
1 9
42 Combined Books of First Entry and Ledger Questions
91 331
43 Control Accounts 109 333 44 Trading Account 109 334 45 Profit and Loss Account 111 336 46 Profit and Loss Appropriation Account 114 337 47 Balance Sheet 118 338 48 Adjustments to Final Accounts 127 339 49 Final Accounts and Balance Sheet with
Adjustments 132 341
50 Assessing a Business 148 342 51 Club Accounts 152 346 52 Club Accounts with Adjustments 161 347 53 Farm Accounts 166 348 54 Service Firms 173 348 55 Information Technology 177 348
Junior Certificate
Business Studiesfor Households and Enterprises
TEXTBOOK TEACHER’S MANUAL
Matt Hynes
© Matt Hynes 2005
ISBN 1-84131-703-9Folens Publishers,
Hibernian Industrial Estate,Greenhills Road,
Tallaght,Dublin 24.
Editor: Fiona DunneDesign 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 Teacher’s Manual
1
Chapter 1 Communications
1.
2. Internal communication
External communication
3. Oral communication
Written communication
Visual communication
4. See chart at bottom of p4 in the textbook.
Method Explanation
ChartsUsed to provide detailed information in lines or easy-to-understand pictures
Television Used to show people actually communicating in real-life situations
Method Explanation
Letters Written communication from one person to another sent by post
Notice boardA space that employees will look at to keep them up-to-date withwhat is happening
Method Explanation
Telephone Use of landline or wire-free device to contact someone else
Meetings Bring employees together to discuss topics face-to-face
Method Explanation
Letters Written communication from one person to another sent in the post
Newspapers Written communication printed on local or national newspapers
Method Explanation
Notice boardA space that employees will look at to keep them up-to-date withwhat is happening
Meetings Bring employees together to discuss topics face-to-face
Factors Explanation
Destination Is communication within Ireland or worldwide?
Cost How do the different methods compare on price?
Speed How urgent is the information to be communicated?
Record Is it necessary to keep the information?
Chapter 2 Communications in Action
Letter WritingThe answers to letters should follow the nine-point plan. It’s good discipline for the studentsto put in the numbers beside the text when doing the exercises, to ensure that they completethe letter fully. The address of the sender and date of the letter can also be placed on the left-hand side of the page.
1.
2.
1. Harmony Street,Carlow.(086) 85341245.
2.3. Edge Music Store,
Piano Row,Waterford.
4. Dear Mr Edge,
5. I wish to order a new CD called How to Make A Snowman Melt.6. When can you have it in stock?7. Please phone or text me when it’s in.
8. Yours faithfully,
9. Nora Jones.
1. Top View Road,Sligo.(087) 4325676.
2.3. Ms News Agent,
Corner Grove,Sligo.
4. Dear Ms News Agent,
5. I wish to enquire about a new magazine called Predict Your Future.6. Can you obtain this magazine for me?
How much will it cost?How many issues are there?
7. Please let me know as soon as possible.
8. Yours sincerely,
9. Patrick Kerns.
Junior Certificate Business Studies Textbook Teacher’s Manual
2
3.
Report WritingThe answers to reports should follow the nine-point plan. It’s good discipline for thestudents to put in the numbers beside the text when doing the exercises, to ensure that theycomplete the report fully.
4.1. Siobhán Gallagher,
Class 1,Vocational School,Letterkenny,Co. Donegal.
2. Best Value In Mobile Phone Credit
3.
4. Class 1,Vocational School,Letterkenny,Co. Donegal.
5. 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.
6. Providers O2 Vodafone Meteor
Price per call per minute cent cent cent
Price per text cent cent cent
I recommend
7. I am available to discuss my findings if required.
8. Siobhán Gallagher.9. Mobile Phone Consultant.
1. Students Union,St. Mark’s Community School,Celbridge,Co. Kildare.
2.
3. Finbar Keenan,Main Street,Maynooth,Co. Kildare.
4. Dear Finbar,
5. I was delighted to hear that you are coming to our school in September.6. 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:
7. Please contact me if you want details about these subjects.
8. Yours faithfully,
9. Monica Grey.President Students’ Union.
Junior Certificate Business Studies Textbook Teacher’s Manual
3
5.
6.
7. Notice is given that a meeting of the Business Studies Students Club will take place in Room5 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 meeting2. Matters arising from the minutes3. Correspondence received by club officers4. Treasurer’s report5. Club tour to AIB headquarters6. Membership fees7. Any Other Business for the next meeting
1. Máire McGrath,Class A,Ard Scoile.
2. Main Sources of Income for Students in Class A
3.
4. 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.
5. Income Pocket money Part-time Work Other
Percentage of income earned 60% 30% 10%
6. The main source is pocket money.
7. I am available to discuss my findings if required.
8. Máire McGrath.9. Financial Consultant.
1. Ilona Donnelly,Class D,Mercy Convent.
2. Best Fast-Food Outlets in
3.
4. Class D,Mercy Convent.
5. 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.
6. Providers Mighty Sams Mini Macks Burger Queen
Price 7 6 9
Quality 8 8 5
Service 9 7 8
I recommend Mighty Sams.
7. I am available to discuss my findings if required.
8. Ilona Donnelly.9. Fast Food Consultant.
Junior Certificate Business Studies Textbook Teacher’s Manual
4
Charts and Graphs
9. Bar chart showing sales of shoes for period 2000–2005.
10. Line graph showing rate of inflation for period 1999–2004.
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 studentsto do likewise depending on their progress.
1.
Date Details Total Date Details Total
2005 € 2005 €
1/1 Prize money 100 8/1 Sports gear 30
6/1 Pocket money 10 10/1 Lunch 5
10/1 Balance c/d 75
110 110
11/1 Balance b/d 75
Junior Certificate Business Studies Textbook Teacher’s Manual
5
2.
3.
4.
5.
6.Date Details Total Date Details Total
2008 € 2008 €
1/5 Birthday 75 2/5 CD 18
9/5 Sale of CD 30 5/5 Magazine 15
13/5 Uncle 10 13/5 Clothes 45
13/5 Balance c/d 37
115 115
14/5 Balance b/d 37
Date Details Total Date Details Total
2008 € 2008 €
1/4 Aunt 20 6/4 Hair styles 5
4/4 Parents 80 8/4 Music lessons 75
10/4 Wages 45 18/4 School tour 60
18/4 Balance c/d 5
145 145
19/4 Balance b/d 5
Date Details Total Date Details Total
2007 € 2007 €
1/1 Parents 100 2/1 School books 90
5/1 Pocket money 12 3/1 Lunch 8
7/1 Interest 38 9/1 Magazine 24
9/1 Balance c/d 28
150 150
10/1 Balance b/d 28
Date Details Total Date Details Total
2006 € 2006 €
1/3 Interest 28 8/3 School books 40
4/3 Wages 32 12/3 Sweets 6
6/3 Pocket money 8 12/3 Balance c/d 22
68 68
13/3 Balance b/d 22
Date Details Total Date Details Total
2005 € 2005 €
1/2 Pocket money 12 6/2 New books 20
4/2 Sale of books 55 8/2 Video 4
10/2 Magazines 6
10/2 Balance c/d 37
67 67
11/2 Balance b/d 37
Junior Certificate Business Studies Textbook Teacher’s Manual
6
Chapter 4 Household Accounts
1.
2.
3.
Analysed Cash Book
Date Details TotalCash
TotalBank
Date Details Ch.no.
TotalCash
TotalBank
HK Car Mort-gage
2007 € € 2007 € € € € €
1/2 Balance b/d 180 320 2/2 Car service 1 85 85
3/2 Child Benefit 120 6/2 Groceries 60 60
4/2 Wages 650 7/2 Insurance 2 150 150
9/2 Petrol 25 25
10/2 Mortgage 3 320 320
12/2 Meat bill 4 100 100
85 655 310 110 320
12/2 Balance c/d 215 315
300 970 300 970
13/3 Balance b/d 215 315
Analysed Cash Book
Date Details Total Date Details Total HK Car Other
2005 € 2005 € € € €
1/4 Balance b/d 500 2/4 Groceries 300 300
6/4 Wages 850 4/4 Petrol 45 45
5/4 Electricity 100 100
8/4 Car service 155 155
11/4 Groceries 185 185
13/4 School books 35 35
820 485 200 135
13/4 Balance c/d 530
1,350 1,350
14/4 Balance b/d 530
Analysed Cash Book
Date Details Total Date Details Total HK L&H Other
2005 € 2005 € € € €
1/3 Balance b/d 200 5/3 Groceries 120 120
3/3 Wages 600 6/3 Fuel 220 220
7/3 Petrol 40 40
8/3 Electricity 80 80
10/3 Groceries 145 145
12/3 Window clean 60 60
665 265 300 100
12/3 Balance c/d 135
800 800
13/3 Balance b/d 135
Junior Certificate Business Studies Textbook Teacher’s Manual
7
4.
5.
6.
Analysed Cash BookDate Details Total
CashTotalBank
Date Details Ch.no.
TotalCash
TotalBank
HK Mort-gage
Other
2008 € € 2008 € € € € €
1/4 Balance b/d 100 1/4 Balance b/d 250
5/4 Child Benefit 120 7/4 Groceries 95 95
6/4 Wages 500 8/4 Mortgage 1 355 355
9/4 Insurance 2 380 380
11/4 Milk bill 3 65 65
12/4 Electricity 4 75 75
13/4 School fees 55 55
150 160 355 510
13/4 Balance c/d 625 13/4 Balance c/d 70220 1,125 220 1,125
14/4 Balance b/d 70 14/4 Balance b/d 625
Analysed Cash BookDate Details Total
CashTotalBank
Date Details Ch.no.
TotalCash
TotalBank
HK Per L&H
2007 € € 2007 € € € € €
1/3 Balance b/d 50 230 4/3 Heating oil 1 380 380
3/3 Child Benefit 120 5/3 Milk bill 2 38 38
12/3 Wages 450 6/3 Groceries 82 82
8/3 Hair cut 3 50 50
10/3 Doctor 4 31 31
12/3 Electricity 5 100 100
82 599 120 81 480
12/3 Balance c/d 88 81
170 680 170 680
13/3 Balance b/d 88 81
Junior Certificate Business Studies Textbook Teacher’s Manual
8
Analysed Cash BookDate Details Total
CashTotalBank
Date Details Ch.no.
TotalCash
TotalBank
HK L&H Other
2008 € € 2008 € € € € €
1/6 Balance b/d 320 1/6 Balance b/d 250
2/6 Child Benefit 120 3/6 Groceries 80 80
8/6 Wages 860 5/6 Insurance 1 500 500
6/6 Electricity 2 55 55
10/6 Milk bill 3 50 50
12/6 Holiday 4 50 50
80 130 55 550
12/6 Balance c/d 45 12/6 Balance c/d 320
440 905 440 905
13/6 Balance b/d 320 13/6 Balance b/d 45
7.
Chapter 5 Income
1. (a) Tom’s gross wage = €400 (40 hours @ €10. Basic = €400. No overtime.)(b) Anne’s gross wage = €648 (40 hours @ €12. Basic = €480 + overtime €168.)(c) Jim’s gross wage = €624 (40 hours @ €8. Basic = €320 + overtime €304.)
2. (a) Pat’s gross wage = €531 (38 hours @ €9. Basic = €342 + overtime €135 + €54.)(b) Irene’s gross wage = €440 (38 hours @ €8. Basic = €304 + overtime €120 + €16.)
3.
4.
5. Employee Gross Wage Tax before deducting tax credit Tax Credit Tax Due PRSI Net Wage
(a) Martin €350 €70 €50 €20 €17.50 €312.50
(b) Louise €650 €273 €65 €208 €32.50 €409.50
Employee Gross Wage Tax before deducting tax credit Tax Credit Tax Due
(a) Shelia €320 €64 €25 €39
(b) Paul €320 €64 €35 €29
(c) Breda €450 €90 €50 €40
(d) Conor €500 €100 €60 €40
Deductions Explanation Example
Statutory Compulsory payments by employees to the government taken from the gross wage
Income Tax, PRSI
Non-statutory Voluntary amounts taken from an employee’s grosswage at the request of the employee
Pension, Savings, VHI, Union Fee
Difference Statutory payments are compulsory whereas non statutory are voluntary
Junior Certificate Business Studies Textbook Teacher’s Manual
9
Analysed Cash BookDate Details Total
CashTotalBank
Date Details Ch.no.
TotalCash
TotalBank
L&H
School Other
2008 € € 2008 € € € € €
1/2 Balance 40 120 3/2 Cash C 100
2/2 Wages 850 4/2 Groceries 50 50
3/2 Bank C 100 5/2Schooluniform
1 150 150
10/2 Child Benefit 80 6/2 Electricity 2 105 105
7/2 Petrol 38 38
11/2CentralHeating
3 440 440
88 795 545 150 88
12/8 Balance c/d 132 175
220 970 220 970
13/8 Balance b/d 312 175
6. (a) Gerard
(b) Monica
(c) Adrian
(d) Josephine
€ Tax Due € Total Deductions €
Gross pay 37,000
First €21,586 @ 20% 21,586 4,317.20
Remainder @ 42% 15,414 6,473.08
Tax before deducting tax credits 10,791.08
Less tax credits 1,850
Tax due 8,941.08
Add PRSI due 1,850 10,791.08
Net pay = Gross pay less deductions: €37,000 – €10,623.08 = €26,208.92
€ Tax Due € Total Deductions €
Gross pay 55,000
First €21,586 @ 20% 21,586 4,317.20
Remainder @ 42% 33,414 14,033.88
Tax before deducting tax credits 18,351.08
Less tax credits 2,700
Tax due 15,651.08
Add PRSI due 2,750 18,401.08
Net pay = Gross pay less deductions: €55,000 – €18,401.08 = €36,598.92
€ Tax Due € Total Deductions €
Gross pay 42,000
First €21,586 @ 20% 21,586 4,317.20
Remainder @ 42% 20,414 8,573.88
Tax before deducting tax credits 12,891.08
Less tax credits 2,400
Tax due 10,491.08
Add PRSI due 2,100 12,591.08
Net pay = Gross pay less deductions: €42,000 – €12,591.08 = €29,408.92
€ Tax Due € Total Deductions €
Gross pay 30,000
First €21,586 @ 20% 21,586 4,317.20
Remainder @ 42% 8,414 3,533.88
Tax before deducting tax credits 7,858.64
Less tax credits 1,592
Tax due 6,259.08
Add PRSI due 1,500 7,759.08
Net pay = Gross pay less deductions: €30,000 – €7,759.08 = €22,240.92
Junior Certificate Business Studies Textbook Teacher’s Manual
10
Chapter 6 Expenditure
1. ‘Our income is limited’ = We have not got enough income to buy all the things we wouldlike 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 ofanother.
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.
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.
8.
9.
Lynch King Highest Bill
Units used 723 737
Cost €68.69 €70.02
Standing charge €9 €9
VAT €10.49 €10.67
Total cost €88.18 €89.87 King
Cost of electricity Standing charge VAT@ 13.5% Total Cost
(i) €44.52 €9 €7.23 (13.5% of €53.52) €60.75
(ii) €43.54 €9 €7.09 €59.63
(iii) €49.98 €9 €7.96 €66.94
(iv) €73.64 €9 €11.16 €93.8
Number of units used Cost of electricity
(i) 636 (8,516 – 7,880) €44.52
(ii) 622 (9,202 – 8,580) €43.54
(iii) 714 (5,493 – 4,779) €49.98
(iv) 1,052 (3,393 – 2,341) €73.64
Type of Expenditure Examples
Fixed House insurance, mortgage
Irregular Electricity, telephone
Discretionary Birthday presents, entertainment
Junior Certificate Business Studies Textbook Teacher’s Manual
11
10. Households usually receive a telephone bill every two months for a landline and once amonth for a mobile phone bill.
Chapter 7 The Budget
1. (a)
(b)
2.
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 onethinks about it.
Expenditure Present Cost 3% Increase Future Cost
Mortgage €260 €7.80 €267.80
Housekeeping €140 €4.20 €144.20
Telephone €90 €2.70 €92.70
Car Tax €290 €8.70 €298.70
Saver Deposit 3% Interest
Pat €1,230 €36.90
Mike €740 €22.20
Kate €335 €10.10
Mary €1,940 €58.20
Employee Monthly wage 5% Increase Future Income
Monica €780 €39 €819.00
Oliver €920 €46 €966.00
Pat €535 €26.75 €561.75
Butler Lennon
Number of calls 1,432 689
Cost €71.60 €34.45
Rental charge €40.00 €40.00
VAT €23.44 €15.64
Total cost €135.04 €90.09
Junior Certificate Business Studies Textbook Teacher’s Manual
12
Chapter 8 The Good Consumer
1.
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 acredit note.
(b) Pat is entitled to a replacement suit unless he was clearly warned in advance by thedrycleaner 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 anyloss due to faulty goods, but who do not want to go to the District Court or employ asolicitor. The largest amount they can claim is €1,270.The Office of the Ombudsman can help consumers who have difficulty gettingsatisfaction from government bodies and departments.
(b) Trade Associations are made up of members of similar types of business to protect theirinterests and provide them with assistance when required, e.g. Irish Travel AgentsAssociation.The Office of the Director of Consumer Affairs is responsible for enforcing theConsumer Information Act 1978. It educates consumers on their rights.
5. (a) The Consumer Association of Ireland.(b) Consumer Choice Magazine.
1.
2.
3.
4.5/6.
7.
8.
9.
Handlebar Street,Roscommon.(086) 8732258.
KM Cycles Ltd,Main Street,Longford.
Dear Mr. Martin,I wish to order one of the new racing bicycles which you advertised on ShannonsideNorthern Sound on 15/4/2006 at a price of €140.Can you ring me if one is available?
Yours faithfully,
Mary Farrell.
Junior Certificate Business Studies Textbook Teacher’s Manual
13
6. (i) Goods should be of merchantable quality;(ii) Good should be fit for their purpose;
(iii) Goods should be as described;(iv) Goods should correspond to sample shown;(v) The suppliers of services must be qualified.
Chapter 10 Making a complaint
1. Consumers complain because: the seller gives misleading information; they are unhappywith 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 theproblem. 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 orreplacement; put the complaint in writing; contact the seller’s trade association if available;bring the seller to the Small Claims Court.
3. (a)
(b) Mr Murphy could contact the seller’s trade association or contact the registrar of theSmall Claims Court.
1.
2.
3.
4.
5.
6.7.
8.
9.
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 Ibought 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 responseby return of post.
Yours faithfully,
Tom Murphy.
Junior Certificate Business Studies Textbook Teacher’s Manual
14
4. (a)
(b) Mr Cooney could contact the local media or the registrar of the Small Claims Court.
5. (a)
(b) The Sale of Goods and Supply of Services Act 1980. The goods were not fit for thepurpose and the fitter was not properly qualified.
(c) The receipt; credit card statement; the door itself, copy of contract signed by AllbriteLtd.
1.
2.
3.
4.5.
6.
7.
8.
9.
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 acopy of the contract.After a month, it did not seal properly and allowed in the wind and rain. Spots of rust havedeveloped on it.I'm very dissatisfied with the door and demand an immediate replacement or a full refund ofmy money €698. Please let me know your response by return of post.
Yours faithfully,
Maeve O'Sullivan.
1.
2.
3.
4.
5.
6.
7.
8.
9.
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 ahill. I am very disappointed with it.I require a replacement or a refund of my money €179. Please let me know your responseby return of post.
Yours faithfully,
Peter Cooney.
Junior Certificate Business Studies Textbook Teacher’s Manual
15
6. A credit note is a document given by a seller to a customer that states that the amount owingor paid has been reduced. It is only acceptable if the customer agrees to it. This is usually whenthere 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.
2. A standing order is an instruction by a bank current account holder to pay a fixed sum ofmoney on a fixed date to a named person/organisation. A direct debit is where a named person/organisation obtains permission from a currentaccount holder to take a varying amount out of their account on a date to be decided by theperson/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
There are no exercises in the textbook.
Chapter 14 Bank Accounts
1.
Date Details Total Date Details Cheque/ATM Total
2005 € 2005 €
1/4 Balance b/d 950 8/4 Cash ATM 100
5/4 Wages 600 15/4 Insurance 7 600
30/4 Wages 800 19/4 Groceries 8 250
23/4 Car repairs 9 200
28/4 Cash ATM 200
30/4 Balance c/d 1,000
2,350 2,350
1/5 Balance b/d 1,000
Method Cost Safety Record
Cheque Expensive Could be forged Yes in stub
Bank draft Most expensive 100% safe Yes in a receipt
Standing order Fixed charge 100% safe Yes in statement
Direct debit Fixed charge 100% safe Yes in statement
Credit transfer Least expensive 100% safe Yes in statement
Junior Certificate Business Studies Textbook Teacher’s Manual
16
Bank A/C
2.
3.
Bank Reconciliation Statement as on 31/5/2006Balance as per Bank Statement €1,925Add lodgements not credited €1,100
€3,025Less cheques not cashed €2,900Balance 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 upto six months.
(d) Current account fees could include: cost of standing orders; cost of direct debits; chequebook.
(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 themoney is taken from the account is decided by the receiver when a direct debit is usedand by the account holder when a standing order is used.
Date Details Total Date Details Total
2006 € 2006 €
31/5 Balance b/d 210 SO 480
CT 700 DD 200
Interest/charges 105
Balance c/d 125
910 910
1/6 Balance b/d 125
Date Details Total Date Details Cheque/ATM Total
2006 € 2006 €
Bank A/C
1/5 Balance b/d 1,200 11/5 Cash ATM 200
8/5 Wages 950 13/5 Milk bill 4 230
31/5 Wages 950 22/5 Grocery bill 5 170
26/5 Mortgage 6 600
29/6 Cash ATM 300
31/5 Balance c/d 1,600
3,100 3,100
1/6 Balance b/d 1,600
Junior Certificate Business Studies Textbook Teacher’s Manual
17
Bank A/C
(f)
Bank Reconciliation Statement as 31/5/2006Balance as per Bank Statement €497Add lodgements not credited €355
€852Less cheques not cashed € 75Balance 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; theamount 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 ischeaper 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 makinga number of instalments. The second stage involves the person taking ownership of theitem by paying a final instalment.
(b) Hire purchase can be used for obtaining cars; furniture; household equipment such aswashing 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 thecost of repaying a loan, then that person may not be able to repay the amount owing on time.
Date Details Total Date Details Total
2006 € 2006 €
Updated Bank A/C
31/3 Balance b/d 683 Fees 6
CT 100
Balance c/d 777
783 783
1/6 Balance b/d 777
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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.
Option 3 is the best value.
Chapter 16 Insurance
1. People need insurance because they are afraid of risks occurring which would make themworse off and they may not be able to recover from these losses, e.g. fire burning down theirhouse, car crashing into someone else.
2. Insurance operates as follows. People who fear possible losses can share these fears withothers by paying premiums to an insurer, who in turn agrees to pay compensations shouldthese losses occur.
3. (a) Ann Smyth might purchase any or all of the following: Flat and contents insurance; motor insurance; health insurance; salary protectioninsurance; 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 lifeassurance there is a certainty that the loss will occur. Insurance is purchased on anannual 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 withendowment assurance the insurer will pay out on death or the insured reaching a certainage, whichever comes first.
5. Car insurance is required by law because a motorist is driving on public roads, which arebuilt 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. Onbeing accepted, a premium is paid and an insurance policy or certificate is given by theinsurer 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 lossyou will suffer.Utmost Good Faith – when completing an insurance proposal form all questions must beanswered truthfully and accurately.
Options Cost of each option workings
Option 1 Bank Loan €9,000 + interest €2,970 = €11,970
Option 2 Hire Purchase €500 + instalments €9,720 = €10,220
Option 3 Bank Loan €9,000 + interest €2,700 = €11,700
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Chapter 17 Premium Calculation and Estimating Compensation
1. Patrick Kiernan
2. Geraldine Lally
3. Inform the Gardaí and the insurer of the loss; obtain estimates for the loss; complete a claimsform; 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) Thebroker is arranging better cover than the agent.
(iv) An insurance agent sells the policies of only one insurance company. An insurancebroker on the other hand, being independent, can select from a number of insurancecompanies.
Chapter 18 Economic Framework
1. People have to make choices because their income is limited, but they want to obtain themost 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
Basic Premium €1,200
Add loadings
Medical condition €180
Living abroad €180
Dangerous hobby €180 €540
Basic plus loadings €1,740
Less loadings
Non-drinker €87
Non-smoker €87 €174
Total Premium €1,566
Basic Premium €1,000
Add loadings
Working abroad €100
Dangerous hobby €100 €200
Basic plus loadings €1,200
Less loadings
Non-smoker €60
Total Premium €1,140
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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 willreceive 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 Síochána, theArmy.
2. The main services provided by the government are education; healthcare; transport; postalservices; 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. Itis responsible for local roads, water, housing, sewage etc.
4. The government provides services through government departments e.g. Department ofEducation 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. National Budget
Income € millions Expenditure € millions
Income Tax 3,500 Social welfare 3,500
VAT 2,800 National debt 2,900
Customs and excise duty 2,100 Security 880
Corporation tax 350 Education 1,400
Capital tax 150 Health 1,550
EU and other receipts 3,200 Agriculture 340
Deficit 770 Other 2,300
12,870 12,870
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6. National Budget
(a) The biggest source of income is EU receipts, the biggest source of expenditure is SocialWelfare.
(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
7. (a) National Budget 2001
(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) Gardaí, Army.
(c) Increase corporation tax by €150m. Reason: the employees are paying too much tax andthe businesses are paying too little.Decrease Miscellaneous by €350m. Reason: savings could be found in each departmentto ensure that there would be a balanced budget.
Income € millions Expenditure € millions
Income Tax 3,200 Security 800
EU and other receipts 2,100 Social welfare 3,000
VAT 2,100 Education 1,368
Customs and excise 1,900 Health 1,400
Corporation tax 500 Agriculture 400
Capital tax 100 Debit services 2,432
Other receipts 1,000 Miscellaneous 2,000
Deficit 500
11,400 11,400
Income € millions Expenditure € millions
Income Tax 3,100 Education 1,627.50
VAT 2,475 Agriculture 602.49
Customs duties 2,900 Health 2,047.50
Capital tax 240 Social welfare 3,220
EU receipts 3,800 Security 703.50
Surplus 4,314.01
12,515 12,515
Income € millions Expenditure € millions
Income Tax 3,100 Education 1,550
VAT 2,750 Agriculture 570
Customs duties 2,900 Health 1,950
Capital tax 240 Social welfare 2,800
EU receipts 3,800 Security 670
Surplus 5,250
12,790 12,790
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(d) Total expenditure would be up by €570 (5% of €11,400) to €11,970. Total incomewould be down by €210 (10% of VAT €2,100) to €10,690. The overall budget deficitwould be €1,280m.
(e) An increase in the level of unemployment would increase the social welfare paymentsand 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 ofgoods.
2.
3.
4. Enterprise Ireland. It provides information about foreign markets and introduces Irishbusinesses to foreign buyers.
5.
6. Balance of trade is a surplus of €100m. (€400m–€300m).
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 Language Currency
Belgium Flemish/French Euro
Denmark Danish Krone
France French Euro
Hungary Hungarian Forint
Italy Italian Euro
Poland Polish Zloty
Amount in € millions Surplus/Deficit
a 15 Surplus
b 70 Surplus
c 25 Deficit
d 30 Deficit
e 120 Surplus
f 10 Deficit
(a) Butter (b) Cattle (c) Computer parts (d) Irish Water (e) CDs
England Egypt USA Spain Japan
(a) Cars (b) Newspapers (c) Oil (d) Coal (e) Shoes (f) Bananas
Germany England USA Poland Italy Israel
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9. (a and b)
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 (b) €5 (c) €694.44(d) €820.90 (e) $65,000
Chapter 21 Forms of Ownership
1.
2.
3.
Form of Ownership Ownership Liability Profitability
Sole Trader 1 Unlimited Owner takes all
Private LimitedCompany
1–50 LimitedShared betweenshareholders
Co-operatives 8 plus LimitedShared betweenmembers
State-owned business Government UnlimitedReinvested or taken bygovernment
Form of Ownership Advantage 1 Advantage 2 Disadvantage 1 Disadvantage 2Sole Trader Easy to set up Takes all the
profitsUnlimited liability Lacks continuity
Private LimitedCompany
Limited liability Can have up to 50shareholders
A lot of legalitieswhen setting up
Costly to set up
Co-operative Limited liability Together everyoneachieves moresuccess (TEAMS)
One vote permember
Often too small todevelop
State-owned busi-ness
Provides extrarevenue ifprofitable
Providesemployment
Losses have to beborne by the taxpayer
Too dependent ongovernment forcapital
Form of Ownership Characteristic 1 Characteristic 2 Characteristic 3Sole Trader One person puts up the
investmentOne person makes allthe decisions
One person takes allthe profit or suffers allthe loss
Private LimitedCompany
Owed by between 1and 50 shareholders
Control over who canbuy the shares
Must have the word‘limited’ after its name
Co-operative Owed by eight or moremembers
Each member has onlyone vote
Each member has anequal say in the run-ning of the co-operative
State-owned business Owned by the government
Government makes top managementappointments
Profits are reinvestedor taken by the government
Country UK Sweden Denmark
Currency Pound Sterling Krona Krone
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(b) State ownership has been used in Ireland because no one invests in non profit-makingbusinesses. Employment had to be created.Co-operatives were used to process the milk produced by farmers. Some workersformed co-operatives, to give themselves employment when their businesses closeddown.
5.(a) A state-owned or semi-state company is a business owned by the government.(b) A sole trader is a business owned and run by one person.(c) A co-operative is a business owned and controlled by the workers or members.(d) 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 Fáilte 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) Iarnród Éireann runs the railways in Ireland.(i) Bord na Móna provides turf and briquettes.(j) Telecom Éireann provides telephone and fax services.
Note: Bord Fáilte, Telecom Éireann and ACC have changed since this Q7 was asked in1995. Bord Fáilte is now Fáilte Ireland and Telecom and ACC are no longer state-ownedcompanies.
(b) FÁS provides training for unemployed people.Bus Éireann provides a national road transport service.
Chapter 22 Private Limited Company
There are no exercises in the textbook.
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4. (a)
Chapter 23 Chain of Production
1. (a) The channels of distribution are the means by which goods and services are passed fromthe producers to the final consumers.
(b) 1. Manufacturer → ConsumerExample: Shipbuilding
2. Manufacturer → Retailer → ConsumerExample: Groceries (e.g. Tesco)
3. Manufacturer → Wholesaler → Retailer → ConsumerExample: 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 provideadvice for consumers.
4. In-store banking; growth in international retailers; greater use of technology e.g. bar codescanners; 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 carparking.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 healthyworkplace; be treated in an equal way.Three responsibilities: An employee is responsible for doing an honest day’s work; protectingtheir employer’s 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 doingpart-time work.
3.
4. Two rewards of being self-employed include: Making one’s own decisions; keeping all the profit made.Two risks of being self-employed include: Losing everything if the business fails; using up all one’s savings to start up business.
5.
Products used in Ireland Yes/No
Motor cars No
Clothes Yes
Petrol No
Coal No
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6. (a and b)
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.
Department Work Skills required
Finance Recording income and expenditure Bookkeeping, accuracy
Production Designing and making goods Creative, engineering
Marketing Researching the market; advertising and selling goods Good communication skills
3.
4. Basic week 40 hours @ €8 = €320Overtime 9 hours @ €12 = €108Gross wage €428
5. Basic wage 40 hours @ €10 €400Overtime 10 hours @ €15 per hour €150
6 hours @ €20 per hour €120 €270Gross wage €670
6. Basic wage 10 rolls @ €7 per roll €70Bonus 5 rolls @ €8 per roll €40Gross wage €110
7. Basic wage €125Commission 6 policies @ €350 €2,100Gross wage €2,225
8. Basic wage €15Commission 250 copies @ €1 €250
47 copies @ €1.50 €70.50 €320.50Gross wage €335.50
9. Gross income €43,000First €29,400 @ 20% €5,880Remainder €13,600 @ 42% €5,712Gross tax due €11,592Less tax credits (€1,580 + €1,270) €2,850Actual tax due €8,742
PRSI Calculation 7.5% of €43,000 €3,225
Net Wage: Gross Wage (€43,000) – PAYE (€8,742) – PRSI (€3,225) = €31,033
Caretaker required for St Veronica’s College, Cork
Qualifications: FÁS certificate in caretaker studiesExperience: Four yearsHours of work: 48-hour week, flexi-workRate of pay: €25 per hourHolidays: 34 days per year
Apply to Chairperson, BOM, St Veronica’s College, CorkClosing date for applications 25 August 2008
St Veronica’s College is an equal opportunities employer
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10. Gross income €63,000First €29,400 @ 20% €5,880Remainder €33,600 @ 42% €14,114Gross tax due €19,992Less tax credits (€1,580 + €1,270) €2,850Actual tax due €17,140
PRSI: Calculation 7.5% of €63,000 €4,725
Net Wage Gross Wage (€63,000) – PAYE (€17,140) – PRSI (€4,725) = €41,135
11. Gross income €62,000First €29,400 @ 20% €5,880Remainder €32,600 @ 42% €13,440Gross tax due €19,320Less tax credits (€1,580 + €1,270) €2,850Actual tax due €16,470
PRSI: Calculation 7.5% of €62,000 €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 conditionsetc., 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 onmatters such as taxation and employment.
3.
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.
Union Type Explanation Example
Craft Union Represents workers who have served an apprenticeship NUJ
White Collar Union Represents workers who have professional qualification ASTI
Industrial Union Represents workers who work in the same industry INO
General Union Represents workers who are not in any of the other three unions SIPTU
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6. (a)(i) Line graph showing number of strikes for the period 1990–1994
(ii) 44.2 strikes.(iii) 1992 and 1994.
(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 andpublic 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 Postwanted 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 wouldnot 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 eachone has a different time period and will require a different type of finance. E.g. a long-termneed would require a source of finance to be paid back after at least five years.
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(b)
2.
3.
4.
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 andusing 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.
Long-Term Source ExplanationReserves 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.
Grants This is an external source of finance, which is obtained from the EU orgovernment, to start or expand a business, if certain conditions are met.
Long-term loan This is an external source of finance that is obtained from a financial institu-tion for the purchase of land, buildings and machinery.The business mustbe creditworthy, be able to repay the loan and have security.
External Source ExplanationHire Purchase 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 lastinstalment is paid.
Leasing This is a source of finance where the business that wants the use but notownership of the three vans, pays a finance company for the use of them.
Short-Term Source ExplanationCreditors This is where a business buys goods from a supplier and pays for them
at a later date.
Expenses due This where certain expenses are incurred and paid for later, e.g.electricity and telephone.
Bank overdraft This where a person has a current account and has permission fromthe bank to take out more money than is in the account.
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Chapter 28 Preparation of a Business Plan
1. (i) The business background giving details of the owners and a history of the business;(ii) A description of the product or service;(iii) Market research details of customers and competitors;(iv) How the product or service will be promoted;(v) The sources of finance that will be used, both internal and external.
2. Total cost of project (€60,000 + €30,000 + €18,000 + €14,000) = €122,000Less Finance Available (€56,000 + €30,000) = €86,000Finance Required: €36,000
3. Total cost of project (€80,000 + €40,000 + €60,000 + €20,000 + €10,000) = €210,000Less Finance Available (€62,500 + €35,000) = €97,500Finance 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; proofof 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) = €290,000Less finance available (€80,000 + €50,000) = €130,000Loan required: €160,000
Chapter 30 Banking for Business
1.
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 signcheques.
Service ExplanationMoney transmission This involves moving money from one business to another e.g.
cheques, credit transfers etc
Lending Banks provide loans for different periods as well as overdrafts
Night-safe facilities Banks provide a safe place to keep business money overnight
Paypath Banks will transfer money to an employee’s account
International services Banks will make payments to foreign businesses on behalf of theiraccount holders
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3.The directors of the company, having completed an application form and provided necessarydetails, 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, bystanding orders, direct debits, credit transfers etc;The account is checked against the bank statement.
4. Adjusted Bank Account
Bank Reconciliation Statement as on 31/7/2005
Balance as per bank statement €12,750Add lodgements not credited €10,600
€23,350Less cheques not yet presented (4,600 + 6,000) €10,600Balance as per adjusted bank account €12,750
5. Adjusted Bank Account
Bank Reconciliation Statement as on 31/5/2007
Balance as per bank statement €9,810Add lodgements not credited €7,500
€17,310Less cheques not yet presented (1,300 + 600 + 1,450) €3,350Balance as per adjusted bank account €13,960
6. Adjusted bank account
Date Details Total Date Details Total
2007 € 2007 €
31/3 Balance b/d 16,740 31/3 Direct debit 1,790
Credit transfer 2,780 Bank charges 100
Balance c/d 17,630
19,520 19,520
Balance b/d 17,630
Date Details Total Date Details Total
2007 € 2007 €
31/5 Balance b/d 12,900 31/5 Standing order 1,300
Credit transfer 2,400 Bank charges 40
Balance c/d 13,960
15,300 15,300
Balance b/d 13,960
Date Details Debit Credit Balance
2005 € € €
31/7 Balance b/d 17,000
Credit transfer 3,000 20,000
Standing order 2,400 17,600
Direct debit 4,500 13,100
Bank charges 350 12,750
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Bank Reconciliation Statement as on 31/3/2007Balance as per bank statement €14,890Add lodgements not credited €11,600
€26,490Less cheques not yet presented (950 + 4,360 + 3,550) €8,860Balance as per adjusted bank account €17,630
7. (a) Bank Account
(b) Adjusted Bank Account
(c)Bank Reconciliation Statement as on 31/5/2004
Balance as per bank statement €6,345Add lodgements not credited €12,400
€18,745Less cheques not yet presented (4,500 + 1,900) €6,400Balance as per adjusted bank account €12,345
Chapter 31 Business Insurance
1.
Types of Insurance ExplanationThird party motor insurance Required by law in case damage is caused by its motor
vehicles
Theft insurance In case goods or equipment is stolen
Cash in transit In case money is stolen on the way to the bank
Employer’s liability In case workers get injured at work
Product liability In case consumers get injured using the product
Date Details Total Date Details Total
2004 € 2004 €
31/5 Balance b/d 5,920 Direct debit 3,400
Credit transfer 10,000 Bank fees 175
Balance c/d 12,345
15,920 15,920
12,345
Date Details Total Date Details Ch. no./ATM Total
2004 € 2004 €
1/5 Balance b/d 1,500 7/5 Martin Ltd 1 1,700
3/5 Lodgement 3,500 10/5 Bruton Ltd 2 4,500
31/5 Lodgement 12,400 14/5 Cash withdrawal ATM 600
19/5 Kenny Ltd 3 2,780
27/5 Harney Ltd 4 1,900
31/5 Balance c/d 5,920
17,400 17,400
1/6 Balance b/d 5,920
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2. (a) Hayes Ltd is required by law to have third party motor insurance, and to pay its share ofPRSI.
(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;Employer’s 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 furnituregoing out of date.
(d) Hayes Ltd should have adequate insurance so that all possible risks are insured for thecorrect amounts.
(e) Hayes Ltd should consult an insurance broker because the broker will be independentand 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-bulkygoods.
4.
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 canalso 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
DeliverySystem
Speed Cost Reliability Good transported
Road Fast over short distances
Expensive Very reliable Non-bulky
Rail Very fast Cheaper than road Very reliable Bulky
Sea Slow Cheaper than airDependent onweather
Bulky
Air Very fast Very expensiveDependent onweather
Non-bulky
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11. (a) Cost of diesel: 168 = 6.72 litres @ €0.60 = €4.0325
Driver wages: €100Annual costs: €1,500 + €600 + €1,100 = €10
320Total costs: €114.03
(b) Cost of diesel: 168 = 6.72 litres @ €0.60 = €4.0325
Driver wages: €120Annual costs: €1,350 + €750 + €1,200 = €11
300Total costs: €135.03
12. (a) Cost of diesel: 472 = 18.88 litres @ €0.60 = €11.3325
Driver wages: 11@ €8 + 11 @ €3 = €121
Annual costs: €900 + €520 + €3,000 = €14.98295
Total costs: €147.31
(b) 1.46%.
13. Cost of diesel: 460 = 28,75 litres @ €0.60 = €17.2516
Driver wages: €98
Annual costs: €580 + €1,500 + €750 = €10283
Total costs: €125.25
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 Conrad Hotel Farmer’sJournal
Sky Sports BusinessStudies Books
Doc Martensboots
Target Market Business people Farmers Sports JuniorCertificateStudents
Teenagers
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4. Sample layout
5. Market research is important because it provides details of customers and competitors. Thishelps identify the target market.
6. A business would first use desk research, which involves studying existing information onthe market. It would then use field studies to get additional information that is not availablefrom desk research. This involves using questionnaires, interviews etc.
7. A business advertises to inform customers about its products or services, to persuadecustomers to buy only its products or services and also to highlight the difference betweenits 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 ofnewspaper advertisements.
Example:
‘Don’t 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:
‘You’ve seen the restNow watch the bestGet it all off your chestWith the new Finance and Consumer test.’
11. Students to suggest answer.
12.
13. Students to suggest answers.
14. ‘Must have’, ‘Can’t live without it’, ‘Be ahead of the pack’.
Product/Service Smarties Swimwear Festival Circus Bank
Media Television Colour magazine Posters Fliers Radio
Four P’s Product chosen: school bag
Product Available in ten colours and five sizes
Price Range from €12.50 to €28.60
Promotion Send fliers to schools.Television advertisements in August
Place Available in all sports and school bookshops
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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 atransaction.
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 orCreditors Ledgers.
Chapter 35 Business Documents I
1. ‘Effective purchasing’ means purchasing the right quantity and quality of goods at the rightprice 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.
6. C €556.20 (A = €565.25 B = €580.30 C = €556.20)
7.
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 (b) Mark up % = 50%. Margin % = 33 %
10. (a) 20% (b) 16.67%
11. (a) €50 (b) 40%
12. 25%
Chapter 36 Business Documents II
There are no exercises in the textbook.
Term Explanation
CWO Cash must be sent with the order
Ex WorksPrice does not include delivery. If goods have to be delivered theywill cost more
Trade Discount 30%Retailers will receive a 30% reduction in the price to encouragethem to sell the goods
5% in 10 days otherwise netIf payment is made within 10 days of receiving the goods a furtherreduction of 5% will be given, otherwise the normal price applies
Subject to VAT @21%Value Added Tax at 21% has to be added to the price of thegoods
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.
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13
Chapter 37 Recording Credit Transactions
1.
2.
Sales Book (p1)
Date Details Inv. no. F Net VAT Total
2006 € € €
17/4 Foley Ltd 34 DL 11,000 1,485 12,485
18/4 Roley Ltd 35 DL 19,000 2,565 21,565
20/4 Poley Ltd 36 DL 52,000 7,020 59,020
82,000 11,070 93,070
Trial Balance as on 15/10/2006
Coyne Ltd 36,320
Hynes Ltd 31,780
Lyons Ltd 18,160
Sales 76,000
VAT 10,260
86,260 86,260
Debtors Ledger
Date Details F Total Date Details F Total
2006 € 2006 €
Coyne Ltd A/C
11/10 Sales SB 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 Total debtors SB 76,000
Vat A/C
15/10 Credit sales SB 10,260
Sales Book (p1)
Date Details Inv. no. F Net VAT Total
2006 € € €
11/10 Coyne Ltd 54 DL 32,000 4,320 36,320
13/10 Hynes Ltd 55 DL 28,000 3,780 31,780
15/10 Lyons Ltd 56 DL 16,000 2,160 18,160
76,000 10,260 86,260
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3.
Sales Book (p1)
Date Details Inv. no. F Net VAT Total
2007 € € €
12/5 Mark Ltd 67 DL 27,000 3,645 30,645
14/5 Dark Ltd 68 DL 10,400 1,404 11,804
15/5 Park Ltd 69 DL 38,400 5,184 43,584
75,800 10,233 86,033
Trial Balance as on 20/4/2006
Foley Ltd 12,485
Roley Ltd 21,565
Poley Ltd 59,020
Sales 82,000
VAT 11,070
93,070 93,070
Debtors Ledger
Date Details F Total Date Details F Total
2006 € 2006 €
Foley Ltd A/C
17/4 Sales SB 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 Total debtors SB 82,000
20/4 Credit sales SB 11,070
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VAT A/C
4.Sales Book (p1)
Date Details Inv. no. F Net VAT Total
2007 € € €
23/9 Brown Ltd 45 DL 21,000 4,410 25,410
24/9 White Ltd 46 DL 50,000 10,500 60,500
26/9 Green Ltd 47 DL 16,000 3,360 19,360
87,000 18,270 105,270
Trial Balance as on 15/5/2007
Mark Ltd 30,645
Dark Ltd 11,804
Park Ltd 43,584
Sales 75,800
VAT 10,233
86,033 86,033
Debtors Ledger
Date Details F Total Date Details F Total
2007 € 2007 €
Mark Ltd A/C
12/5 Sales SB 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 Total debtors SB 75,800
VAT A/C
15/5 Credit sales SB 10,233
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5.
Purchases Book (p1)
Date Details Inv. no. F Net VAT Total
2007 € € €
3/4 PM Ltd 4 CL 18,000 3,780 21,780
5/4 ET Ltd 2 CL 8,000 1,680 9,680
8/4 AA Ltd 1 CL 12,000 2,520 14,520
38,000 7,980 45,980
Trial Balance as on 26/9/2007
Brown Ltd 25,410
White Ltd 60,500
Green Ltd 19,360
Sales 87,000
VAT 18,270
105,270 105,270
Debtors Ledger
Date Details F Total Date Details F Total
2007 € 2007 €
Brown Ltd A/C
23/9 Sales SB 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 Total debtors SB 87,000
VAT A/C
26/9 Credit sales SB 18,270
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6.
Purchases Book (p1)
Date Details Inv. no. F Net VAT Total
2007 € € €
17/9 BC Ltd 7 CL 36,000 7,560 43,560
19/9 MP Ltd 5 CL 4,000 840 4,840
23/9 CC Ltd 3 CL 54,000 11,340 65,340
94,000 19,740 113,740
Trial Balance as on 8/4/2007
PM Ltd 21,780
ET Ltd 9,680
AA Ltd 14,520
Purchases 38,000
VAT 7,890
45,790 45,790
Creditors Ledger
Date Details F Total Date Details F Total
2007 € 2007 €
3/4 Purchases PB 21,780
5/4 Purchases PB 9,680
8/4 Purchases PB 14,520
8/4 Total creditors PB 38,000
8/4 Credit purchases PB 7,890
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PM Ltd A/C
ET Ltd A/C
AA Ltd A/C
Purchases A/C
General Ledger
VAT A/C
7.
Purchases Book (p1)
Date Details Inv. no. F Net VAT Total
2007 € € €
29/5 PP Ltd 9 CL 64,000 8,640 72,640
30/5 DJ Ltd 8 CL 48,000 6,480 54,480
31/5 FI Ltd 7 CL 96,000 12,960 108,960
208,000 28,080 236,080
Trial Balance as on 23/9/2007
BC Ltd 43,560
MP Ltd 4,840
CC Ltd 65,340
Purchases 94,000
VAT 19,740
113,740 113,740
Creditors Ledger
Date Details F Total Date Details F Total
2007 € 2007 €
17/9 Purchases PB 43,560
19/9 Purchases PB 4,840
23/9 Purchases PB 65,340
23/9 Total purchases PB 94,000
23/9 Credit purchases PB 19,740
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BC Ltd A/C
MP Ltd A/C
CC Ltd A/C
General Ledger
Purchases A/C
VAT A/C
8.
Purchases Book (p1)
Date Details Inv. no. F Net VAT Total
2007 € € €
14/7 PJ Ltd 7 CL 16,000 2,160 18,160
16/7 SM Ltd 2 CL 44,000 5,940 49,940
18/7 JC 4 CL 36,000 4,860 40,860
96,000 12,960 108,960
Trial Balance as on 31/5/2007
PP Ltd 72,640
DJ Ltd 54,480
FI Ltd 108,960
Purchases 208,000
VAT 28,080
236,080 236,080
Creditors Ledger
Date Details F Total Date Details F Total
2007 € 2007 €
29/5 Purchases PB 72,640
30/5 Purchases PB 54,480
31/5 Purchases PB 108,960
31/5 Total creditors PB 208,000
31/5 Credit purchases PB 28,080
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PP Ltd A/C
DJ Ltd A/C
FI Ltd A/C
General Ledger
Purchases A/C
VAT A/C
9.
Sales Returns Book (p1)
Date Details Credit note no. F Net VAT Total
2006 € € €
20/4 Bun Ltd 67 DL 1,300 273 1,573
23/4 Gun Ltd 68 DL 600 126 726
1,900 399 2,299
Trial Balance as on 18/7/2007
PJ Ltd 18,160
SM Ltd 49,940
JC Ltd 40,860
Purchases 96,000
VAT 12,960
108,960 108,960
Creditors Ledger
Date Details F Total Date Details F Total
2007 € 2007 €
14/7 Purchases PB 18,160
16/7 Purchases PB 49,940
18/7 Purchases PB 40,860
18/7 Total creditors PB 96,000
18/7 Credit purchases PB 12,960
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PJ Ltd A/C
SM Ltd A/C
JC Ltd A/C
General Ledger
Purchases A/C
VAT A/C
10.
Sales Returns Book (p1)
Date Details Credit note no. F Net VAT Total
2006 € € €
12/1 Bob Ltd 45 DL 3,000 405 3,405
14/1 Rob Ltd 46 DL 1,600 216 1,816
4,600 621 5,221
Trial Balance as on 20/4/2007
Bun Ltd 1,573
Gun Ltd 726
Sales returns 1,900
VAT 399
2,299 2,299
Debtors Ledger
Date Details F Total Date Details F Total
2006 € 2006 €
20/4 Sales returns SRB 1,573
23/4 Sales returns SRB 726
20/4 Total debtors SRB 1,900
20/4 Sales returns SRB 399
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Bun Ltd A/C
Gun Ltd A/C
General Ledger
Sales Returns A/C
VAT A/C
11.
Debtors Ledger
Date Details F Total Date Details F Total
2006 € 2006 €
24/9 Sales returns SRB 2,724
26/9 Sales returns SRB 6,356
26/9 Total debtors SRB 8,000
26/9 Sales returns SRB 1,080
Sales Returns Book (p1)
Date Details Credit note no. F Net VAT Total
2006 € € €
24/9 Joe Ltd 78 DL 2,400 324 2,724
26/9 Coe Ltd 79 DL 5,600 756 6,356
8,000 1,080 9,080
Trial Balance as on 14/1/2006
Bob Ltd 3,405
Rob Ltd 1,816
Sales returns 4,600
VAT 621
5,221 5,221
Debtors Ledger
Date Details F Total Date Details F Total
2006 € 2006 €
12/1 Sales returns SRB 3,405
14/1 Sales returns SRB 1,816
14/1 Total debtors SRB 4,600
14/1 Sales returns SRB 621
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Bob Ltd A/C
Rob Ltd A/C
General Ledger
VAT A/C
Sales Returns A/C
General Ledger
Sales Returns A/C
VAT A/C
Coe Ltd A/C
Joe Ltd A/C
12.
Trial Balance as on 8/3/2007
Mike Ltd 4,086
Alma Ltd 1,589
Purchases returns 5,000
VAT 675
5,675 5,675
Creditors Ledger
Date Details F Total Date Details F Total
2007 € 2007 €
Mike Ltd A/C
7/3 Purchases returns PRB 4,086
Alma Ltd A/C
8/3 Purchases returns PRB 1,589
Purchases Returns A/C
8/3 Total creditors PRB 5,000
VAT A/C
8/3 Purchases returns PRB 675
Purchases Returns Book (p1)
Date Details Credit note no. F Net VAT Total
2007 € € €
7/3 Mike Ltd 56 CL 3,600 486 4,086
8/3 Alma Ltd 12 CL 1,400 189 1,589
5,000 675 5,675
Trial Balance as on 26/9/2006
Joe Ltd 2,724
Coe Ltd 6,356
Sales returns 8,000
VAT 1,080
9,080 9,080
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13.
14.
Purchases Returns Book (p1)
Date Details Credit note no. F Net VAT Total
2007 € € €
16/2 Vera Ltd 14 CL 3,400 714 4,114
18/2 Jack Ltd 67 CL 2,800 588 3,388
6,200 1,302 7,502
Trial Balance as on 25/1/2007
Vickie Ltd 3,178
Steve Ltd 908
Purchase returns 3,600
VAT 486
4,086 4,086
Creditors Ledger
Date Details F Total Date Details F Total
2007 € 2007 €
23/1 Purchases returns PRB 3,178
25/1 Purchases returns PRB 908
Purchases Returns A/C
25/1 Total creditors PRB 3,600
25/1 Purchases returns PRB 486
Purchases Returns Book (p1)
Date Details Credit note no. F Net VAT Total
2007 € € €
23/1 Vicki Ltd 34 CL 2,800 378 3,178
25/1 Steve Ltd 5 CL 800 108 908
3,600 486 4,086
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Vickie Ltd A/C
Steve Ltd A/C
General Ledger
VAT A/C
15.
Sales Returns Book (p1)
Date Details Credit note no. F Net VAT Total
2008 € € €
8/4 Smyth Ltd 12 DL 4,500 945 5,445
9/4 Smart Ltd 13 DL 3,200 672 3,872
7,700 1,617 9,317
Sales Book (p1)
Date Details Invoice no. F Net VAT Total
2008 € € €
3/4 Smyth Ltd 43 DL 20,000 4,200 24,200
5/4 Smart Ltd 44 DL 15,500 3,255 18,755
35,500 7,455 42,955
Trial Balance as on 18/2/2007
Vera Ltd 4,114
Jack Ltd 3,388
Purchase returns 6,200
VAT 1,302
7,502 7,502
Creditors Ledger
Date Details F Total Date Details F Total
2007 € 2007 €
16/2 Purchases returns PRB 4,114
18/2 Purchases returns PRB 3,388
Purchases Returns A/C
18/2 Total creditors PRB 6,200
18/2 Purchase returns PRB 1,302
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Vera Ltd A/C
Jack Ltd A/C
General Ledger
VAT A/C
16.
Sales Book (p1)
Date Details Invoice no. F Net VAT Total
2008 € € €
13/2 Harry Ltd 67 DL 35,000 4,725 39,725
14/2 Helen Ltd 68 DL 24,000 3,240 27,240
59,000 7,965 66,965
Trial Balance as on 9/4/2008
Smyth Ltd 18,755
Smart Ltd 14,883
Sales 35,500
Sales returns 7,700
VAT 5,838
41,338 41,338
Debtors Ledger
Date Details F Total Date Details F Total
2008 € 2008 €
3/4 Sales SB 24,200 8/4 Sales returns SRB 5,445
9/4 Balance c/d 18,755
24,200 24,200
10/4 Balance b/d 18,755
5/4 Sales SB 18,755 9/4 Sales returns SRB 3,872
9/4 Balance c/d 14,883
18,755 18,755
10/2 Balance b/d 14,883
General Ledger
Sales A/C
9/4 Total debtors SB 35,500
9/4 Total debtors SRB 7,700
VAT A/C
9/4 Sales returns SRB 1,617 9/4 Credit sales SB 7,455
9/4 Balance c/d 5,838
7,455 7,455
10/4 Balance b/d 5,838
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Smart Ltd A/C
Sales Returns A/C
Smyth Ltd A/C
Trial Balance as on 18/2/2008
Harry Ltd 32,915
Helen Ltd 24,516
Sales 59,000
Sales returns 8,400
VAT 6,831
65,831 65,831
Debtors Ledger
Date Details F Total Date Details F Total
2008 € 2008 €
Harry Ltd A/C
13/2 Sales SB 39,725 16/2 Sales returns SRB 6,810
18/2 Balance c/d 32,915
39,725 39,725
19/2 Balance b/d 32,915
Helen Ltd A/C
14/2 Sales SB 27,240 18/2 Sales returns SRB 2,724
Balance c/d 24,516
27,240 27,240
19/2 Balance b/d 24,516
General Ledger
Sales A/C
18/2 Total debtors SB 59,000
Sales Returns A/C
18/2 Total debtors SRB 8,400
VAT A/C
18/2 Sales returns SRB 1,134 18/2 Credit sales SB 7,965
18/2 Balance c/d 6,831
7,965 7,965
19/2 Balance b/d 6,831
Sales Returns Book (p1)
Date Details Credit note no. F Net VAT Total
2008 € € €
16/2 Harry Ltd 56 DL 6,000 810 6,810
18/2 Helen Ltd 57 DL 2,400 324 2,724
8,400 1,134 9,534
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17.
Trial Balance as on 27/6/2008
Glass Ltd 45,254
Task Ltd 94,380
Sales 123,000
Sales returns 7,600
VAT 24,234
147,234 147,234
Debtors Ledger
Date Details F Total Date Details F Total
2008 € 2008 €
25/6 Sales SB 54,450 27/6 Sales returns SRB 9,196
27/6 Balance c/d 45,254
54,450 54,450
28/6 Balance b/d 45,254
26/6 Sales SB 94,380
27/6 Total debtors SB 123,000
27/6 Total debtors SRB 7,600
27/6 Sales returns SRB 1,596 27/6 Credit sales SB 25,830
27/6 Balance c/d 24,234
25,830 25,830
28/6 Balance b/d 24,234
Sales Returns Book (p1)
Date Details Credit note no. F Net VAT Total
2008 € € €
27/6 Glass Ltd 32 DL 7,600 1,596 9,196
Sales Book (p1)
Date Details Invoice no. F Net VAT Total
2008 € € €
25/6 Glass Ltd 78 DL 45,000 9,450 54,450
26/6 Task Ltd 79 DL 78,000 16,380 94,380
123,000 25,830 148,830
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VAT A/C
Sales Returns A/C
General Ledger
Task Ltd A/C
Glass Ltd A/C
Sales A/C
18.
Trial Balance as on 16/4/2008
Dinny Ltd 39,930
Tesie Ltd 88,814
Purchases 116,300
Purchases returns 9,900
VAT 22,344
138,644 138,644
Creditors Ledger
Date Details F Total Date Details F Total
2006 € 2006 €
14/4 Purchase returns PRB 7,744 10/4 Purchases PB 47,674
16/4 Balance c/d 39,930
47,674 47,674
17/4 Balance b/d 39,930
16/4 Purchases returns PRB 4,235 12/4 Purchases PB 93,049
16/4 Balance c/d 88,814
93,049 93,049
17/4 Balance b/d 88,814
16/4 Total creditors PB 116,300
16/4 Total creditor PRB 9,900
16/4 Credit purchases PB 24,423 16/4 Purchases ret. 2,079
16/4 Balance c/d 22,344
24,423 24,423
17/4 Balance b/d 22,344
Purchases Returns Book (p1)
Date Details Credit note no. F Net VAT Total
2006 € € €
14/4 Dinny Ltd 21 CL 6,400 1,344 7,744
16/4 Tesie Ltd 89 CL 3,500 735 4,235
9,900 2,079 11,979
Purchases Book (p1)
Date Details Invoice no. F Net VAT Total
2006 € € €
10/4 Dinny Ltd 32 CL 39,400 8,274 47,674
12/4 Tesie Ltd 56 CL 76,900 16,149 93,049
116,300 24,423 140,723
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General LedgerPurchases A/C
Purchase Returns A/C
VAT A/C
Tesie Ltd A/C
Dinny Ltd A/C
19.
Trial Balance as on 28/5/2006
Miley Ltd 78,088
Biddy Ltd 60,155
Purchases 132,600
Purchases returns 10,800
VAT 16,443
149,043 149,043
Creditors Ledger
Date Details F Total Date Details F Total
2006 € 2006 €
26/5 Purchases returns PRB 8,172 13/5 Purchases PB 86,260
27/5 Balance c/d 78,088
86,260 86,260
28/5 Balance b/d 78,088
28/5 Purchases returns PRB 4,086 25/5 Purchases PB 64,241
28/5 Balance c/d 60,155
64,241 64,241
29/5 Balance b/d 60,155
28/5 Total creditors PB 132,600
28/5 Total creditors PRB 10,800
28/5 Credit purchases PB 17,901 28/5 Purchases ret. PRB 1,458
28/5 Balance c/d 16,443
17,901 17,901
29/5 Balance b/d 16,443
Purchases Returns Book (p1)
Date Details Credit note no. F Net VAT Total
2006 € € €
26/5 Miley Ltd 34 CL 7,200 972 8,172
28/5 Biddy Ltd 56 CL 3,600 486 4,086
10,800 1,458 12,258
Purchases Book (p1)
Date Details Invoice no. F Net VAT Total
2006 € € €
13/5 Miley Ltd 43 CL 76,000 10,260 86,260
25/5 Biddy 12 CL 56,600 7,641 64,241
132,600 17,901 150,501
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Purchases Returns A/C
VAT A/C
Purchases A/C
General Ledger
Biddy Ltd A/C
Miley Ltd A/C
20.
Creditors Ledger
Date Details F Total Date Details F Total
2006 € 2006 €
Nora Ltd A/C
20/8 Purchases returns PRB 2,497 17/8 Purchases PB 52,664
22/8 Balance c/d 50,167
52,664 52,664
23/8 Balance b/d 50,167
Brian Ltd A/C
22/8 Purchase returns PRB 2,951 19/8 Purchases PB 64,241
22/8 Balance c/d 61,290
64,241 64,241
23/8 Balance b/d 61,290
General Ledger
Purchases A/C
22/8 Total creditors PB 103,000
Purchases Returns A/C
22/8 Total creditors PRB 4,800
VAT A/C
22/8 Credit purchases PB 13,905 22/8 Purchases ret. PRB 648
22/8 Balance c/d 13,257
13,905 13,905
23/8 Balance b/d 13,257
Purchases Returns Book (p1)
Date Details Credit note no. F Net VAT Total
2006 € € €
20/8 Nora Ltd 14 CL 2,200 297 2,497
22/8 Brian Ltd 86 CL 2,600 351 2,951
4,800 648 5,448
Purchases Book (p1)
Date Details Invoice no. F Net VAT Total
2006 € € €
17/8 Nora Ltd 13 CL 46,400 6,264 52,664
19/8 Brian Ltd 92 CL 56,600 7,641 64,241
103,000 13,905 116,905
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21.
Sales Returns Book (p1)
Date Details Credit note no. F Net € VAT € Total €
8/7/2006 Turner Ltd 42 DL 1,600 216 1,816
Sales Book (p1)
Date Details Invoice no. F Net € VAT € Total €
4/7/2006 Turner Ltd 17 DL 4,800 648 5,448
Purchases Returns Book (p1)
Date Details Credit note no. F Net € VAT € Total €
6/7/2006 Fagan Ltd 61 CL 2,400 324 2,724
Purchases Book (p1)
Date Details Invoice no. F Net € VAT € Total €
1/7/2006 Fagan Ltd 6 CL 14,000 1,890 15,890
Trial Balance as on 22/8/2006
Nora Ltd 50,167
Brian Ltd 61,290
Purchases 103,000
Purchases returns 4,800
VAT 13,257
116,257 116,257
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Creditors Ledger
Date Details F Total Date Details F Total
2006 € 2006 €
Fagan Ltd A/C
6/7 Purchases returns PRB 2,724 1/7 Purchases PB 15,890
8/7 Balance c/d 13,166
15,890 15,890
9/7 Balance b/d 13,166
Debtors Ledger
Turner Ltd
4/7 Sales SB 5,448 8/7 Sales returns SRB 1,816
8/7 Balance c/d 3,632
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 Total creditors PRB 2,400
Sales A/C
8/7 Total debtors SB 4,800
Sales Returns A/C
8/7 Total debtors SRB 1,600
VAT A/C
8/7 Credit purchases PB 1,890 8/7 Credit sales SB 648
8/7 Sales returns SRB 216 8/7 Purchases returns PRB 324
8/7 Balance c/d 1,134
2,106 2,106
9/7 Balance b/d 1,134
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22.
Sales Returns Book (p1)
Date Details Credit note no. F Net € VAT € Total €
8/4/2006 Rice Ltd 71 DL 8,600 1,806 10,406
Sales Book (p1)
Date Details Invoice no. F Net € VAT € Total €
5/4/2006 Rice Ltd 92 DL 56,000 11,760 67,760
Purchases Returns Book (p1)
Date Details Credit note no. F Net € VAT € Total €
4/4/2006 CB Ltd 16 CL 10,000 2,100 12,100
Purchases Book (p1)
Date Details Invoice no. F Net € VAT € Total €
1/4/2006 CB Ltd 50 CL 36,000 7,560 43,560
Trial Balance as on 9/7/2006
Fagan Ltd 13,166
Turner Ltd 3,632
Purchases 14,000
Purchases returns 2,400
Sales 4,800
Sales returns 1,600
VAT 1,134
20,366 20,366
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Creditors Ledger
Date Details F Total Date Details F Total
2006 € 2006 €
CB Ltd
5/4 Purchases returns PRB 12,100 1/4 Purchases PB 43,560
8/4 Balance c/d 31,460
43,560 43,560
9/4 Balance b/d 31,460
Debtors Ledger
Rice Ltd A/C
5/4 Sales SB 67,760 8/4 Sales returns SRB 10,406
8/4 Balance c/d 57,354
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 Total creditors PRB 10,000
Sales A/C
8/4 Total debtors SB 56,000
Sales Returns A/C
8/4 Total debtors SRB 8,600
VAT A/C
8/4 Credit purchases PB 7,560 8/4 Credit sales SB 11,760
8/4 Sales returns SRB 1,806 8/4 Purchases returns 2,100
8/4 Balance c/d 4,494
13,860 13,860
9/4 Balance b/d 4,494
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23.
Sales Returns Book (p1)
Date Details Credit note no. F Net € VAT € Total €
4/1/2007 Dolan Ltd 9 DL 4,000 840 4,840
Sales Book (p1)
Date Details Invoice no. F Net € VAT € Total €
1/1/2007 Dolan Ltd 78 DL 72,000 15,120 87,120
Purchases Returns Book (p1)
Date Details Credit note no. F Net € VAT € Total €
9/1/2007 FX Ltd 40 CL 3,400 714 4,114
Purchases Book (p1)
Date Details Invoice no. F Net € VAT € Total €
6/1/2007 FX Ltd 23 CL 28,000 5,880 33,880
Trial Balance as on 9/4/2006
CB Ltd 31,460
Rice Ltd 57,354
Purchases 36,000
Purchases returns 10,000
Sales 56,000
Sales returns 8,600
VAT 4,494
101,954 101,954
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Creditors Ledger
Date Details F Total Date Details F Total
2007 € 2007 €
FX Ltd A/C
9/1 Purchases returns PRB 4,114 6/1 Purchases PB 33,880
9/1 Balance c/d 29,766
33,880 33,880
10/1 Balance b/d 29,766
Debtors Ledger
Dolan Ltd A/C
1/1 Sales SB 87,120 4/1 Sales returns SRB 4,840
9/1 Balance c/d 82,280
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 Total creditors PRB 3,400
Sales A/C
9/1 Total debtors SB 72,000
Sales Returns A/C
9/1 Total debtors SRB 4,000
VAT A/C
9/1 Credit purchases PB 5,880 9/1 Credit sales SB 15,120
9/1 Sales returns SRB 840 9/1 Purchases returns PRB 714
9/1 Balance c/d 9,114
15,834 15,834
10/1 Balance b/d 9,114
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24.
Sales Returns Book (p1)
Date Details Credit note no. F Net € VAT € Total €
7/11/2007 Glynn Ltd 8 DL 1,400 189 1,589
Sales Book (p1)
Date Details Invoice no. F Net € VAT € Total €
1/11/2007 Glynn Ltd 3 DL 16,000 2,160 18,160
Purchases Returns Book (p1)
Date Details Credit note no. F Net € VAT € Total €
9/11/2007 DL Ltd 18 CL 5,400 729 6,129
Purchases Book (p1)
Date Details Invoice no. F Net € VAT € Total €
6/11/2007 DL Ltd 6 CL 38,000 5,130 43,130
Trial Balance as on 9/1/2007
FX Ltd 29,766
Dolan Ltd 82,280
Purchases 28,000
Purchases returns 3,400
Sales 72,000
Sales returns 4,000
VAT 9,114
114,280 114,280
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Creditors Ledger
Date Details F Total Date Details F Total
2007 € 2007 €
DL Ltd A/C
9/11 Purchases returns PRB 6,129 6/11 Purchases PB 43,130
9/11 Balance c/d 37,001
43,130 43,130
10/11 Balance b/d 37,001
Debtors Ledger
Glynn Ltd A/C
1/11 Sales SB 18,160 7/11 Sales returns SRB 1,589
9/11 Balance c/d 16,571
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 Total creditors PRB 5,400
Sales A/C
9/11 Total debtors SB 16,000
Sales Returns A/C
9/11 Total debtors SRB 1,400
VAT A/C
9/11 Credit purchases PB 5,130 9/11 Credit sales SB 2,160
9/11 Sales returns SRB 189 9/11 Purchases returns PRB 729
9/11 Balance c/d 2,430
5,319 5,319
10/11 Balance b/d 2,430
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25.
Sales Returns Book (p1)
Date Details Credit note no. F Net € VAT € Total €
9/6/2007 Adams Ltd 38 DL 12,000 1,620 13,620
Sales Book (p1)
Date Details Invoice no. F Net € VAT € Total €
1/6/2007 Adams Ltd 4 DL 46,000 6,210 52,210
Purchases Returns Book (p1)
Date Details Credit note no. F Net € VAT € Total €
8/6/2007 KC Ltd 17 CL 5,000 675 5,675
Purchases Book (p1)
Date Details Invoice no. F Net € VAT € Total €
3/6/2007 KC Ltd 94 CL 35,000 4,725 39,725
Trial Balance as on 9/11/07
DL Ltd 37,001
Glynn Ltd 16,571
Purchases 38,000
Purchases returns 5,400
Sales 16,000
Sales returns 1,400
VAT 2,430
58,401 58,401
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Creditors Ledger
Date Details F Total Date Details F Total
2007 € 2007 €
KC Ltd A/C
8/6 Purchases returns PRB 5,675 3/6 Purchases PB 39,725
9/6 Balance c/d 34,050
39,725 39,725
10/6 Balance b/d 34,050
Debtors Ledger
Adams Ltd A/C
1/6 Sales SB 52,210 9/6 Sales returns SRB 13,620
9/6 Balance c/d 38,590
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 Total creditors PRB 5,000
Sales A/C
9/6 Total debtors SB 46,000
Sales Returns A/C
9/6 Total debtors SRB 12,000
VAT A/C
9/6 Credit purchases PB 4,725 9/6 Credit sales SB 6,210
9/6 Sales returns SRB 1,620 9/6 Purchases returns PRB 675
9/6 Balance c/d 540
6,885 6,885
10/6 Balance b/d 540
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26.
Sales Returns Book (p1)
Date Details Credit note no. F Net € VAT € Total €
9/3/2007 Keenan Ltd 57 DL 1,400 294 1,694
Sales Book (p1)
Date Details Invoice no. F Net € VAT € Total €
1/3/2007 Keenan Ltd 10 DL 34,000 7,140 41,140
Purchases Returns Book (p1)
Date Details Credit note no. F Net € VAT € Total €
8/3/2007 MG Ltd 15 CL 1,200 252 1,452
Purchases Book (p1)
Date Details Invoice no. F Net € VAT € Total €
3/3/2007 MG Ltd 64 CL 14,000 2,940 16,940
Trial Balance as on 9/6/2007
KC Ltd 34,050
Adams Ltd 38,590
Purchases 35,000
Purchases returns 5,000
Sales 46,000
Sales returns 12,000
VAT 540
85,590 85,590
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Creditors Ledger
Date Details F Total Date Details F Total
2007 € 2007 €
MG Ltd A/C
8/3 Purchases returns PRB 1,452 3/3 Purchases PB 16,940
9/3 Balance c/d 15,488
16,940 16,940
10/3 Balance c/d 15,488
Debtors Ledger
Keenan Ltd A/C
1/3 Sales SB 41,140 9/3 Sales returns SRB 1,694
9/3 Balance c/d 39,446
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 Total creditors PRB 1,200
Sales A/C
9/3 Total debtors SB 34,000
Sales Returns A/C
9/3 Total debtors SRB 1,400
VAT A/C
9/3 Credit purchases PB 2,940 9/3 Credit sales SB 7,140
9/3 Sales returns SRB 294 9/3 Purchases returns PRB 252
9/3 Balance c/d 4,158
7,392 7,392
10/3 Balance b/d 4,158
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Chapter 38 Continuous Balancing Ledgers and Statements
There are no exercises in the textbook.
Chapter 39 Analysed Cash Books I
1.
Analysed Cash Book (Credit Side) p1
Date2006
Details Cheque no. F Total Bank€
Purchases€
VAT€
Other€
2/1 Purchases 1 GL 13,620 12,000 1,620
3/1 Advertising 2 GL 3,200 3,200
4/1 Insurance 3 GL 2,750 2,750
5/1 Purchases 4 17,252 15,200 2,052
7/1 Carriage 5 GL 1,700 1,700
7/1 Balance c/d 95,468
133,990 27,200 3,672 7,650
Analysed Cash Book (Debit Side) p1Date2006
Details Rec. no. F Total Bank €
Sales€
VAT€
Other€
1/1 Sales GL 20,430 18,000 2,430
4/1 Sales GL 63,560 56,000 7,560
6/1 Shareholders GL 50,000 50,000
133,990 74,000 9,990 50,000
8/1 Balance b/d 95,468
Trial Balance as on 9/3/2007
MG Ltd 15,488
Keenan Ltd 39,446
Purchases 14,000
Purchases returns 1,200
Sales 34,000
Sales returns 1,400
VAT 4,158
54,846 54,846
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2.
Analysed Cash Book (Debit Side) p1Date
2006
Details Rec. no. F Total Bank
€
Sales
€
VAT
€
Other
€
1/2 Sales GL 38,720 32,000 6,720
4/2 Sales GL 58,080 48,000 10,080
6/2 Shareholders GL 175,000 175,000
271,800 80,000 16,800 175,000
10/2 Balance b/d 190,206
Trial Balance as on 7/1/2006
Sales 74,000
Purchases 27,200
VAT 6,318
Share capital 50,000
Advertising 3,200
Insurance 2,750
Carriage 1,700
Bank 95,468
130,318 130,318
General LedgerDate Details F Total Date Details F Total
2006 € 2006 €
Sales A/C
7/1 Bank ACB 74,000
Purchases A/C
7/1 Bank ACB 27,200
VAT A/C
7/1 Purchases ACB 3,672 7/1 Sales ACB 9,990
7/1 Balance c/d 6,318
9,990 9,990
6,318
Share Capital A/C
6/1 Bank ACB 50,000
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
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Trial Balance as on 9/2/2006
Sales 80,000
Purchases 31,400
VAT 10,206
Share capital 175,000
Rent 2,200
Wages 6,400
Machinery 35,000
Bank 190,206
265,206 265,206
General LedgerDate Details F Total Date Details F Total
2006 € 2006 €
Sales A/C
9/2 Bank ACB 80,000
Purchases A/C
9/2 Bank ACB 31,400
VAT A/C
9/2 Purchases ACB 6,594 9/2 Sales ACB 16,800
9/2 Balance c/d 10,206
16,800 16,800
10/2 Balance b/d 10,206
Share Capital A/C
6/2 Bank ACB 175,000
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
Analysed Cash Book (Credit Side) p1Date
2006
Details Cheque no. F Total Bank
€
Purchases
€
VAT
€
Other
€
2/2 Purchases 21 GL 21,780 18,000 3,780
3/2 Rent 22 GL 2,200 2,200
4/2 Wages 23 GL 6,400 6,400
5/2 Purchases 24 GL 16,214 13,400 2,814
9/2 Machinery 25 GL 35,000 35,000
9/2 Balance c/d 190,206
271,800 31,400 6,594 43,600
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3.
General LedgerDate
2007
Details F Total
€
Date
2007
Details F Total
€
8/4 Bank ACB 132,000
8/4 Bank ACB 37,400
8/4 Purchases ACB 7,854 8/4 Sales ACB 27,720
8/4 Balance c/d 19,866
27,720 27,720
9/4 Balance b/d 19,866
6/4 Bank ACB 110,000
3/4 Bank ACB 900
4/4 Bank ACB 20,000
8/4 Bank ACB 8,700
Analysed Cash Book (Credit Side) p1
Date
2007
Details Cheque no. F Total Bank
€
Purchases
€
VAT
€
Other
€
3/4 Light and heat 34 GL 900 900
3/4 Purchases 35 GL 15,004 12,400 2,604
4/4 Equipment 36 GL 20,000 20,000
7/4 Purchases 37 GL 30,250 25,000 5,250
8/4 Repairs 38 GL 8,700 8,700
8/4 Balance c/d 194,866
269,720 37,400 7,854 29,600
Analysed Cash Book (Debit Side) p1Date
2007
Details Rec. no. F Total Bank
€
Sales
€
VAT
€
Other
€
1/4 Sales GL 87,120 72,000 15,120
6/4 Shareholders GL 110,000 110,000
6/4 Sales GL 72,600 60,000 12,600
269,720 132,000 27,720 110,000
9/4 Balance b/d 194,866
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Sales A/C
Purchases A/C
VAT A/C
Share Capital A/C
Light and Heat A/C
Equipment A/C
Repairs A/C
4.
Analysed Cash Book (Credit Side) p1
Date
2007
Details Cheque no. F Total Bank
€
Purchases
€
VAT
€
Other
€
13/5 Purchases 78 GL 40,860 36,000 4,860
14/5 Insurance 79 GL 2,400 2,400
17/5 Equipment 80 GL 95,000 95,000
18/5 Purchases 81 GL 52,210 46,000 6,210
19/5 Advertising 82 GL 2,600 2,600
193,070 82,000 11,070 100,000
20/5 Balance b/d 22,270
Analysed Cash Book (Debit Side) p1Date
2006
Details Rec. no. F Total Bank
€
Sales
€
VAT
€
Other
€
12/5 Sales GL 54,480 48,000 6,480
16/5 Shareholders GL 80,000 80,000
19/5 Sales GL 36,320 32,000 4,320
19/5 Balance c/d 22,270
193,070 80,000 10,800 80,000
Trial Balance as on 8/4/2007
Sales 132,000
Purchases 37,400
VAT 19,866
Share capital 110,000
Light and heat 900
Equipment 20,000
Repairs 8,700
Bank 194,866
261,866 261,866
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5.
Analysed Cash Book (Debit Side) p1Date
2007
Details Rec. no. F Total Bank
€
Sales
€
VAT
€
Debtors
€
Other
€
1/3 Balance b/d 2,400
1/3 Sales GL 72,640 64,000 8,640
4/3 Sales GL 90,800 80,000 10,800
4/3 Fahey Ltd DL 4,500 4,500
170,340 144,000 19,440 4,500
7/3 Balance b/d 76,680
Trial Balance as on 19/5/2007
Sales 80,000
Purchases 82,000
VAT 270
Shareholders 80,000
Insurance 2,400
Equipment 95,000
Advertising 2,600
Bank 22,270
182,270 182,270
General LedgerDate Details F Total Date Details F Total
2007 € 2007 €
Sales A/C
19/5 Bank ACB 80,000
Purchases A/C
19/5 Bank ACB 82,000
VAT A/C
19/5 Purchases ACB 11,070 19/5 Sales ACB 10,800
19/5 Balance c/d 270
11,070 11,070
20/5 Balance c/d 270
Shareholders A/C
16/5 Bank ACB 80,000
Insurance A/C
14/5 Bank ACB 2,400
Equipment A/C
17/5 Bank ACB 95,000
Advertising A/C
19/5 Bank ACB 2,600
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Date Details F Total Date Details F Total
2007 € 2007 €
6/3 Bank ACB 144,00
Purchases A/C
6/3 Bank ACB 56,000
VAT A/C
6/3 Purchases ACB 7,560 6/3 Sales ACB 19,440
6/3 Balance c/d 11,880
19,440 19,440
7/3 Balance c/d 11,880
Insurance A/C
3/3 Bank ACB 4,200
Motor Vehicles A/C
4/3 Bank ACB 21,000
Debtors Ledger
Fahey Ltd A/C
1/3 Balance b/d 4,500 4/3 Bank ACB 4,500
Creditors Ledger
Duffy Ltd A/C
6/3 Bank ACB 4,900 1/3 Balance b/d 6,900
6/3 Balance c/d 2,000
6,900 6,900
7/3 Balance b/d 2,000
Analysed Cash Book (Credit Side) p1
Date
2007
Details Cheque no. F Total Bank
€
Purchases
€
VAT
€
Creditors
€
Other
€
2/3 Purchases 6 GL 63,560 56,000 7,560
3/3 Insurance 7 GL 4,200 4,200
4/3 Motor vehicle 8 GL 21,000 21,000
6/3 Duffy Ltd 9 CL 4,900 4,900
6/3 Balance c/d 76,680
170,340 56,000 7,560 4,900 25,200
General Ledger
Sales A/C
Purchases A/C
VAT A/C
Insurance A/C
Motor Vehicles A/C
Debtors Ledger
Fahey Ltd A/C
Creditors Ledger
Duffy Ltd A/C
6.
Analysed Cash Book (Credit Side) p1
Date Details Chequeno.
F Total Bank Purchases VAT Creditors Other
2008 € € € € €
1/6 Balance b/d 4,500
3/6 Purchases 23 GL 27,830 23,000 4,830
4/6 Rent 24 GL 2,800 2,800
5/6 Hayden Ltd 25 CL 7,500 7,500
7/6 Purchases 26 GL 54,450 45,000 9,450
7/6 Balance c/d 25,680
122,760 68,000 14,280 7,500 2,800
Analysed Cash Book (Debit Side) p1Date Details Rec. no. F Total Bank Sales VAT Debtors Other
2008 € € € € €
1/6 Sales GL 67,760 56,000 11,760
2/6 Fallon Ltd 34 DL 10,000 10,000
6/6 Shareholders GL 45,000 45,000
122,760 56,000 11,760 10,000 45,000
8/6 Balance b/d 25,680
Trial Balance as on 7/3/2007
Sales 144,000
Purchases 56,000
VAT 11,880
Insurance 4,200
Motor vehicle 21,000
Duffy Ltd 2,000
Bank 76,680
157,880 157,880
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Trial Balance as on 7/6/2007
Sales 56,000
Purchases 68,000
VAT 2,520
Shareholders 45,000
Rent 2,800
Fallon Ltd 2,000
Bank 25,680
101,000 101,000
Date Details F Total Date Details F Total
2007 € 2007 €
Sales A/C
7/6 Bank ACB 56,000
Purchases A/C
7/6 Bank ACB 68,000
VAT A/C
7/6 Purchases ACB 14,280 7/6 Bank ACB 11,760
7/6 Balance c/d 2,520
14,280 14,280
8/6 Balance b/d 2,520
Shareholders A/C
6/6 Bank ACB 45,000
Rent A/C
4/6 Bank ACB 2,800
Debtors Ledger
Fallon Ltd A/C
1/6 Balance c/d 12,000 2/6 Bank ACB 10,000
7/6 Balance c/d 2,000
12,000 12,000
8/6 Balance b/d 2,000
Creditors Ledger
Hayden Ltd A/C
5/6 Bank ACB 7,500 1/6 Balance b/d 7,500
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General Ledger
Sales A/C
Purchases A/C
VAT A/C
Shareholders A/C
Rent A/C
Debtors Ledger
Fallon Ltd A/C
Creditors Ledger
Hayden Ltd A/C
Chapter 40 Analysed Cash Book II Monitoring Overheads
1.
General LedgerDate2005
Details F Total€
Date2005
Details F Total€
Postage A/C
6/4 Petty cash PC 9
Cleaning A/C
6/4 Petty cash PC 12
Stationery A/C
6/4 Petty cash PC 11
Travel A/C
6/4 Petty cash PC 14
Other A/C
6/4 Petty cash PC 7
Bank A/C
7/4 Petty cash PC 53
Petty Cash Book (p1) Date Details Total Date Details V. no. Total Post Clean. Stat. Travel Other
2005 € 2005 € € € € € €
1/4 Bank 60 1/4 Cleaning 23 5 5
2/4 Taxi 24 6 6
2/4 Stamps 25 4 4
3/4 Disks 26 8 8
3/4 Raffle 27 7 7
4/4 Parcel 28 5 5
5/4 Cleaning 29 7 7
6/4 Tippex 30 3 3
6/4 Bus fare 31 8 8
53 9 12 11 14 7
6/4 Balance c/d 7
60 60
7/4 Balance 7
7/4 Bank 53
60
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Postage A/C
Cleaning A/C
Stationery A/C
Travel A/C
Other A/C
Bank A/C
2.
General LedgerDate2005
Details F Total€
Date2005
Details F Total€
Postage A/C
7/6 Petty cash PC 18
Cleaning A/C
7/6 Petty cash PC 8
Stationery A/C
7/6 Petty cash PC 13
Office A/C
7/6 Petty cash PC 6
Other A/C
7/6 Petty cash PC 12
Bank A/C
7/6 Petty cash PC 57
Petty Cash Book (p1) Date Details Total Date Details V. no. Total Post Clean. Stat. Travel Other
2005 € 2005 € € € € € €
1/6 Bank 70 1/6 Stamps 12 7 7
2/6 Flower 13 6 6
3/6 Cleaning 14 8 8
3/6 Pens 15 3 3
4/6 Taxi 17 12 12
5/6 Disks 18 10 10
6/6 Parcel 19 11 11
57 18 8 13 6 12
6/6 Balance c/d 13
70 70
7/6 Balance 13
7/6 Bank 57
70
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Postage A/C
Cleaning A/C
Stationery A/C
Office A/C
Other A/C
Bank A/C
3.
General LedgerDate2005
Details F Total€
Date2005
Details F Total€
Postage A/C
6/7 Petty cash PC 16
Repairs A/C
6/7 Petty cash PC 11
Stationery A/C
6/7 Petty cash PC 4
Travel A/C
6/7 Petty cash PC 6
Other A/C
6/7 Petty cash PC 19
Bank A/C
6/7 Petty cash PC 54
Petty Cash Book (p1) Date2005
Details Total€
Date2005
Details V. no. Total€
Post€
Repairs€
Stat.€
Travel€
Other€
1/7 Bank 60 1/7 Stamps 2 9 9
2/7 Taxi 3 6 6
3/7 Tippex 4 4 4
4/7 Repairs 5 11 11
5/7 Donation 6 10 10
6/7 M/B 7 3 3
6/7 Cleaning 8 6 6
6/7 Parcel 9 7 7
56 16 11 4 6 19
6/7 Balance c/d 4
60 60
7/7 Balance 4
7/7 Bank 54
60
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Postage A/C
Repairs A/C
Stationery A/C
Travel A/C
Other A/C
Bank A/C
4.
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.
General LedgerDate2005
Details F Total€
Date2005
Details F Total€
Postage A/C
7/8 Petty cash PC 28
Cleaning A/C
7/8 Petty cash PC 10
Stationery A/C
7/8 Petty cash PC 13
Travel A/C
7/8 Petty cash PC 17
Other A/C
7/8 Petty cash PC 17
Bank A/C
7/8 Petty cash PC 85
Petty Cash Book (p1) Date2005
Details Total€
Date2005
Details V. no. Total€
Post€
Clean.€
Stat.€
Travel€
Other€
1/8 Bank 85 1/8 Bus fare 33 8 8
2/8 Cleaning 34 10 10
3/8 Stamps 35 14 14
4/8 Folders 36 13 13
4/8 T/S/M 37 7 7
5/8 Raffle 38 10 10
6/8 Taxi 39 9 9
7/8 Parcel 40 14 14
85 28 10 13 17 17
7/8 Balance c/d 00
85 85
7/8 Balance 00
7/8 Bank 85
85
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Postage A/C
Cleaning A/C
Stationery A/C
Travel A/C
Other A/C
Bank A/C
Junior Certificate Business Studies Textbook Teacher’s Manual
(c) (i) and (ii)
Chapter 41 General Journal
1.
Date Details F Total Date Details F Total
2005 € 2005 €
Machinery A/C
1/5 Balance GJ 45,000
Stock A/C
1/5 Balance GJ
Bank A/C
1/5 Balance GJ 1,000
Ordinary Share Capital A/C
1/5 Balance GJ 40,000
Creditors Ledger
King Ltd A/C
1/5 Balance GJ 15,000
General Journal (p1)Date2005
Details F DR€
CR€
1/5 Machinery GL 45,000
Stock GL 11,000
Bank overdraft ACB 1,000
King Ltd CL 15,000
Ordinary share capital 40,000
Assets, liabilities of company on 1/5/2005 56,000 56,000
Greater thanbudgeted figures
Less thanbudgeted figures
Possible reason for difference
Insurance Increase in risks leading to increased premiums
Advertising Incorrect estimates in budgeted figures
Repairs Employees were more careful with equipment etc
Carriage Outwards Less deliveries had to be made
84
General Ledger
Machinery A/C
Stock A/C
Bank A/C
Ordinary Share Capital A/C
Creditors Ledger A/C
King Ltd A/C
2.
3.
General Journal (p1)Date2006
Details F DR€
CR€
1/7 Premises GL 90,000
Machinery GL 40,000
Bank ACB 4,000
Debtors: Reynolds Ltd DL 20,000
Creditors: Farrell Ltd CL 16,000
Giles Ltd CL 24,000
Ordinary share capital 114,000
Assets, liabilities of company on 1/7/2006 154,000 154,000
Date Details F Total Date Details F Total
2005 € 2005 €
Buildings A/C
1/6 Balance GJ 60,000
Stock A/C
1/6 Balance GJ 6,000
Bank Loan A/C
1/6 Balance GJ 30,000
Ordinary Share Capital A/C
1/6 Balance GJ 31,000
Creditors Ledger
Kelly Ltd A/C
1/6 Balance GJ 17,000
Debtors Ledger
Toolin Ltd A/C
1/6 Balance GK 12,000
General Journal (p1)Date2005
Details F DR€
CR€
1/6 Buildings GL 60,000
Stock GL 6,000
Debtors: Toolin Ltd DL 12,000
Kelly Ltd CL 17,000
Bank loan GL 30,000
Ordinary share capital 31,000
Assets, liabilities of company on 1/6/2005 78,000 78,000
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General Ledger
Buildings A/C
Stock A/C
Bank Loan A/C
Ordinary Share Capital A/C
Creditors Ledger A/C
Kelly Ltd A/C
Debtors Ledger A/C
Toolin Ltd A/C
4.
General Journal (p1)Date2006
Details F DR€
CR€
1/8 Land GL 75,000
Buildings GL 55,000
Bank ACB 3,500
Stock GL 2,000
Debtors: Prunty Ltd DL 6,000
Creditors: Mitchell Ltd CL 14,000
Long-term loan GL 90,000
Ordinary share capital GL 37,500
Assets, liabilities of company on 1/8/2006 141,500 141,500
Date Details F Total Date Details F Total
2006 € 2006 €
Premises A/C
1/7 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
1/7 Balance GJ 114,000
Creditors Ledger
Giles Ltd A/C
1/7 Balance GJ 24,000
Farrell Ltd A/C
1/7 Balance GJ 16,000
Debtors Ledger
Reynolds Ltd A/C
1/7 Balance GJ 20,000
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General Ledger
Premises A/C
Machinery A/C
Bank A/C
Ordinary Share Capital A/C
Creditors Ledger
Giles Ltd A/C
Farrell Ltd A/C
Debtors Ledger
Reynolds Ltd A/C
5.
Date Details F Total Date Details F Total
2005 € 2005 €
Van A/C
23/7 A. Murphy GJ 9,000
Debtors Ledger (p1)
A. Murphy A/C
23/7 Van GJ 9,000
General Journal (p1) of Pat the Baker LtdDate2005
Details F DR€
CR€
23/7 A. Murphy DL 9,000
Van GL 9,000
Sale of second-hand van on credit
Date Details F Total Date Details F Total
2006 € 2006 €
Land A/C
1/8 Balance GJ 75,000
Stock A/C
1/8 Balance GJ 2,000
Buildings A/C
1/8 Balance GJ 55,000
Bank A/C
1/8 Balance GJ 3,500
Long-Term Loan A/C
1/8 Balance GJ 90,000
Ordinary Share Capital A/C
1/8 Balance GJ 37,500
Creditors Ledger
Mitchell Ltd A/C
1/8 Balance GJ 14,000
Debtors Ledger
Prunty Ltd A/C
1/8 Balance GJ 6,000
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General Ledger
Land A/C
Stock A/C
Buildings A/C
Bank A/C
Long-Term Loan A/C
Ordinary Share Capital A/C
Creditors Ledger
Mitchell Ltd A/C
Debtors Ledger
Prunty Ltd A/C
General Ledger
Van A/C
Debtors Ledger (p1)
A. Murphy A/C
6.
7.
8.
General Journal (p1) of John Joe Ltd Painting SpecialistsDate2006
Details F DR€
CR€
7/8 Van GL 35,000
Tom Cunningham Ltd CL 35,000
Purchase of van on credit
Date Details F Total Date Details F Total
2006 € €
Computer System A/C
1/6 Info Tec Ltd GJ 600,000
Creditors Ledger
Info Tec Ltd A/C
1/6 Computer system GJ 600,000
General Journal (p1) of Mels Ltd Educational ConsultantsDate2006
Details F DR€
CR€
1/6 Computer system GL 600,000
Info Tec Ltd CL 600,000
Purchase of computer system on credit
Date Details F Total Date Details F Total
2005 € 2005 €
Electric Saw A/C
6/10 Butler Ltd GJ 18,000
Debtors Ledger
6/10 Electric saw GJ 18,000
General Journal (p1) of Oak Ltd Furniture ManufacturersDate2005
Details F DR€
CR€
6/10 Butler Ltd DL 18,000
Electric saw GL 18,000
Sale of electric saw on credit
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General Ledger
Electric Saw A/C
Debtors Ledger
General Ledger
Computer System A/C
Creditors Ledger
Info Tec Ltd A/C
9.
10.
General Journal (p1)Date2005
Details F DR€
CR€
7/5 Cash GL 1,250
Bad debts GL 3,750
Tully Ltd DL 5,000
Tully Ltd goes bankrupt, pays 25 cent in the €1
Date Details F Total Date Details F Total
2005 € 2005 €
Bad Debts A/C
4/11 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
General Journal (p1)Date2005
Details F DR€
CR€
4/11 Bad debts GL 4,000
Donlon Ltd DL 4,000
Donlon Ltd was written off as a bad debt
Date Details F Total Date Details F Total
2006 € 2006 €
Van A/C
7/8 Tom Cunningham Ltd GJ 35,000
Creditors Ledger
7/8 Van GJ 35,000
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General Ledger
Van A/C
Creditors Ledger
General Ledger
Bad debts A/C
Debtors Ledger
Donlon Ltd A/C
11.
12.
General Journal (p1)Date2006
Details F DR€
CR€
6/6 Cash GL 24,000
Bad debts GL 8,000
Gallagher Ltd DL 32,000
Gallagher Ltd goes bankrupt, pays 75 cent in the €1
Date Details F Total Date Details F Total
2006 € 2006 €
Cash A/C
9/4 Kilbride Ltd GJ 10,000
Bad Debts A/C
9/4 Kilbride Ltd GJ 10,000
Debtors Ledger
9/4 Balance b/d 20,000 9/4 Cash GJ 10,000
9/4 Bad debts GJ 10,000
20,000 20,000
General Journal (p1)Date2006
Details F DR€
CR€
9/4 Cash GL 10,000
Bad debts GL 10,000
Kilbride Ltd DL 20,000
Kilbride Ltd goes bankrupt, pays 50 cent in the €1
Date Details F Total Date Details F Total
2005 € 2005 €
Cash A/C
7/5 Tully Ltd GJ 1,250
Bad Debts A/C
7/5 Tully Ltd GJ 3,750
Debtors Ledger
Tully Ltd A/C
7/5 Balance b/d 5,000 7/5 Cash GJ 1,250
7/5 Bad debts GJ 3,750
5,000 5,000
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General Ledger
Cash A/C
Bad Debts A/C
Debtors Ledger
Tully Ltd A/C
General Ledger
Cash A/C
Bad Debts A/C
Debtors Ledger
Chapter 42 Combined Books of First Entry and Ledger Questions1.
Analysed Cash Book (Credit Side) p1Date
2005
Details Chequeno.
F TotalBank
€
Purchases
€
VAT
€
Creditors
€
Other
€
3/3 McGrath 3 CL 15,000 15,000
5/3 Purchases 4 GL 27,830 23,000 4,830
16/3 Insurance 5 GL 3,500 3,500
28/3 Balance c/d 45,630
91,960 23,000 4,830 15,000 3,500
Analysed Cash Book (Debit Side) p1Date2005
Details Rec. no. F Total Bank€
Sales€
VAT€
Debtors€
1/3 Sales GL 31,460 26,000 5,460
28/3 Murray Ltd 23 DL 60,500 60,500
91,960 26,000 5,460 60,500
29/3 Balance b/d 45,630
Sales Book (p1)Date2005
Details Inv. no. F Net€
VAT€
Total€
16/3 Murray Ltd 2 DL 50,000 10,500 60,500
Purchases Book (p1)Date Details Inv. no. F Net VAT Total
2005 € € €
12/3 McGrath Ltd 10 CL 24,000 5,040 29,040
13/3 Smyth Ltd 34 CL 20,000 4,200 24,200
44,000 9,240 53,240
Date Details F Total Date Details F Total
2006 € 2006 €
Cash A/C
6/6 Gallagher Ltd GJ 24,000
Bad Debts A/C
6/6 Gallagher Ltd GJ 8,000
Debtors Ledger
Gallagher Ltd
6/6 Balance b/d 32,000 6/6 Cash GJ 24,000
6/6 Bad debts GJ 8,000
32,000 32,000
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General Ledger
Cash A/C
Bad Debts A/C
Debtors Ledger
Gallagher Ltd
Trial Balance as on 28/3/2005
Sales 76,000
Purchases 67,000
VAT 1,890
Insurance 3,500
McGrath Ltd 14,040
Smyth Ltd 24,200
Bank 45,630
116,130 116,130
Date Details F Total Date Details F Total
2005 € 2005 €
Sales A/C
28/3 Total debtors SB 50,000
28/3 Bank ACB 26,000
76,000
Purchases A/C
28/3 Total creditors PB 44,000
28/3 Bank ACB 23,000
67,000
VAT A/C
28/3 Credit purchases PB 9,240 28/3 Credit sales SB 10,500
28/3 Cash purchases ACB 4,830 28/3 Cash sales ACB 5,460
28/3 Balance c/d 1,890
15,960 15,960
29/3 Balance b/d 1,890
Insurance A/C
16/3 Bank ACB 3,500
Debtors Ledger
Murray Ltd A/C
16/3 Sales SB 60,500 28/3 Bank ACB 60,500
Creditors Ledger
McGrath Ltd A/C
3/3 Bank ACB 15,000 1/3 Purchases PB 29,040
28/3 Balance c/d 14,040
29,040 29,040
29/3 Balance b/d 14,040
Smyth Ltd A/C
13/3 Purchases PB 24,200
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General Ledger
Sales A/C
Purchases A/C
VAT A/C
Insurance A/C
Debtors Ledger
Murray Ltd A/C
Creditors Ledger
McGrath Ltd A/C
Smyth Ltd A/C
2.
Analysed Cash Book (Credit Side) p1Date
2005
Details Chequeno.
F TotalBank
€
Purchases
€
VAT
€
Creditors
€
Other
€
3/5 Wages 45 GL 1,700 1,700
4/5 Purchases 46 GL 31,780 28,000 3,780
6/5 Mona Ltd 47 CL 25,000 25,000
9/5 Balance c/d 45,080
103,560 28,000 3,780 25,000 1,700
Analysed Cash Book (Debit Side) p1Date2005
Details Rec. no. F Total Bank€
Sales€
VAT€
Debtors€
8/5 Sales GL 63,560 56,000 7,560
9/5 Maloney Ltd 4 DL 40,000 40,000
103,560 56,000 7,560 40,000
9/5 Balance b/d 45,080
Sales Book (p1)Date2005
Details Inv. no. F Net€
VAT€
Total€
4/5 Maloney Ltd 23 DL 40,000 5,400 45,400
Purchases Book (p1)Date2005
Details Inv. no. F Net€
VAT€
Total€
2/5 Mona Ltd 56 CL 32,000 4,320 36,320
6/5 Ton Ltd 67 CL 46,000 6,210 52,210
78,000 10,530 88,530
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Trial Balance as on 9/5/2005Sales 96,000
Purchases 106,000
VAT 1,350
Wages 1,700
Maloney Ltd 5,400
Mona Ltd 11,320
Ton Ltd 52,210
Bank 45,080
159,530 159,530
Date Details F Total Date Details F Total
2005 € 2005 €
Sales A/C
9/5 Total debtors SB 40,000
9/5 Bank ACB 56,000
96,000
Purchases A/C
9/5 Total creditors PB 78,000
4/5 Bank ACB 28,000
106,000
VAT A/C
9/5 Credit purchases PB 10,530 9/5 Credit sales SB 5,400
9/5 Cash purchases ACB 3,780 9/5 Cash sales ACB 7,560
9/5 Balance c/d 1,350
14,310 14,310
1,350
Wages A/C
3/5 Bank ACB 1,700
Debtors Ledger
Maloney Ltd A/C
4/5 Sales SB 45,400 9/5 Bank ACB 40,000
9/5 Balance c/d 5,400
45,400 45,400
10/5 Balance b/d 5,400
Creditors Ledger
Mona Ltd A/C
6/5 Bank ACB 25,000 2/5 Purchases PB 36,320
9/5 Balance c/d 11,320
36,320 36,320
10/5 Balance b/d 11,320
Ton Ltd A/C
6/5 Purchases PB 52,210
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General Ledger
Sales A/C
Purchases A/C
VAT A/C
Wages A/C
Debtors Ledger
Maloney Ltd A/C
Creditors Ledger
Mona Ltd A/C
Ton Ltd A/C
3.
Analysed Cash Book (Credit Side) p1Date
2006
Details Chequeno.
F TotalBank
€
Purchases
€
VAT
€
Creditors
€
Other
€
3/7 Purchases 23 GL 21,780 18,000 3,780
5/7 Electricity 24 GL 700 700
8/7 Pony Ltd 25 CL 5,000 5,000
8/7 Balance c/d 93,520
121,000 18,000 3,780 5,000 700
Analysed Cash Book (Debit Side) p1Date2006
Details Rec. no. F Total Bank€
Sales€
VAT€
2/7 Sales GL 62,920 52,000 10,920
7/7 Sales GL 58,080 48,000 10,080
121,000 100,000 21,000
8/7 Balance c/d 93,520
Purchases Returns Book (p1)Date2006
Details Credit note no. F Net€
VAT€
Total€
7/7 Tony Ltd 23 CL 7,500 1,575 9,075
Purchases Book (p1)Date2006
Details Inv. no. F Net€
VAT€
Total€
4/7 Tony Ltd 3 CL 32,000 6,720 38,720
5/7 Pony Ltd 9 CL 13,000 2,730 15,730
45,000 9,450 54,450
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Trial Balance as on 8/7/2006
Sales 100,000
Purchases 63,000
Purchases returns 7,500
VAT 9,345
Electricity 700
Pony Ltd 10,730
Tony Ltd 29,645
Bank 93,520
157,220 157,220
Date Details F Total Date Details F Total
2006 € 2006 €
Sales A/C
8/7 Bank ACB 100,000
Purchases A/C
8/7 Credit purchases PB 45,000
8/7 Cash purchases ACB 18,000
63,000
Purchases Returns A/C
8/7 Total creditors PRB 7,500
VAT A/C
8/7 Credit purchases PB 9,450 8/7 Cash sales ACB 21,000
8/7 Cash purchases ACB 3,780 8/7 Purchases returned PRB 1,575
8/7 Balance c/d 9,345
22,575 22,575
9/7 Balance b/d 9,345
Electricity A/C
5/7 Bank ACB 700
Creditors Ledger
Tony Ltd A/C
7/7 Purchases returns PRB 9,075 4/7 Purchases PB 38,720
8/7 Balance c/d 29,645
38,720 38,720
9/7 Balance b/d 29,645
Pony Ltd A/C
8/7 Bank ACB 5,000 5/7 Purchases PB 15,730
8/7 Balance c/d 10,730
15,730 15,730
9/7 Balance b/d 10,730
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General Ledger
Sales A/C
Purchases A/C
Purchases Returns A/C
VAT A/C
Electricity A/C
Creditors Ledger
Tony Ltd A/C
Pony Ltd A/C
4.
Analysed Cash Book (Credit Side p1)Date
2006
Details Chequeno.
F TotalBank
€
Purchases
€
VAT
€
Creditors
€
Other
€
2/9 Insurance 34 GL 1,500 1,500
8/9 Purchases 35 GL 27,240 24,000 3,240
9/9 Rent 36 GL 3,000 3,000
9/9 Norm Ltd 37 CL 29,510 29,510
61,250 24,000 3,240 29,510 4,500
10/9 Balance b/d 24,930
Analysed Cash Book (Debit Side p1)Date2005
Details Rec. no. F Total Bank€
Sales€
VAT€
3/9 Sales GL 36,320 32,000 4,320
9/9 Balance c/d 24,930
61,250 32,000 4,320
Purchases Returns Book (p1)Date
2005
Details Creditnote no.
F Net
€
VAT
€
Total
€
7/9 Norm Ltd 67 CL 10,000 1,350 11,350
Purchases Book (p1)Date2005
Details Inv. no. F Net€
VAT€
Total€
2/9 Norm Ltd 12 CL 36,000 4,860 40,860
6/9 Form Ltd 57 CL 44,000 5,940 49,940
80,000 10,800 90,800
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Trial Balance as on 9/9/2006
Sales 32,000
Purchases 104,000
Purchases returns 10,000
VAT 8,370
Insurance 1,500
Rent 3,000
Form Ltd 49,940
Bank 24,930
116,870 116,870
Date Details F Total Date Details F Total
2006 € 2006 €
Sales A/C
9/9 Bank ACB 32,000
Purchases A/C
9/9 Total creditors PB 80,000
9/9 Bank ACB 24,000
104,000
Purchases Returns A/C
9/9 Total creditors PRB 10,000
VAT A/C
9/9 Credit purchases PB 10,800 9/9 Cash sales ACB 4,320
9/9 Cash purchases ACB 3,240 9/9 Purchases returns PRB 1,350
9/9 Balance c/d 8,370
14,040 14,040
10/9 Balance b/d 8,370
Insurance A/C
2/9 Bank ACB 1,500
Rent A/C
9/9 Bank ACB 3,000
Creditors Ledger
Form Ltd A/C
6/9 Purchases PB 49,940
Norm Ltd A/C
7/9 Purchases returns PRB 11,350 2/9 Purchases PB 40,860
9/9 Bank ACB 29,510
40,860 40,860
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General Ledger
Sales A/C
Purchases A/C
Purchases Returns A/C
VAT A/C
Insurance A/C
Rent A/C
Creditors Ledger
Form Ltd A/C
Norm Ltd A/C
5.
Analysed Cash Book (Credit Side) p1Date
2006
Details Chequeno.
F TotalBank
€
Purchases
€
VAT
€
Creditors
€
Other
€
13/1 Wages 45 GL 7,000 7,000
15/1 Purchases 46 GL 27,830 23,000 4,830
18/1 Mel Ltd 47 CL 20,000 20,000
21/1 Balance c/d 87,950
142,780 23,000 4,630 20,000 7,000
Analysed Cash Book (Debit Side) p1Date2006
Details Rec. no. F Total Bank€
Sales€
VAT€
10/1 Sales GL 72,600 60,000 12,600
21/1 Sales GL 70,180 58,000 12,180
142,780 118,000 24,780
22/1 Balance b/d 87,950
Purchases Returns Book (p1)Date
2006
Details Creditnote no.
F Net
€
VAT
€
Total
€
17/1 Del Ltd 97 CL 4,800 1,008 5,808
Purchases Book (p1)Date2006
Details Inv. no. F Net€
VAT€
Total€
12/1 Mel Ltd 3 CL 25,000 5,250 30,250
14/1 Del Ltd 26 CL 34,000 7,140 41,140
59,000 12,390 71,390
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Date Details F Total Date Details F Total
2006 € 2006 €
Sales A/C
21/1 Bank ACB 118,000
Purchases A/C
21/1 Total creditors PB 59,000
21/1 Bank ACB 23,000
82,000
Purchases Returns A/C
21/1 Total creditors PRB 4,800
VAT A/C
21/1 Credit purchases PB 12,390 21/1 Cash sales ACB 24,780
21/1 Cash purchases ACB 4,830 21/1 Purchases returns PRB 1,008
21/1 Balance c/d 8,568
25,788 25,788
21/1 Balance b/d 8,768
Wages A/C
13/1 Bank ACB 7,000
Creditors Ledger
Mel Ltd A/C
18/1 Bank ACB 20,000 12/1 Purchases PB 30,250
21/1 Balance c/d 10,250
30,250 30,250
22/1 Balance b/d 10,250
Del Ltd A/C
17/1 Purchases returns PRB 5,808 14/1 Purchases PB 41,140
21/1 Balance c/d 35,332
41,140 41,140
22/1 Balance b/d 35,332
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General Ledger
Sales A/C
Purchases A/C
Purchases Returns A/C
VAT A/C
Wages A/C
Creditors Ledger
Mel Ltd A/C
Del Ltd A/C
6.
Analysed Cash Book (Credit Side) p1Date
2006
Details Chequeno.
F TotalBank
€
Purchases
€
VAT
€
Creditors
€
Other
€
4/4 Purchases 1 GL 21,565 19,000 2,565
6/4 Insurance 2 GL 3,000 3,000
7/4 Morrissey Ltd 3 CL 14,755 14,755
9/4 Balance c/d 81,374
120,750 19,000 2,565 14,755 3,000
Analysed Cash Book (Debit Side) p1Date2006
Details Rec. no. F Total Bank€
Sales€
VAT€
Other€
1/4 Balance b/d 14,000
2/4 Sales GL 56,750 50,000 6,750
9/4 Share capital GL 50,000 50,000
120,750 50,000 6,750 50,000
10/4 Balance b/d 81,374
Trial Balance as on 21/1/2006
Sales 118,000
Purchases 82,000
Purchases returns 4,800
VAT 8,568
Wages 7,000
Mel Ltd 10,250
Del Ltd 35,332
Bank 87,950
176,950 176,950
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Date Details F Total Date Details F Total
2006 € 2006 €
Buildings A/C
1/4 Balance GJ 60,000
Ordinary Share Capital A/C
1/4 Balance GJ 74,000
9/4 Bank ACB 50,000
124,000
Purchases A/C
19/4 Total creditors PB 34,000
19/4 Bank ACB 19,000
53,000
Purchases Returns A/C
19/4 Total creditors PRB 3,000
Sales A/C
19/4 Bank ACB 50,000
VAT A/C
19/4 Credit purchases PB 4,590 19/4 Cash sales SB 6,750
19/4 Cash purchases ACB 2,565 19/4 Purchases returns PRB 405
7,155 7,155
Insurance A/C
6/4 Bank ACB 3,000
Creditors Ledger
Morrissey Ltd A/C
9/4 Purchases PRB 3,405 3/4 Purchases PB 18,160
9/4 Bank ACB 14,755
18,160 18,160
Shanley Ltd A/C
5/4 Purchases PB 20,430
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General Ledger
Buildings A/C
Ordinary Share Capital A/C
Purchases A/C
Purchases Returns A/C
Sales A/C
VAT A/C
Insurance A/C
Creditors Ledger
Morrissey Ltd A/C
Shanley Ltd A/C
7.
Analysed Cash Book (Credit Side) p1Date
2006
Details Chequeno.
F TotalBank
€
Purchases
€
VAT
€
Other
€
4/5 Purchases 1 GL 22,990 19,000 3,990
6/5 Wages 2 GL 4,000 4,000
9/5 Machinery 3 GL 25,000 25,000
9/5 Balance c/d 49,840
101,830 19,000 3,990 29,000
Analysed Cash Book (Debit Side) p1Date2006
Details Rec. no. F Total Bank€
Sales€
VAT€
Other€
1/5 Balance b/d 13,500
2/5 Sales GL 60,500 50,000 10,500
17/5 Murtagh Ltd 8 DL 27,830 27,830
101,830 50,000 10,500 27,830
19/5 Balance b/d 49,830
Trial Balance as on 9/4/2006
Buildings 60,000
Ordinary share capital 124,000
Purchases 53,000
Purchases returns 3,000
Sales 50,000
Insurance 3,000
Shanley Ltd 20,430
Bank 81,430
197,430 197,430
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Date Details F Total Date Details F Total
2006 € 2006 €
Machinery A/C
1/5 Balance GJ 40,500
9/5 Bank ACB 25,000
65,500
Ordinary Share Capital A/C
1/5 Balance GJ 54,000
Sales A/C
19/5 Total debtors SB 64,000
19/5 Bank ACB 50,000
114,000
Sales Returns A/C
19/5 Total debtors PRB 3,000
Purchases A/C
19/5 Bank ACB 19,000
Wages A/C
6/5 Bank ACB 4,000
VAT A/C
19/5 Cash purchases ACB 3,990 19/5 Credit sales SB 13,400
19/5 Sales returns SRB 630 19/5 Cash sales ACB 10,500
19/5 Balance c/d 19,230
23,900 23,900
20/5 Balance b/d 19,230
Debtors Ledger
Murtagh Ltd A/C
2/5 Sales SB 31,460 9/5 Sales returns SRB 3,630
17/5 Bank ACB 27,830
31,460 31,460
Lyons Ltd A/C
3/5 Sales SB 45,980
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General Ledger
Machinery A/C
Ordinary Share Capital A/C
Sales A/C
Sales Returns A/C
Purchases A/C
Wages A/C
VAT A/C
Debtors Ledger
Murtagh Ltd A/C
Lyons Ltd A/C
8.
Analysed Cash Book (Credit Side) p1Date
2006
Details Chequeno.
F TotalBank
€
Purchases
€
VAT
€
Creditors
€
Other
€
4/6 Brennan Ltd 3 CL 25,000 25,000
6/6 Purchases 4 GL 31,780 28,000 3,780
7/6 Advertising 5 GL 3,400 3,400
9/6 Neary Ltd 6 CL 45,400 45,400
9/6 Balance c/d 35,460
141,040 28,000 3,780 25,000 48,800
Analysed Cash Book (Debit Side) p1Date2006
Details Rec. no. F Total Bank€
Sales€
VAT€
Other€
1/6 Balance GJ 23,000
3/6 Sales GL 63,560 56,000 7,560
8/6 Carey Ltd 45 DL 54,480 54,480
141,040 56,000 7,560 54,480
10/6 Balance b/d 35,460
General Journal
Date Details F DR € CR €
1/6/2006 Buildings GL 45,000
Bank ACB 23,000
Ordinary share capital GL 68,000
Assets and share capital of company 68,000 68,000
Trial Balance as on 19/5/2006
Machinery 65,500
Ordinary share capital 54,000
Sales 114,000
Sales returns 3,000
Purchases 19,000
Wages 4,000
VAT 19,320
Lyons Ltd 45,980
Bank 49,840
187,320 187,320
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Date Details F Total Date Details F Total
2006 € 2006 €
Buildings A/C
1/6 Balance GJ 45,000
Ordinary Share Capital A/C
1/6 Balance GJ 68,000
Sales A/C
9/6 Total debtors SB 48,000
9/6 Bank ACB 56,000
104,000
Purchases A/C
9/6 Total creditors PB 72,000
9/6 Bank ACB 28,000
100,000
Advertising A/C
7/6 Bank ACB 3,400
VAT A/C
9/6 Credit purchases PB 9,720 9/6 Credit sales SB 6,480
9/6 Cash purchases ACB 3,780 9/6 Cash sales ACB 7,560
9/6 Balance c/d 540
14,040 14,040
10/6 Balance b/d 540
Debtors Ledger
Carey Ltd A/C
2/6 Sales SB 54,480 8/6 Bank ACB 54,480
Creditors Ledger
Neary Ltd A/C
9/6 Bank ACB 45,400 1/6 Purchases PB 45,400
Brennan Ltd A/C
4/6 Bank ACB 25,000 3/6 Purchases PB 36,320
9/6 Balance c/d 11,320
36,320 36,320
10/6 Balance b/d 11,320
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General Ledger
Buildings A/C
Ordinary Share Capital A/C
Sales A/C
Purchases A/C
Advertising A/C
VAT A/C
Debtors Ledger
Carey Ltd A/C
Creditors Ledger
Neary Ltd A/C
Brennan Ltd A/C
9.
Date
2006
Details Chequeno.
F TotalBank
€
Purchases
€
VAT
€
Other
€
6/9 Insurance 1 GL 5,000 5,000
7/9 Purchases 2 GL 38,720 32,000 6,720
7/9 Rent 3 GL 8,400 8,400
9/9 Balance c/d 109,382
161,502 32,000 6,720 13,400
Analysed Cash Book (Debit Side) p1Date2006
Details Rec. no. F Total Bank€
Sales€
VAT€
Other€
2/9 Sales GL 101,640 84,000 17,640
8/9 Dardis Ltd 35 DL 26,862 26,862
9/9 Tobin Ltd 36 DL 33,000 33,000
161,502 84,000 17,640 59,862
10/9 Balance b/d 109,502
General Journal
Date Details F DR € CR €
1/9/2006 Machinery GL 39,000
Stock GL 13,000
Ordinary share capital GL 52,000
Assets, ordinary share capital of the company 52,000 52,000
Trial Balance as on 9/6/2006
Buildings 45,000
Ordinary share capital 68,000
Sales 104,000
Purchases 100,000
VAT 540
Advertising 3,400
Brennan Ltd 11,320
Bank 35,460
183,860 183,860
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Date Details F Total Date Details F Total
2006 € 2006 €
Machinery A/C
1/9 Balance GJ 39,000
Stock A/C
1/9 Balance GJ 13,000
Ordinary Share Capital A/C
1/9 Balance GJ 52,000
Sales A/C
1/9 Total debtors SB 60,000
9/9 Bank ACB 84,000
144,000
Purchases A/C
9/9 Bank ACB 32,000
Sales Returns A/C
9/9 Total debtors SRB 4,800
VAT A/C
9/9 Cash purchases ACB 6,720 9/9 Credit sales SB 12,600
9/9 Sales returns SRB 1,008 9/9 Cash sales ACB 17,640
9/9 Balance c/d 22,512
30,240 30,240
10.90 Balance b/d 22,512
Insurance A/C
6/9 Bank ACB 5,000
Rent A/C
7/9 Bank ACB 8,400
Debtors Ledger
Dardis Ltd A/C
1/9 Sales SB 32,670 2/9 Sales returns SRB 5,808
8/9 Bank ACB 26,862
32,670 32,670
Tobin Ltd A/C
3/9 Sales SB 39,930 9/9 Bank ACB 33,000
9/9 Balance c/d 6,930
39,930 39,930
10/9 Balance b/d 6,930
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General Ledger
Stock A/C
Ordinary Share Capital A/C
Sales A/C
Purchases A/C
Sales Returns A/C
VAT A/C
Insurance A/C
Rent A/C
Debtors Ledger
Dardis Ltd A/C
Tobin Ltd A/C
Machinery A/C
Chapter 43 Control Accounts
1. Main control procedures used by a business
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.
Sales 300,000
Less cost of sales
Purchases 160,000
Less closing stock 30,000
Cost of actual sales 130,000
Gross profit 170,000
Control Procedure ExplanationTrial balance This checks that the double entry process has
been followed correctly
Bank reconciliation statement This checks the accuracy of the bank accountand the bank statement
Control accounts These check the accuracy of the debtors andcreditors ledger accounts
Trial Balance as on 9/9/2006
Machinery 39,000
Stock 13,000
Ordinary share capital 52,000
Sales 144,000
Sales returns 4,800
Purchases 32,000
VAT 22,512
Insurance 5,000
Rent 8,400
Tobin Ltd 6,930
Bank 109,382
218,512 218,512
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Trading Account for year ending 31/5/20062006 € €
6.
7.
8.
9.
Sales 270,000
Less sales returns 30,000 240,000
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 250,000
Gross loss (10,000)
Sales 180,000
Less sales returns 20,000 160,000
Less cost of sales
Opening stock 16,000
Purchases 96,000
Less purchases returns 16,000 80,000
Import duty 5,500
Cost of goods available for sale 101,500
Less closing stock 18,500
Cost of actual sales 83,000
Gross profit 77,000
Sales 72,000
Less sales returns 8,000 64,000
Less cost of sales
Purchases 70,000
Less purchases returns 17,000 53,000
Add carriage inwards 10,000
Cost of goods available for sale 63,000
Less closing stock 15,000
Cost of actual sales 48,000
Gross profit 16,000
Sales 270,000
Less cost of sales
Purchases 145,000
Less purchases returns 85,000
Cost of actual sales 60,000
Gross profit 210,000
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Trading Account for year ending 31/5/20052005 € €
Trading Account for year ending 31/12/20062006 € € €
Trading Account for year ending 20/6/20052005 € € €
Trading Account for year ending 31/3/20072007 € € €
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 theother records. Identify slow-moving or damaged goods. Complete stock sheets andprepare a stock report.
11. Students to do this in class.
Chapter 45 Profit and Loss Account
1.
2.
Profit and Loss Account for the year ending 31/5/2006
€ €
Gross profit 120,000
Add gains
Rent receivable 12,000
Interest receivable 9,000 21,000
141,000
Less expenses
Wages 34,000
Insurance 6,000
Bad debts 8,000
Advertising 8,500 56,500
Net profit 84,500
Profit and Loss Account for the year ending 31/5/2005
€ €
Gross profit 65.000
Add gains
Rent receivable 15,000
80,000
Less expenses
Wages 24,000
Insurance 8,000
Light and heat 9,000
Advertising 6,500
Interest paid 8,000 55,500
Net profit 24,500
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3.
4.
€ €
Sales 220,000
Less sales returns 23,000 197,000
Less cost of sales
Opening stock 17,000
Purchases 56,000
Carriage inwards 3,000
Cost of goods available for sale 76,000
Less closing stock 23,000
Cost of actual sales 53,000
Gross profit 144,000
Add gains
Rent receivable 19,000
163,000
Less expenses
Wages 45,000
Advertising 13,900
Bad debts 9,000 67,900
Net profit 95,100
Profit and Loss Account for the year ending 1/5/2006
€ €
Gross profit 230,000
Add gains
Commission receivable 20,000
Rent receivable 14,500 34,500
195,500
Less expenses
Wages 75,000
Advertising 11,000
Bad debts 16,700
Interest paid 8,000 110,700
Net profit 84,800
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Trading, Profit and Loss Account for year ending 31/5/2006
5.
6.
Trading, Profit and Loss Account for year ending 31/5/2005
€ € €
Sales 340,000
Less cost of sales
Opening stock 27,000
Purchases 96,000
Less purchases returns 14,000 82,000
Carriage inwards 7,000
Cost of goods available for sale 116,000
Less closing stock 23,000
Cost of actual sales 93,000
Gross profit 247,000
Add gains
Commission receivable 25,000
272,000
Less expenses
Wages 75,000
Advertising 15,300
Rent paid 17,000 107,300
Net profit 164,700
Trading, Profit and Loss Account for year ending 31/7/2005
€ €
Sales 250,000
Less sales returns 12,000 238,000
Less cost of sales
Opening stock 45,000
Purchases 67,000
Import duty 4,000
Cost of goods available for sale 116,000
Less closing stock 32,000
Cost of actual sales 84,000
Gross profit 154,000
Add gains
Interest receivable 6,000
160,000
Less expenses
Wages 56,000
Carriage outwards 8,000
Light and heat 5,400 69,400
Net profit 90,600
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7.
8.(a) Net profit × 100% €21,000 × 100% = 15%
Net sales €140,000
(b) Net profit × 100% €24,050 × 100% = 13%Net sales €185,000
(c) Net profit × 100% €39,100 × 100% = 17%Net sales €230,000
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; toretain 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 (¼ of €80,000)(b) €4,000 (¼ of €16,000)
4. (a) 25% (€30,000 is ¼ of €120,000)(b) €70,000 (€40,000 + €30,000)
Trading, Profit and Loss Account for year ending 31/5/2005
€ € €
Sales 460,000
Less cost of sales
Opening stock 65,000
Purchases 85,000
Less purchases returns 22,000 63,000
Import duty 5,000
Cost of goods available for sale 133,000
Less closing stock 32,000
Cost of actual sales 101,000
Gross profit 359,000
Add gains
Rent receivable 12,000
347,000
Less expenses
Wages 93,000
Carriage outwards 6,000
Bad debts 12,500 111,500
Net profit 235,500
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5. Erratum. Year ended 30 November, not 31 November.
6.
7.
8.
9.
Date2006
Details F Total€
Date2006
Details F Total€
Dividends A/C
30/5 Profit and loss app. 60,000
Reserves A/C
30/5 Profit and loss app. 35,000
€
Net profit 95,000
Less dividends 60,000
Reserves 35,000
€
Net profit 180,000
Less dividends 60,000
120,000
Add opening balance 50,000
Reserves 170,000
€
Net profit 140,000
Less dividends 75,000
Reserves 65,000
€
Net profit 105,000
Less dividends 75,000
Reserves 30,000
€
Net profit 95,000
Less dividends 30,000
Reserves 65,000
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Profit and Loss Appropriation Account for year ended 30/11/ 2006
Profit and Loss Appropriation Account for year ended 30/8/2006
Profit and Loss Appropriation Account for year ended 31/3/2006
Profit and Loss Appropriation Account for year ended 30/5/2006
Profit and Loss Appropriation Account for year ended 31/5/2006
Dividends A/C
Reserves A/C
10.(a) €2,500.(b) The company retains some of the profit for use in future expansion.
11.
€ € €
Sales 290,000
Less cost of sales
1/6/05 Opening stock 37,000
Purchases 76,000
Less purchases returns 19,000 57,000
Carriage inwards 7,000
Cost of goods available for sale 101,000
Less closing stock 28,000
Cost of actual sales 73,000
Gross profit 217,000
Add gains
Commission receivable 28,000
245,000
Less expenses
Wages 75,000
Advertising 13,300 88,300
Net profit 156,700
Less dividends 30,000
Reserves 126,700
____________________________________________________________
____________________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 companyretains 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.
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Trading, Profit and Loss Appropriation Account for year ended 31/5/2006
12.
13.
€ €
Sales 390,000
Less sales returns 34,000 356,000
Less cost of sales
1/6/2005 Opening stock 29,000
Purchases 107,000
Import duty 8,000
Cost of goods available for sale 144,000
Less closing stock 34,000
Cost of actual sales 110,000
Gross profit 246,000
Add gains
Rent receivable 19,000
265,000
Less expenses
Wages 65,000
Insurance 14,600 79,600
Net profit 185,400
Less dividends 18,000
167,400
Add opening balance 10,000
Reserves 177,400
€ € €
Sales 560,000
Less cost of sales
1/6/2005 Opening stock 65,000
Purchases 95,000
Less purchases returns 20,000 75,000
Import duty 15,000
Cost of goods available for sale 155,000
Less closing stock 44,000
Cost of actual sales 111,000
Gross profit 449,000
Add gains
Interest receivable 16,000
465,000
Less expenses
Wages 73,000
Bad debts 15,500 88,500
Net profit 376,500
Less dividends 45,000
Reserves 331,500
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Trading, Profit and Loss Appropriation Account for year ended 31/5/2006
Trading, Profit and Loss Appropriation Account for year ended 31/5/2006
14.
Chapter 47 Balance Sheet
1.
€ € €
Fixed Assets Cost Depreciation NBV
Buildings 150,000 150,000
Machinery 60,000 60,000
Total fixed assets 210,000 210,000
Current assets
Closing stock 12,000
Debtors 10,000
Cash 2,000 24,000
Less current liabilities
Creditors 39,000
Bank overdraft 5,000 44,000
Working capital (20,000)
Total net assets 190,000
Financed by Authorised Issued
200,000 €1 ordinary shares 200,000 180,000
Reserves 10,000
Capital employed 190,000
€ €
Sales 450,000
Less sales returns 29,000 421,000
Less cost of sales
Opening stock 59,000
Purchases 120,000
Carriage inwards 9,000
Cost of goods available for sale 188,000
Less closing stock 9,000
Cost of actual sales 179,000
Gross profit 242,000
Add gains
Interest receivable 6,000
248,000
Less expenses
Wages 86,000
Carriage outwards 8,000 94,000
Net profit 154,000
Less dividends 50,000
104,000
Add opening balance 24,000
Reserves 128,000
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Trading, Profit and Loss Appropriation Account for year ended 31/5/2006
Balance Sheet as on 31/5/2005
2.
3.
€ € €
Fixed Assets Cost Depreciation NBV
Buildings 150,000 150,000
Motor vehicles 40,000 40,000
Total fixed assets 190,000 190,000
Current assets
Closing stock 12,000
Debtors 40,000
Cash 7,000 59,000
Less current liabilities
Creditors 16,000
Dividends due 20,000
Bank overdraft 5,000 41,000
Working capital 18,000
Total net assets 208,000
Financed by Authorised Issued
400,000 €1 ordinary shares 400,000 200,000
Reserves 8,000
Capital employed 208,000
€ € €
Fixed Assets Cost Depreciation NBV
Land 150,000 150,000
Equipment 72,000 72,000
Total fixed assets 222,000 222,000
Current assets
Closing stock 24,000
Debtors 35,000
Bank 13,000 72,000
Less current liabilities
Creditors 19,000
Dividends due 30,000 49,000
Working capital 23,000
Total net assets 245,000
Financed by Authorised Issued
300,000 €1 ordinary shares 300,000 200,000
Reserves 45,000
Capital employed 245,000
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Balance Sheet as on 31/5/2005
Balance Sheet as on 31/5/2006
4.
5.
€ € €
Fixed Assets Cost Depreciation NBV
Buildings 150,000 150,000
Machinery 40,000 40,000
Total fixed assets 190,000 190,000
Current assets
Closing stock 8,000
Debtors 20,000
Cash 2,000 30,000
Less current liabilities
Creditors 20,000
Dividends due 35,000
Bank overdraft 5,000 60,000
Working capital (30,000)
Total net assets 160,000
Financed by Authorised Issued
300,000 €1 ordinary shares 300,000 100,000
Long-term liabilities
20-year loan 60,000
Capital employed 160,000
€ € €
Fixed Assets Cost Depreciation NBV
Land 150,000 150,000
Machinery 58,000 58,000
Total fixed assets 208,000 208,000
Current assets
Closing stock 16,000
Debtors 27,000
Bank 9,000 52,000
Less current liabilities
Creditors 19,000
Dividends due 16,000 35,000
Working capital 17,000
Total net assets 225,000
Financed by Authorised Issued
250,000 €1 ordinary share capital 250,000 160,000
Reserves 15,000 175,000
Long-term liabilities
10-year loan 50,000
Capital employed 225,000
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Balance Sheet as on 31/5/2006
Balance Sheet as on 31/5/2006
6.
7. (a)
€ € €
Sales 260,000
Less sales returns 5,000 255,000
Less cost of sales
Opening stock 1/6/2004 14,000
Purchases 130,000
Carriage inwards 3,000
Cost of goods available for sale 147,000
Less closing stock 25,000
Cost of actual sales 122,000
Gross profit 133,000
Add gains
Commission receivable 16,000
149,000
Less expenses
Wages 25,000
Light and heat 6,000
Advertising 8,000
Carriage outwards 6,000
Bad debts 10,000 55,000
94,000
Less dividends 18,400
Reserves 75,600
€ € €
Fixed Assets Cost Depreciation NBV
Land 170,000 170,000
Equipment 52,000 52,000
Total fixed assets 222,000 222,000
Current assets
Closing stock 15,000
Debtors 15,000
Cash 4,000 34,000
Less current liabilities
Creditors 39,000
Dividends due 10,000
Bank overdraft 17,000 66,000
Working capital (32,000)
Total net assets 190,000
Financed by Authorised Issued
450,000 €1 ordinary shares 450,000 100,000
Long-term liabilities
12-year loan 90,000
Capital employed 190,000
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Balance Sheet as on 31/5/2006
Trading, Profit and Loss Appropriation Account for year ending 31/5/2005
(b) Goods are faulty; goods are not as ordered.
8. (a)
€ € €
Sales 300,000
Less sales returns 5,000 295,000
Less cost of sales
Opening stock 1/6/2005 34,000
Purchases 140,000
Import duty 12,000
Cost of goods available for sale 186,000
Less closing stock 30,000
Cost of actual sales 156,000
Gross profit 139,000
Add gains
Interest receivable 20,000
159,000
Less expenses
Wages 40,000
Light and heat 7,000
Advertising 8,000
Carriage outwards 9,000
Bad debts 13,000 77,000
Net profit 82,000
Less dividends 33,000
Reserves 49,000
€ € €
Fixed Assets Cost Depreciation NBV
Buildings 100,000 100,000
Machinery 120,000 120,000
Total fixed assets 220,000 220,000
Current assets
Closing stock 25,000
Debtors 40,000
Bank 12,000
Cash 1,000 78,000
Less current liabilities
Creditors 20,000
Dividends due 18,400 38,400
Working capital 39,600
Total net assets 259,600
Financed by Authorised Issued
250,000 €1 ordinary shares 250,000 184,000
Reserves 75,600
Capital employed 259,600
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Balance Sheet as on 31/5/2005
Trading, Profit and Loss Appropriation Account for year ending 31/5/2006
(b). Radio; television; newspapers.
9. (a)
€ € €
Sales 410,000
Less cost of sales
Opening stock 1/4/2005 14,000
Purchases 200,000
Less purchases returns 15,000 185,000
Carriage inwards 3,000
Cost of goods available for sale 202,000
Less closing stock 22,000
Cost of actual sales 180,000
Gross profit 230,000
Add gains
Commission receivable 4,000
234,000
Less expenses
Wages 10,000
Light and heat 6,000
Insurance 10,000
Carriage outwards 8,000
Rent 10,000 44,000
Net profit 190,000
Less dividends 17,500
Reserves 172,500
€ € €
Fixed Assets Cost Depreciation NBV
Buildings 110,000 110,000
Machinery 115,000 115,000
225,000 225,000
Current assets
Closing stock 30,000
Debtors 47,000
Bank 10,000
Cash 7,000 94,000
Less current liabilities
Creditors 17,000
Dividends due 33,000 50,000
Working capital 44,000
Total net assets 269,000
Financed by Authorised Issued
450,000 €1 ordinary shares 450,000 220,000
Reserves 49,000
Capital employed 269,000
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Balance Sheet as on 31/5/2006
Trading, Profit and Loss Appropriation Account for year ending 31/3/2006
(b) Hourly rate and piece rate10. (a) Erratum. Date should be 31/5/2006 not 29/5/2006
€ € €
Sales 370,000
Less sales returns 5,000 365,000
Less cost of sales
Opening stock 1/6/2005 34,000
Purchases 160,000
Carriage inwards 6,000
Cost of goods available for sale 200,000
Less closing stock 25,000
Cost of goods actually sold 175,000
Gross profit 190,000
Add gains
Rent receivable 19,000
209,000
Less expenses
Wages 55,000
Insurance 9,000
Advertising 21,000 85,000
Net profit 124,000
Less dividends 19,000
Reserves 105,000
€ € €
Fixed Assets Cost Depreciation NBV
Land and buildings 200,000 200,000
Machinery 123,000 123,000
Total fixed assets 323,000 323,000
Current assets
Closing stock 22,000
Debtors 55,000
Cash 3,000 80,000
Less current liabilities
Creditors 30,000
Bank overdraft 8,000
Dividends due 17,500 55,500
Working capital 24,500
Total net assets 348,500
Financed by Authorised Issued
500,000 €1 ordinary shares 500,000 175,000
Reserves 172,500
Capital employed 347,500
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Balance Sheet as on 31/3/2006
Trading, Profit and Loss Appropriation Account for year ending 31/5/2006
(b) Motor insurance; fire and theft; employer’s liability.
11.
€ € €
Sales 190,000
Less sales returns 1,000 189,000
Less cost of sales
Opening stock 1/5/2006 11,000
Purchases 100,000
Carriage inwards 2,000
Cost of goods available for sale 113,000
Less closing stock 45,000
Cost of actual sales 68,000
Gross profit 121,000
Add gains
Rent receivable 10,000
131,000
Less expenses
Wages 21,000
Light and heat 4,000
Advertising 4,000
Carriage outwards 7,000
Repairs 7,000 43,000
Net profit 88,000
Less dividends 20,000
Reserves 68,000
€ € €
Fixed Assets Cost Depreciation NBV
Equipment 120,000 120,000
Buildings 180,000 180,000
Total fixed assets 300,000 300,000
Current assets
Closing stock 25,000
Debtors 40,000
Bank 19,000
Cash 1,000 85,000
Less current liabilities
Creditors 10,000
Working capital 75,000
Total net assets 375,000
Financed by Authorised Issued
320,000 €1 ordinary shares 320,000 190,000
Reserves 105,000 295,000
Long-term liabilities
10-year loan 80,000
Capital employed 375,000
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Balance Sheet as on 31/5/2006
Trading, Profit and Loss Appropriation Account for year ending 30/4/2007
(b) Monark Ltd could raise a further €290,000 by issuing shares.
12. (a)
€ € €
Sales 390,000
Less sales returns 13,000 377,000
Less cost of sales
Opening stock 1/6/2006 14,000
Purchases 210,000
Less purchases returns 15,000 195,000
Cost of goods available for sale 209,000
Less closing stock 42,000
Cost of actual sales 167,000
Gross profit 210,000
Add gains
Commission receivable 12,000
222,000
Less expenses
Advertising 8,000
Wages 55,000
Light and heat 6,000
Bank interest 10,000 79,000
Net profit 143,000
Less dividends 37,500
Reserves 105,500
€ € €
Fixed Assets Cost Depreciation NBV
Buildings 112,000 112,000
Equipment 76,000 76,000
Total fixed assets 188,000 188,000
Current assets
Closing stock 45,000
Debtors 20,000
Bank 10,000
Cash 1,000 76,000
Less current liabilities
Creditors 16,000
Dividends due 20,000 36,000
Working capital 40,000
Total net assets 228,000
Financed by Authorised Issued
450,000 €1 ordinary shares 450,000 160,000
Reserves 68,000
Capital employed 228,000
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Balance Sheet as on 30/4/2007
Trading, Profit and Loss Appropriation Account for year ending 30/4/2007
(b) Rate of dividend paid is 12½%.
Chapter 48 Adjustments to Final Accounts1.
2.
2006 € 2006 €
Rent A/C
1/4 Bank ACB 3,200 31/12 Profit and loss 2,400
31/12 Balance c/d 800
3,200 3,200
1/5 Balance b/d 800
Balance Sheet as on 31/12/2006
Current assets €
Insurance prepaid 600
Profit and Loss Account for year ending 31/12/2006
Less expenses €
Insurance (1,200 – 600) 600
2006 € 2006 €
Insurance A/C
1/6 Bank ACB 1,200 31/12 Profit and loss 600
31/12 Balance c/d 600
1,200 1,200
1/1 Balance b/d 600
€ € €
Fixed Assets Cost Depreciation NBV
Buildings 200,000 200,000
Motor vehicles 180,000 180,000
Total fixed assets 380,000 380,000
Current assets
Closing stock 42,000
Debtors 44,500
Cash 4,000 90,500
Less current liabilities
Creditors 20,000
Bank overdraft 45,000 65,000
Working capital 25,500
Total net assets 405,500
Financed by Authorised Issued
500,000 €1 ordinary shares 500,000 300,000
Reserves 105,500
Capital employed 405,500
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Balance Sheet as on 30/4/2007
General LedgerDate Details F Total Date Details F Total
Date Details F Total Date Details F Total
Insurance A/C
Rent A/C
3.
4.
Balance Sheet as on 31/12/2006
Current liabilities €
Wages due 2,500
Profit and Loss Account for year ending 31/12/2006
Less expenses €
Wages (27,000 + 2,500) 29,500
€ €
Wages A/C
Bank ACB 27,000 31/12/2006 Profit and loss 29,500
31/12/2006 Balance c/d 2,500
29,500 29,500
1/1/2007 2,500
Profit and Loss Account for year ending 31/5/2006
Current assets €
Stationery on hand 450
Profit and Loss Account for year ending 31/5/2006
Less expenses €
Stationery (1,900 – 450) 1,450
2006 € 2006 €
Statioery A/C
31/5 Bank ACB 1,900 31/5 Profit and loss 1,450
31/5 Balance c/d 450
1,900 1,900
1/6 Balance b/d 450
Balance Sheet as on 31/12/2006
Current assets €
Rent prepaid 800
Profit and Loss Account for year ending 31/12/2006
Less expenses €
Rent (3,200 – 800) 2,400
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General LedgerDate Details F Total Date Details F Total
General LedgerDate Details F Total Date Details F Total
Stationery A/C
Wages A/C
5.
6.
7.
2006 € 2006 €
Machinery A/C
1/1 Bank ACB 12,000
Bank A/C
1/1 Machinery ACB 12,000
Provision for depreciation A/C
31/12 Profit and loss 1,200
Balance Sheet as on 31/12/2006
Current assets €
Interest receivable due 1,800
Profit and Loss Account for year ending 31/12/2006
Add gains €
Interest receivable 1,800
€ €
Interest receivable A/C
31/12/2006 Profit and loss 1,800 31/12/2006 Balance c/d 1,800
1/1/2007 Balance b/d 1,800
Balance Sheet as on 31/12/2005
Current liabilities €
Electricity due 1,500
Profit and Loss Account for year ending 31/12/2005
Less expenses €
Electricity (6,000+1,500) 7,500
€ €
Electricity A/C
Bank ACB 6,000 31/12/2005 Profit and loss 7,500
31/12/2005 Balance c/d 1,500
7,500 7,500
1/1/2006 Balance b/d 1,500
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General LedgerDate Details F Total Date Details F Total
General LedgerDate Details F Total Date Details F Total
General LedgerDate Details F Total Date Details F Total
Interest receivable A/C
Machinery A/C
Bank A/C
Provision for depreciation A/C
8.
Balance Sheet as on 31/12/2006
Fixed Assets Cost Depreciation NBV
€ € €
Motor vans 60,000 24,000 36,000
Balance Sheet as on 31/12/2005
Fixed Assets Cost Depreciation NBV
€ € €
Motor vans 60,000 12,000 48,000
Profit and Loss Account for year ending 31/12/2006
Less expenses €
Depreciation: Motor vans 12,000
Profit and Loss Account for year ending 31/12/2005
Less expenses €
Depreciation: Motor vans 12,000
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 Balance c/d 12,000 31/12/2005 Profit and loss 12,000
1/1/2006 Balance b/d 12,000
31/12/2006 Balance c/d 24,000 31/12/2006 Profit and loss 12,000
24,000 24,000
1/1/2007 Balance b/d
Balance Sheet as on 31/12/2006
Fixed Assets Cost Depreciation NBV
€ € €
Machinery 12,000 1,200 10,800
Profit and Loss Account for year ending 31/12/2006
Less expenses €
Depreciation: Machinery 1,200
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9.
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 Balance c/d 8,000 31/12/2006 Profit and loss 8,000
1/1/2007 Balance b/d 8,000
31/12/2007 Balance c/d 16,000 31/12/2007 Profit and loss 8,000
16,000 16,000
31/12/2007 Balance b/d 16,000
Balance Sheet as on 31/12/2005
Fixed Assets Cost Depreciation NBV
€ € €
Equipment 30,000 8,800 21,200
Balance Sheet as on 31/12/2005
Fixed Assets Cost Depreciation NBV
€ € €
Equipment 30,000 4,400 25,600
Profit and Loss Account for year ending 31/12/2006
Less expenses €
Depreciation: Equipment 8,800
Profit and Loss Account for year ending 31/12/2005
Less expenses €
Depreciation: Equipment 8,800
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 Balance c/d 4,400 31/12/2005 Profit and loss 4,400
1/1/2006 Balance b/d 4,400
31/12/2006 Balance c/d 8,800 31/12/2006 Profit and loss 4,400
8,800 8,800
1/1/2007 Balance b/d 8,800
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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) 341,000
Less cost of sales
Opening stock 1/6/2004 37,000
Purchases 210,000
Import duty 11,000
Cost of goods available for sale 258,000
Less closing stock 30,000
Cost of actual sales 228,000
Gross profit 113,000
Add gains
Commission receivable (25,000 + 2,500) 25,000 27,500
140,500
Less expenses
Insurances 9,870
Wages (56,000 + 4,600) 60,600
Light and heat 13,400
Depreciation: Motor vehicles 12,300
Buildings 3,600 15,900 99,770
Net profit 40,730
Less dividends 30,000
10,730
Add opening balance 24,000
Reserves 34,730
Balance Sheet as on 31/12/2007
Fixed Assets Cost Depreciation NBV
€ € €
Motor vans 40,000 16,000 24,000
Profit and Loss Account for year ending 31/12/2007
Less expenses €
Depreciation: Motor vans 8,000
Balance Sheet as on 31/12/2005
Fixed Assets Cost Depreciation NBV
€ € €
Motor vans 40,000 8,000 32,000
Profit and Loss Account for year ending 31/12/2006
Less expenses €
Depreciation: Motor vans 8,000
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(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) 256,000
Less cost of sales
Opening stock 1/6/2004 13,000
Purchases (165,000 – 2,000) 163,000
Carriage inwards 6,800
Cost of goods available for sale 182,800
Less closing stock 20,000
Cost of actual sales 162,800
Gross profit 93,200
Add gains
Interest receivable (18,000 + 6,000) 24,000
117,200
Less expenses
Insurance 8,600
Bad debts 10,900
Repairs (16,000 + 2,900) 18,900
Advertising 6,600
Depreciation: Delivery van 27,312
Machinery 11,600 38,912 83,912
Net profit 33,288
Less dividends 12,750
Reserves 20,538
Balance Sheet of Niall Ltd as on 31/5/2005
€ € €
Fixed assets Cost Depreciation NBV
Buildings 180,000 3,600 176,400
Motor vehicles 123,000 12,300 110,700
Total fixed assets 303,000 15,900 287,100
Current assets
Closing stock 30,000
Debtors 78,000
Commission receivable 2,500
Cash 2,330 112,830
Less current liabilities
Creditors 63,000
Bank overdraft 17,600
Wages due 4,600
Dividends due 30,000 115,200
Working capital (2,370)
Total net assets 284,730
Financed by Authorised Issued
360,000 €1 ordinary shares 360,000 250,000
Reserves 34,730
284,730
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(b) Bad debts constitute one third of the debtors. This means that one third of credit saleswill 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) 304,000
Less cost of sales
Opening stock 1/8/2004 17,000
Purchases 120,000
Import duty 11,600
Cost of goods available for sale 148,600
Less closing stock 27,000
Cost of actual sales 121,600
Gross profit 182,400
Add gainsNone 000000
182,400
Less expensesLight and heat (18,000 + 2,500) 20,500
Insurances (8,900 – 600) 8,300
Wages and salaries 38,600
Depreciation: Premises 5,500
Machinery 11,200 16,700 84,100
Net profit 98,300
Less dividends 17,100
81,200
Add opening balance 25,000
Reserves 106,200
Balance Sheet of Adrian Ltd as on 31/5/2005
€ € €
Fixed assets Cost Depreciation NBV
Delivery vans 170,700 27,312 143,388
Machinery 145,000 11,600 133,400
Total fixed assets 315,700 38,912 276,788
Current assets
Closing stock 20,000
Debtors 34,000
Bank 10,000
Interest receivable due 6,000 70,000
Less current liabilities
Creditors 15,600
Repairs due 2,900
Dividends due 12,750 31,250
Working capital 38,750
Total net assets 315,538
Financed by Authorised Issued
500,000 €1 ordinary shares 500,000 255,000
Reserves 20,538 275,538
Long-term liabilities
12-year loan 40,000
Capital employed 315,538
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(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) 280,000
Less cost of sales
Opening stock 1/5/2004 17,000
Purchases (140,000 – 6,000) 134,000
Cost of goods available for sales 151,000
Less closing stock 40,000
Cost of goods actually sold 111,000
Gross profit 169,000
Add gains
Rent receivable (24,900 – 5,500) 19,400
188,400
Less expenses
Advertising (25,000 + 860) 25,860
Petty cash expenses 4,000
Loan interest 2,800
Depreciation: Motor vehicles 21,120 53,780
Net profit 134,620
Less dividends 36,000
98,620
Add opening balance 25,000
Reserves 123,620
Balance Sheet of Richard Ltd as on 31/7/2005
€ € €
Fixed assets Cost Depreciation NBV
Premises 220,000 5,500 214,500
Machinery 80,000 11,200 68,800
Total fixed assets 300,000 16,700 283,300
Current assets
Closing stock 27,000
Debtors 34,000
Insurance prepaid 600
Cash 5,200 66,800
Less current liabilities
Creditors 45,000
Bank overdraft 6,400
Light and heat due 2,500 53,900
Working capital 12,900
Total net assets 296,200
Financed by Authorised Issued
600,000 €1 ordinary shares 600,000 190,000
Reserves 106,200
Capital employed 296,000
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(b) The source document for purchases returns is a credit note received and for petty cashexpenses 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) 254,000
Less cost of sales
Opening stock 1/7/2004 23,000
Purchases 120,000
Import duty 7,000
Cost of goods available for sale 150,000
Less closing stock 27,900
Cost of actual sales 122,100
Gross profit 131,900
Add gainsCommission receivable (35,000 + 4,750) 39,750
171,650
Less expensesInsurance 13,700
Carriage outwards 17,500
Repairs (13,400 + 2,600) 16,000
Depreciation: Motor vehicles 16,548
Equipment 26,950 43,498 90,698
Net profit 80,952
Less dividends 39,000
41,952
Add opening balance 20,000
Reserves 61,952
Balance Sheet of Darra Ltd as on 30/4/2005
€ € €
Fixed assets Cost Depreciation NBVMotor vehicles 132,000 21,120 110,880
Land 196,000 196,000
Total fixed assets 328,000 21,120 306,880
Current assetsClosing stock 40,000
Debtors 64,000
Bank 14,100
Cash 2,000 120,100
Less current liabilitiesCreditors 46,000
Interest receivable prepaid 5,500
Advertising due 860
Dividends due 36,000 88,360
Working capital 31,740
Total net assets 338,620
Financed by Authorised Issued
200,000 €1 ordinary shares 200,000 180,000
Reserves 123,620 303,620
Long-term liability7-year loan 35,000
Capital employed 338,620
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(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 214,000
Less cost of sales
Opening stock 1/6/2004 31,000
Purchases (120,000 – 12,000) 108,000
Cost of goods available for sale 139,000
Less closing stock 30,000
Cost of actual sales 109,000
Gross profit 105,000
Add gains
Rent receivable (25,000 + 2,500) 27,500
132,500
Less expenses
Wages 56,000
Insurance (3,800 – 600) 3,200
Bad debts 5,700
Advertising 11,800
Depreciation: Motor vehicles 7,760
Machinery 15,840 23,600 100,300
Net profit 32,200
Less dividends 28,000
4,200
Add opening balance 45,000
Reserves 49,200
Balance Sheet of James Ltd as on 30/6/2005
€ € €
Fixed assets Cost Depreciation NBV
Equipment 245,000 26,950 218,050
Motor vehicles 118,200 16,548 101,652
363,200 43,498 319,702
Current assets
Closing stock 27,900
Debtors 34,000
Commission receivable due 4,750
Cash 2,100 68,750
Less current liabilities
Creditors 12,000
Repairs due 2,600
Bank overdraft 12,900
Dividends due 39,000 66,500
Working capital 2,250
Total net assets 321,952
Financed by Authorised Issued
400,000 €1 ordinary shares 400,000 260,000
Reserves 61,952
Capital employed 31,952
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(b) Closing stock should be valued at the lower price of: cost price, market price orreplacement cost.
7. (a)
Trading, Profit and Loss Appropriation Account of Enda Ltd for year ending 31/3/2005
€ € €
Sales (230,000 – 5,000) 225,000
Less cost of sales
Opening stock 13,000
Purchases (89,000 – 1,200) 87,800
Import duty 4,450
Cost of goods available for sale 105,250
Less closing stock 17,000
Cost of actual sales 88,250
Gross profit 136,750
Add gains
Interest receivable (13,750 – 4,500) 18,250
155,000
Less expenses
Advertising (8,000 – 1,370) 6,630
Insurance 4,600
Repairs 6,900
Depreciation: Premises 4,000
Machinery 21,120 25,120 43,250
Net profit 111,750
Less dividends 14,000
Reserves 97,350
Balance Sheet of Conor Ltd as on 31/5/2005
€ € €
Fixed assets Cost Depreciation NBV
Motor vehicles 97,000 7,760 89,240
Machinery 132,000 15,840 116,160
229,000 23,600 205,400
Current assets
Closing stock 30,000
Debtors 33,000
Rent receivable 2,500
Insurance prepaid 600
Cash 300
Bank 1,400 67,800
Less current liabilities
Creditors 56,000
Dividends due 28,000 84,000
Working capital (16,200)
Total net assets 189,200
Financed by Authorised Issued
200,000 €1 ordinary shares 200,000 140,000
Reserves 49,200
Capital employed 189,200
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(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) 447,000
Less cost of sales
Opening stock 1/5/2005 17,000
Purchases (290,000 – 3,600) 286,400
Cost of goods available for sale 303,400
Less closing stock 21,000
Cost of actual sales 282,400
Gross profit 164,600
Add gains
Rent receivable (19,700 + 2,500) 22,200
186,800
Less expenses
Loan interest 8,000
Insurance (14,800 – 900) 13,900
Bad debts 10,000
Carriage outwards (4,300 + 3,500) 7,800
Depreciation: Motor vehicles 11,040
Machinery 49,000 60,040 99,740
Net profit 87,060
Less dividends 39,100
Reserves 47,960
Balance Sheet of Enda Ltd as on 31/3/2005
€ € €
Fixed assets Cost Depreciation NBV
Premises 200,000 4,000 196,000
Machinery 132,000 21,120 110,880
Total fixed assets 332,000 25,120 306,880
Current assets
Closing stock 17,000
Debtors 24,000
Cash 3,000
Advertising prepaid 1,370
Interest receivable due 4,500 49,870
Current liabilities
Creditors 14,000
Bank overdraft 6,000
Dividends due 14,400 34,400
Working capital 15,470
322,350
Financed by Authorised Issued
400,000 €1 ordinary shares 400,000 180,000
Reserves 97,350 277,350
Long-term liabilities
20-year loan 45,000
Capital employed 322,350
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(b) 17% (Dividend ÷ Issued shares × 100%)
9. (a)
Trading, Profit and Loss Appropriation Account of Burns Ltd for year ending 31/5/2005
€ € €
Sales 200,000
Less cost of sales
Opening stock 1/6/2004 42,000
Purchases (110,000 – 15,000) 95,000
Carriage inwards 8,000
Cost of goods available for sale 145,000
Less closing stock 68,000
Cost of actual sales 77,000
Gross profit 123,000
Add gains
Interest receivable (12,000 + 8,000) 20,000
143,000
Less expenses
Light and heat 7,500
Wages (47,500 + 2,500) 50,000
Bad debts 6,700
Depreciation: Machinery 30,000
Delivery van 12,000 42,000 106,200
Net profit 36,800
Less dividends 34,800
2,000
Add opening balance 22,000
Reserves 24,000
Balance Sheet of Andrew Ltd as on 30/4/2006
€ € €
Fixed assets Cost Depreciation NBV
Motor vehicles 110,400 11,040 99,360
Machinery 245,000 49,000 196,000
Total fixed assets 355,400 60,040 295,360
Current assets
Closing stock 21,000
Debtors 29,700
Insurance prepaid 900
Rent receivable due 2,500
Cash 19,000 73,100
Less current liabilities
Creditors 47,000
Carriage outwards due 3,500 50,500
Working capital 22,600
Total net assets 317,960
Financed by Authorised Issued
400,000 €1 ordinary shares 400,000 230,000
Reserves 47,960 277,960
Long-term liabilities
10-year loan 40,000
Capital employed 317,960
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(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) 262,500
Less cost of sales
Opening stock 1/4/2005 23,000
Purchases 130,000
Import duty 11,800
Cost of goods available for sale 164,800
Less closing stock 40,000
Cost of actual sales 124,800
Gross profit 137,700
Add gains
Commission receivable (16,000 + 4,000) 20,000
Interest receivable 8,000
165,700
Less expenses
Advertising (14,000 – 3,000) 11,000
Wages 32,000
Depreciation: Equipment 25,600
Delivery vans 22,000 47,600 90,600
Net profit 75,100
Less dividends 30,000
45,100
Add opening balance 68,000
Reserves 113,100
Balance Sheet of Burns Ltd as on 31/5/2005
€ € €
Fixed assets Cost Depreciation NBV
Machinery 200,000 30,000 170,000
Delivery vans 120,000 12,000 108,000
Total fixed assets 320,000 42,000 278,000
Current assets
Closing stock 68,000
Debtors 54,000
Cash 4,300
Interest receivable due 8,000 134,300
Less current liabilities
Creditors 13,000
Bank overdraft 13,000
Wages due 2,500
Dividends due 34,800 63,300
Working capital 71,000
Total net assets 349,000
Financed by Authorised Issued
350,000 €1 ordinary shares 350,000 290,000
Reserves 24,000 314,000
Long-term liabilities
15-year loan 35,000
Capital employed 349,000
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(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 270,000
Less cost of sales
Opening stock 23,000
Purchases (160,000 – 13,000) 147,000
Carriage inwards 5,600
Cost of goods available for sale 175,600
Less closing stock 22,000
Cost of actual sales 153,600
Gross profit 116,400
Add gains
Rent receivable (8,600 + 4,400) 13,000
129,400
Less expenses
Insurance (7,800 – 1,200) 6,600
Wages 32,800
Bad debts 5,600
Depreciation: Machinery 10,400
Delivery vans 23,400 33,800 78,800
Net profit 50,600
Less dividends 26,000
24,600
Add opening balance 15,000
Reserves 39,600
Balance Sheet of Balfe Ltd as on 31/3/2006
€ € €
Fixed assets Cost Depreciation NBV
Buildings 200,000 200,000
Equipment 160,000 25,600 134,400
Delivery vans 110,000 22,000 88,000
Total fixed assets 270,000 47,600 422,400
Current assets
Closing stock 40,000
Debtors 28,000
Advertising prepaid 3,000
Commission receivable due 4,000
Cash 2,700 77,700
Less current liabilities
Creditors 43,000
Bank overdraft 14,000
Dividends due 30,000 87,000
Working capital (9,300)
Total net assets 413,100
Financed by Authorised Issued
400,000 €1 ordinary shares 400,000 300,000
Reserves 113,100
Capital employed 413,100
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(b) Carr Ltd should have motor insurance; employers liability insurance; product liabilityand 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) 298,000
Less cost of sales
Opening stock (1/6/2007) 20,000
Purchases 168,000
Import duty 4,600
Cost of goods available for sale 192,600
Less closing stock 18,000
Cost of goods actually sold 174,600
Gross profit 123,400
Add gainsInterest receivable 3,500
126,900
Less expensesRent (8,800 – 1,200) 7,600
Wages (40,000 + 6,000) 46,000
Depreciation: Machinery 9,600
Delivery vans 18,000 27,600 81,200
Net profit 45,700
Less dividends 36,000
9,700
Add balances 16,700
Reserves 26,400
Balance Sheet of Carr Ltd as on 31/5/2007
€ € €
Fixed assets Cost Depreciation NBV
Machinery 130,000 10,400 119,600
Delivery vans 195,000 23,400 171,600
Total fixed assets 325,000 33,800 291,200
Current assets
Closing stock 22,000
Debtors 49,500
Rent receivable due 4,400
Cash 1,300
Insurance prepaid 1,200
Bank 11,000 89,400
Less current liabilities
Creditors 30,000
Dividends due 26,000 56,000
Working capital 33,400
Total net assets 324,600
Financed by Authorised Issued
300,000 €1 ordinary shares 300,000 260,000
Reserves 39,600 299,600
Long-term liability
12-year loan 25,000
Capital employed 324,600
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(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 340,000
Less cost of sales
Opening stock (1/4/2007) 12,000
Purchases 125,000
Carriage inwards 8,000
Cost of goods available for sale 145,000
Less closing stock 14,000
Cost of actual sales 131,000
Gross profit 209,000
Add gainsRent receivable (5,600 – 1,800) 3,800
212,800
Less expensesLoan interest due (2,500 + 500) 3,000
Wages (57,000 + 3,000) 60,000
Bad debts 2,400
Depreciation: Equipment 21,600
Delivery vans 15,000 36,600 102,000
Net profit 110,800
Less dividends 34,000
76,800
Add opening balance 32,000Reserves 108,800
Balance Sheet for Keogh Ltd as on 31/5/2008
€ € €
Fixed assets Cost Depreciation NBVBuildings 200,000 200,000
Machinery 160,000 9,600 150,400
Delivery vans 150,000 18,000 132,000
Total fixed assets 510,000 27,600 482,400
Current assets
Closing stock 18,000
Debtors 32,000
Cash 3,400
Rent prepaid 1,200 54,600
Less current liabilitiesCreditors 21,000
Bank overdraft 15,600
Dividends due 36,000
Wages due 6,000 78,600
Working capital (24,000)
Total net assets 458,400
Financed by Authorised Issued
500,000 €1 ordinary shares 500,000 400,000
Reserves 26,400 426,400
Long-term liabilities10-year loan 32,000
Capital employed 458,400
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(b) Kirby Ltd can reduce its bad debts by not selling on credit, checking the creditworthiness 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 330,000
Less cost of sales
Opening stock (1/6/2006) 15,000
Purchases 145,000
Import duty 3,400
Cost of goods available for sale 163,400
Less closing stock 18,000
Cost of actual sales 145,400
Gross profit 184,600
Add gainsCommission receivable (12,400 + 1,600) 14,000
Rent receivable 12,000
210,600
Less expensesWages (28,400 + 600) 29,000
Carriage outwards (6,600 + 2,200) 8,800
Depreciation: Machinery 24,000
Delivery vans 26,000 50,000 87,800
Net profit 122,800
Less dividends 32,000
90,800
Add opening balance 35,000Reserves 125,800
Balance Sheet of Kirby Ltd as on 31/3/2008
€ € €
Fixed assets Cost Depreciation NBVEquipment 180,000 21,600 158,400
Delivery van 150,000 15,000 135,000
Total fixed assets 330,000 36,600 293,400
Current assetsClosing stock 14,000
Debtors 54,000
Cash 2,100
Bank 5,600 75,700
Less current liabilitiesCreditors 40,000
Rent receivable prepaid 1,800
Wages due 3,000
Loan interest due 500 45,300
Working capital 30,400
Total net assets 323,800
Financed by Authorised Issued
300,000 €1 ordinary shares 300,000 200,000
Reserves 108,800 308,800
Long-term liabilities6-year loan 15,000Capital employed 323,800
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(b) 11.43%
15.(a)
Trading, Profit and Loss Appropriation Account of Joyce Ltd for year ending 31/5/2007
€ € €
Sales 320,000
Less cost of sales
Opening stock (1/6/2006) 22,000
Purchases (140,000 – 4,000) 136,000
Import duty 8,000
Cost of goods available for sale 166,000
Less closing stock 16,000
Cost of actual sales 150,000
Gross profit 170,000
Add gainsInterest receivable (10,000 + 4,000) 14,000
184,000
Less expensesCarriage outwards 5,600
Wages (48,400 + 1,600) 50,000
Bad debts 4,000
Depreciation: Machinery 12,000
Delivery vans 12,900 24,900 84,500
Net profit 99,500
Less dividends 30,000
69,500
Add opening balance 26,000Reserves 95,500
Balance Sheet of Moore Ltd as on 31/5/2007
€ € €
Fixed assets Cost Depreciation NBVMachinery 200,000 24,000 176,000
Delivery vans 190,000 26,000 164,000
Total fixed assets 390,000 50,000 340,000
Current assetsClosing stock 18,000
Debtors 80,000
Cash 2,000
Bank 20,000
Commission receivable due 1,600 121,600
Less current liabilities
Creditors 13,000
Wages due 600
Carriage outwards due 2,200 15,800
Working capital 105,800
Total net assets 445,800
Financed by Authorised Issued
350,000 €1 ordinary shares 350,000 280,000
Reserves 125,800 405,800
Long-term liabilities20-year loan 40,000Capital employed 445,800
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(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 390,000
Less cost of sales
Opening stock (1/6/2007) 14,500
Purchases (175,000 – 5,000) 170,000
Carriage inwards 5,500
Cost of goods available for sale 190,000
Less closing stock 22,000
Cost of actual sales 168,000
Gross profit 222,000
Add gains
Commission receivable (6,600 + 1,800) 8,400
230,400
Less expenses
Insurance (4,800 – 900) 3,900
Wages 32,200
Bad debts 8,000
Depreciation: Equipment 18,720
Delivery vans 8,450 27,170 71,270
Net profit 159,130
Less dividends 25,600
133,530
Add opening balance 34,400
Reserves 167,930
Balance Sheet of Joyce Ltd as on 31/5/2007
€ € €
Fixed assets Cost Depreciation NBV
Buildings 200,000 200,000
Machinery 120,000 12,000 108,000
Delivery vans 86,000 12,900 73,100
Total fixed assets 406,000 24,900 381,100
Current assets
Closing stock 16,000
Debtors 30,000
Cash 2,300
Bank 5,700
Interest receivable due 4,000 58,000
Less current liabilities
Creditors 12,000
Dividends due 30,000
Wages due 1,600 43,600 14,400
Total net assets 395,500
Financed by Authorised Issued
400,000 €1 ordinary shares 400,000 300,000
Reserves 95,500
Capital employed 395,500
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(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 Formula Workings Answer
Gross profit marginGross profit × 100%
Sales€25,000 x 100%
€100,00025%
Gross profit marginGross profit × 100%
Sales€30,000 x 100%
€120,00025%
Gross profit marginGross profit × 100%
Sales€24,000 x 100%
€96,00025%
Gross profit marginGross profit × 100%
Sales€15,000 x 100%
€65,00023.08%
Balance Sheet of Nevin Ltd as on 31/5/2008
€ € €
Fixed assets Cost Depreciation NBV
Buildings 300,000 300,000
Equipment 156,000 18,720 137,280
Delivery vans 65,000 8,450 56,550
Total fixed assets 521,000 27,170 493,830
Current assets
Closing stock 22,000
Debtors 28,000
Cash 2,000
Insurance prepaid 900
Commission receivable due 1,800 54,700
Less current liabilities
Creditors 20,000
Dividends due 25,600
Bank overdraft 15,000 60,600
Working capital (5,900)
Total net assets 487,930
Financed by Authorised Issued
400,000 €1 ordinary shares 400,000 320,000
Reserves 167,930
Capital employed 487,930
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3.
4.
5.
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.
8.
Name of Ratio Formula Workings Answer
Current Ratio Current Assets: Current Liabilities €50,000 : €25,000 2 : 1
Current Ratio Current Assets: Current Liabilities €54,000 : €32,000 1.69 : 1
Current Ratio Current Assets: Current Liabilities €35,000 : €45,000 0.78 : 1
Current Ratio Current Assets: Current Liabilities €38,000 : €56,000 0.68 : 1
Ratio A B C
Rate of stock turnover 15 times 16 times 7.38
Ratio 2005 2006 2007 2008
Gross profit % 30% 40% 35% 29.5%
Net profit % 20% 12% 17% 20.49%
Return on capital employed 6.67% 12% 6.89% 12.18%
Name of Formula Formula Workings Answer
Return on capitalemployed
Net profit × 100%Capital employed
€10,000 x 100%€300,000
3.33%
Return on capitalemployed
Net profit × 100%Capital employed
€15,000 x 100%€450,000
3.33%
Return on capitalemployed
Net profit × 100%Capital employed
€12,000 x 100%€360,000
3.33%
Return on capitalemployed
Net profit × 100%Capital employed
€5,000 x 100%€250,000
2%
Name of Formula Formula Workings Answer
Net profit marginNet profit × 100%
Sales€10,000 x 100%
€100,00010%
Net profit marginNet profit × 100%
Sales€15,000 x 100%
€120,00012.5%
Net profit marginNet profit × 100%
Sales€12,000 x 100%
€96,00012.5%
Net profit marginNet profit × 100%
Sales€5,000 x 100%
€65,0007.69%
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9.
10.Workings for report
Louise Ltd has the greatest liquidity problem.
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 istherefore solvent.
Workings for report
Assets Buildings €80,000 + Buses €74,000 + Equipment €40,000 + Debtors€8,000 + Cash €2,000
External Liabilities Wages due €5,000m + Creditors €2,000 + Bank overdraft €7,000 + 15-yearloan €40,000
1. Liquidity Consultants Ltd,Anytown,Longford.
2. Liquidity problems of Louise Ltd
3. _______________________
4. The Directors of Louise Ltd,Anytown,Longford.
5. I was asked by the directors to examine the liquidity situation of the company and makerecommendations. I used both the Current and Acid Test ratios in my examination. Myfindings are set out below.
6. 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 bypaying less in dividends.
7. I am available to discuss this report if required.
8. Patricia Cooney.
9. Liquidity Consultant.
Ratio Hilary Ltd Louise Ltd Helen Ltd Aisling Ltd
Current Ratio 1.25 : 1 0.50 : 1 2.06 : 1 1.98 : 1
Acid Test Ratio 0.88 : 1 0.37 : 1 1.37 : 1 1.69 : 1
Name of Ratio Formula Workings Answer
Acid Test RatioCurrent Assets – Closing stock:Current Liabilities
€50,000 – €15,000 : €25,000 1.4 : 1
Acid Test RatioCurrent Assets – Closing stock:Current Liabilities
€54,000 – €17,000 : €32,000 1.16 : 1
Acid Test RatioCurrent Assets – Closing stock:Current Liabilities
€35,000 – €15,000 : €45,000 0.44 : 1
Acid Test RatioCurrent Assets – Closing stock:Current Liabilities
€38,000 – €12,000 : €56,000 0.46 : 1
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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
1. Management Consultants Ltd,Suspense Street,Waterford.
2. Report on the Performance of Bridge Ltd for years 2004 and 2005
3. ______________________
4. The Directors of Bridge Ltd,Main Street,Cork.
5. I was asked by the shareholders to examine the performance of the company. I used anumber of ratios. My findings are as follows.
6. 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.
7. I am available to discuss this report if required.
8. Kevin Scully.
9. Management Consultant.
Ratios Answers
2004 2005
Gross profit % 41.67% 54.90%
Net profit % 20.83% 35.29%
Return on capital employed % 19.23% 31.03%
Acid test ratio 2 : 1 0.95 : 1
1. Financial Consultants Ltd, Cork.
2. Solvency of Cork Bus Ltd
3. ___________________4. The Shareholders of Cork Bus Ltd, Cork.
5. I was asked by the shareholders to examine the solvency position of the company. Ideducted the Total External Liabilities of the company from the Total Assets. My findingsare as follows.
6. Cork Bus Ltd is solvent as its Total Assets of €204,000 exceeds its Total ExternalLiabilities of €54,000.
7. I am available to discuss this report if required.
8. Mary Smyth.
9. Financial Consultant.
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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 thecompany is making from using the loan. If the loan cost 12% per year and the Return onCapital is 7%, then the company is paying 5% more on the loan than it is able to makefrom using the loan.
(b) Workings for report
Chapter 51 Club Accounts
1.
Functions of Treasurer Explanation
Collect membership Issue receipts and record membership received
Make all club payments Write cheques and pay all club expenses
Prepare accounts Prepare Income and Expenditure and Balance Sheet for club
Report on clubs finances at AGM Inform members of the club's finances at the AGM
1. Management Consultants Ltd,News Road,Wicklow.
2. Report on the Performance of Chess Ltd
3. _______________________
4. The Directors of Chess Ltd,Main Street,Cork
5. I was asked by the directors to examine the performance of the company. I used a numberof ratios. My findings are as follows.
6. 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. Returnis now less than the cost of the loan at 15%, which means the company is losing 2.15% onthe loan.The Current Ratio decreased from 2.6 : 1 (greater than the recommended ratio of 2:1) to1.35 : 1. This trend is worrying.
7. I am available to discuss this report if required.
8. George Lee.
9. Management Consultant.
Ratios Answers
2005 2006
Gross profit % 48.48% 42.62%
Net profit % 21.21% 14.75%
Return on capital employed % 24.14% 12.86%
Current ratio 2.6 : 1 1.35 : 1
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2.
3.
Analysed Cash Book
Date Details Total Subs Disco Com. Date Details Total Wage Disco Com.
2005 € € € € 2005 € € € €
1/5Balanceb/d
225 5/5Competi-tion prizes
25 25
2/5Subscrip-tions
40 40 12/5 DJ 30 30
6/5Competi-tion fees
35 35 15/5Caretak-er’s wages
100 100
14/5Subscrip-tions
65 65 16/5Discoposters
10 10
20/5Competi-tion fees
60 60 19/5 Prizes 45 45
26/5Discoreceipts
160 160 29/5Caretak-er’s wages
100 100
29/5Balancec/d
275
585 105 160 95 585 200 40 70
30/5Balanceb/d
275
Analysed Cash BookDate Details Total Subs Disco Lotto Date Details Total Rent Disco Lotto2005 € € € € 2005 € € € €
7/1Balancec/d
460 12/1Lottoprizes
100 100
8/1Subscrip-tions
65 65 14/1 Rent 55 55
9/1Lottotickets
170 170 15/1Discoposters
20 20
11/1Discoreceipts
250 250 19/1Lottoprizes
80 80
13/1Subscrip-tions
85 85 26/1Lottoprizes
150 150
17/1Lottotickets
135 135 27/1 DJ 120 120
24/1Lottotickets
190 190 28/1 Rent 55 55
25/1Discoreceipts
300 300 31/1 Balance 1,075
1,655 150 550 495 1,655 110 140 330
1/2Balanceb/d
1,075
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4.
5.
Analysed Cash Book
DateDe-tails
TotalBank
Subs. Bar Oth. Date DetailsCh.no
TotalBank
Bar Trvl.Dan-ce
Oth.
2006 € € € € 2006 € € € € €
8/4Sub-scrip-tions
2,400 2,400 5/4Barpurch-ases
1 4,600 4,600
10/4Dancerecei-pts
3,750 3,750 14/4Danceexp-enses
2 750 750
26/4Grantreceiv-ed
3,000 3,000 18/4Adver-tising
3 500 500
29/4Barsales
2,100 2,100 21/4Barexpen-ses
4 980 980
28/4Affilia-tion
5 450 450
30/4 Travel 6 400 400
30/4Clean-ing
7 100 100
30/4Balan-ce c/d
3,470
11,250 2,400 2,100 6,750 11,250 5,580 400 750 1,050
1/5Balan-ce c/d
3,470
Analysed Cash Book
DateDe-tails
TotalBank
Subs. Bar Oth. DateDe-tails
Ch.no
TotalBank
Bar Trvl.Dan-ce
Oth.
2006 € € € € 2006 € € € € €
3/3 Grant 6,000 6,000 13/3Insur-ance
6 350 350
7/3Barsales
2,700 2,700 17/3Purch-ases
7 2,100 2,100
10/3Loanreceiv-ed
10,000 10,000 23/3Clean-ing
8 130 130
19/3Sub-scrip-tions
3,500 3,500 28/3 Travel 9 870 870
26/3Barsales
1,780 1,780 31/3Danceexp.
10 320 320
31/3Dancereceip-ts
1,790 1,790 31/3Balan-ce c/d
22,000
25,770 3,500 4,480 17,790 25,770 2,230 870 320 350
1/4Balan-ce b/d
22,000
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6.
7.
Analysed Cash Book
DateDetai-
lsTotalbank
Subs.Dan-ce
Oth. Date DetailsCh.no.
TotalBank
Ins.Dan-ce
Oth.
2006 € € € € 2006 € € € €
5/6Dancereceip-ts
4,600 4,600 1/6Balanceb/d
2,000
8/6Grantreceiv-ed
10,000 10,000 3/6 ESB 2 300 300
10/6Sub-scrip-tions
3,655 3,655 14/6 Minibus 3 11,300 11,300
23/6Lottowin
15,000 15,000 16/6Danceexpences
4 1,325 1,325
29/6Spon-soredwalk
5,500 5,500 18/6Equip-ment
5 4,660 4,660
26/6 Affiliation 6 1,700 1,700
30/6 Insurance 7 675 675
30/6Balancec/d
16,795
38,755 3,655 4,600 30,050 38,755 675 1,325 17,960
1/7Balan-ce b/d
16,795
Analysed Cash Book
Date DetailsTotalbank
Subs. Dance Oth. Date DetailsCh.no.
TotalBank
Ins.Dan-ce
Oth.
2006 € € € € 2006 € € € €
1/5Balanceb/d
1,400 5/5Equip-ment
1 2,600 2,600
3/5Subscri-ptions
3,800 3,800 7/5 Drinks 2 285 285
9/5Loanreceived
12,000 12,000 17/5Danceexpen-ses
3 1,455 1,455
11/5Sale ofland
30,000 30,000 19/5Insur-ance
4 675 675
15/5Dancereceipts
4,300 4,300 24/5Affilia-tion
5 2,200 2,200
31/5Grantreceived
7,000 7,000 27/5 ESB 6 430 430
50,855
58,500 3,800 4,300 49,000 31/5Balan-ce b/d
58,500 675 1,455 5,515
1/6Balanceb/d
50,855
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8.
9.
Income and Expenditure Account for year ended 30/6/2005
Income € €
Subscriptions 12,400
Profit on dance (3,500 – 1,155) 2,345
Profit on refreshments (6,895 – 2,565) 4,330
19,075
Less expenses
Light and heat 1,890
Travel 2,345 4,235
Surplus (excess income over expenditure) 14,840
Receipts and Payment Account for year ended 30/6/2006Date Details Total Bank Date Details Total Bank 2005 € 2005 €
Subscriptions 12,400 1/7 Balance 500Dance receipts 3,500 Dance expenses 1,155Sale of refreshments 6,895 Light and heat 1,890Loan received 15,000 Travel 2,345
Loan repayment 5,000Purchase of refreshments 2,565
30/6 Balance c/d 24,34037,795 37,795
1/7 Balance b/d 24,340
Income and Expenditure Account for year ended 30/4/2005
Income € €
Subscriptions 4,500
Raffle profit (1,565 – 650) 915
Competition receipts 6,455
11,870
Less expenses
Insurance 1,440
Postage and telephone 1,565
Rent 855 3,860
Surplus (excess income over expenditure) 8,010
Receipts and Payments Account for year ended 30/4/2005Date Details Total Bank Date Details Total Bank 2005 € 2005 €
1/5/04 Balance b/d 3,200 Raffle expenses 650Subscriptions 4,500 Equipment 3,500Grant 2,500 Insurance 1,440Raffle receipts 1,565 Postage and stationery 1,565Competition receipts 6,455 Rent 855
30/4 Balance c/d 10,21018,220 18,220
1/5 Balance b/d 10,210
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Note to teachers: loan repayments are not revenue expenditure and are therefore not treatedas an expense. If the exercise stated ‘loan interest’, then this would be treated as an expense.
10.
11.
Income and Expenditure Account for year ended 31/7/2005
Income € €
Subscriptions 26,865
Profit on competition (670 – 125) 545
Green fees 12,900
Rent of club car park 3,600
43,910
Less expenses
Light and heat 1,670
Caretakers wages 10,900
Telephone 4,500 17,070
Surplus (excess income over expenditure) 26,840
Receipts and Payment Account for year ended 31/7/2005Date Details Total Bank Date Details Total Bank 2005 € 2005 €
1/7 Balance b/d 650 Competition expenses 125Subscriptions 26,865 Light and heat 1,670Competition receipts 670 Caretaker's wages 10,900Green fees 12,900 Purchase of roller 2,565Rent of club car park 3,600 Telephone 4,500
30/6 Balance c/d 24,92544,685 44,685
1/7 Balance b/d 24,925
Income and Expenditure Account for year ended 30/4/2005
Income € €
Profit on dance (5,605 – 1,950) 3,655
Membership fees 4,550
8,205
Less expenses
Insurance 2,450
Light and heat 2,455 4,905
Surplus (excess income over expenditure) 3,300
Receipts and Payment Account for year ended 30/4/2006
Date Details Total Bank Date Details Total Bank
2005 € 2005 €
1/5 Balance b/d 1,400
Dance expenses 1,950
Dance receipts 5,605 Purchases of machinery 12,450
Membership fees 4,550 Insurance 2,450
Lotto win 50,000 Purchase of minibus 17,800
Sale of machinery 6,895 Light and heat 2,455
30/4 Balance c/d 28,545
67,050 67,050
1/5 Balance b/d 28,545
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12.
13.
14.
Balance Sheet as on 31/8/2006
€ € €
Fixed assets Cost NBV
Premises and track 90,000 90,000
Equipment 4,500 4,500
Minibus 18,300 18,300
Total fixed assets 112,800 112,800
Current assets
Cash 200
Less current liabilities
Bank overdraft 2,000
Working capital (1,800)
Total net assets 111,000
Financed by
Accumulated fund 65,000
Long-term liabilities
Bank loan 46,000
Capital employed 111,000
Accumulated Fund Statement as on 1/1/2006
Assets € €
Buildings 200,000
Equipment 75,000
Cash 900 275,900
Less liabilities
Bank overdraft 2,600
Bank loan 60,000 62,600
Accumulated fund 213,300
Accumulated Fund Statement as on 1/1/2006
Assets € €
Cash 300
Bank 2,000
Stock bar supplies 700
Clubhouse 80,000 83,000
Less liabilities
Bank loan 40,000
Accumulated fund 43,000
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15.
16.
1. Financial Consultants Ltd,Euro Avenue,Cavan.
2. Report on ways of raising finance for new den
3. _______________________________
4. The Members of Cavan Girl Guides,Main Street,Cavan.
5. I was asked by the members for advice on methods of raising €70,000 for a newden. I researched different methods. My findings are as follows.
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. I am available to discuss this report if required.
8. Margaret Murray.
9. Financial Consultant.
Balance Sheet of Athenry Gun Club as on 31/12/2005
€ € €
Fixed assets Cost NBVBuildings 50,000 50,000
Equipment 3,200 3,200
Total fixed assets 53,200 53,200
Current assetsCash 25
Bank 1,700
Stock of rain gear 400 2,125
Less current liabilities 0000
Working capital 2,125
Total net assets 55,325
Financed byAccumulated fund 33,325
Long-term liabilitiesBank loan 22,000
Capital employed 55,325
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17.
18.(a)
Analysed Cash Book (Debit Side)
Date Details Total Bank Membership Fees Games Receipts Collection
2001 € € € €
15/2 Membership fees 1,500 1,500
19/3 Gate receipts 516 516
21/6 Church collection 2,347 2,347
15/8 Membership fees 500 500
19/10 Gate receipts 1,200 1,200
10/12 Flag day 849 849
6,912 2,000 1,716 3,196
1/1/02 Balance b/d 888
1. Disco Consultants Ltd,Roscrea,Co. Tipperary.
2. Report on the organisation of a disco
3. _______________________
4. The Members of Roscrea Youth Club,Roscrea,Co. Tipperary.
5. I was asked by the members to outline how to organise a disco to raise club funds. Icontacted a number of clubs and I outline my findings below.
6. Organising a disco is time-consuming and requires many helpers. The following factorshave 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.
The following are some of the expenses that the club may have:
• Wages of bouncers;• Insurance premium;• Hire of hall;• Cost of tickets;• Cost of DJ;• Cost of advertising.
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. I am available to discuss this report if required.
8. John Murphy.
9. Disco Consultant.
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(b)
(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 58,000
Less cost of sales
Opening stock 1/1/2006 6,000
Bar purchases 16,000
22,000
Less closing stock 4,000 18,000
Gross profit 40,000
Less bar wages 7,000
Bar net profit (add to income in the I & E account) 33,000
Receipts and Payment Account for year ended 31/12/2001
Date Details Date Details
2001 € 2001 €
Membership fees 2,000 1/1 Balance b/d 781
Game receipts 1,716 Travel 2,025
Collection 3,196 Insurance 1,658
Equipment 1,170
Wages 400
31/12 Balance c/d 888
2002 6,912 6,912
1/1 Balance b/d 888
Analysed Cash Book (Credit Side)
Date Details Ch. no. Total Bank Travel Insurance Equipment Wages
2001 € € € € €
1/1 Balance b/d 781
8/1 Calidonian Ltd 70 1,648 1,648
7/3 Sportswear Ltd 71 700 700
13/4 Caretaker 72 240 240
9/3 Bus Éireann 73 325 325
4/7 Hurleys 74 470 470
3/9 Cleaner 75 160 160
6/11 Bus Éireann 76 1,700 1,700
31/12 Balance c/d 888
6,912 2,025 1,648 1,170 400
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2.
3.
4. (a)
Income and Expenditure Account for year ending 28/2/2006
Income € €
Subscriptions (1,900 + 1,700) 3,600
Profit on dinner dance (3,400 – 2,500) 900
4,500
Less expenses
Loss on light and heat (4,300 – 2,400) 1,900
Cleaner’s wages 4,500
Travel 950
Insurance (1,700 – 300) 1,400
Playing gear 400
Prizes 600
Depreciation of equipment 600 10,350
Deficit (excess expenditure over income) (5,850)
Accumulated Fund Statement as on 1/3/2005
Assets € €
Clubhouse 70,000
Equipment 5,000
Bank 1,700 76,700
Less liabilities 000000
Accumulated fund 76,700
Disco Account for year ending 31/12/2006
€ € €
Disco receipts 700
Less expenses
Hire of hall 200
DJ 250
Add due to DJ 50 300
Tickets 100
Insurance 140
Less prepaid 50 90
Advertising 120
Add advertising due 40 160 850
Loss on disco (add to expenditure in I & E account) (150)
Canteen Trading Account for year ending 30/6/2006
€ €
Sales 42,000
Less cost of salesOpening stock 1/7/05 2,000
Canteen purchases 20,000
22,000
Less closing stock 3,000 19,000
Gross profit 23,000
Less canteen wages 17,000
Add wages due 2,000 19,000
Canteen net profit (add to income in I & E account) 4,000
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(b)
5. (i)
Accumulated Fund Statement as on 1/5/2004
Assets € €
Land and buildings 140,000
Equipment 1,600
Bar stock 3,000
Bank 4,000 148,600
Less liabilities
Bank loan 50,000
Accumulated fund 98,600
1. Membership Consultant,Mullingar,Co. Westmeath.
2. Report on members not paying membership
3. ____________________________
4. Members of Leinster Ladies Squash Club,Mullingar,Co. Westmeath.
5. I was asked by the members to report on the problem of members not paying theirsubscriptions. I contacted different clubs to see how they deal with this situation.My findings are as follows.
6. The club can do one or other of the following to improve the situation:
• 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.
7. I am available to discuss this report if required.
8. Sarah Walshe.
9. Membership Consultant.
Balance Sheet as on 28/2/2006
€ € €
Fixed assets Cost Depreciation NBV
Clubhouse 70,000 70,000
Equipment 5,000 600 4,400
Total fixed assets 75,000 600 74,400
Current assets
Bank (receipts + opening bank balance – payments) 450
Insurance prepaid 300
Subscriptions due 1,700 2,450
Less current liabilities 0000
Working capital 2,450
Total net assets 76,850
Financed by
Accumulated fund 76,700
Less deficit (5,850) 70,850
Add Lottery grant 6,000
Capital employed 76,850
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(ii)
(iii)
(iv)
Balance Sheet as on 30/4/2005
€ € €
Fixed assets Cost Depreciation NBV
Land and buildings 140,000 140,000
Equipment 1,600 1,600
Total fixed assets 141,600 141,600
Current assets
Bank 35,100
Bar closing stock 9,000
Subscriptions due 300 44,400
Less current liabilities
Subscriptions prepaid 900
Wages due 500 1,400
Working capital 43,000
Total net assets 184,600
Financed by
Accumulated fund 98,600
Add surplus 36,000 134,600
Long-term liabilities
Long-term loan 50,000
Capital employed 185,600
Income and Expenditure for year ending 30/4/2005
Income € €
Bar net profit 28,000
Subscriptions (6,000 + 300 – 900) 5,400
Profit on disco (17,000 – 9,000) 8,000
41,400
Less expenditure
Insurance 1,800
Travel 3,600 5,400
Surplus (excess income over expenditure) 36,000
Bar Trading Account for year ending 30/4/2005
€ €
Bar sales 57,000
Less cost of sales
Opening stock 1/5/2004 3,000
Bar purchases 29,000
32,000
Less closing stock 9,000 23,000
Gross profit 34,000
Less expenses
Bar wages (5,500 + 500) 6,000
Bar net profit (add to income in I & E account) 28,000
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6.
7.Income and Expenditure Account for year ended 31/12/2005
Income € € €
Raffle income 7,198
Subscriptions (9,300 – 800) 8,500
Dance income (6,430 + 860) 7,290
22,988
Less expenditure
Wages 12,500
Telephone (635 + 147) 782
Catering 2,466
Insurance 2,700
Light 1,597
Depreciation: Premises 800 20,845
Surplus (excess of income over expenditure) 2,143
Balance Sheet as on 30/11/2004
€ € €
Fixed assets Cost Depreciation NBVEquipment 18,000 2,160 15,840
Minibus 18,000 2,700 15,300
Total net assets 36,000 4,860 31,140
Current assetsCash 200
Subscriptions due 6,000
Stationery 300 6,500
Less current liabilitiesSubscriptions prepaid 100
Light and heat due 250
Bank overdraft 2,500 2,850
Working capital 3,650
Total net assets 34,790
Financed byAccumulated fund 18,950
Add surplus 15,840
Capital employed 34,790
Income and Expenditure Account for year ending 30/11/2004Income € € €
Subscriptions (17,000 + 6,000 – 100) 22,900
Dance profits 6,000
28,900
Less expenditureInsurance 950
Rent 3,000
Light and heat (2,800 + 250) 3,050
Stationery (1,500 – 300) 1,200
Depreciation: Equipment 2,160
Minibus 2,700 4,860 13,060
Surplus (excess of income over expenditure) 15,840
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Chapter 53 Farm Accounts
1.
2.
Analysed Cash Book (Debit Side) p1
Date Details Total Bank Livestock Grants/Loans Other
2006 € € € €
1/9 Balance b/d 1,300
1/9 Sale of cattle 1,600 1,600
7/9 Sale of hay 300 300
15/9 Loan 12,000 12,000
19/9 EU grant 8,000 8,000
30/9 Balance c/d 1,530
24,730 1,600 20,000 300
Analysed Cash Book (Credit Side) p1
Date Details Ch.no.
TotalBank
Electr. Fertilisers Tractor Livest. Other
2006 € € € € € €
5/5 Electricity 4 250 250
7/5 Tractor diesel 5 400 400
9/5 Wages 6 200 200
14/5 Fertiliser 7 600 600
18/5 Builder 8 5,000 5,000
24/5 IFA membership 9 80 80
29/5 Calves 10 1,200 1,200
29/5 Seeds 11 300 300
30/5 Wages 12 200 200
31/5 Tractor repairs 13 120 120
31/5 Balance c/d 2,200
10,550 250 600 520 1,200 5,780
Analysed Cash Book (Debit Side) p1
Date Details Total Bank Milk Cattle Other
2006 € € € €
1/5 Balance b/d 750
3/5 Milk receipts 900 900
8/5 Cattle sales 1,900 1,900
16/5 EU grant 7,000 7,000
10,550 900 1,900 7,000
1/6 Balance b/d 2,200
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3.Ordinary Level
Income and Expenditure Account of Farmer Conway for year ended 31/12/2005
Income € €
Milk 45,000
Cattle 25,000
Sheep 9,000
79,000
Less expenditure
Wages 14,500
Light and heat 3,500
Rent 2,750
Tractor repairs 1,950
Fertiliser and seed 2,670
Silage contractor 6,500
Insurance 1,750 33,620
Surplus (excess of income over expenditure) 45,380
Analysed Cash Book (Credit Side) p1
Date DetailsCh.no.
TotalBank
Electricity Feeds Drawings Livestock Other
2006 € € € € € €
1/9 Purchase of calves 16 800 800
5/9 Feedstuff 17 280 280
5/9 Fertiliser 17 550 550
7/9 Silage contractor 18 800 800
9/9 Electricity 19 180 180
9/9 Telephone 20 240 240
15/9 Fencing 21 140 140
19/9 Land reclamation 22 20,000 20,000
22/9 Drawings 700 700
22/9 Insurance 23 500 500
26/9 Vet 24 70 70
26/9 Diesel 25 320 320
26/9 Interest on loan 150 150
24,730 180 280 700 800 22,770
30/9 Balance b/d 1,530
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Higher Level
4.Ordinary Level
Income and Expenditure Account of Farmer Campbell for year ended 31/12/2005
Income € €
Cattle 38,500
Crops 17,500
Pigs 8,500
64,500
Less expenditure
Fertiliser and seed 7,400
Repairs to machinery 3,100
Wages 17,400
Vet fees 1,950
Bank interest 1,900
Light and telephone 4,200
Insurance 2,400 38,350
Surplus (excess of income over expenditure) 26,150
Income and Expenditure Account of Farmer Conway for year ended 31/12/2005
Income € €
Milk 45,000
Cattle 25,000
Sheep 9,000
79,000
Less expenditure
Wages 14,500
Light and heat (3,500 + 500) 4,000
Rent 2,750
Tractor repairs 1,950
Fertiliser and seed (2,670 – 230) 2,440
Silage contractor 6,500
Insurance 1,750
Depreciation: Tractor 3,200 37,090
Surplus (excess of income over expenditure) 41,910
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Higher Level
5.Ordinary Level
Higher LevelIncome and Expenditure Account of Farmer Ward for year ended 31/5/2006
Income € €
Crops 36,800
Interest on deposit account 2,500
Poultry 13,900
53,200
Less expenditure
Repairs 3,400
Wages (14,600 + 1,400) 16,000
Fertiliser 2,785
Telephone 1,895
Packaging (5,675 – 900) 4,775
Depreciation: Equipment 1,400 30,255
Surplus (excess of income over expenditure) 22,945
Income and Expenditure Account of Farmer Ward for year ended 31/5/2006
Income € €
Crops 36,800
Interest on deposit account 2,500
Poultry 13,900
53,200
Less expenditure
Repairs 3,400
Wages 14,600
Fertiliser 2,785
Telephone 1,895
Packaging 5,675 28,355
Surplus (excess of income over expenditure) 24,845
Income and Expenditure Account of Farmer Campbell for year ended 31/12/2005
Income € €
Cattle 38,500
Crops 17,500
Pigs 8,500
64,500
Less expenditure
Fertiliser and seed 7,400
Repairs to machinery 3,100
Wages (17,400 + 1,600) 19,000
Vet fees 1,950
Bank interest 1,900
Light and telephone 4,200
Insurance (2,400 – 600) 1,800
Depreciation: Equipment 1,500 40,850
Surplus (excess of income over expenditure) 23,650
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6.Ordinary Level
Higher LevelIncome and Expenditure Account of Farmer Slevin for year ended 31/5/2006
Income € €
Cattle 45,000
Milk 29,000
Sheep 13,455
87,455
Less expenditure
Loan interest (5,000 + 700) 5,700
Feed 3,900
Transport 6,500
Insurance (2,765 – 500) 3,265
Light and heat 4,300
Depreciation: Tractor 1,900 25,565
Surplus (excess of income over expenditure) 61,890
Income and Expenditure Account of Farmer Slevin for year ended 31/5/2006
Income € €
Cattle 45,000
Milk 29,000
Sheep 13,455
87,455
Less expenditure
Loan interest 5,000
Feed 3,900
Transport 6,500
Insurance 2,765
Light and heat 4,300 22,465
Surplus (excess of income over expenditure) 64,990
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Note: EU grant is treated as annual income.
7.
Balance Sheet of Farmer J. Flood as on 31/12/2006
Ordinary Level Higher Level
Fixed assets Cost € NBV € Fixed assets Cost € Depr. € NBV €
Land and buildings 185,000 185,000 Land and buildings 185,000 ------- 185,000
Machinery 54,800 54,800 Machinery 54,800 6,576 48,224
239,800 239,800 239,800 6,576 233,224
Current assets Current assets
Cash 1,200 Cash 1,200
Stock of feed on hand 2,200 3,400
Less current liabilities ------- Less current liabilities
Loan interest due 1,000
Working capital 1,200 Working capital 2,400
Total net assets 241,000 Total net assets 235,624
Financed by Financed by
Capital 85,100 Capital 85,100
Add surplus 100,900 186,000 Add surplus 95,524 180,624
Long-term liabilities Long-term liabilities
20-year loan 55,000 20-year loan 55,000
Capital employed 241,000 Capital employed 235,624
Income and Expenditure Account of Farmer J. Flood for year ending 31/12/2006
Ordinary Level Higher Level
Income € € Income € €
Sale of cattle 45,600 Sale of cattle 45,600
Sale of milk 67,800 Sale of milk 67,800
EU grant 20,000 EU grant 20,000
133,400 133,400
Less expenditure Less expenditure
Wages 13,400 Wages 13,400
Light and heat 3,600 Light and heat 3,600
Feed 7,800 Feed (7,800 – 2,200) 5,600
Loan interest 4,500 Loan interest (4,500 + 1,000) 5,500
Repairs 3,200 32,500 Repairs 3,200
Depreciation: Machinery 6,576 37,876
Surplus (excess ofincome over expenditure)
100,900Surplus (excess of incomeover expenditure)
95,524
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8.
Balance Sheet of Farmer B. Hay as on 31/12/2006
Ordinary Level Higher Level
Fixed assets Cost € NBV € Fixed assets Cost € Depr. € NBV €
Land and buildings 245,000 245,000 Land and buildings 245,000 245,000
Tractor 23,000 23,000 Tractor 23,000 3,450 19,550
268,000 268,000 268,000 3,450 264,550
Current assets Current assets
Bank 12,000 Bank 12,000
Insurance prepaid 400 12,400
Less current liabilities -------- Less current liabilities
Wages due 700
Working capital 12,000 Working capital 11,700
Total net assets 280,000 Total net assets 276,250
Financed by Financed by
Capital 188,500 Capital 188,500
Add surplus 51,500 240,000 Add surplus 47,750 236,250
Long-term liabilities Long-term liabilities
10-year loan 40,000 10 year loan 40,000
Capital employed 280,000 Capital employed 276,250
Income and Expenditure Account of Farmer J. Flood for year ending 31/12/2006
Ordinary Level Higher Level
Income € € Income € €
Sale of sheep 14,500 Sale of sheep 14,500
Sale of cattle 67,900 Sale of cattle 67,900
REP grant 10,000 REP grant 10,000
92,400 92,400
Less expenditure Less expenditure
Contractors fees 6,500 Contractors fees 6,500
Wages 14,300 Wages (14,300 + 700) 15,000
Loan interest 3,600 Loan interest 3,600
Insurance 3,200 Insurance (3,200 – 400) 2,800
Feed and fertiliser 13,300 40,900 Feed and fertiliser 13,300
Depreciation 3,450 44,650
Surplus (excess ofincome over expenditure
51,500Surplus (excess ofincome over expenditure)
47,750
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Chapter 54 Service Firms
1.
2.
Analysed Cash Book of Insure all (Debit Side) p1
Date Details F Rec.no.
TotalBank
Life Car House Business
2006 € € € € €
4/6 House insurance GL 5 140 140
6/6 Car insurance GL 6 500 500
9/6 Bar insurance GL 7 550 550
16/6 House insurance GL 8 160 160
22/6 Life assurance GL 9 50 50
26/6 Life assurance GL 10 300 300
1,700 350 500 300 550
27/6 Balance b/d 1,035
Analysed Cash Book of Quinn’s Travel (Credit Side) p1
Date Details F Ch.no.
TotalBank
Wages L&H Teleph. Advert. Other
2006 € € € € € €
7/5 Advertising GL 75 300 300
18/5 Electricity GL 76 180 180
21/5 Telephone GL 77 600 600
28/5 Wages GL 78 500 500
30/5 Window cleaner GL 79 15 15
30/5 Balance c/d 8,525
10,120 500 180 600 300 15
Analysed Cash Book of Quinn’s Travel (Debit Side) p1
Date Details F Rec. no. Total Bank
Ireland EU Rest ofworld
2006 € € € €
1/5 Balance 20
2/5 Holidays in France GL 1 1,600 1,600
4/5 Holidays in Russia GL 2 3,000 3,000
12/5 Holiday in Kerry GL 3 700 700
16/5 Holidays in USA GL 4 2,800 2,800
24/5 Holidays in Greece GL 5 2,000 2,000
10,120 700 3,600 5,800
31/5 Balance b/d 8,525
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3.
4.
Analysed Cash Book of ‘Big T’Taxi (Debit Side) p1
Date Details F Rec. no. Total Bank Routine Weddings HSE
2008 € € € €
1/4 Routine hire GL 1 700 700
3/4 Routine hire GL 2 580 580
4/4 Wedding hire GL 3 420 420
9/4 HSE GL 4 400 400
16/4 HSE GL 5 600 600
29/4 Wedding hire GL 6 340 340
3,040 1,280 760 1,000
1/5 Balance b/d 740
Analysed Cash Book of Spring Cleaners (Credit Side) p1
Date Details F Ch. no. TotalBank
Wages Equipment Transport
2007 € € € €
6/7 Petrol GL 89 40 40
10/7 Ladders GL 90 240 240
14/7 Wages GL 91 180 180
18/7 Vacuum cleaner GL 92 280 280
21/7 Car insurance GL 93 360 360
27/7 Balance c/d 40
1,140 180 520 400
Analysed Cash Book of Spring Cleaners (Debit Side) p1
Date Details F Rec. no. Total Bank Households Business
2007 € € €
1/7 Balance b/d 50
4/7 Window cleaning DL 1 160 160
5/7 Butler Ltd DL 2 120 120
11/7 Willis Oil Ltd DL 3 350 350
24/7 Dunnes Stores DL 4 400 400
27/7 Mrs Kane DL 5 60 60
1,140 320 870
28/7 Balance b/d 40
Analysed Cash Book of Insure all (Credit Side) p1
Date Details F Ch.no.
TotalBank
Wages Rent Telephone
Station-ery
2006 € € € € €
3/6 Rent GL 50 160 160
6/6 Wages GL 51 200 200
12/6 Eircom GL 52 230 230
18/6 Office stationery GL 53 75 75
26/6 Balance c/d 1,035
1,700 200 160 230 75
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5.
6.
Income and Expenditure Account for year ended 31/7/2006
Income € €
Fees earned 75,900
Commission receivable 12,500
88,400
Less expenditure
Insurance 4,300
Rent 6,600 10,900
Surplus (net profit) 77,500
Balance Sheet as on 31/5/2006
Fixed assets Cost € Depreciation € NBV €
Buildings 98,000 ----------------- 98,000
Machinery 45,000 ----------------- 45,000
Total fixed assets 143,000 ----------------- 143,000
Current assets
Cash 3,600
Debtors 14,600 18,200
Less current liabilities
Bank overdraft 5,600
Working capital 12,600
Total net assets 155,600
Financed by
Share capital 83,500
Add surplus 47,100 130,600
Long-term liabilities
15-year loan 25,000
Capital employed 155,600
Income and Expenditure Account for year ended 31/5/2006
Income
Sales income 65,000
Less expenditure
Wages 13,400
Telephone 4,500 17,900
Surplus (net profit) 47,100
Analysed Cash Book of ‘Big T’Taxi (Credit Side) p1
Date Details F Ch. no. Total Bank Wages Transport
2008 € € €
7/4 Wages GL 60 600 600
12/4 Car taxes GL 61 900 900
18/4 Car service GL 62 200 200
30/4 Wages GL 63 600 600
30/4 Balance c/d 740
3,040 1,200 1,100
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7.
Balance Sheet as on 31/12/2006
Fixed assets Cost € Depreciation € NBV €
Delivery vans 65,000 ----------------- 65,000
Total fixed assets 65,000 ----------------- 65,000
Current assets
Cash 3,400
Bank 34,500
Debtors 14,500 52,400
Less current liabilities --------
Working capital 52,400
Total net assets 117,400
Financed by
Share capital 43,300
Add surplus 44,100 87,400
Long-term liabilities
10-year loan 30,000
Capital employed 117,400
Income and Expenditure Account for year ended 31/12/2006
Income
Income from fees 55,000
Commissionable receivable 21,000
76,000
Less expenditure
Wages 17,500
Rent 12,000
Insurance 2,400 31,900
Surplus (net profit) 44,100
Balance Sheet as on 31/7/2006
Fixed assets Cost € Depreciation € NBV €
Equipment 34,500 ------------------ 34,500
Vans 84,500 ----------------- 84,500
Total fixed assets 119,000 ----------------- 119,000
Current assets
Cash 2,940
Less current liabilities
Bank overdraft 3,300
Creditors 11,340 14,640
Working capital (11,700)
Total net assets 107,300
Financed by
Share capital 29,800
Add surplus 77,500
Capital employed 107,300
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8.
Chapter 55 Information Technology
1.
2.Computers are used in the home to:
Send messages via the internet; purchase items like travel tickets via the internet; keepfiles 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 orderstock; keep employee records; prepare accounts and cash budgets; operate alarms andmachinery; design and manufacture goods.
Software Programs Explanation
Word processingThis program allows the user to type letter/reports, make corrections onscreen before printing them or sending them by email.
SpreadsheetThis program allows the user perform mathematical calculations, keepfinancial records and prepare budgets.
DatabaseThis is a computerised filing system. It allows the user keep computerisedrecords, which can be sorted and linked to letters.
Computer AidedDesign
This program allows the user produce drawings and plans for designinghouses, equipment clothes etc.
Balance Sheet as on 31/5/2006
Fixed assets Cost € Depreciation € NBV €
Buildings 120,000 --------------- 120,000
Machinery 68,000 --------------- 68,000
Total fixed assets 188,000 --------------- 188,000
Current assets
Bank 12,400
Debtors 13,500 25,900
Less current liabilities
Creditors 19,000
Working capital 6,900
Total net assets 194,900
Financed by
Share capital 129,500
Add surplus 65,400
194,900
Income and Expenditure Account for year ended 31/5/2006
Income € €
Sale of services 98,600
Interest receivable 3,400
102,000
Less expenditure
Wages 23,400
Advertising 6,500
Light and heat 6,700 36,600
Surplus (net profit) 65,400
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3.Computers are used in banks to:
Send messages to customers; lodge and withdraw money; prepare statements of bankingrecords; 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-the-minute information on what is happening around the world, by publishing newsbulletins 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.
6.
7.
General Journal (p1)
Date Details F Dr Cr
2006 € €
1/9 Computer GL 11,400
MBI Ltd CL 11,400
Purchase of computer on credit
General Ledger
Date Details F Total Date Details F Total
2006 € 2006 €
Computer A/C (p1)
1/7 Bank ACB 7,700
Bank A/C ( p2)
1/7 Computer GL 7,700
General Ledger
Date Details F Total Date Details F Total
2006 € 2006 €
Computer A/C (p1)
1/2 Bank ACB 8,500
Bank A/C (p2)
1/2 Computer GL 8,500
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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 anothercomputer 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 eventthat 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 alarmsetc.
(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 byemail.
Database: This is a computer program which acts as a computerised filingsystem. It allows the user keep computerised records, which can besorted and linked to letters.
Date Details F Total Date Details F Total
2006 € 2006 €
General Ledger
Computer A/C (p1)
1/9 MBI Ltd GJ 11,400
Creditors Ledger
MBI LTD A/C (p2)
1/9 Computer GJ 11,400
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Junior Certificate
Business Studiesfor Households and Enterprises
WORKBOOK TEACHER’S MANUAL
Matt Hynes
© Matt Hynes 2005
ISBN 1-84131-703-9Folens Publishers,
Hibernian Industrial Estate,Greenhills Road,
Tallaght,Dublin 24.
Editor: Fiona DunneDesign 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
Chapter 1 Communication
1. Tick � the most appropriate box to show which of the following methods of communicationare internal or external means of communication.
2. Complete the sentences below showing which of the following methods of communicationare oral, written or visual.
(i) A memo is a form of communication.
(ii) The intercom is a form of communication.
(iii) An e-mail is a form of communication.
(iv) A chart is a form of communication.
(v) A report is a form of communication.
(vi) A notice board is a form of communication.
(vii) A committee meeting is a form of communication.
Chapter 2 Communications in Action 1. Place the following customers’ names in alphabetical order: Malcolm Reilly; Mary Roche;
Graham Reilly; Peggy Rafter.
2. Place the following customers’ names in alphabetical order: Stephen Kelly; Sean Kirwan;Shane Victory; James Mulligan.
3. Place the following customers’ names in alphabetical order: Mary Mahon; MonaCampbell; Nora Kennedy; Deirdre Warde.
4. (a) Complete the memo, dated 2 September 2005, sent by the PE teacher Ms V. Fit to yourBusiness Studies teacher Mr Money to remind his class that athletics trials will takeplace in the sports field at 12.30 pm on 10 September 2005. Assume you are Ms V. Fit.
(b) A memo is a form of communication.
Memo
To: Mr Money, Business Studies Teacher
From: Ms V Fit, PE Teacher
Date: 2 September 2005
Subject: Athletic Trials
Message: Trials will take place in the sports field
at 12.30 pm on 10 September 2005
Signed: V. Fit
(a) Mona Campbell (b) Nora Kennedy (c) Mary Mahon (d) Deirdre Warde
(a) Stephen Kelly (b) Sean Kirwan (c) James Mulligan (d) Shane Victory
(a) Peggy Rafter (b) Graham Reilly (c) Malcolm Reilly (d) Mary Roche
Methods of Communication Internal External
Letter �
Memo �
Notice Board �
Staff Meeting �
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written
oral
written
visual
written
written
oral
written
5. Complete the memo, on today’s date, that your IT teacher might send to your BusinessStudies teacher regarding the use of the computer room at lunchtime. The computer room isavailable to the Business Studies class from 12.30 pm to 1 pm on Monday and Wednesday.
Additional memo for practice.
6. Complete the notice of meeting for the Mullingar Golf Club AGM which will be held in theclubhouse at 3.30 pm on 20 November 2006.
Chapter 3 Introduction to Record Keeping
In questions 1 to 4 you are required to complete the sentences by inserting the correct words.1. Money received is entered on the _________ side of the Cash Account.2. Money paid out is entered on the _________ side of the Cash Account.3. The details column shows the money or
the money to.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 Right Hand Side
1. In 1. Out
2. Receive 2. Give
3. Debit side 3. Credit side
Notice of MeetingNotice is hereby given that the AGM of , will take place in the
, at on the .All members are welcome to attend.
Memo
To:
From:
Date:
Subject:
Message:
Signed:
Memo
To: Ms Fiona Dunne, Business Studies Teacher
From: Mr William Web, IT Teacher
Date:
Subject: Use of Computer Room
Message: The computer room is available to the
Business Studies class from 12.30 pm to 1 pm
on Monday and Wednesday
Signed: William Web
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Mullingar Golf Club
debitcredit
who gave you
who you gaveday month
club house 3.30 pm 20 November 2006
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6. Balance the following Cash Account and bring down the balance to the next day.
7. Balance the following Cash Account and bring down the balance to the next day.
8. Balance the following Cash Account and bring down the balance to the next day.
9. (a) Record the following details in the blank Cash Account below:
2006 €
1/1/ Received pocket money 256/1/ Won raffle prize 2007/1/ Paid for new trainers 708/1/ Paid for lunch 8
(b)Balance the Cash Account on 8 January 2006.Cash Account
Date Details Total€
Date Details Total€
2006 2006
1/1/ Pocket money 25 7/1/ Trainers 70
Raffle prize 200 8/1/ Lunch 8
8/1/ Balance c/d 147
225 225
9/1/ Balance b/d 147
Cash Account
Date Details Total€
Date Details Total€
2008 2008
1/7/ Balance b/d 13 1/7/ Mobile phone credit 10
7/7/ Pocket money 142 8/7/ New clothes 143
8/7/ Balance c/d 2
155 155
9/7/ Balance b/d 2
Cash Account
Date Details Total€
Date Details Total€
2007 2007
1/4/ Balance b/d 195 3/4/ CDs 45
6/4/ Part-time work 120 9/4/ New shoes 97
9/4/ Balance c/d 173
315 315
10/4/ Balance b/d 173
Cash Account
Date Details Total€
Date Details Total€
2006 2006
1/1/ Balance b/d 230 2/1/ New bicycle 212
3/1/ Pocket money 65 5/1/ Mobile phone credit 30
5/1/ Balance c/d 53
295 295
6/1/ Balance b/d 53
10. (a) Record the following details in the blank Cash Account below:2007 €
1/4/ Received pocket money 102/4/ Received wages from part-time job 604/4/ Paid for school trip 307/4/ Paid for cinema 12
(b)Balance the Cash Account on 7 April 2007.
11. (a) Record the following details in the blank Cash Account below:2008 €
1/5/ Cash on hand (balance) 453/5/ Received wages from part-time job 1005/5/ Paid for cosmetics 349/5/ Paid hairdresser 43
(b)Balance the Cash Account on 9 May 2008.
Chapter 4 Household Accounts1. Total the Analysed Columns and balance the Cash and Bank columns and bring down the
balances on 8 January 2006.
Analysed Cash Book
Date Details Cash Bank Date Details Cash Bank HK L & H Other
2006 2006
1/1/ Balance b/d 20 200 3/1/ ESB 300 300
5/1/ Child Ben. 260 5/1/ Groceries 160 160
8/1/ Wages 700 8/1/ Car tax 450 450
8/1/ Balance c/d 120 150
280 900 280 900 160 300 450
9/1/ Balance b/d 120 150
Cash Account
Date Details Total€
Date Details Total€
2008 2008
1/5/ Balance b/d 45 5/5/ Cosmetics 34
3/5/ Wages 100 9/5/ Hairdresser 43
9/5/ Balance c/d 68
145 145
10/5/ Balance b/d 68
Cash Account
Date Details Total€
Date Details Total€
2007 2007
1/4/ Pocket money 10 4/4/ School trip 30
2/4/ Wages 60 7/4/ Cinema 12
7/4/ Balance c/d 28
70 70
8/4/ Balance b/d 28
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3. Total the Analysed Columns and balance the Cash and Bank columns and bring down thebalances on 7 February 2007.
4. Total the Analysed Columns and balance the Cash and Bank columns and bring down the balances on 7 April 2008.
Chapter 5 Income1. 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:
(b) In a wage slip the net wage is calculated by:
Statement Tick ��
i Adding deductions to gross wage
ii Subtracting VIVAS payments and PRSI from gross wage
iii Subtracting all deductions from gross wage ��
Statement Tick ��
i Basic wage, bank interest, overtime wages
ii Basic wage and child benefit ��iii Basic wage, child benefit, bank interest and lotto win
Analysed Cash Book
Date Details Cash Bank Date Details Cash Bank HK School
2008 2008
1/4/ Balance b/d 240 1/4/ Balance b/d 90
4/4/ Child Ben. 260 3/4/ Groceries 220 220
7/4/ Wages 1,200 6/4/ School trip 700 700
6/4/ Exam fee 240 240
220 1,030 220 940
7/4/ Balance c/d 280 170
500 1,200 500 1,200
8/4/ Balance b/d 280 170
Analysed Cash Book
Date Details Cash Bank Date Details Cash Bank HK Car
2007 2007
1/2/ Balance b/d 90 1/2/ Balance b/d 200
2/2/ Child Ben. 390 2/2/ Groceries 190 190
7/2/ Wages 1,900 5/2/ Car Insurance 600 600
7/2/ New tyres 300 300
190 1,100 190 900
7/2/ Balance c/d 290 800
480 1,900 480 1,900
8/2/ Balance b/d 290 800
2. Column 1 is a list of income terms. Column 2 is a list of possible explanations for thoseterms. Match the two lists by placing the number of the explanation beside the relevantterm. One explanation does not match a term. E.g. Explanation no. 4 matches PRSI.
3. Column 1 is a list of people. Column 2 is a list of different sources of income. Match thetwo lists by placing the number of the income beside the relevant person. One source ofincome does not match.
4. (a) Calculate the net wage for Sean Kirwin, employee No. 246 for week No. 1, whosupplied the following information: Basic wage €200; overtime €160; PAYE €60;PRSI €14; BUPA €12; Pension €15.
(b) Complete the wage slip below.
5. (a) Calculate the net wage for Jamie Mulligan, employee No. 135 for week No. 6, whosupplied the following information: Jamie worked 60 hours, basic week 48 hours at €10per hour, overtime at time and half for all additional hours worked. Tax credit €50; Rateof tax 40%; PRSI 5% of gross wage; VHI €20; Pension €15; Union €10.
(b) Complete the wage slip below.
Wage Slip Jamie Mulligan Employee No:
Week Gross Wage DeductionsNet
Wage
No. Basic Overtime Total PAYE PRSI Union VHI Pension Total
6 480 180 660 214 33 10 20 15 292 368
Wage Slip Sean Kirwin Employee No: 246
Week Gross Wage DeductionsNet
Wage
No. Basic Overtime Total PAYE PRSI BUPA Pension Total
1 200 160 360 60 14 12 15 101 259
Column 1 People Insert Number No. Column 2 Source of Income
Employee 4 1. Pension
Student 3 2. PAYE
Unemployed person 5 3. Pocket money
Retired person 1 4. Wages
5. Social welfare assistances
Column 1 Terms Insert Number No. Column 2 Explanations
PRSI 4 1. Amount paid for working a normal week
Gross Wage 8 2. Contributions paid towards pension
Net Wage 7 3. Tax on income paid to government
Superannuation 2 4. Pay-related social insurance in case of unemployment
Statutory Deductions 5 5. Compulsory deductions paid to government
Basic Wage 1 6. Payment given for working more than normal hours
Overtime payment 6 7. Amount of wages after all deductions are paid
8. Amount of wages before deductions are made
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6. (a) Calculate the net wage for Marie Dowler, employee No. 78 for week No. 10, whosupplied 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 doubletime 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.
7. (a) Calculate the net wage for Cathal Maher, employee No. 188 for week No. 4, whosupplied 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 doubletime 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.
8. (a) Calculate the net wage for Thomas Madden, employee No. 13 for week No. 30, whosupplied 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 timethereafter. Tax credit €65; Rate of tax 40%; PRSI 5% of gross wage; BUPA €25,Savings €30, Union €8.
(b) Complete the wage slip below.
9. Complete the six-month income record below from the following information: Net basicwage €1,200 per month; Net overtime February €300 and May €500; Child Benefit €399per month; Interest of bank deposit account €100 in March.
Jan Feb March April May June Total
Income € € € € € € €
Net Basic Wage 1,200 1,200 1,200 1,200 1,200 1,200 7,200
Net Overtime – 300 – – 500 – 800
Child Benefit 399 399 399 399 399 399 2,394
Bank Interest – – 100 – – – 100
Total Income 1,599 1,899 1,699 1,599 2,099 1,599 10,494
Wage Slip Thomas Madden Employee No: 13
Week Gross Wage DeductionsNet
Wage
No. Basic Overtime Total PAYE PRSI BUPA Savings Union Total
30 546 434 980 327 49 25 30 8 439 541
Wage Slip Cathal Maher Employee No: 188
Week Gross Wage DeductionsNet
Wage
No. Basic Overtime Total PAYE PRSI VIVAS Savings Pension Total
4 480 310 790 252 39.50 23 30 12 356.50 433.50
Wage Slip Marie Dowler Employee No: 78
Week Gross Wage DeductionsNet
Wage
No. Basic Overtime Total PAYE PRSI Union VHI Savings Total
10 468 348 816 278.40 40.80 10 20 20 369.20 446.80
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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; ChildBenefit €133 per month; Sale of table in November €350.
Chapter 6 Expenditure1. Write brief notes on:
(a) Opportunity Cost:
(b) Priorities:
(c) Impulse Buying:
2. Sindy has €1 to spend. She would love to buy a bar of chocolate or a can of orange, butthey both cost €1. She decides to buy the bar of chocolate.(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)
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 Telephone Entertainment
House mortgage Petrol Church donation
School fees Holiday in Greece
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
July Aug Sept Oct Nov Dec Total
Income € € € € € € €
Net Basic Wage 1,450 1,450 1,450 1,450 1,450 1,450 8,700
Net Overtime - 450 - - - 800 1,250
Child Benefit 133 133 133 133 133 133 798
Sale of table - - - - 350 - 350
Total Income 1,583 2,033 1,583 1,583 1,933 2,383 11,098
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The decision to give up something and choose
These are things that are most important or most needed,
e.g. food, clothing etc.
Buying things on the spur of the moment, i.e things
that are not planned for.
€ 1
something else is referred to as the opportunity cost of the things chosen.
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 spaceprovided.
(Note: annual costs should be divided evenly over the whole year.)
(a)
(b) Cost of the car for six months is: €
Household Expenditure Record for Six Months
Jan Feb March April May June Total forJan to June
Expenditure
Fixed
Mortgage 280 280 280 280 320 320 1,760
Car Tax 240 240
Car Insurance 450 450
House Insurance 120 120
Subtotal 520 280 730 280 320 440 2,570
Irregular
Housekeeping 180 165 170 190 180 200 1,085
Petrol 40 30 25 25 - 120
Electricity 85 65 60 210
Telephone 170 190 360
Clothes 300 300
Car Repairs 110 110
Subtotal 305 635 265 515 265 200 2,185
Discretionary
Entertainment 60 60 40 50 50 60 320
Birthday 90 90
Holidays 800 800
Subtotal 60 60 40 50 140 860 1,210
Total Expenditure 885 975 1,035 845 725 1,500 5,965
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575
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 Feb March AprilTotal for
Jan to April
Expenditure
Fixed
Mortgage 340 340 340 340 1,360
Car Tax 240 240
Life Insurance 80 80 80 80 320
TV Licence 62
Subtotal 420 660 482 420 1,982
Irregular
Housekeeping 190 210 180 200 780
Petrol 40 30 35 45 150
Electricity 100 65 165
Telephone 210 220 430
Clothes 120 120
Heating Oil 300 300
Subtotal 630 450 400 465 1,945
Discretionary
House Decoration 700 700
Birthday 70 70
Church 80 80
Subtotal 70 80 – 700 850
Total Expenditure 1,120 1,190 882 1,585 4,777
Amount of income required
1,220 1,290 982 1,685
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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. Matchthe two lists by placing the letter of the correct explanation under the relevant number inthe table below. One explanation does refer to any term.
2. Complete the budget statement below. Show the Net Cash position for each month and forthe total.
3. Complete the budget statement below. Show the Net Cash position for each month and forthe total.
4. Complete the budget statement below.
5. Complete the budget statement below.
Jan€
Feb€
March€
April€
May€
June€
Total€
Income 2,200 2,100 3,220 2,850 2,150 2,700 15,220
Expenditure 1,800 2,300 2,850 2,700 1,950 2,400 14,000
Net Cash 400 (200) 370 150 200 300 1,220
Opening Cash 100 500 300 670 820 1,020 100
Closing Cash 500 300 670 820 1,020 1,320 1,320
Jan€
Feb€
March€
April€
May€
June€
Total€
Income 1,700 1,800 2,000 2,900 1,800 1,900 12,100
Expenditure 1,400 1,900 3,200 2,000 1,400 1,500 11,400
Net Cash 300 (100) (1,200) 900 400 400 700
Opening Cash 30 330 230 (970) (70) 330 30
Closing Cash 330 230 (970) (70) 330 730 730
Jan€
Feb€
March€
April€
May€
June€
Total€
Income 1,000 1,200 1,400 1,300 1,550 1,900 8,350
Expenditure 1,400 1,100 950 1,000 1,150 1,200 6,800
Net Cash (400) 100 450 300 400 700 1,550
Jan€
Feb€
March€
April€
May€
June€
Total€
Income 700 700 900 900 960 960 5,120
Expenditure 600 650 850 1,100 960 960 5,120
Net Cash 100 50 50 (200) – – –
Column 1 Terms Column 2 Explanations1.2.3.4.
SavingsNet CashClosing CashDiscretionary Expenditure
A.B.C.D.E.
Income equals to expenditureGoods and services that can be done withoutIncome greater than expenditureNot spending income until sometime in the futureNet cash plus opening cash
1. 2. 3. 4.
D C E B
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6. Complete the budget statement below.
7. Complete the budget statement below.
8. Complete the budget statement below.
Jan€
Feb€
March€
April€
May€
June€
Total€
Income 2,200 2,100 3,220 2,850 2,150 2,700 15,220
Expenditure 1,800 2,300 2,850 2,700 1,950 2,400 14,000
Savings 150 150 200 200 300 300 1,300
Total Expenditureand Savings
1,950 2,450 3,050 2,900 2,250 2,700 15,300
Net Cash 250 (350) 170 (50) (100) – (80)
Opening Cash 100 350 – 170 120 20 100
Closing Cash 350 – 170 120 20 20 20
Jan€
Feb€
March€
April€
May€
June€
Total€
Income 2,200 2,100 3,220 2,850 2,150 2,700 15,220
Expenditure 1,800 2,300 2,850 2,700 1,950 2,400 14,000
Savings 300 300 400 400 500 500 2,400
Total Expenditureand Savings
2,100 2,600 3,250 3,100 2,450 2,900 16,400
Net Cash 100 (500) (30) (250) (300) (200) (1,180)
Opening Cash 100 200 (300) (330) (580) (880) 100
Closing Cash 200 (300) (330) (580) (880) (1,080) (1,080)
Jan€
Feb€
March€
April€
May€
June€
Total€
Income 1,550 1,550 1,760 1,850 2,230 2,140 11,080
Expenditure 1,980 890 1,150 1,220 1,650 3,400 10,290
Net Cash (430) 660 610 630 580 (1,260) 790
Opening Cash (150) (580) 80 690 1,320 1,900 (150)
Closing Cash (580) 80 690 1,320 1,900 640 640
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9. Opposite is a budget for the Dowd household for four months, January, February, Marchand 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 monthon 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.
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Dowd Household Jan Feb March April Total
€ € € € €
Planned Income
Mr Dowd – Salary 1,000 1,000 1,000 1,000 4,000
Mrs Dowd – Salary 900 900 900 900 3,600
Child Benefit 40 40 40 40 160
Total Income A. 1,940 1,940 1,940 1,940 7,760
Planned Expenditure
Fixed
Mortgage 300 300 300 300 1,200
Car Tax 250 250
Car Insurance 550 550
Life Assurance 120 120 120 120 480
House Insurance 100 100
Subtotal 420 420 1,220 520 2,580
Irregular
Household Expenses 400 400 400 400 1,600
Diesel 40 40 40 40 160
School Fees 90 150 240
Electricity 100 80 180
Subtotal 530 540 590 520 2,180
Discretionary
Entertainment 40 40 40 40 160
House Decoration 700 700
Subtotal 40 40 40 740 860
Total Expenditure B. 990 1,000 1,850 1,780 5,620
Net Cash (A – B) 950 940 90 160 2,140
Opening Cash 80 1,030 1,970 2,060 80
Closing Cash 1,030 1,970 2,060 2,220 2,220
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10. Opposite is a budget for the Lynch household for four months, January, February, Marchand 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)
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(a)
(b)Saved in four months: €
Lynch Household Jan Feb March April Total
€ € € € €
Planned Income
R. Lynch – Salary 800 800 800 800 3,200
M. Lynch – Salary 650 650 650 650 2,600
Child Benefit 30 30 30 30 120
Total Income A. 1,480 1,480 1,480 1,480 5,920
Planned Expenditure
Fixed
Mortgage 300 300 300 300 1,200
Annual Car Tax 140 140
Car Loan 230 230 230 – 690
Annual Car Insurance 400 400
House Insurance 10 10 10 10 40
Subtotal 540 680 940 310 2,470
Irregular
Household 450 450 450 450 1,800
Car Running Costs 90 90 160 90 430
Electricity 180 230 410
Subtotal 720 540 840 540 2,640
Discretionary
Birthdays 90 50 140
Entertainment 70 70 70 70 280
Subtotal 70 160 70 120 420
Total Expenditure B. 1,330 1,380 1,850 970 5,530
Net Cash (A – B) 150 100 (370) 510 390
Opening Cash 80 230 330 (40) 80
Closing Cash 230 330 (40) 470 470
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390
11. Opposite is a budget for the Mullins household for four months, May, June, July andAugust: 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.• John’s annual car insurance €450. Brenda’s 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)
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Mullins Household May June July Aug Total
Planned Income € € € € €
John Mullins – Salary 1,225 1,225 1,225 1,225 4,900
Brenda Mullins – Salary 1,250 1,250 1,250 1,300 5,050
Child Benefit 150 150 150 150 600
Total Income A. 2,625 2,625 2,625 2,675 10,550
Planned Expenditure
Fixed
Mortgage 340 340 340 340 1,360
House Insurance 40 40 40 40 160
Car Insurance 825 825
Subtotal 380 1,205 380 380 2,345
Irregular
Household Expenses 550 550 300 550 1,950
Car Running Costs 225 225 225 225 900
Irish College 550 550
Light and Heat 110 80 190
Telephone Costs 30 195 30 180 435
Subtotal 915 1,520 635 955 4,025
Discretionary
Birthday Parties 350 350
Holidays 2,500 2,500
Entertainment 200 200 200 600
Subtotal 200 200 2,500 550 3,450
Total Expenditure B. 1,495 2,925 3,515 1,885 9,820
Net Cash (A – B) 1,130 (300) (890) 790 730
Opening Cash 240 1,370 1,070 180 240
Closing Cash 1,370 1,070 180 970 970
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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)
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Hughes Family January February March April Total
Planned Income € € € € €
Aidan Hughes – Salary 825 825 825 825 3,300
Fiona Hughes – Salary 650 650 650 690 2,640
Child Benefit 120 120 120 120 480
Total Income A. 1,595 1,595 1,595 1,635 6,420
Planned Expenditure
Fixed
House Rental 400 400 450 450 1,700
Contents Insurance 10 10 10 10 40
Health Insurance 55 55 60 60 230
Subtotal 465 465 520 520 1,970
Irregular
Groceries 350 350 350 350 1,400
Travel Costs 105 105 105 105 420
Clothes 600 600
Light and Heat 95 220 80 395
Subtotal 1,150 675 535 455 2,815
Discretionary
Birthdays 100 100
Entertainment 120 120 420 120 780
TV and Video 700 700
Subtotal 120 220 420 820 1,580
Total Expenditure B. 1,735 1,360 1,475 1,795 6,365
Net Cash (A – B) (140) 355 120 (160) 55
Opening Cash 150 10 245 365 150
Closing Cash 10 245 365 205 205
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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.• Mary’s 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.
(c) State whether tickets for a Britney Spears concert is fixed, irregular or discretionaryexpenditure.
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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.
Britney Spears tickets are discretionary.
Keane Family Jan Feb March April Total
Planned Income € € € € €
Brian Keane – Salary 2,500 2,500 2,500 4,500 12,000
Mary Keane – Salary 1,950 1,950 1,950 2,650 8,500
Deposit Interest 900 900
Total Income A. 4,450 4,450 5,350 7,150 21,400
Planned Expenditure
Fixed
House Mortgage 950 950 1,000 1,000 3,900
House Insurance 60 60 60 60 240
Car Loan 240 240 240 – 720
Subtotal 1,250 1,250 1,300 1,060 4,860
Irregular
Household Expenses 1,600 1,600 1,300 1,600 6,100
Car Running Costs 295 295 295 295 1,180
Driving Lessons 140 140 140 – 420
Light and Heat 640 300 570 – 1,510
Telephone Costs – 350 – 350 700
Subtotal 2,675 2,685 2,305 2,245 9,910
Discretionary
Presents 1,000 1,000
Entertainment 600 600 600 300 2,100
Subtotal 600 600 1,600 300 3,100
Total Expenditure B. 4,525 4,535 5,205 3,605 17,870
Net Cash (A – B) (75) (85) 145 3,545 3,530
Opening Cash 880 805 720 865 880
Closing Cash 805 720 865 4,410 4,410
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(a)
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.• Noel’s annual car insurance is €480. Nora’s 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 abovefigures.
(b) Name three examples of car running costs.1. 2. 3.
(c) Name three ways of paying the telephone bill.1. 2. 3.
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PetrolRepairsReplacement parts e.g. tyres
By direct debitBy chequeBy credit card
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Kelly Family May June July August Total
Planned Income € € € € €
Noel Kelly – Salary 1,800 1,800 1,800 1,800 7,200
Nora Kelly – Salary 1,750 1,750 1,950 1,950 7,400
Child Benefit 280 280 280 280 1,120
Total Income A. 3,830 3,830 4,030 4,030 15,720
Planned Expenditure
Fixed
House Mortgage 750 750 750 680 2,930
House Insurance 60 60 60 60 240
Car Insurance 1,030 1,030
Subtotal 810 1,840 810 740 4,200
Irregular
Household Expenses 1,200 1,200 1,200 2,200 5,800
Car Running Costs 505 505 505 505 2,020
Irish College Fees 675 675
Light and Heat 480 370 850
Telephone Costs 245 495 245 495 1,480
Subtotal 2,430 2,200 2,995 3,200 10,825
Discretionary
Presents 900 900
Holidays 3,800 3,800
Subtotal 4,700 4,700
Total Expenditure B. 3,240 4,040 8,505 3,940 19,725
Net Cash (A – B) 590 (210) (4,475) 90 (4,005)
Opening Cash 460 1,050 840 (3,635) 460
Closing Cash 1,050 840 (3,635) (3,545) (3,545)
(a)
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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.• Murt’s annual car insurance is €685. Agnes’s 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 Agnes’s 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.
(c) Give three examples of discretionary expenditure other than those given in the budgetabove.1. 2.
3.
Join VHI, BUPA or VIVAS;
Join the Saturday Hospital Fund;
Claim under PRSI.
Holidays Decorations
Church donations
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Diffley Family Sept Oct Nov Dec Total
Planned Income € € € € €
Murt Diffley – Salary 3,600 1,800 1,800 1,800 9,000
Agnes Diffley – Salary 2,450 2,450 3,250 3,250 11,400
Share Dividend 5,000 5,000
Total Income A. 6,050 4,250 10,050 5,050 25,400
Planned Expenditure
Fixed
House Mortgage 1,200 1,320 1,320 1,320 5,160
House Insurance 70 70 70 70 280
Car Insurance 1,265 1,265
Subtotal 1,270 1,390 1,390 2,655 6,705
Irregular
Household Expenses 1,500 1,500 1,500 1,700 6,200
Car Running Costs 800 800 800 800 3,200
Clothes 1,800 1,800
Medical Bills 5,500 5,500
Light and Heat 640 2,070 2,710
Telephone Costs 575 125 575 125 1,400
Subtotal 3,515 9,725 4,945 2,625 20,810
Discretionary
Presents 1,200 1,200
Entertainment 400 400 200 400 1,400
Subtotal 400 1,600 200 400 2,600
Total Expenditure B. 5,185 12,715 6,535 5,680 30,115
Net Cash (A – B) 865 (8,465) 3,515 (630) (4,715)
Opening Cash 5,000 5,865 (2,600) 915 5,000
Closing Cash 5,865 (2,600) 915 285 285
(a)
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Questions on Estimating Budgets16. 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. Thefollowing 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.
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Lynch Household Jan Feb March April May Total Estimate TotalJan-May Jun-Dec for year
Planned Income € € € € € € € €
T. Lynch – Salary 1,000 1,000 1,000 1,000 1,000 5,000 7,200 12,200
P. Lynch – Salary 800 800 800 800 800 4,000 5,936 9,936
Child Benefit 45 45 45 45 45 225 315 540
Dividends 250 250
Total Income A. 1,845 1,845 1,845 1,845 1,845 9,225 13,701 22,926
Planned Expenditure
Fixed
Mortgage 450 450 450 450 450 2,250 3,050 5,300
House Insurance 25 25 25 25 25 125 175 300
Car Loan 310 310 310 310 310 1,550 310 1,860
Annual Car Tax 250 – – – – 250 – 250
Annual Car Insurance – 600 – – – 600 – 600
Subtotal 1,035 1,385 785 785 785 4,775 3,535 8,310
Irregular
Housekeeping Costs 360 360 360 360 360 1,800 2,740 4,540
Car Running Costs 80 80 80 180 80 500 650 1,150
Telephone – 90 – 100 – 190 850 1,040
Electricity 205 – 190 – 170 565 215 780
Subtotal 645 530 630 640 610 3,055 4,455 7,510
Discretionary
Birthdays 35 – – 30 – 65 80 145
Entertainment 60 50 40 50 50 250 585 835
Subtotal 95 50 40 80 50 315 665 980
Total Expenditure B. 1,775 1,965 1,455 1,505 1,445 8,145 8,655 16,800
Net Cash (A – B) 70 –120 390 340 400 1,080 4,046 6,126
Opening Cash 30 100 –20 370 710 30 1,110 30
Closing Cash 100 –20 370 710 1,100 1,110 6,156 6,156
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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 takeninto 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)
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Total Estimate TotalReidy Family Jan Feb Mar
Jan-Mar Apr-Dec for yearJan-Dec
Planned Income € € € € € €
John Reidy – Salary 660 660 660 1,980 6,138 8,118
Mary Reidy – Salary 700 700 700 2,100 6,620 8,720
Child Benefit 30 30 30 270 360
Total Income A. 1,390 1,390 1,390 4,170 13,028 17,198
Planned Expenditure
Fixed
Mortgage 280 280 280 840 2,720 3,560
Annual Car Tax 240 – – 240 – 240
Annual Car Insurance – – 650 650 – 650
House Insurance 18 18 18 54 162 216
Subtotal 538 298 948 1,784 2,882 4,666
Irregular
Household Costs 490 490 490 1,470 4,500 5,970
Car Running Costs 80 80 80 240 810 1,050
Electricity 190 – 160 350 800 1,150
Subtotal 760 570 730 2,060 6,110 8,170
Discretionary
Presents – – 40 – 40 200 240
Entertainment 45 60 55 160 440 600
Holidays – – – – – 1,400 1,400
Subtotal 45 100 55 200 2,040 2,240
Total Expenditure B. 1,343 968 1,733 4,044 11,032 15,076
Net Cash (A – B) 47 422 –343 126 1,996 2,122
Opening Cash 75 122 544 75 201 75
Closing Cash 122 544 201 201 2,197 2,197
90
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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 Aprilto December’ column, and the ‘Total for year’ column. The following informationshould be taken in account.
• Martin expects to get promotion in September which will increase his salary by30%.
• Norah is doing overtime from 1 October and this will result in a 10% increase in hersalary 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 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 Keanefamily would do with the €600 per month that they no longer have to pay?
____________________________________________________________________
_____________________________________________________________________
(ii) Name a suitable method that the Keane family could save for their holiday andgive a reason for your answer.
____________________________________________________________________
_____________________________________________________________________
The Keane family should save it in an index-linked saving scheme in An Post,
The Keane family could save €215 per month in a deposit account.
In seven months they will have saved €1,500.
where fixed amounts are paid in.
October
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Total Estimate TotalKeane Household Jan Feb Mar
Jan-Mar Apr-Dec for yearJan-Dec
Planned Income € € € € € €
Martin Keane – Salary 1,000 1,000 1,000 3,000 10,200 13,200
Norah Keane – Salary 1,100 1,100 1,100 3,300 10,230 13,530
Child Benefit 100 100 100 300 1,020 1,320
Total Income A. 2,200 2,200 2,200 6,600 21,450 28,050
Planned Expenditure
Fixed
House Mortgage 600 600 600 1,800 3,000 4,800
Car Insurance 120 120 360 480
Annual Car Tax 400 400 – 400
House Insurance 30 30 30 90 270 360
Subtotal 750 630 1,030 2,410 3,630 6,040
Irregular
Household Expenses 650 650 650 1,950 6,060 8,010
Car Running Costs 100 100 100 300 1,290 1,590
Light and Heat Costs 160 140 300 540 840
Telephone 160 160 320 640 960
Subtotal 1,070 750 1,050 2,870 8,530 11,400
Discretionary
Presents 400 400
Entertainment 150 150 150 450 1,440 1,890
Holidays 1,500 1,500
Subtotal 150 150 150 450 3,340 3,790
Total Expenditure B. 1,970 1,530 2,230 5,730 15,500 21,230
Net Cash (A – B) 230 670 (30) 870 5,950 6,820
Opening Cash 10 240 910 10 880 10
Closing Cash 240 910 880 880 6,830 6,830
(a)
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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 Aprilto December’ column, and the ‘Total for year’ column. The following informationshould be taken in to account.
• Andrew expects to go on a two-week month from August which will reduce hissalary by half.
• Ilona will take up a second job from 1 July which will earn her an extra €600 permonth.
• 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)
(b)
(ii) Why might Andrew have to go on a two-week month?
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
Petrol
Repairs
The sales in his job might be slowing down and there is less work available.
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Total Estimate TotalLyons Household Jan Feb Mar
Jan-Mar Apr-Dec for yearJan-Dec
Planned Income € € € € € €
Andrew – Salary 1,600 1,600 1,600 4,800 10,400 15,200
Ilona – Salary 1,000 1,000 1,000 3,000 12,600 15,600
Deposit Interest 400 400 – 400
Total Income A. 2,600 2,600 3,000 8,200 23,000 31,200
Planned Expenditure
Fixed
House Mortgage 800 800 800 2,400 8,550 10,950
Car Insurance 700 700 – 700
Annual Car Tax 115 115 345 460
House Insurance 550 550 – 550
Subtotal 800 2,165 800 3,765 8,895 12,660
Irregular
Household Expenses 960 960 960 2,880 8,928 11,808
Car Running Costs 110 110 110 330 1,690 2,020
Light and Heat Costs 150 150 620 770
Telephone 140 140 280 560 840
Subtotal 1,210 1,220 1,210 3,640 11,798 15,438
Discretionary
Presents 200 200 780 980
Entertainment 180 180 180 540 1,800 2,340
Savings 1,500 1,500
Subtotal 180 380 180 740 4,080 4,820
Total Expenditure B. 2,190 3,765 2,190 8,145 24,773 32,918
Net Cash (A–B) 410 (1,165) 810 55 1,714 1,718
Opening Cash 300 710 (455) 300 355 300
Closing Cash 710 (455) 355 355 1,418 1,418
(a)
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20. The Egan household have to change their budget because M. Egan has to take a 15% cut insalary.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 Egansdecided to provide for these changes by cutting entertainment down to €80 per month andreducing decoration costs to €600.All other figures were to remain unchanged.
(a) Complete the revised budget form opposite for January-March taking the above intoaccount.
(b) Will these reductions in expenditure be enough to cover the changes above?
Yes No
Reason for Answer
(c) What other actions could be considered?
�
The net cash will be €385 and the total expenditure will
They could consider taking out a loan.
reduce by €100.
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Budget Revised Budget
Egan Household Jan Feb Mar Total Jan Feb Mar Total
Planned Income € € € € € € € €
M. Egan – Salary 900 900 900 2,700 765 765 765 2,295
N. Egan – Salary 700 700 700 2,100 700 700 700 2,100
Child Benefit 60 60 60 180 60 60 60 180
Bank Interest 400 400
Total Income A. 1,660 1,660 1,660 4,980 1,525 1,525 1,925 4,975
Planned Expenditure
Fixed
House Mortgage 320 320 320 960 320 320 320 960
Car Tax 280 280 280 280
Car Insurance – – –
House Insurance – – – 20 20 20 60
Subtotal 320 600 320 1,240 340 620 340 1,300
Irregular
Housekeeping 380 380 380 1,140 380 380 380 1,140
Car Expenses 60 60 60 180 60 60 60 180
Telephone 160 180 340 160 180 340
School Fees 200 200
Subtotal 600 440 620 1,660 600 440 820 1,860
Discretionary
Entertainment 100 100 100 300 80 80 80 240
House Decorations 900 – 900 – 600 600
Birthday 60 80 140 60 80 140
Subtotal 160 1,000 180 1,340 140 680 160 980
Savings 150 150 150 450 150 150 150 450
Total Expenditure B. 1,230 2,190 1,270 4,690 1,230 1,890 1,470 4,590
Net Cash (A – B) 430 –530 390 290 295 (365) 455 385
Opening Cash 20 450 –80 20 20 315 (50) 20
Closing Cash 450 –80 310 310 315 (50) 405 405
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21. Opposite is a completed budget and a revised budget form for the O’Mara family fromApril to June.After preparing the budget for April-June the O’Mara family were informed thatMr O’Mara was to go on a three-day week in his employment. This would result in a substantial drop in the family’s income. The O’Maras decided to revise their budget in viewof the changed circumstances.
(a) Complete the revised budget form opposite taking the following into account:
• Mr O’Mara’s 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 O’Mara 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.
1. _______________________________________________________________
2.__________________________________________________________________
(c) What other actions could be considered?
(Junior Certificate Higher Level 1996 amended for euro)
�
There was an overall net cash of €20
They were able to save each month
Mr O’Mara could look for a part-time job.
The O’Maras could pay the car tax quarterly and the car insurance monthly.
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Budget Revised Budget
Income Apr May Jun Total Apr May Jun Total
Planned Income € € € € € € € €
Mr O’Mara – Wage 900 900 900 2,700 540 540 540 1,620
Mrs O’Mara – Wage 595 595 595 1,785 595 595 595 1,785
Child Benefit 25 25 25 75 25 25 25 75
Total Income A. 1,520 1,520 1,520 4,560 1,160 1,160 1,160 3,480
Planned Expenditure
Fixed
Car Loan 240 240 240 720 240 240 240 720
Car Insurance 205 205 205 205
Car Tax 220 220 220 220
House Insurance 75 75 75 75
Video/T.V. 30 30 30 90
Subtotal 460 315 445 1,220 490 345 475 1,310
Irregular
Housekeeping 600 600 600 1,800 600 600 600 1,800
Car Running Costs 125 125 125 375 105 105 105 315
Electricity 105 85 190 105 85 190
Telephone 130 130 130 130
Subtotal 830 855 810 2,495 810 805 790 2,405
Discretionary
Holidays 75 75 75 225
Entertainment 60 60 60 180 60 60 60 180
Birthdays/Presents 60 60 60 60
Subtotal 135 195 135 465 60 120 60 240
Savings 120 120 120 360
Total Expenditure B. 1,545 1,485 1,510 4,540 1,360 1,270 1,325 3,955
Net Cash (A – B) –25 35 10 20 (200) (110) (165) (475)
Opening Cash 180 155 190 180 180 (20) (130) 180
Closing Cash 155 190 200 200 (20) (130) (295) (295)
(a)
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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 family’sincome 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 Byrne’s 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 yearsbeginning 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.
____________________________________________________________________
____________________________________________________________________
(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.
___________________________________________________________________
___________________________________________________________________
(iii) Is their revised budget a good one in their new circumstances? Give reasons foryour answer.
__________________________________________________________________
___________________________________________________________________
The income was less than expenditure.
No. They had a net cash deficit in January and February
No. The car insurance should be paid quarterly and the house insurance
and the mobile home insurance should be paid monthly.
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Budget Revised Budget
Income Jan Feb March Total Jan Feb March Total
Planned Income € € € € € € € €
Mr Byrne – Salary 1,800 1,800 1,800 5,400 1,800 1,800 1,800 5,400
Mrs Byrne – Salary – 2,000 2,000 4,000
Child Benefit 120 120 120 360 120 120 120 360
Total Income A. 1,920 1,920 1,920 5,760 1,920 3,920 3,920 9,760
Planned Expenditure
Fixed
House Mortgage 560 560 560 1,680 560 560 560 1,680
Mobile Home Loan 750 750 750 2,250
Car Insurance 950 950 950 950
Car Tax 80 80 80 80
House Insurance 140 140 140 140
Mobile Home Insurance 480 480
Subtotal 640 1,650 560 2,850 1,870 2,400 1,310 5,580
Irregular
House Keeping 460 460 460 1,380 460 460 460 1,380
Car Running Costs 100 100 100 300 100 100 100 300
Tel. & ESB 200 90 80 370 200 90 80 370
Baby Sitting 480 480 480 1,440 720 720 720 2,160
Subtotal 1,240 1,130 1,120 3,490 1,480 1,370 1,360 4,210
Discretionary
Entertainment 100 100 100 300 300 300 300 900
Birthdays 45 100 145 45 100 145
Subtotal 145 100 200 445 345 300 400 1,045
Total Expenditure B. 2,025 2,880 1,880 6,785 3,695 4,070 3,070 10,835
Net Cash (A – B) (105) (960) 40 (1,025) (1,775) (150) 850 (1,075)
Opening Cash 500 395 565 500 500 (1,275) (1,425) 500
Closing Cash 395 (565) (525) (525) (1,275) (1,425) (575) (575)
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23. After preparing the budget for May-July the Lynch family were informed that Mr Lynch wasto go on a three-day week. Mrs Lynch who qualified as a nurse, secured employment. Thiswould result in a change in the family’s income starting in May. The Lynchs decided torevise their budget in view of the changed circumstances.
(a) Complete the revised budget form, taking the following into account:
• Mr Lynch’s wages to be reduced by 30%.• Mrs Lynch’s 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.
(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.
(iii) Is their revised budget a good one in their new circumstances?
Yes _______ No _______
Give reasons for your answer.
Their finances were poor because there was a net cash deficit each month and
all their savings were used up.
They were intending to live beyond their means by planning a holiday even
though they could not afford it.
They have a net cash surplus in May and June and their closing cash has
increased.
�
�
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Original Budget Revised Budget
Income May June July Total May June July Total
Planned Income € € € € € € € €
Mr. Lynch – Salary 1,800 1,800 1,800 5,400 1,260 1,260 1,260 3,780
Mrs. Lynch – Salary – – – – 2,500 2,500 2,500 7,500
Child Benefit 140 140 140 420 140 140 140 420
Total Income A. 1,940 1,940 1,940 5,820 3,900 3,900 3,900 11,700
Planned Expenditure
Fixed
House Mortgage 800 800 800 2,400 800 800 800 2,400
New Car Loan 500 500 1,000
Car Insurance 560 560 50 50 100
Car Tax – – – – 90 90
House Insurance 40 40 40 120 40 40 40 120
School Fees – – – – 3,000 3,000
Subtotal 840 1,400 840 3,080 930 1,390 4,390 6,710
Irregular
House keeping 400 400 400 1,200 400 400 400 1,200
Car Running Costs 100 100 100 300 140 140 140 420
Telephone & ESB 120 140 120 380 120 140 120 380
Baby Sitting 400 400 400 1,200 480 480 480 1,440
Subtotal 1,020 1,040 1,020 3,080 1,140 1,160 1,140 3,440
Discretionary
Holiday 1,500 1,500 – – – –
Entertainment 100 100 100 300 100 100 100 300
Subtotal 100 1,600 100 1,800 100 100 100 300
Savings 500 500 500 1,500 250 250 250 750
Total Expenditure B. 2,460 4,540 2,460 9,460 2,320 2,800 5,780 10,900
Net Cash (A – B) (520) (2,600) (520) (3,640) 1,580 1,100 (1,880) 800
Opening Cash 2,600 2,080 (520) 2,600 2,600 4,180 5,280 2,600
Closing Cash 2,080 (520) (1,040) (1,040) 4,180 5,280 3,400 3,400
(a)
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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, inthe differences column.
(b) What are the main reasons for the difference?
(c) What action should be taken to deal with the differences?
Budget Actual Difference
Planned Income € € €
Wages 950 860 –90
Child Benefit 60 60 –
Deposit Interest 160 120 –40
Lotto Prize 500 +500
Total Income A. 1,170 1,540 +370
Planned Expenditure
Fixed
Mortgage 310 375 +65
Car Insurance 360 450 +90
House Insurance – 180 +180
Subtotal 670 1,005 +335
Irregular
Food 240 280 +40
Petrol 70 55 –15
Clothes 100 180 +80
Pocket Money 20 20 –
Subtotal 430 535 +105
Discretionary
Entertainment 40 80 +40
Church 10 – –10
Subtotal 50 80 +30
Savings 10 – –10
Total Expenditure B. 1,160 1,620 +460
Net Cash (A – B) 10 –80 –70
Wages are less by €90. There was a lotto prize of €500. Most of the expenses
were greater than budgeted for.
Rework the budget, cut back on clothes by €80 and entertainment by €40.
Shop around for food and save €20.
Junior Certificate Business Studies Workbook Teacher’s Manual
25. The O’Brien 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.
(a) Enter the above transactions in the analysed cash book (blank columns only) in yourcopybook, 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.
(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 col-umn marked ‘Difference’. Use a plus + or minus – sign in front of each figure in that column.
Budget Comparison Statement of the O’Brien Family
Budget Actual Difference
Planned Income € € €
Wages 840 860 +20
Child Benefit 30 30 –
Other – 125 +125
Total Income A. 870 1,015 +145
Expenditure – – –
Groceries 195 195 –
Light and Heat 200 187 –13
Shoes and Clothes 130 108 –22
Car 50 91 +41
Other – 415 +415
Total Expenditure B. 575 996 +421
Net Cash (A – B) 295 +19 –276
Analysed Cash Book Credit side (Summary)
Total Groceries L&H Shoe/clothes Car Other
996 195 187 108 91 415
Analysed Cash Book Debit side (Summary)
Total Wages Child Benefit Other
1,125 860 30 125
2003 Transaction €
May 2 Paid for shoes by cheque (No. 14) 35
May 4 Withdrew cash by ATM for groceries 93
May 5 Paid electricity bill by cheque (No. 15) 87
May 8 Paid for petrol by cheque (No. 16) 26
May 11 Paid for heating oil by cheque (No. 17) 100
May 15 Paid for car repairs by cheque (No. 18) 65
May 19 Paid for coat by cheque (No. 19) 73
May 23 Withdrew cash by ATM for groceries 102
May 26 Lodged wages cheque €860 plus child benefit €30 (No. 20) 890
May 27 Paid hospital expenses by cheque (No. 21) 415
May 28 Lodged cash from sale of old furniture 125
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(c) (i) How much money had the O’Briens intended to save in May?
(ii) By how much did the O’Briens’ actual income exceed their actual expenditure inMay?
(iii) By how much did the O’Briens’ actual expenditure exceed their budgeted expenditure in May?
(iv) How much money did the O’Briens have in their bank account at the end of May?
(Junior Certificate Higher Level 1995 amended for euro)
26. The following information has been obtained from the analysed cash book of the O’Reilly 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 O’Reilly Family for May 2005
(b) (i) Suggest one reason why the actual figures are not as budgeted.
(ii) What advice would you give to the O’Reilly family when preparing theirbudget for June 2005 and onwards?
(iii) Should the annual deposit interest be included in the June budget? Yes __ No __Give a reason for your answer.
Planned Income Budget Actual Difference
€ € €
Wages 1,500 2,000 +500
Child Benefit 250 300 +50
Deposit Interest 300 250 –50
Total Income A. 2,050 2,550 +500
Expenditure
Housekeeping 650 712 +62
Personal 500 350 –150
Car 390 900 +510
Other 120 220 +100
Total Expenditure B. 1,660 2,182 +522
Net Cash (A – B) 390 368 –22
€295
€19
€421
€129 (€1,125 – €996)
Additional wages from overtime. Increase in child benefit. Repairs to car that
were not planned.
When planning the budget, don’t leave out any possible income, such as overtime.
Don’t leave out possible expenses, such as car repairs.
The interest is payable in May so it can only be included in the May budget.
�
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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.
(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.
(b) Enter the appropriate figures from the above analysed cash book in the Actual column inthe 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
(c) (i) How much money did the Crilly family hope to have at the end of May?€
(ii) How much money did the Crilly family have in the bank at the end of May?€
Planned Income Budget Actual Difference
€ € €
Wages 1,600 1,800 +200
Child Benefit 240 240 –
Other – 5,000 +5,000
Total Income A. 1,840 7,040 +5,200
Expenditure
Groceries 180 210 +30
School 400 520 +120
Car 450 370 –80
Other 800 1,500 +700
Total Expenditure B. 1,830 2,600 +770
Net Cash (A – B) 10 4,440 +4430
Analysed Cash Book (Credit Side) Summary
Bank Geoceries School Car Other
2,600 210 520 370 1,500
Analysed Cash Book (Debit Side) Summary
Bank Wages Child Benefit Other
7,340 1,800 240 5,000
2004 Transaction €
1 May Purchased groceries by cheque (No. 1) 80
3 May Lodged wages in bank 1,800
5 May Paid for repairs to car cheque (No. 2) 300
7 May Lodged child benefit 240
9 May Paid for school trip cheque (No. 3) 400
13 May Paid meat bill cheque (No. 4) 130
15 May Paid BUPA membership cheque (No. 5) 800
18 May Paid for petrol cheque (No. 6) 70
23 May Lodged Lotto win 5,000
27 May Withdrew cash by ATM for clothes 700
30 May Paid for new school uniform cheque (No. 7) 120
10
4,740 (€7,340 + €2,600)
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(iii) Was the Crillys’ family budget a good one? Yes_____ No ____
Give a reason for your answer:
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 toDecember differed from the budgeted figures (contained in the Budget ComparisonStatement 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 12½% 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 completingthe 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 Actual Difference
430 480 +50
780 710 –70
Total 1,210 1,190 –20
They planned to have a surplus budget.
�
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Junior Certificate Business Studies Workbook Teacher’s Manual
(a) Budget Comparison Statement for the Doyle Family for the year 2000
(b) (i) Did the Doyle family have a surplus or deficit at the end of the year?
What was this figure? €
(ii) How much money had the Doyles intended to save during the year? €
(iii) By how much did they exceed their budgeted expenditure? €
(iv) If the Doyles had an opening cash balance of €2,000 on 1 January 2000, what wastheir actual closing cash balance at the end of the year?
€
BudgetJan-Dec
€
ActualJan-Dec
€
Difference€
Income
Salaries 18,000 18,900 +900
Child Benefit 960 1,140 +180
Interest 150 113 –37
Other – 1,200 +1,200
Total Income A. 19,110 21,353 +2,243
Expenditure
Fixed
Mortgage 4,320 4,920 +600
Car Insurance 397 637 +240
House Insurance 170 204 +34
Subtotal 4,887 5,761 +874
Irregular
Household Costs 7,504 6,566 –938
Shoes and Clothes 1,740 1,635 –105
Car Costs 1,800 6,070 +4,270
Medical Expenses 200 75 –125
Subtotal 11,244 14,346 3,102
Discretionary
Entertainment 1,000 720 –280
Gifts 200 180 –20
Subtotal 1,200 900 –300
Total Expenditure B. 17,331 21,007 +3,676
Net Cash (A – B) 1,779 +346 1,433
Surplus
346
1,779
3,676
2,346
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Junior Certificate Business Studies Workbook Teacher’s Manual
Chapter 8 The Good Consumer
1. Complete the following sentences.
(a) A consumer is
(b) An informed consumer is
2. Complete the receipt below from the following data:Received €240 by cheque from Mary Mulligan, Mohill, Co. Leitrim on today’s date.Assume you are Andrea Flynn.
3. Complete the receipt below from the following data:Received €500 cash from Francis King, Oranmore, Co. Galway on today’s date.Assume you are Darren Walsh.
Chapter 9 Protecting the Consumer
1. The following sign was displayed in a shop.
Is this sign legal? . Give a reason for your answer.
No ChequesAccepted Under Any Circumstances
RECEIPT No: 475Walsh Concrete, Oranmore, Co. Galway
Date:
RECEIVED FROM:
€
THE SUM OF:
With Thanks Signed:(Accounts Department)
RECEIPT No: 20Flynn’s Furniture Stores Ltd, Sligo
Date:
RECEIVED FROM:
€
THE SUM OF:
With Thanks Signed:(Accounts Department)
a person who buys goods and services.
a person who chooses goods and services wisely.
Mary Mulligan,
Francis King,
Oranmore, Co. Galway
Five hundred euro
Mohill, Co Leitrim
Two hundred and forty euro240
500
Andrea Flynn
Darren Walsh
Yes
Cheques are not regarded as legal tender and do not have to be accepted.
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2. Complete the following sentences by choosing the appropriate term below. One term does not fit.
(a) Ingredients on a label must be stated in order.
(b) Giving misleading information breaks the Act.
(c) The investigates complaints against state agencies.
(d) A exists when goods or services are bought by a consumer.
(e) A is written proof of payment for goods or services.
3. Crunchy Corn Flakes can be purchased in two packet sizes, each a different weight andprice.
Which size is the best value? Show your workings.
The best value is:
4. Bubbles Washing Up Liquid comes in two sizes.
Which size is the best value? Show your workings.
The best value is:
5. Munch Cereal comes in three sizes.
Which size is the best value? Show your workings.
The best value is:
Size Price
450 grams €1.26
528 grams €1.52
600 grams €2.03
Size Price
100ml €0.25
280ml €0.89
Size Weight Price
Small 500 grams €0.93
Large 1,000 grams €1.90
Contract, Ombudsman, Consumer Information, Descending, Small Claims, Receipt
Workings
Workings
Workings
descending
Consumer Information
Ombudsman
contract
receipt
Small
100 ml
Two small 500 gramscost only €1.86
Per ml 100 = €0.00250280 = €0.00318
Per gram 450 = €0.0028528 = €0.00289600 = €0.00338
450 grams
Junior Certificate Business Studies Workbook Teacher’s Manual
232
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 today’s date and assume you are Mary Black.
2. Complete the Credit Note below from the following data:Issue credit note to Bernard Cronin, Maynooth, Co. Kildare for return of two microwavesreceived as unwanted wedding present, value €150 each. Use today’s date and assume youare Siobhan O’Farrell.
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 unopenedpaint at €45 per tin. Use today’s date and assume you are Patricia Cooney.
CREDIT NOTE No. 371Murphy’s Stores, Nass, Co. Kildare
Tel No: 045-777503To: ____________________ e-mail: [email protected]
____________________ VAT Reg. IE786543
____________________ Date _________________
Quantity Description Unit Price€
Total€
2 Microwaves 150300
ReasonUnwanted wedding present
Signed Total________________________________________________Manager
300
CREDIT NOTE No. 490Cork Tiles Ltd, Marble Arch, Cork
Tel No: 021-2213345To: _ ___________________ e-mail: [email protected]
____________________ VAT Reg. IE234345
____________________ Date _________________
Quantity Description Unit Price€
Total€
5 Tiles 50 250
ReasonUnused
Signed Total________________________________________________Manager
250
Joan Morris
Mill Street
Cork
Mary Black
Bernard Cronin
Maynooth
Co. Kildare
Siobhan O’Farrell
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 numberin the table below. (One explanation does not refer to any term.)
2. State what the following initials stand for.
ATM ___________________________________________________________
PIN ___________________________________________________________
AIB ___________________________________________________________
EBS ___________________________________________________________
ACC ___________________________________________________________
3. Name four banks operating in Ireland.
1.2. ___________________________________________________________
3. ___________________________________________________________
4. ___________________________________________________________
1. 2. 3. 4.
d c e a
Column 1 Terms Column 2 Explanations
1. Money2. Barter3. Twenty-four hours banking4. Credit Union
(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
CREDIT NOTE No. 124McGraths Paints Ltd, High St, Carlow
Tel No: 0503-12543To: ____________________ e-mail: [email protected]
____________________ VAT Reg. IE234345
____________________ Date _____________
Quantity Description Unit Price€
Total€
5 Paint 45225
ReasonUnopened paint
Signed Total________________________________________________Manager
225
Junior Certificate Business Studies Workbook Teacher’s Manual
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Michael Daly
Cork Street
Carlow
Patricia Cooney
Automated Teller Machine
Personal Identity Number
Allied Irish Bank
Educational Building Society
Agricultural Credit Corporation
Allied Irish BankBank of Ireland
Ulster Bank
Permanent TSB
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.
(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 themost suitable method, from the list below, by placing a tick � in the box.
(a) Standing Order(b) Credit Card(c) Bank Overdraft(d) Direct Debit
3. Apart from banks, name two other financial agencies where people can save their money.
1. ____________________________ 2. ____________________________
4. Assume you are Mary Hannifin, Aherne Lane, Dublin 4. Make a credit transfer of €230 cashto BUPA which has an account no. 99876723 in the Bank of Ireland, Abbey Street, Dublin.Complete the blank Credit Transfer form below on today’s date.
Chapter 13 Money and Banking III
1. John Monaghan paid a cheque to Olive Heslin. Answer the following question by selectingthe correct term from the following list: Drawer; Drawee; Payee.Olive is known as the ______________ of that cheque.(Write the answer in the space provided.)
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True
�
�
False
�
�
�
�
Credit Union An Post
payee
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2. Complete the following sentences:
(a) Endorsing a cheque means __________________________________________
(b) A dishonourable cheque is __________________________________________
3. List four methods by which a current account holder can make payments from a currentaccount.
(a) _____________________________ (b) ____________________________
(c) _____________________________ (d) ____________________________
4. You make a lodgment to your personal account in your local bank. The bank official givesyou back the counterfoil of the lodgment slip. What does the bank official do to thiscounterfoil before handing it back to you? Explain your answer.
5. The following information is given on the counterfoil of current account lodgment slips.
Explain its significance to the current account holder.
6. Column 1 is a list of cheque terms. Column 2 is a list of possible explanations. Match thetwo lists by placing the letter of the correct explanation under the relevant number in thetable below. (One explanation does not refer to any term.)
7. Assume you are Kerry Holmes, Olympic Avenue, Greek Road, Carlow. Your date of birth is7 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 account15008004, on 16 September 2006, using the lodgment form supplied.
1. 2. 3. 4.
c a d e
Column 1 Terms Column 2 Explanations
1. Endorsed cheque2. Stopped cheque3. Open cheque4. Blank cheque
(a) A cheque which the drawer informs the bank not to honour(b) A cheque with two parallel lines on the face of it(c) A cheque which is signed on the back by the payee(d) A cheque which is not crossed(e) A cheque with some of the details missing
Cheques are accepted subject to examination and verification and are transmitted for collection atthe customer’s risk. Though credited when paid in, they should not be drawn against until clear.
the payee passes on the cheque by signing it on the back.
a cheque that the bank refuses to accept.
Withdrawal slip
ATM
Cheque
Standing order
The bank official stamps it and intials it. This is proof of the lodgment.
The cheques lodged by the account holder have to be cleared before the account
holder can withdraw money.
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(a)
(b)
CURRENT ACCOUNT APPLICATION FORM
Personal Details
Mr/Mrs/Miss/Ms Surname ��������� Forename �����
Address ..............................................................................................................................................................................................................................................
Tel. Home: 066 740211 Work: 066 74852
Date of Birth Status: Single �� Married � Other �
Dependant Children No.�� Ages ���
Are You Homeowner: �� Tenant � With Parents �
Employment Details:
Occupation ��������� Gross Pay �€�������
Employer’s Name: ......................................................................................................................Address: ......................................................................................................................
......................................................................................................................
Bank/Other/Details ......................................................................................................................
If account elsewhere Yes �� No � Name of Agency An Post
Signature: ..................................................................................... Date: ........................................
Holmes Kerry
Olympic Avenue, Greek Road, Carlow
7/9/1974
0
Fitness Coach 4,400 per month
Glen Eagle HotelKillarneyCo, Kerry
Kerry Holmes 12/9/2006
8. Complete the following cheques and counterfoils supplied from the following data. Makethe cheques as safe as possible.
(a) Pauline Murphy paid Ryanair €250 on 14 November 2005.
(b) Richie Ryan paid ESB €240 on 10 December 2006.
(c) Gertie Barrett paid Brown Thomas €3,200 on 16 April 2006.
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SPECIMEN
SPECIMEN
SPECIMEN
A/C p
ayee
only
A/C p
ayee
only
A/C p
ayee
only
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(d) Jack Burns paid Trinity College €4,500 on 5 October 2006.
Chapter 14 Bank Accounts
1. The following initials can appear in a bank statement. Write them out in full below.
(i) OD (ii) SO (iii) DD (iv) CT
2. Compare the balance in Ann Hannon’s bank account below with that of the bank statementand update it as necessary. Prepare a Bank Reconciliation Statement in your copybook as on31 May 2005.
Current Account Bank Statement NO. 11
Date Details Debit€
Credit€
Balance€
2006
1/5/ Balance 1,680
2/5/ Cheque (No. 20) 300 1,380
4/5/ Cheque (No. 21) 340 1,040
11/5/ Credit Transfer 600 1,640
17/5/ Cheque (No. 23) 310 1,330
19/5/ Standing Order 600 730
22/5/ ATM Withdrawal 320 410
24/5/ Direct Debit 200 210
30/5/ Current Account Fees 50 160
Date Details Amount Date Details Cheque No./ATM Amount
2005 Bank A/C 2005
1/5/ Balance 1,680 2/5/ Eircom 20 300
31/5/ Lodgment 820 4/5/ Rent 21 340
7/5/ Dr O’Rourke 22 300
11/5/ ESB 23 310
22/5/ Cash ATM 320
31/5/ Balance C/D 930
2,500 2,500
31/5/ Balance B/D 930
SPECIMEN
Over DrawnDirect Debit
Standing OrderCredit Transfer
A/C p
ayee
only
3. Compare the balance in Andrew Lyons’ bank account with that of the bank statement andupdate it as necessary. Prepare a Bank Reconciliation Statement in your copybook as on 31May 2006.
OD = Overdrawn
Current Account Bank Statement NO. 50
Date Details Debit€
Credit€
Balance€
2006
1/5/ Balance 1,000
4/5/ Cheque (No. 1) 700 300
5/5/ ATM Cash Withdrawal 400 100 OD
6/5/ Lodgment 900 800
12/5/ ATM Cash Withdrawal 250 550
16/5/ Cheque (No. 2) 540 10
18/5/ Credit Transfer 700 710
21/5/ Standing Order 480 230
22/5/ Lodgment 2,000 2,230
26/5/ Direct Debit 200 2,030
31/5/ Bank Interest and Charges 105 1,925
Date Details Amount Date Details Cheque No./ATM Amount
2006 Bank A/C 2006
1/5/ Balance B/D 1,000 1/5/ Insurance 1 700
6/5/ Lodgment 900 5/5/ Cash ATM 400
21/5/ Lodgment 2,000 9/5/ Car Tax 2 540
31/5/ Lodgment 1,100 12/5/ Cash ATM 250
17/5/ Carpet 3 700
21/5/ Furniture 4 2,200
31/5/ Balance C/D 210
5,000 5,000
31/5/ Balance B/D 210
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Updated Bank A/C
31/5/05 Balance b/d 930 SO 600
C/T 600 OD 200
Fees 50
Balance c/d 680
1,530 1,530
Balance b/d 680
Bank Reconciliation Statement
Balance as per bank statement 160
Add lodgments not credited 820
980
Less cheques not yet cashed 300
Balance as per updated Bank A/C 680
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4. Compare the balance in Donal Clarke’s bank account with that of the bank statement andupdate it as necessary. Prepare a Bank Reconciliation Statement in your copybook as on 31May 2006.
OD = Overdrawn
Current Account Bank Statement NO. 32Date Details Debit
€
Credit€
Balance€
2006
1/5/ Balance 200 OD
5/5/ Lodgment 650 450
9/5/ Cheque (No. 1) 40 410
10/5/ Standing Order 150 260
13/5/ Credit Transfer 300 560
16/5/ Cheque (No. 3) 70 490
17/5 ATM Withdrawal 30 460
21/5/ Direct Debit 600 140 OD
31/5/ Bank Charges and Interest 85 225 OD
31/5/ Bank Interest 45 270 OD
Date Details Amount Date Details Cheque No./ATM Amount
2006 Bank A/C 2006
5/9/ Lodgment 650 1/5/ Balance 200
31/5/ Lodgment 200 2/5/ Groceries 1 40
7/5/ Petrol 2 25
9/5/ Clothes 3 70
17/5/ Cash ATM 30
24/5/ Clothes 4 200
31/5/ Balance C/D 285
850 850
31/5/ Balance B/D 285
Updated Bank A/C
31/5/05 Balance b/d 210 DD 200
C/T 700 SO 480
Charges 105
Balance c/d 125
910 910
Balance b/d 125
Bank Reconciliation Statement
Balance as per bank statement 1,925
Add lodgments not credited 1,100
3,025
Less cheques not cashed 2,900
Balance as per updated Bank A/C 125
5. Compare the balance in Duffy Ltd’s bank account with that of the bank statement and updateit as necessary. Prepare a Bank Reconciliation Statement in your copybook as on 31 May2005.
OD = Overdrawn
Current Account Bank Statement NO. 23Date Details Debit
€
Credit€
Balance€
2005
1/5/ Balance 700
5/5/ Cheque (No. 1) 550 150
10/5/ Cheque (No. 3) 140 10
14/5/ Cheque (No. 4) 120 110 OD
16/5/ Lodgment 1,600 1,490
18/5/ Cheque (No. 2) 360 1,130
24/5/ Standing Order 400 730
26/5/ Credit Transfer 550 1,280
28/5/ Lodgment 1,700 2,980
30/5/ Current Account fees 25 2,955
Date Details Amount Date Details Cheque No./ATM Amount
2005 Bank A/C 2005
1/5/ Balance B/D 700 2/5/ Suppliers 1 550
16/5/ Sales 1,600 6/5/ Purchases 2 360
28/5/ Lodgment 1,700 9/5/ ESB 3 140
31/5/ Sales 1,450 11/5/ Insurance 4 120
19/5/ Jones Ltd 5 1,900
30/5/ Eircom 6 320
31/5/ Balance C/D 2,060
5,450 5,450
31/5/ Balance B/D 2,060
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Updated Bank A/C
31/5/05 Balance b/d 285 SO 150
C/T 300 DD 600
Charges 85
Interest 45
Balance c/d 295
880 880
Balance B/D 295
Bank Reconciliation Statement
Balance as per bank statement 270 OD
Add lodgments not credited 200
70 OD
Less cheques not cashed 225
Balance as per updated Bank A/C 295 OD
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6. Compare the balance in Carey Ltd’s bank account with that of the bank statement and updateit as necessary. Prepare a Bank Reconciliation Statement in your copybook as on 31 May2005.
Current Account Bank Statement NO. 17Date Details Debit
€
Credit€
Balance€
2005
1/6/ Balance 12,450
8/6/ Cheque (No. 2) 2,500 9,950
12/6/ Lodgment 12,000 21,950
14/6/ Standing Order 2,200 19,750
17/6/ Cheque (No. 1) 550 19,200
21/6/ Credit Transfer 5,500 24,700
24/6/ Direct Debit 3,800 20,900
27/6/ Cheque (No. 4) 4,000 16,900
30/6/ Bank Interest and Charges 270 16,630
Date Details Amount Date Details Cheque No./ATM Amount
2005 Bank A/C 2005
1/6/ Balance B/D 12,450 4/6/ Butter Ltd 1 550
12/6/ Lodgment 12,000 4/6/ Jam Ltd 2 2,500
31/6/ Lodgment 8,000 17/6/ Honey Ltd 3 3,600
23/6/ Flora Ltd 4 4,000
30/6/ Marg Ltd 5 5,000
30/6/ Balance C/D 16,800
32,450 32,450
30/6/ Balance B/d 16,800
Updated Bank A/C
31/5/05 Balance b/d 2,060 SO 400
C/T 550 Fees 25
Balance c/d 2,185
2,610 2,610
Balance b/d 2,185
Bank Reconciliation Statement
Balance as per bank statement 2,955
Add lodgments not credited 1,450
4,405
Less cheques not cashed 2,220
Balance as per updated Bank A/C 2,185
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7. Prepare Murphy Ltd’s bank account and calculate the closing bank balance from the datasupplied. Compare the balance in Murphy Ltd’s bank account with that of the bankstatement and update it as necessary. Prepare a Bank Reconciliation Statement in yourcopybook as on 31 May 2005.
Date Details Amount Date Details Cheque No./ATM Amount
2005 Bank A/C 2005
1/5/ Balance b/d 1,200 6/5/ Lynam Ltd 1 1,400
2/5/ Lodgment 3,200 11/5/ Dolan Ltd 2 4,200
31/5/ Lodgment 12,100 15/5 Cash ATM 300
18/5/ Lynch Ltd 3 2,480
26/5/ Tobin Ltd 4 1,000
31/5/ Balance c/d 7,120
16,500 16,500
31/5/ Balance b/d 7,120
2005 Transactions €
1/5/
2/5/
6/5/
11/5/
15/5/
18/5/
26/5/
31/5/
Balance in bank 1,200
Lodged to bank 3,200
Paid Lynam Ltd cheque (No. 1) 1,400
Paid Dolan Ltd cheque (No. 2) 4,200
ATM withdrawal 300
Paid Lynch Ltd cheque (No. 3) 2,480
Paid Tobin Ltd cheque (No. 4) 1,000
Lodged to bank 12,100
Updated Bank A/C30/6/05 Balance b/d 16,800 SO 2,200
C/T 5,500 DD 3,800
Charges 270
Balance c/d 16,030
22,300 22,300
Balance b/d 16,030
Bank Reconciliation Statement
Balance as per bank statement 16,630
Add lodgments not credited 8,000
24,630
Less cheques not cashed 8,600
Balance as per updated Bank A/C 16,030
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OD = Overdrawn
Current Account Bank Statement NO. 14Date Details Debit
€
Credit€
Balance€
2005
1/5/ Balance 1,200
2/5/ Lodgment 3,200 4,400
10/5/ Cheque (No. 1) 1,400 3,000
13/5/ Direct Debit 4,000 1,000 OD
15/5/ ATM withdrawal 300 1,300 OD
18/5/ Credit Transfer 12,000 10,700
26/5/ Cheque (No. 3) 2,480 8,220
31/5/ Bank Interest and Charges 150 8,070
Updated Bank A/C
31/5/05 Balance b/d 7,120 DD 4,000
C/T 12,000 Charges 150
Balance c/d 14,970
19,120 19,120
Balance b/d 14,970
Bank Reconciliation Statement
Balance as per bank statement 8,070
Add lodgments not credited 12,100
20,170
Less cheques not cashed 5,200
Balance as per updated Bank A/C 14,970
8. Prepare Bannon Ltd’s bank account and calculate the closing bank balance from the datasupplied. Compare the balance in Bannon Ltd’s bank account with that of the bank statementand update it as necessary. Prepare a Bank Reconciliation Statement in your copybook as on31 May 2006.
2006 Transactions €
1/5/ Balance in bank 1,900 OD
3/5/ Paid Mitchell Ltd cheque (No. 1) 4,100
5/5/ Paid Glennon Ltd cheque (No. 2) 2,350
11/5/ Lodged to bank 3,100
15/5/ Paid Nolan Ltd cheque (No. 3) 2,950
20/5/ ATM withdrawal 850
24/5/ Paid Barry Ltd cheque (No. 4) 5,200
31/5/ Lodged to bank 9,600
OD = Overdrawn
Current Account Bank Statement NO. 12Date Details Debit
€
Credit€
Balance€
2006
1/5/ Balance 1,900 OD
3/5/ Standing Order 900 2,800 OD
8/5/ Cheque (No. 1) 4,100 6,900 OD
11/5/ Lodgment 3,100 3,800 OD
14/5/ Direct Debit 1,700 5,500 OD
19/5/ Credit Transfer 12,700 7,200
20/5/ ATM Withdrawal 850 6,350
25/5/ Cheque (No. 3) 2,950 3,400
31/5/ Bank Interest and Charges 340 3,060
Date Details Amount Date Details Cheque No./ATM Amount
2006 Bank A/C 2005
11/05 Lodgment 3,100 1/5/ Balance b/d 1,900
31/05 Lodgment 9,600 3/5/ Mitchell Ltd 1 4,100
5/5/ Glennon Ltd 2 2,350
15/5/ Nolan Ltd 3 2,950
20/5/ Cash ATM 850
31/5/ Balance c/d 4,650 24/5/ Barry Ltd 4 5,200
17,350 17,350
Balance b/d 4,650
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Updated Bank A/C
31/5/06 C/T 12,700 Balance b/d 4,650
SD 900
DD 1,700
Charges 340
Balance c/d 5,110
12,700 12,700Balance b/d 5,110
Bank Reconcilation Statement
Balance as per bank statement 3,060
Add lodgments not credited 9,600
12,660
Less cheques not cashed 7,550
Balance as per updated Bank A/C 5,110
Chapter 15 Personal Borrowing
1. Explain how the following methods of purchasing goods operate:(a) Credit purchase
(b) Hire purchase
2. Complete the following sentences:
(a) Being creditworthy means
(b) Collateral means
(c) A person is declared bankrupt when
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
(d) Payment of annual school fees of €5,000
(e) Purchase of TV €780
(f) Purchase of a new car €23,500
4.Cheap finance available
only 12% per annum
(a) Comment on the legality of this advertisement:
Easy Credit €120 depositplus €25 monthly for
three years
(b) Comment on the legality of this advertisement:
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The seller gives the buyer a period of time to pay, e.g. Eircom gives customers two
months’ credit.
The customer obtains immediate use by paying installments and owns the item on paying the last installment.
being trusted to pay all money owing on time.
some form of security which the lender can take if the loan is not
a court declares that money owed cannot be
paid back.
paid back.
Long-term loan (mortgage)
Overdraft
Budget account
Budget account
Hire purchase
Term loan
This advertisement is illegal because it does not show the APR, the cash price,
the number of instalments or the total credit price.
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 NoraJones, Piano Keys, Waterford on today’s date. Nora requires a loan of €13,000 for five yearsto buy a new piano. She owns her own house valued at €350,000. She works as a concertpianist with RTE, Dublin 4 and earns €3,500 gross per month. She has €25,000 saved inthe National Irish Bank and €5,000 in An Post. Her current account number is 23233232.
PERSONAL LOAN APPLICATION FORM
National Irish Bank
Name(s) ________________________________
Mr, Mrs, Ms _____________________________
Address(es) _____________________________
__________________________________________
__________________________________________
__________________________________________
Number of years at this address 7 years
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
Occupation ________________________________
Employer’s Name & Address _______________
__________________________________________
__________________________________________
Gross pay per month €______________________
No. of years in your present employment6 years
LOAN REQUIRED
Amount €____________________________
Purpose _____________________________
How long do you want the loan for? ________
BANK DETAILS (for existing customers)
Time with bank 8 years__________________
Current Account Yes � No
Account No. ____________________________
Details of savings
Bank/Other ______________________________
_______________________________________
_______________________________________
Name _________________________________
Amount
€ _ ____________________________________
€ _ ____________________________________
SIGNATURE ___________________________
DATE __________________________________
Nora Jones
Piano Keys
Waterford
13,000
Purchase of piano
Ms
5 years
Owned
23233232
Yes
NIB and An Post
25,000
5,000
Nora Jones
Pianist
RTE
Dublin 4
3,500
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6. Rhona King lives at 56 Banks Road, Cork, in a house which she purchased in 1995 with thehelp 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 employedas a legal secretary with Smart & Keane, Solicitors, Airport Road, Cork, where she startedwork in 1991. She earns a Gross Salary of €2,400 per month, out of which she pays incometax and PRSI totalling €826. Rhonda wishes to buy a new car for her next birthday. She willbe 35 years old on 14 August 2005. In order to buy the car, she needs to borrow €12,500which she hopes to repay in monthly instalments of €290 over the next four years. She isalready 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 Rhona’s Loan Application Form supplied, on today’s date.
(b) If the bank grants Rhona the loan for the car at €290 per month, how much interest willshe have paid after four years? €_________________________Show your workings in the space provided.
PERSONAL LOAN APPLICATION FORM
AIB
Name(s) _____________________________
Mr, Mrs, Ms _____________________________
Address(es) _____________________________
_________________________________________
_________________________________________
_________________________________________
Number of years at this address ___________
Owned or Rented ________________________
Telephone ______________________________
Date of Birth ____________________________
Mortgage amount (if any) €________________
Annual repayments on mortgage € _________
Mortgage borrowed from __________________
EMPLOYMENT DETAILS
Occupation ______________________________
Employer’s Name & Address_______________
_________________________________________
_________________________________________
Net pay per month €______________________
No. of years in your present employment
LOAN REQUIRED
Amount € _______________________________
Purpose ________________________________
How long do you want the loan for? ________
How much can you repay each month?
€ ______________________________________
Details of existing loans
Lender _________________________________
_________________________________________
Amount
€ ______________________________________
Annual repayments
€ ______________________________________
_________________________________________
SIGNATURE ________
DATE ___________________________________
Rhona King
Ms 12,500
Purchase of car
4 years
290
Cork Credit Union
768
Rhona King
56 Banks Road
Cork
10 years
Owned
021-134567
14/8/1970
59,000
3,000
Startup Building Society
Legal secretary
Smart and Keane Solicitors,
Airport Road, Cork
1,574
14
1,420
Total repaid €13,920 less loan €12,500 = €1,420
64 per month
(c) Explain the following terms:
(i) Mortgage
(ii) Debtor
(iii) Bankruptcy
Chapter 16 Insurance
1. (a) Explain the following insurance terms:
(i) Premium
(ii) Adequate Insurance
(iii) All Risks Insurance
(iv) Proposal Form
(b) What conditions must be present before a risk is insurable?
(i)
(ii)
(iii)
(iv)
2. Indicate with a tick � which of the following are true or false.
(a) A premium is paid by the insurer to the insured
(b) The principle of Utmost Good Faith applies to thecompletion 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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249
This is a long-term loan which is used to purchase or build a house.
This is a person who owes money to another person.
This is where the court declares publicly that a person cannot pay
money owing.
This is payment made to an insurance company when insurance is
purchased.
This insures all possible risks for the correct amount.
This covers any accidental loss or damage to selected
household items anywhere in Ireland or Europe.
This is an application form that has to be completed when
purchasing insurance.
There must be an insurable risk
There must be a large number of similar risks insured
All losses must be accidental
It must be possible to calculate the risk of a loss occuring
True
�
�
False
�
�
�
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250
3. Name and explain the two principles of insurance that apply to the purchasing of insurance/assurance.1. Name:
Explanation:
2. Name:
Explanation:
4. Martin Keane, aged 27 and single, of 12 Roy Lane, Waterford, is a carpenter. He wishes topurchase an endowment policy of €100,000 on his life. He likes to go mountain climbing andis hoping to get his helicopter licence next year. Martin does not drink or smoke and is ingood health. He will pay his monthly premium by standing order. Assume that you are MartinKeane, complete the partially completed life assurance proposal form below on today’s 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 allor part of the benefits under this policy being cancelled. Please use BLOCK CAPITALS.
1. Name
Address
Age Next Birthday
2. Type of Policy Premiums to be paid monthly
Method of Payment
3. Have you ever had Life Assurance
4. Are you likely to:(a) Fly other than as a fare paying passenger
(b) Engage in a hazardous occupation orhobby
5. Are you in good health
6. Do you smoke
7. Do you consume alcohol
Please tick �
Single �� Married �
Occupation
Sum to be insured €
Please tick Yes � No ��
Please tick Yes � No �If Yes give details
Please tick Yes � No �If Yes give details
Please tick Yes � No �If No give details
Please tick Yes � No ��If Yes state how many
Please tick Yes � No ��If Yes state average daily consumption
DeclarationI 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 con-tract between me and the Insurance Company.
Date Signature of Proposer
Insurable interestThe insured must gain from the existence of the item insured and
suffer from its loss.Utmost Good Faith
All questions asked must be answered truthfully.
MARTIN KEANE
12, ROY LANE, WATERFORD
28
ENDOWMENT
STANDING ORDER
CARPENTER
100,000
�
HELICOPTER PILOT
�
MOUNTAIN CLIMBING
�
Martin Keane
5. Why might a person purchase comprehensive insurance for their new 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 topurchase 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 herfirst insurance. Complete the partially completed car insurance proposal form from thefollowing details.
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XA INSURANCE LTDCAR INSURANCE PROPOSAL FORM
Please answer all questions fully to the best of your knowledge. Failure to do so may result in all orpart of the benefits under this policy being cancelled. Please use BLOCK CAPITALS.
THE PROPOSER
Name and Address
Date of Birth
Address where car is usually kept
Occupation
THE CAR
Make and Model
Engine Type
Year of Manufacture
Registration No.
Value €
1400cc
COVER
Type of policy required Please tick
Use of car Comprehensive Third Part Fire and Theft
Pleasure Business
OTHER INFORMATION
Have you passed your driving test Please tick Yes No
Will the car be driven by anyone Please tick Yes No
under twenty-five If Yes state when
Have you had any accidents in the Please tick Yes No last four years
Have you or anyone who will drive Please tick Yes No this car had any driving convictions inthe last five years
DECLARATIONI declare that I am the owner of the vehicle, that the above statements or any other written state-ments by me are true and that they and this proposal shall be the basis of the contract between meand the Insurance Company.
Date / / Proposer’s Signature
Comprehensive insurance will give third party, fire and theft cover as well as covering
accidental damage to the insured’s own car.
MARY MULLIGAN
MBNA VIEW, CARRICK-ON-SHANNON, CO. LEITRIM
13/5/1981
AT THE ABOVE ADDRESS
ACCOUNTANT
NISSAN MICRA
2005
05 LM 612
19,600
�
�
�
�
�
�
BY MYSELF
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 thetwo lists by placing the letter of the correct explanation under the relevant number in thetable below. (One explanation does not refer to any term.)
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 analarm 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)
(b)
Details Calculations Premium
Total Premium
1. 2. 3. 4.
Column 1 Terms Column 2 Explanations
1. Underinsurance2. Loadings3. Actuary4. Principle of Contribution
(a) Calculates the amount of the premium(b) Applies in cases where something is insured by more than one insurer (c) Additional premiums charged due to higher risks(d) Calculates the amount of compensation to be paid out(e) Applies in cases of partial loss
e c a b
House €300,000Contents 100,000
Less deductions
Alarm system
Neighbour watch scheme
2.5 per €1,000
7.5 per €1,000
10% of €750
10% of €750
€750
€600
€1,350
€50
€750
SPECIMEN
Ross Insurers
1/5/
2006
1,35
0
1/5/06
1,350
Ros
s In
sure
rs
Thirteen hundred and fifty euro
Theresa Mahon
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 approvedalarm system. They carry on the family business from their house. The Slevins were giventhe 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 fromhome. They will receive deductions on contents insurance of 10% of basic plus loadings forhaving 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 ConwayInsurers, on 1/5/2007.
(a)
(b)
4. Complete the partially completed claims form provided from the following details. On 25May 2005 at 22.45 pm Maura Smith, 15 Downs Avenue, Mullingar, Co. Westmeath returnedhome to find her house broken into. Missing were her new Dell Laptop which she hadpurchased 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.
Details Calculations Premium
Total Premium
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House €200,000
Contents €50,000
Add loadings
Less deductions
2 per €1,000
8 per €1,00020% of €800
20% of €480
€400
€400 €800
€160
€960€96
€864
SPECIMEN
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5. Complete the partially completed claims form provided from the following details. On 5May 2006 at 02.30 am Paddy Neary, 46 Doran Road, Waterford had his 2005 Micra 05 WD796 stolen from outside his house. He had purchased the car in March 2005 for €19,500 andhe estimated that it was worth €16,000. He reported the theft to his local garda station. Hispolicy number was P1167L.
6. A house was fully insured for €100,000. Fire caused €20,000. How much compensationshould be paid?
€
WAT INSURERS LTDLOSS / DAMAGE CLAIMS FORM
Name
Address
Policy No.
Occupation Factory Worker
Details of Loss/Damage Time: Date
Reported at Garda Station Name: Ballybricken Garda: J.P. Rock
Description of ItemsLost / Damaged
Date of Purchase Cost PriceDeduction forUse / Wear / Tear
Amount Claimed
I declare that the above statements are true to the best of my knowledge
Signed Date:
EAT INSURERS LTD
LOSS / DAMAGE CLAIMS FORM
Name
Address
Policy No. P 2312
Occupation Bus Éireann driver
Details of Loss / Damage Time: Date
Reported at Garda Station Name: Mullingar Garda: Joan Kelly
Description of ItemsLost / Damaged
Date of Purchase Cost PriceDeduction forUse / Wear/ Tear
Amount Claimed
I declare that the above statements are true to the best of my knowledge
Signed _____________________Date: ______________
Maura Smith
15, Downs Avenue, Mullingar, Co. Westmeath
22.45 pm 25 May 2005
Dell Laptop
Maura Smith26 May 2005
Cannon camera
15/5/2005
2003
€1,400
€600
0
€100
€1,400
€500
Paddy Neary46, Doran Road, Waterford
P 1167L
2.30 am 5 May 2006
Micra 05 WD 796 March 2005 €19,500 €3,500 €16,000
Paddy Neary6 May 2006
20,000
7. A house was insured for €300,000 with A Ltd and for €300,000 with B Ltd. The house wasburned. How much compensation can the insured expect to receive? Give a reason for youranswer.
8. A person who had his car stolen was compensated fully by an insurance company. The thiefwho stole the car was eventually caught. Who has the right to sue the thief?
9. A house with a market value of €250,000 was insured for €200,000. Fire caused €50,000damage. How much compensation should be paid? Give a reason for your answer.
10. Contents valued €40,000 were insured for €30,000. A thief stole €20,000 worth. Howmuch compensation should be paid? Give a reason for your answer.
11. Martin’s car insurance policy had an excess clause of €500. An accident caused €1,400damage. How much compensation can he expect to receive? Give a reason for your answer.
12. Name and explain the three insurance principles that apply to the estimation and paymentof compensation.
Name Explanation
1.
2.
3.
Calculations Answer €
Reason:
Calculations Answer €
Reason:
Calculations Answer €
Reason:
Calculations Answer €
Reason:
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€150,000 from A Ltd and €150,000 from B
The Principle of Contribution Applies - cannot gain
300,000
The insurer, as the principle of subrogation applies.
4/5 of €50,000
3/4 of €20,000
The house was underinsured by 1/5 of its value
40,000
The contents were underinsured by 1/4 of their value
15,000
900€1,400 less €500
Martin had agreed to pay the first €500 of a loss
Indemnity
Contribution
Subrogation
This states that the insured cannot gain from insurance
When two or more insurers insure some item, they share
the compensation
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
(b) Resources are
(c) The term GNP means
2. To which factors of production do the following refer? Lorries, lorry drivers, engineers,trees, machinery, shopkeeper, bank loan, farmer, hairdresser, rivers.
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.
4. Seán 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? €(ii) What is the opportunity cost of his decision?
5. Rose has €30. She can buy cosmetics, a mobile phone credit or join the supporters club ofher favourite football team. She joins the supporters club.
(i) What is the financial cost of joining the supporters club? €(ii) What is the opportunity cost of her decision?
6. Complete the following chart naming the four factors of production and giving twoexamples of each.
7. Answer the following questions on employment and unemployment.
(a) The labour force consists of:
(b) The implications for the government of high unemployment are:
Factors of Production Example 1 Example 2
1. Land Fields Mines
2. Labour Engineer Block layer
3. Capital Buildings Loans
4. Enterprise Denis O’Brien Michael O’Leary
Items Wants Needs Explanation
Clothes � You need to wear clothes
Computer games � You can do without computer games
Food � You need food to survive
School Books � You need books to be educated
Land Labour Capital Enterprise
Trees Lorry drivers Lorries Shopkeeper
Rivers Engineers Machinery Farmer
Hairdresser Bank loan
the factor of production that brings together land, labour and capital.
things that are used in the production of goods and services.
Gross National Production.
20
30Cosmetics and mobile phone credit
people who are able and available to work.
less income
from taxation and more social welfare payments.
A CD and a football
8. Calculate the rate of economic growth from the following information.
(i) Production of goods and services in Year 1 €23,000 and Year 2 €24,610(ii) Production of goods and services in Year 3 €28,000 and Year 4 €29,400
(iii) Production of goods and services in Year 5 €32,000 and Year 6 €33,600(iv) Production of goods and services in Year 7 €36,000 and Year 8 €38,880
9. Calculate the rate of inflation from the following information.
(i) Cost of living in Year 1 €2,000 and Year 2 €2,120(ii) Cost of living in Year 3 €1,800 and Year 4 €1,872
(iii) Cost of living in Year 3 €1,950 and Year 4 €2,028(iv) Cost of living in Year 3 €3,500 and Year 4 €3,745
10. (a) Explain the term economic growth
(b) Name two consequences of economic growth
(c) Name two consequences of high inflation
Formula Workings Answer
(i)Difference × 100
Original amount120 × 100
2,0006%
(ii)Difference × 100
Original amount72 × 1001,800
4%
(iii)Difference × 100
Original amount78 × 1001,950
4%
(iv)Difference × 100
Original amount245 × 100
3,5007%
Formula Workings Answer
(i)Difference × 100
Original amount1,610 × 100
23,0007%
(ii)Difference × 100
Original amount1,400 × 100
28,0005%
(iii)Difference × 100
Original amount1,600 × 100
32,0005%
(iv)Difference × 100
Original amount2,880 × 100
36,0008%
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This is the increase in the production of goods and
services from one year to the next.
Higher standard of living. More money
to create employment.
Workers will look for more wages. Irish
goods and services will be too expensive.
Chapter 19 Budgeting: The National Budget
1. Indicate with a tick � which of the following are true or false.
(a) A budget deficit is where income is greater thanexpenditure
(b) FÁS 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 capitalexpenditure
(e) The Minister for Education and Science presents thebudget to Dáil Éireann in December each year
2. Complete the following sentences:
(a) Current expenditure includes spending on
(b) An increase in unemployment can effect the budget in two ways:
3. Tick � the correct answer. When government–planned expenditure is greater than plannedspending 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 inspending 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 andFamily Affairs.
(a) (b)
(c) (d)
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True
�
False
�
�
�
�
wages of teachers and nurses as well as
There will be less
Old age pension Unemployment assistance
Disability paymentsFree school books
income tax received and more social welfare payments to be made.
supplies for hospitals.
�
�
6. The following figures were produced by a Minister of Finance on Budget Day as projectionsfor the year 2003.
(a) From the above information, draft the National Budget for 2003 in your copybook.
(b) Is this budget a surplus or deficit budget?
Give one example of current expenditure by:
(i) the Department of Justice and Law Reform
(ii) the Department of Social, Family and Community Affairs
(c) Suggest one effect each of the following would have on a National Budget:
(i) an increase in VAT:
(ii) an increase in the number of Gardaí:
National Budget
Income € millions Expenditure € millions
PAYE 600 Health and Children 350
Excise 80 Education and Science 335
VRT 25 Environment 268
VAT 385 Debt Servicing 195
Corporation Tax 198 Justice and Law Reform 157
Balance (Deficit) 383 Social, Family 366
1,671 1,671
Main Item of Revenue and Expenditure Estimated figures in millions€
Health and Children 350
PAYE 600
Education and Science 335
Excise Duty 80
VRT 25
Environment 268
VAT 385
Debt Servicing 195
Justice and Law Reform 157
Corporation Tax 198
Social, Family and Community Affairs 366
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Deficit budget of €383m
Wages of judges
Old age pension
Increase income / Decrease deficit
Increase expenditure / Increase deficit
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7. The following figures were provided by the Minister of Finance on Budget Day as hisprediction for the year ahead.
(a) From the above information, draft the National Budget for the year ahead in yourcopybook. Show clearly the total income and total expenditure and balance the budget.
(b) (i) Is this budget a surplus or deficit budget?
(ii) Suggest two courses of action which the government can take to rectify a budgetdeficit.
1.
2.
(c) What effect, if any, has a budget surplus on the National Debt of a country?
(d) From 2007 Ireland will pay more to the EU than it receives. What effect will this haveon the Irish Government’s finances?
Chapter 20 Foreign Trade
1. Which of the following are in the European Union. Tick � to indicate membership.
The Netherlands Estonia Bulgaria Austria Norway Turkey Russia
National Budget
Income € millions Expenditure € millions
Corporation Tax 5,100 Contributions to EU 1,400
Income Tax 9,300 Social, Family 10,300
VAT 9,800 Education and Science 5,300
Excise 4,900 Debt Servicing 2,500
Stamp duty 2,000 Health and Children 8,600
Balance (Deficit) 2,400 Security 2,500
Industry, Farming, Tourism 2,900
33,500 33,500
Main Item of Revenue and Expenditure Estimated figures in millions €
Contributions to EU 1,400
Social, Family and Community Affairs 10,300
Corporation Tax 5,100
Education and Science 5,300
Income Tax 9,300
Debt Servicing 2,500
VAT 9,800
Health and Children 8,600
Excise 4,900
Security 2,500
Stamp Duty 2,000
Industry, Farming and Tourism 2,900
Deficit of € 2,400 million
Increase taxation / VAT, Income Tax
Reduce spending / Reduce Civil Service
It could be used to reduce the debt.
The government will have to find more income from taxes and reduce spending.
� � �
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2. As far as Ireland is concerned, two of the following are invisible imports. Tick 0 which areinvisible.
Irish fans going to Germany for the World Cup finalsIrish lamb sold to FranceEnglish 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
(b) Examples of invisible exports include
4. Tick 0 which of the following are imports or exports.
(a) Britney Spears on tour in Ireland(b) Irish mushrooms sold to France(c) Irish tourists in Greece(d) Purchase of clothes on the internet from New York fashions(e) Ryanair flying passengers from Rome to Berlin(f) Purchase of Toyota cars from Japan(g) U2 on a worldwide tour
5. In the spaces provided, write the names of the currencies of the following countries:
6. Complete the chart below and state whether the balance of trade is a surplus or deficit in each year.
The balance of trade is a _________________________________
7. Complete the chart below and state whether the balance of trade is a surplus or deficit in each year.
The balance of trade is a ________________________________
Year 3 €m Year 4 €m
Visible Exports 18,900 Visible Exports 27,900
Visible Imports 18,880 Visible Imports 29,670
Balance of Trade 20 Balance of Trade – 1,770
Year 1 €m Year 2 €m
Visible Exports 17,300 Visible Exports 23,400
Visible Imports 17,680 Visible Imports 21,980
Balance of Trade – 380 Balance of Trade 1,420
Country Currency
United Kingdom Pound Sterling
Sweden Krona
Italy Euro
Japan Yen
United States US Dollar
0
0
Exports
0
0
0
Imports
0
00
0
replacing foreign goods with Irish goods.
foreign tourists in Ireland, money earned
deficit in Year 1 and a surplus in Year 2.
by U2 and the Corrs.
surplus in Year 3 and a deficit in Year 4.
8. Complete the chart below and state whether the balance of payments is a surplus or a deficit ineach year.
The balance of payments is a _________________________________
9. Prepare the balance of payments of a country from the following details, and state whether thebalance 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 blankBalance of Payments Statement below.
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; othermonies going out €16,780.
Balance of Trade Statement
The balance of trade is a _____________________________
Balance of Payments Statement
Year 1 €m
Total monies coming into Ireland 50,630
Total monies going out of Ireland 50,780
Balance of payments –150
Year 1 €m
Visible exports 37,430
Visible imports 34,000
Balance of trade 3,430
Year 1 €m
Total monies coming into Ireland 38,000
Total monies going out of Ireland 48,000
Balance of payments –10,000
Year 1 €m Year 2 €m
Total monies coming into Ireland 76,500 Total monies coming into Ireland 87,760
Total monies going out of Ireland 77,540 Total monies going out of Ireland 86,670
Balance of Payments –1,040 Balance of Payments 1,090
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deficit in Year 1 and a surplus in Year 2.
deficit.
surplus.
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11. (a) If the rate of exchange is €1 = $1.16, how much would you receive if you converted$1,340 to euro?Answer Workings
(b) If the rate of exchange is €1 = £0.66, how much would you receive if you converted £1,250 to euro?Answer Workings
(c) If the rate of exchange is €1 = £0.66, how much would you receive if you converted €2,500 to sterling?Answer Workings
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 involvedin production?
(a) An Post
(b) An Bord Bia
(c) Bord na Móna
(d) Fáilte Ireland
3. Explain:
(a) Limited Liability
(b) Dividend
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
2500 × 0.66€ 1,650
12500.66
€ 1,893.94
13401.16
€ 1,155.17
0
True
0
False
0
0
0
0
0
Shareholders in a company can only lose what they invested in the company.
This is a share of the profits made by a company in a given year, paid to
the shareholders.
5. The maximum number of shareholders a private limited company can have is shares.
6. Compare Sole Traders, Co-operatives and Private Limited Companies under these headings:Control, Profits and Number of Owners.
7. Name and explain five different types of state-owned companies.
1. Name:
Explanation:
2. Name:
Explanation:
3. Name:
Explanation:
4. Name:
Explanation:
5. Name:
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 LTD
STD CPU
(b) The document that deals with the internal running of a company is:
(i) Memorandum of association
(ii) Articles of association
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
Forms of Ownerships Control Profits Number of Owners
Sole traders Total control Keeps all 1
Co-operatives Shared Shared 8+
Private Limited Company Shared Shared 1–50
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0
0
0
50
Bord na Móna
Produces peat
ESB
Produces electricity
Fáilte Ireland
Encourages people to holiday in Ireland
An Post
Provides a postal delivery service
Bus Éireann
Provides bus transport throughout Ireland
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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 invest-ed in shares, in the company bank account.
(a) Complete the memorandum of association below.
(b) Record the issue of shares in the bank and ordinary share capital accounts below.
General Ledger
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 moneyreceived from the issue of shares was lodged to the company bank account.
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
MEMORANDUM OF ASSOCIATION
1. The name of the Company is:
2. The Objects of the Company are:
3. The Liability of the shareholders is Limited.
4. The Share Capital of the Company is € divided into €1 Ordinary Shares.
We the several persons whose names, addresses and descriptions are subscribed wish to beformed into a Company in pursuance of the Memorandum of Association and we agree to takethe number of shares in the Capital, of the Company set opposite our names.
Date Signed:
Witness to the above signatures:
Name, Address of each Subscriber Number of shares taken by each Subscriber
Tom KellyHill Top RoadGalway
15,000
Marie KellyHill Top RoadGalway
15,000
Kelly Insurers Ltd
Sale of household, personal and business insurance
200,000
1 July 2000 Tom Kelly, Marie Kelly
Martin Jones
200,000
(a) Complete the memorandum of association below.
(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)General Ledger
(ii)
(c) Name the document that the Registrar of Companies would send to NK Ltd when the
company was formed: ______________________________________________________
Balance Sheet of NK Ltd as on 20 October 2007
Current Assets
Bank 50,000
Financed By Authorised Issued
250,000 € 1 ordinary shares 250,000 50,000 50,000
Date Details F Total Date Details F Total
Bank A/C
20/10/07 Share cap. 50,000
Share Capital A/C
20/10/07 Bank 50,000
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MEMORANDUM OF ASSOCIATION
1. The name of the Company is:
2. The Objects of the Company are:
3. The Liability of the shareholders is Limited.
4. The Share Capital of the Company is € divided into €1 Ordinary Shares.
We the several persons whose names, addresses and descriptions are subscribed wish to beformed into a Company in pursuance of the Memorandum of Association and we agree to takethe number of shares in the Capital, of the Company set opposite our names.
Date Signed:
Witness to the above signatures:
Name, Address of each Subscriber Number of shares taken by each Subscriber
Nora MartinBallsbridgeDublin
25,000
Philip KeoghDart ViewSkerriesCo, Dublin
25,000
NK Ltd
Produce and sell business books and teaching aids
250,000
20/10/2007 Nora Martin, Philip Keogh
Certificate of Incorporation
250,000
Fiona Hyde
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Chapter 23 Chain of Production
1. Explain the term Primary Production.
Primary production is
Two examples of primary production include:
(a) (b)
2. Indicate with a tick 0 which of the following are examples of primary, secondary and tertiaryproduction.
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 correctexplanation 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)
4. Fill in the blank spaces in the two channels of distribution below:
Chapter 24 People at Work
1. Write brief notes on:
(a) The live register
1. 2.(a) Manufacturer (a) Wholesaler
(b) Wholesaler (b) Retailer
(c) Retailer (c) Consumer
1. 2. 3.b d c
Column 1 Terms Column 2 Explanations1. Wholesaler (a) Makes goods for the public
2. Consumer (b) Sells goods to the shops for resale
3. Retailer (c) Sells goods for private use
(d) Buys goods for private use
Good/Service Primary Secondary TertiaryShoe manufacturer 0Advertising manufacturer 0Fisherman 0Coal mining 0Credit Union 0Builder 0
the extraction of raw materials from land, sea and air.
Fishing Mining
measures the level of unemployment, i.e. those who are able and willing
to work
(b) Self-employed
(c) Managing Director
2. Indicate with a tick 0 which of the following are true or 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.
4. Complete the sentences below by filling the blank spaces from the following list of terms. Oneterm does not match.
Labour Force, Responsibilities, Work, Risks, Shareholders, Unemployed, Rewards, Rights,Employment, Managing Director
(a) The difference between and 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 and involved in being self employed.
(e) The Board of Directors appoint the .
(f) Employees have certain and .
Example Work EmploymentNote taking Student taking notes in class Reporter taking notes for news-
paper
1. Cooking a meal Parents making dinner Chef preparing dinners
2. Preparing accounts Student doing accounts Accountant doing accounts
3. Training a team Teacher training a school team Sir Alex training Man Utd
4. Painting Jack painting a house Jack B. Yeats painting a portrait
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True
0
0
False
0
0
0
These are people who work for themselves for payment.
The M.D. is appointed by the Board of Directors and is responsible
for the day-to-day running of the company.
work employment
labour force
unemployed
risks rewards
Managing Director
rights responsibilities
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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.
2. Complete the following sentences below by inserting a suitable terms.
(a) Equal opportunity employers employ both and
workers.
(b) A sets out the work to be done and the qualificationsrequired.
(c) Workers on can start and finish work at differenttimes.
(d) The total cost of employing workers is made up of
plus .
3. Study the job advertisement and explain the terms in bold.
Basic Wage:
Overtime:
Subsidized canteen and travel:
Human Resources Manager:
MORGAN INSURANCE BROKERS LtdGeneral Insurance Clerk required
Computer knowledge and bookkeeping skills an advantage
Basic Wage €390 gross for a 39 hour weekOvertime also a possibility
Subsidized canteen and travel
Apply in writing toThe Human Resources Manager
MORGAN INSURANCE BROKERS Ltd,Indemnity Road,
Sligo
MORGAN INSURANCE BROKERS Ltd is an equal opportunities employer
Workers Method of calculating Gross Wage
Car sales person Commission
Blocker layer Piece rate
Office worker Hourly rate
Garda Hourly rate
Insurance sales person Commission
Strawberry picker Piece rate
male
female
contract
flexitime
employer’s share
gross wageof PRSI
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
of payment.
The person responsible for employing staff.
4. Study the Contract of Employment given below and answer the questions that follow.
(a) Who is being employed? _______________________________________________
(b) What job has the employee obtained? _____________________________________
(c) What is the basic weekly wage? € _______________________________________
(d) What additional benefits will the employee receive? _________________________
(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 paidat 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.
6. Andrew Conway earns €890 per week. His standard cut-off point is €565.38 and he has taxcredits of €49.23 His tax rates are 20% on the first €565.38 and 42% on the remainder of hisincome. 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
(ii) PRSI
(iii) Net Wage
Wage Slip
Tina Clarke Employee No. 1221
Gross Wage Deductions
Basic O/Time Total PAYE PRSI VHI Union Total Net Wage
320 96 416 53.20 41.60 18 12 124.80 291.20
Contract of EmploymentEmployer: Finn Harps Monthly Journal
Employee: Máire McGee
Hours of work per week: 38 hours flexi-time
Job Description: Assistant editor
Rates of Pay:
€45,6001% of sales over 25,000 copies
Basic:
Bonus:
Date of commencing work: 1/5/2006
Holidays: Four weeks
Pension: Non-contributory
Company Car: Nissan Micra
Health Insurance: Vivas premium paid in half
Signed: Máire McGee
Fergus Healy
Date: 30 April 2006
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Máire McGee
Assistant Editor
Company car; non-contributory pension
To show your rights
876.92
€ 200.19€ 63.75
€ 589.06
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(b) Complete Andrew Conway’s wage slip.
7. Sonia Stone earns €1,300 per week. Her standard cut-off point is €565.38 and she has taxcredits, Personal Credit €1,520 and Employee Credit of €1,040. Her tax rates are 20% on thefirst €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
(b) Complete Sonia Stone’s wage slip below.
8. (a) Name two rights and responsibilities of an employer.
(i) _____________________________________________________________________
(ii) _____________________________________________________________________
(b) Assume you are the principal of St. Mark’s Secondary School. Draft a suitable jobdescription in your copybook for the position of PE Teacher. The job description should contain four important pieces of information.
(c) St. Mark’s Secondary School has three non-teaching employees who are paid on a weekly basis. William Kenny pays €71 income tax, Bríd Moore pays €63 income tax,and Philip Farrell pays €47 income tax. Each employee pays PRSI at the rate of 8%. Theemployer’s rate of PRSI is 12%.
(i) Complete the Wages Book, for the month of May, 2005, using the partially completedWages Book provided.
(ii) Calculate the total cost of wages for the month of May, 2005.
Wage SlipSonia Stone Employee No. 5678
Gross Wage Deductions
Week no. Total PAYE PRSI VHI Union Total Net Wage
9 1,300 372.39 97.50 15 10 494.89 805.11
Wage SlipAndrew Conway Employee No. 1335
Gross Wage Deductions
Week no. Total PAYE PRSI BUPA Savings Total Net Wage
3 890 200.19 63.75 25 12 300.94 589.06
€372.39
€97.50
€806.37
Select suitable staff
Dismiss dishonest staff
(i)
(ii) Total cost of wages: € _________________________________________
(d) Record the total cost of wages for the month of May 2005 in the Wages Account andAnalysed Cash Book of St. Mark’s Secondary School provided.
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% ofgross wage.
Ryan Martin: 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.
(a)
(b) Total cost of wages: €___________________________________
Date NameGrossWage
Deductions NetWage
Employer’s PRSIPAYE PRSI Pension VHI Union Total
€ € € € € € € €27/2/05 R. Martin 360 90 18 8 10 10 136 224 36
27/2/05 J. Mulligan 280 72 14 6 15 10 117 163 28
27/2/05 J. Yorke 450 110 22.50 16 20 10 178.50 271.50 45
27/2/05 Total 1,090 272 54.50 30 35 30 431.50 658.50 109
Analysed Cash Book (p1)
Date Details F Bank Wages
May 2005 Wages GL 1 1,747.20 1,747.20
General Ledger
Date Details F Total Date Details F Total
Wages A/C
May 2005 Bank 1,747.20
Date Name Gross Wages Deductions Net Wages EmployersPRSIPAYE PRSI Total
€ € € € € €
31/5/2005 William Kenny 600 71 48 119 481 72
31/5/2005 Bríd Moore 560 63 44.80 107.80 452.20 67.20
31/5/2005 Philip Farrell 400 47 32 79 321 48
Total 1,560 181 124.80 305.80 1,254.20 187.20
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1747.20
1,199
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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% ofgross wage.
(a)
(b) Total cost of wages: €
11. 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: €
(b) Show the entries in the Wages Account and Analysed Cash Book and the extract in theProfit and Loss Account below on 31 March 2006.
12. Answer (a) and (b) below from the following data.Total cost of employing workers €16,000 plus employer’s share of PRSI 10%.
(a) Total cost of wages: €
(b) Show the entries in the Wages Account and Analysed Cash Book and the extract in theProfit and Loss Account below on 30 September 2007.
General Ledger
Date Details F Total Date Details F TotalWages A/C
30/9/07 Bank ACB 17,600
Profit and Loss Account for year ended 31 March 2006Less Expenses
Wages 16,500
Analysed Cash Book (Credit Side)
Date Details Bank Wages
31/3/06 Wages 16,500 16,500
General Ledger
Date Details F Total Date Details F TotalWages A/C
31/3/06 Bank ACB 16,500
Date Name GrossWage
Deductions NetWage
Employer’s PRSIPAYE PRSI Pension Savings Union Total
15/5/06 € € € € € € € €
15/5/06 P. Dunne 570 190 28.50 13 30 15 276.50 293.50 57
15/5/06 M. McGrath 680 230 34 19 40 15 338 342 68
15/5/06 M. Kelly 380 90 19 10 10 15 144 236 38
15/5/06 Total 1,630 510 81.50 42 80 45 758.50 871.50 163
1,793
16,500
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: €
(b) Show the entries in the Wages Account and the Analysed Cash Book and the extract inthe Profit and Loss Account below on 31 July 2008.
14. (a) List two rights and responsibilities of an employer:
Two rights are: 1. 2.
Two responsibilities are: 1. 2.
(b) State two methods of calculating gross wages.
1. 2.
(c) Oidar Ltd has three employees who are paid on a monthly basis. Each employee paysincome tax (PAYE) at the rate of 30% of gross wages. The employer’s share of PRSI is12% of gross wages.
Profit and Loss Account for year ended 31 July 2008
Less Expenses
Wages 32,000
Analysed Cash Book (Credit Side)
Date Details Bank Wages
31/7/08 Wages 32,000 32,000
General LedgerDate Details F Total Date Details F Total
Wages A/C
31/7/08 Bank ACB 32,000
Profit and Loss Account for year ended 30 September 2007Less Expenses
Wages 17,600
Analysed Cash Book (Credit Side)
Date Details Bank Wages
30/9/07 Wages 17,600 17,600
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32,000
Set up business
Pay agreed wage Keep proper records
Hourly rate Piece rate
Decide on aims
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(i) Complete the Wages book for the month of May 2006.
(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 theAnalysed Cash Book of Oidar Ltd.
(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) help their members obtain higher wages.
(c) A is the local union representative.
(d) The Labour Court is an example of a .
(e) The use of a third party to end a dispute is called .
2. Column 1 is a list of industrial relations terms. Column 2 is a list of possible explanations ofthe work which they do. Match the two lists by placing the letter of the correct explanationunder the relevant number in the table below. One explanation does not apply.
Analysed Cash Book (p 1)
Date Details F Bank Wages
31/5/06 Wages GL 4,704 4,704
General LedgerDate Details F Total Date Details F Total
Bank A/C
31/5/06 Wages ACB 4,704
Wages A/C
31/5/06 ACB 4,704
Date NameGrossWages
Deductions NetWages
Employer’sPRSIPAYE PRSI Pension Total
€ € € € € € €
31/5/2006 R. Kenny 1,600 480 112 80 672 928 192
31/5/2006 L. Dunne 1,400 420 98 70 588 812 168
31/5/2006 T. Doyle 1,200 360 84 60 504 696 144
Total 4,200 1,260 294 210 1,764 2,436 504
4,704
white collar
Unions
Shop Steward
Third Party
conciliation
3. Explain:
(a) Work to rule:
(b) Conciliation:
Chapter 27 Finance for Business
1. Select a suitable source of finance for each of the following needs of a garage from this list ofsources of finance.Creditors, Bank Overdraft, Hire Purchase, Leasing, Term Loan, Share Capital, Reserves, LongTerm Loan.
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 Short Medium Long Suitable Source of Finance
Mirrors and Chairs 0 Bank term - loan
Wages of Staff 0 Bank overdraft
Buildings 0 Capital
Light and Heat 0 Expenses due
Cash Register 0 Hire purchase
Advertising 0 Creditors
Computerised Hairdryer 0 Leasing
Shampoo 0 Creditors
Need Suitable Source of Finance
Cars Term loan
Office Equipment Leasing
Extension to Garage Reserves
Light and Heat Creditors
Breakdown Truck Long-term loan
Petrol for Resale Creditors
1. 2. 3. 4.
d c a e
Column 1 Terms Column 2 Explanations
1. Craft Union (a) An organisation which represents employers
2. Arbitration (b) Represents workers in a particular industry
3. IBEC (c) Use of a third party to settle a dispute
4. Demarcation Dispute (d) Represents workers who have served an apprenticeship
(e) A disagreement over who does what work
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Only doing exact work as laid out in the contract.
This is where a third party helps both sides in dispute to settle their
differences.
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3. Indicate with a tick 0 which of the following statements are true or 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
Chapter 28 Preparation of a Business Plan
1. Explain:
(a) Business Plan:
(b) Cash Flow Forecast:
(c) Net Cash:
2. List four examples of business receipts and four examples of business payments.
3. Indicate with a tick 0 which of the following statements are true or 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
Business Receipts Business Payments
1. Cash sales 1. Cash purchases
2. Payment by debtors 2. Payments to creditors
3. Loans 3. Repayment of loans
4. Owner’s capital 4. Taxation
True
0
000
False
0
This sets out what a business wants to do in the future.
This is a statement setting out future income and
expenditure.
This is the difference between expected income and expected expenditure.
True
0
0
False
00
0
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BUSINESS PLAN
COMPANY DETAILS
Name of Company
Address of Company
Shareholders/Owners
Managing Director
Company Bank
PRODUCT
Description of Product
MARKET RESEARCH
Size of Market
Competition
Price per house €
SALES PROMOTION
Methods
FINANCE
Total Required €
Amount Available €
Amount Required €
SIGNED (i)
(ii)
DATE
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 privatecustomers. 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 arefive 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 theirbusiness by advertising in local radio and newspapers.
Picture That Ltd
Centre Forward DriveNaasCo, Kildare
Niall Quinn
Monica McCarthyNiall Quinn
Permanent TSB
Painting of private houses
15,000 potential customers
Five competitors
3,200
150,000
70,00080,000Niall Quinn
Monica McCarthy
Advertisements in local radio and newspapers
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5. Paul Hughes and Emma Daly hope to set up a secretarial services business called H&D ICTLtd. 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 over2000 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 € __________
(b) Complete the blank business plan provided.
WorkingsCosts: 38,000 + 27,000 + 18,000
= 83,00083,000 – 17,500 = 65,500
BUSINESS PLAN
COMPANY DETAILS
Name of Company
Address of Company
Shareholders/Directors
Managing Director
Company Bank
PRODUCT
Description of Product
MARKET RESEARCH
Size of Market
Competition
Price per A4 Sheet €
SALES PROMOTION
Methods
FINANCE
Total Required €
Amount Available €
Amount Required €
SIGNED (i)
(ii)
DATE
65,500
H&D ICT Ltd
Keyboard Avenue
Carrick-on-ShannonCo. Leitrim
Paul Hughes
Emma Daly
Emma DalyAIB
Secretarial Services
2,000 potential customers
1 competitor
3 per A4 printed sheet
Advertise on local radio and in local papers
83,00017,500065,500
Paul Hughes
Emma Daly
6. HM Ltd is located at Hit Parade Avenue, Kiltamagh, Co. Mayo. It produces and distributesmusical t-shirts for the Irish and European market. Its shareholders are Samanta Harte andMichael Joseph Mumba. The managing director is Louise Walshe. HM Ltd has its bank accountin the Permanent TSB. It promotes its t-shirts on the internet and in pop magazines and offersa 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 themoffer a mail order service. HM Ltd offers the following financial information for the year end-ing 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 raisethe remaining finance by issuing shares to friends of the company.
(a) Calculate how much finance it will need to raise through issuing shares. (Show workingsclearly.)
HM Ltd will need to raise € __________
(b) Complete the Business Plan below, using today’s date. (Junior Certificate Higher level 2004 Q5 amended)
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BUSINESS PLAN
COMPANY DETAILS
Name of Company
Address of Company
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 (i)
(ii)
DATE
Workings2,000,000 – 300,000 – 500,000
= 1,200,000
1,200,000
HM Ltd Hit Parade Avenue
Kiltamagh
Co, Mayo.Samanta Harte
Michael Joseph Mumba
Louise Walshe Permanent TSB
20 million potential customers
5 main competitors
20
2,000,000
Internet; pop magazines
800,000 1,200,000
Samanta Harte Michael Joseph Mumba
Musical T-shirts for the Irish and European Markets
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7. Complete the partially completed cash flow forecast for Queen Ltd.
8. Complete the cash flow forecast for MAC Ltd, for the period January to June of 2006 from thefollowing data.Opening Cash €1,000Receipts 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 inMarch and €290 in May. Purchase of equipment in April €40,000. Purchasedstock 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
€
Feb
€
March
€
April
€
May
€
June
€
Total forJan-June
€
Receipts
Sales 16,000 16,000 16,000 19,000 19,000 19,000 105,000
Share Capital 15,000 15,000
A. Total Receipts 16,000 16,000 31,000 19,000 19,000 19,000 120,000
Payments
Purchases 3,000 10,000 5,000 4,000 6,000 7,000 35,000
Advertising 700 700 700 700 700 700 4,200
Telephone 300 280 290 870
Electricity 180 160 140 480
Wages 1,350 1,350 1,350 1,350 1,350 1,350 8,100
Equipment 40,000 40,000
B. Total Payments 5,350 12,230 7,330 46,210 8,340 9,190 88,650
C. Net Cash (A–B) 10,650 3,770 23,670 (–27,210) 10,660 9810 31,350
D. Opening Cash 1,000 11,650 15,420 39,090 11,880 22,540 1,000
Closing Cash (C+D) 11,650 15,420 39,090 11,880 22,540 32,350 32,350
Cash Flow Forecast of Queen Ltd for the period January to June 2005
Jan€
Feb€
March€
April€
Total€
A. Total receipts 16,000 18,000 19,000 22,000 75,000
B. Total payments 13,000 24,000 20,000 19,000 76,000
C. Net Cash (A–B) 3,000 (6,000) (1,000) 3,000 (1,000)
D. Opening Cash 2,000 5,000 (1,000) (2,000) 2,000
Closing Cash (C+D) 5,000 (1,000) (2,000) 1,000 1,000
9. Complete the partially completed cash flow forecast for King Ltd, from the following data forthe months of April, May and June. Sales to increase by 15% beginning in April; bank loan to be obtained in April €20,000; Wagesto increase by 5%; Equipment to be purchased in April €50,000; Light and heat expenses todecrease by 12% in June; Loan repayments to begin in May €500 per month; All other payments to remain the same.
10. (a) With what should a business compare its cash flow forecast at the end of the year?
(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 followinginformation 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 soldin June for €100,000. An EU Grant of €100,000 is expected in May. Monthly purchasesare expected to increase by 30% in May. Wages and transport costs are expected to remainthe same every month. Light and heat expenses are expected to decrease by 25% in themonths 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.
Cash Flow Forecast of King Ltd for the period January to June 2006
Jan
€
Feb
€
March
€
April
€
May
€
June
€
Total forJan-June
€
Receipts
Sales 25,000 25,000 25,000 28,750 28,750 28,750 161,250
Bank Loan 20,000 20,000
A. Total Receipts 25,000 25,000 25,000 48,750 28,750 28,750 181,250
Payments
Purchases 9,000 9,000 9,000 9,000 9,000 9,000 54,000
Advertising 500 500 500 500 500 500 3,000
Loan Repayment — — — 500 500 1,000
Light and Heat 1,600 1,600 1,504 4,704
Wages 8,000 8,000 8,000 8,400 8,400 8,400 49,200
Equipment — — — 50,000 — — 50,000
B. Total Payments 19,100 17,500 19,100 67,900 18,400 19,904 161,904
C. Net Cash (A–B) 5,900 7,500 5,900 (19,150) 10,350 8,846 19,346
D. Opening Cash 100 6,000 13,500 13,500 250 10,600 100
Closing Cash (C+D) 6,000 13,500 19,400 250 10,600 19,446 19,446
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The cash flow forecast should be compared with the actual figures from the
cash book.
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(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)
(c) Answer €
Chapter 29 Business Loan Applications
1. Explain
(a) Collateral: ______________________________________________________________________________________________________________________________________
(b) Auditor: ________________________________________________________________________________________________________________________________________
Cash Flow Forecast of Yam Ltd for the Period January to June 2007
Jan
€
Feb
€
March
€
April
€
May
€
June
€
Total forJan-June
€
Receipts
Sales 60,000 60,000 60,000 60,000 72,000 72,000 384,000
Share Capital 40,000 40,000
Buildings 100,000 100,000
EU Grant 100,000
A. Total Receipts 60,000 60,000 60,000 100,000 172,000 172,000 624,000
Payments
Purchases 24,000 24,000 24,000 24,000 31,200 31,200 158,400
Wages 7,000 7,000 7,000 7,000 7,000 7,000 42,000
Transport Costs 4,500 4,500 4,500 4,500 4,500 4,500 2,700
Light and Heat 3,600 — 2,700 2,700 9,000
Delivery Vans 42,000 42,000
Equipment 250,000 250,000
Dividend 20,000 20,000
B. Total Payments 39,100 77,500 38,200 35,500 295,400 67,200 548,400
C. Net Cash (A–B) 20,900 –17,500 21,800 64,500 (123,400) 109,300 75,600
D. Opening Cash 2,500 23,400 5,900 27,700 92,200 (31,200) 2,500
Closing Cash (C+D) 23,400 5,900 27,700 92,200 (31,200) 78,100 78,100
Workings78,100 – 30,000 = 48,100
48,100
This is security that is put up in case a loan cannot be repaid.
This is an independent accountant who checks the accuracy and truthfulness
of accounts on behalf of the owners.
2. Complete the loan application form provided from the following data, on today’s date. Doreenand John Clarke, directors of Auto Service Ltd, 10 Park Road, Lisdoonvarna, Co. Clare, havebeen in business for five years, Their garage business has been very profitable, and recentlythey obtained the agency for Nissan Cars. They are both qualified mechanics. Dooreen also hasa business diploma. Their business current account is in the AIB Account No. 56787665. Theywish to extend their garage at a cost of €250,000. They have retained earnings of €85,000 ondeposit with the AIB, and require a loan for the remainder repayable over ten years. They willput 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. €__________
(b) Complete the blank Loan Application Form provided on today’s date.
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AIB Loan Application Form
PERSONAL
Name of Business:
Name of Directors: 1. 2.
Address:
BUSINESS HISTORY
QUALIFICATIONS AND EXPERIENCE OF OWNERS
1. 2.
FINANCIAL INFORMATION
Bank Accounts
LOAN DETAILS
Purpose of Loan:
Total Cost of Project: €
Amount of Loan Required: €
Term of Loan:
Ability to Repay Loan:
Security Available:
Signed: 1. 2.
Date:
165,000 (250,000 – 85,000)
Auto Service Ltd
Doreen Clarke John Clarke
10, Park Road
Lisdoonvarna
Co. Clare
In business for 5 years
Very profitable
Recently obtained agency for Nissan Cars
Dooreen is a qualified mechanic with John is a qualified mechanica business diploma
Current Account AIB No. 56787665
250,000
165,000
Garage extension
10 years plus
Average profit €60,000 per year
Garage valued at €650,000
Doreen Clarke John Clarke
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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 isa qualified glazier. The glazing industry has been very profitable over the last few years due tothe boom in the building industry. They wish to expand their factory at a cost of €320,000 andpurchase two new pickup trucks costing €34,000 each. They have reserves of €95,000 and willreceive a grant of 20% of the total cost. They require a 12 year loan for the remainder. Theysupply 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. €
(b) Complete the Loan Application Form provided on today’s date.
National Irish Bank Loan Application Form
PERSONAL
Name of Business:
Name of Directors: 1. 2.
Address:
BUSINESS HISTORY
QUALIFICATIONS AND EXPERIENCE OF OWNERS
1. 2.
FINANCIAL INFORMATION
Bank Accounts
LOAN DETAILS
Purpose of Loan:
Total Cost of Project: €
Amount of Loan Required: €
Term of Loan:
Ability to Repay Loan:
Security Available:
Signed: 1. 2.
Date:
215,400 (388,000 – 95,000 – 77,600)
Thermo Glaze
Dessie Monaghan Joan Monaghan
12 Main Street
Ballina
Co. Mayo
In business for 12 years
Very profitable
Dessie has a marketing degree for GMIT
Current Account NIB
Expansion of factory
12 years
No. 23456784
388,000
215,400
Average profit €75,000 per year
Premises valued €450,000
Dessie Monaghan Joan Monaghan
Joan is a qualified glazier
4. Finnan Ltd received a loan of €50,000 on 23 March 2007. Record the receipt of this loan inthe Bank Account and in the Bank of Ireland Loan Account Finnan Ltd ledger below.
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 hasmachinery and delivery vans valued €120,000. Gear Ltd has a weekly income of €20,000 andfeels 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 €45,000and is eligible for a €30,000 grant. On 1 May 2000 it applied for a seven-year loan, from UlsterBank, for the remainder. The loan was granted on 10 May 2000.
You are required to:(a) Calculate the amount of the loan required. €(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)
(c)
Date Details FAmount
€Date Details F
Amount€
Ulster Bank Loan A/C
10/5/00 Bank ACB 75,000
Bank A/C
10/5/00 U.B. Loan GL 75,000
General Ledger of Finnan Ltd
Date Details F Amount€
Date Details F Amount€
Bank of Ireland Loan A/C
23/3/07 Bank ACB 50,000
Bank A/C
23/3/07 B of I loan GL 50,000
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Ulster Bank Loan Application Form
Company Details Name:Address:
Names of Directors:
Name of Business:
Annual Income:
Amount of loan required€
€
Purpose of Loan:
Length Required For:
Security Available :Signatures of Directors:
Date:
_______________________________________________________________________
1,040,000
75,000
75,000 (150,000 – 45,000 – 30,000)
Gear Ltd
Back Four Street
Garry Kelly
Ian HarteGear Ltd
Drogheda
Co. Louth
7 years
Garry Kelly Ian HartePremises worth €550,000
1/5/2000
Factory extension and purchase of new machinery
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Chapter 30 Banking for Business
1. Explain
(a) ATM cash withdrawal _____________________________________________________
__________________________________________________________________________
(b) Bank overdraft ___________________________________________________________
__________________________________________________________________________
(c) Bank charges ____________________________________________________________
__________________________________________________________________________
2. State two reasons for preparing a bank reconciliation statement.
1. ________________________________________________________________________
__________________________________________________________________________
2. ________________________________________________________________________
__________________________________________________________________________
Chapter 31 Insurance – Business
1. Match the following types of insurance cover in Column 1 to the different types of businessrisks in Column 2. One risk does not match. Match the types of cover to the risks by placingthe correct number or letter under the relevant number in the table below.
2. Complete the following sentence. The payment of an insurance premium by cheque is 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 areason 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___.
The reason for my answer is:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
1 2 3 4
C E A B
Column 1 Types of Insurance Cover Column 2 Types of Business Risks
1 Fidelity insurance A. Injury to employees at work
2 Public liability B. Theft of money being transferred
3 Employers’ liability C. Theft by employees
4 Cash in transit D. Death of owner
E. Injury to customers visiting premises
This is where a current account holder takes more money out of their
current account than they have in it.
These are the fees which bank customers have to pay when making transactions i.e. lodging and withdrawing money.
To make sure that the bank did not make a mistake in their records.
To identify any mistakes in the customer records in the bank records.
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.
insurance bank
This is a means of taking money from an account
using a special card and a PIN.
0
(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 __ (iii) €80,000 __.
The reason for my answer is:
______________________________________________________________________
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 €1,000value; 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 €
(b) Assume you are Peter Andrews, complete the cheque No. 100 paid to Sword Insurers Ltd.
(c) Record the payment of the premium in the Insurance Account and The Analysed Cash Bookprovided.
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
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
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Workings
SPECIMEN
The damage was €90,000 and the buildings were over-insured.
7,838.16
Sw
ord
Insu
ranc
es L
td
Sword Insurance Ltd
Seven thousand, eight hundred and thirty eight euro and
sixteen cent
1/5/2004
7,838.16
Peter Andrews7,83
8.16
1/5/
04
0
B E DV S C1,610 + 420 + 6,600 +165 + 112 = 8,907.
8,907 – 1,068.84 = 7,838.16
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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 year’s insurance:Insurance for Buildings and Machinery €9 per €1,000 value; Stock Insurance €14 per €1,000value; 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 theyinsured 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 €
(b) Assume you are Louise McFadden, complete the cheque No. 675 paid to West Insurers Ltd.
(c) Record the payment of the premium in the Insurance Account and the Analysed Cash Bookprovided.
Analysed Cash Book of Kerry Ltd
Date Details Cheque No. F Bank Insurance
1/5/05 Insurance 675 GL 6,599.88 6,637.68
General Ledger of Kerry Ltd
Date Details F Amount Date Details F Amount
Insurance A/C (p1)
1/5/05 Bank ACB 6,599.88
Workings P M MV S C3,420 + 900 + 3,300 +182 + 55= 7,857. 7,857 – 1,257.12 = 6,599.88
SPECIMEN
6,599.88
West Insurers Ltd
1/5/2005
6,599.88
Louise McFadden
Six thousand, five hundred and ninety nine euro and
eighty eight cent
Wes
t Ins
urer
s Lt
d
6,59
9.88
1/5/
2005
Chapter 32 Delivery Systems 1. What main form of transport would be most likely to be used to transport the following:
2. Using the distance table below calculate the distance from:
Sligo to Ennis kmsWexford to Galway kmsLimerick to Donegal kmsBelfast to Mullingar kms
3. Using the distance table below calculate the distance of a return journey from:
Waterford to Donegal kmsCavan to Ennis kmsSligo to Carlow kmsTralee to Carlow kms
4. Calculate the cost of diesel (show workings) for one day from the following details providedby 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 € ___________
Workings600 km25 = 24 litres
24 litres @75 cent
Goods to be transported Form of transportA. Fresh salmon from Rossaveal (Galway) to Paris Air
B. Industrial diamonds from Limerick to Antwerp Air
C. Bananas from South America Sea
D. Coal from Poland to Waterford Sea
E. Milk from farm to local creamery Road
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225
115 250
85 140 172
220 425 188 300
185 180 296 110 400
125 167 84 112 260 222
145 85 172 82 325 158 85
110 340 178 200 142 260 232 256
87 305 178 166 210 205 216 238 70
120 325 142 206 105 296 198 240 37 105
48 180 100 64 236 172 82 92 164 144 148
210 330 98 275 208 390 164 246 246 274 210 204
118 245 230 126 336 66 216 168 195 138 232 135 326
188 430 252 312 120 350 303 346 94 162 105 254 290 288
175 332 74 235 126 356 158 242 164 220 130 170 82 292 210
190 310 76 256 188 372 142 228 228 254 190 185 19 306 275 62
Distance Table (km)
Athlone
Belfast
Carlow
Cavan
Cork
Donegal
Dublin
Dundalk
Ennis
Galway
Limerick
Mullingar
Rosslare
Sligo
Tralee
Waterford
Wexford
195254296180
712400460504
18
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5. Calculate the cost of diesel (show workings) for one day from the following details providedby Pat Ltd.
6. Calculate the cost of diesel (show workings) for one day from the following details providedby May Ltd.
7. Joan Ltd supplies the following information on its annual costs. Calculate the annual costs(show workings).
8. Emer Ltd supplies the following information on its annual costs. Calculate the annual costs(show workings).
9. Nora Ltd supplies the following information on its annual costs. Calculate the annual costs(show workings).
10. On 1 June 2005 O’Brien Ltd purchased a delivery van by cheque No. 51 €42,000. Show howthis purchase would be recorded in the Analysed Cash Book and the Delivery Van Account of O’Brien Ltd below.
Analysed Cash Book of O’Brien Ltd (p1)Date Details Cheque No. F Bank
€Delivery Van
€1/6/05 Delivery van 51 GL 42,000 42,000
Nora Ltd operates 312 days of the year.Annual motor tax €600.Annual insurance €2,200.Repairs and maintenance €1,800.
Answer € ___________
Workings
€600 + €2,200 + €1,800312
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 + €2,800290
Joan Ltd operates 340 days of the year.Annual motor tax €800.Annual insurance €1,600.Repairs and maintenance €1,200.
Answer € ___________
Workings
€800 + €1,600 + €1,200340
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.
Answer € ___________
Workings450 km
30 = 15 litres
15 litres @75 cent
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.
Answer € ___________
Workings500 km
30 = 16.67 litres
16.67 litres @75 cent12.50
11.25
10.59
29.79
14.74
11. On 1 June 2005 Keenan Ltd purchased a delivery van by cheque No. 1 €30,000. Show howthis purchase would be recorded in the Analysed Cash Book and the Delivery Van Accountof Keenan Ltd below.
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 andShannon Motors Ltd Accounts of Waldron Ltd below.
General Ledger of Waldron Ltd
Date Details F Total€
Date Details F Total€
2005 2005
Delivery Van A/C (p1)
1/6/05 S. Motors Ltd GL 37,000
Shannon Motors Ltd (p2)
1/6/ D. van GL 37,000
General Journal of Waldron Ltd (p1)Date Details F DR
€CR€
1/6/05 Delivery van GL 37,000
1/6/05 Shannon Motors Ltd GL 37,000
Purchase of van on credit
General Ledger of Keenan Ltd
Date Details F Total€
Date Details F Total€
2005 2005
Delivery Van A/C (p1)1/6/05 Bank ACB 30,000
Analysed Cash Book of Keenan Ltd (p1)Date Details Cheque No. F Bank
€Delivary Van
€1/6/05 D.van 1 GL 30,000 30,000
General Ledger of O’Brien Ltd
Date Details F Total€
Date Details F Total€
2005 2005
Delivery Van A/C (p1)1/6/05 Bank ACB 42,000
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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 Vanand Duffy Motors Ltd Accounts of Davis Ltd below.
14. (a) State four factors to be considered when a business is choosing a delivery system.
1.
2.
3.
4.
(b) Why should a driver take into account the permitted drop-off time when planning a journey? _____________________________________________________________
(c) Calculate the cost of transport (show workings) for one day from the following detailsprovided by CD Ltd: CD Ltd operates 290 working days in the year. The diesel van cantravel 25km per litre. The distance travelled in one day is 500km. The cost of diesel is 75cent per litre. The journey takes 12 hours. The van driver’s wages are €20 per hour. Thevan driver’s helper’s wages are €8 per hour. The Annual Motor Tax is €560. The AnnualMotor Insurance is €1,600. The Annual Repairs are €1,100.
Answer € _____________________________
(d) On 1 May 2006 CD Ltd purchased a new delivery van by cheque for €42,000. Record thepurchase of this delivery van in the Analysed Cash Book and the Delivery Van Accountprovided.
Analysed Cash Book of CD Ltd (p1)Date Details Cheque No. F Bank
€Delivery Van
€1/5/06 Delivery van GL 42,000 42,000
General Ledger of Davis Ltd
Date Details F Total€
Date Details F Total€
2006 2006
Delivery Van A/C (p1)
1/5/06 Duffy Motors GJ 37,000
Duffy Motors Ltd (p2)
1/5/06 GJ 37,000
General Journal of Davis Ltd (p1)Date Details F Dr
€CR€
1/5/06 Delivery van GL 37,000
1/5/06 Duffy Motors Ltd GL
Purchase of van on credit 37,000
WorkingsDiesel 20 litre @75c = €15wages €240 + €96 = €336Annual lists = €11.24Total costs = €362.24
Cost
Speed
Reliability
Convenience
If the driver arrives too late they will not be allowed to unload.
362.24
15. (a) Explain the importance of delivery systems in the chain of distribution.
______________________________________________________________________________________________________________________________________________
(b) State where the costs of collecting and delivering goods are entered in the Final Accountsof a business. ___________________________________________________________
(c) Calculate the cost of transport (show workings) for one day (round trip) from Athlone toWaterford and back from the following details provided by MU Ltd:MU Ltd operates 310 working days in the year. The distance from Athlone to Waterfordis 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 driver’s wages are €25 per hour. The van driver’shelper’s wages are €10 per hour. The Annual Motor Tax is €6300. The Annual MotorInsurance is €2,200. The Annual Repairs are €1,900.
Answer € ________________________________
(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 theDelivery Van and PK Motors Ltd Accounts of CD Ltd below.
General Ledger of MU Ltd
Date Details F Total€
Date Details F Total€
2006 s2006
Delivery Van A/C (p1)
1/5/06 PK Motors GJ 42,000
PK Motors Ltd (p2)
1/5/ D. van GJ 42,000
General Journal of MU Ltd (p1)Date Details F Dr
€CR€
1/5/06 Delivery van GL 42,000
1/5/06 PK Motors Ltd GL 42,000
Purchase of van on credit
General Ledger of CD Ltd
Date Details F Total€
Date Details F Total€
2006 2006
Delivery Van A/C (p1)
1/5/ Bank ACB 42,000
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WorkingsDiesel €8.75Wages €315.00Annual costs €33.55Total costs €357.30
Transports raw materials to the manufacturer; transports finished goods to
357.30
wholesaler/retailer; transports workers to their jobs.
Costs of collecting is in trading account; costs of delivery in profit/loss account.
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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. Sales Promotion (a) 3 1 4 2
2. Retail Sales (b) 4 2 1 3
3. Product Development (c) 3 4 2 1
4. Market Research (d) 4 1 3 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. Oneword does not match.
Kelly Ltd was interested in expanding into the EU ___________________________________.
It first did some ___________________________________ but later found that it needed
to do some _____________________________________as well. It decided to choose the French
market as its ___________________________________. It launched its goods by using___________________________________.
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 numberbelow. (One explanations does not apply.)
4. Write brief notes on:
(a) Product development ___________________________________________________
______________________________________________________________________
(b) Branding ____________________________________________________________
______________________________________________________________________
5. Name the four Ps of marketing.
(i) (ii)
(iii) (iv)
1 2 3 4
D E A B
Column 1 Marketing Terms Column 2 Explanation1. Marketing A. Responsible for ensuring a business has a good public image.
2. Advertising B. Studying existing information to find out more about a market.
3. Public relations Officer C. Researching the market through surveys and questionnaires.
4. Desk Research D. Production of goods and services wanted by customers.
E. Informing potential customers about a product or service.
Field Research
Product Development
SpecialOffers
Market DeskResearch
Target Market
market
desk research
field research
target marketspecial offers
Bringing in new products to meet the changing needs and
habits of customers.
Use of a logo or name to distinguish one product from another.
Product
Promotion
Price
Place
0
6. Suggest target markets for the following products or services. Complete the chart below.
7. Complete the marketing mix chart for a pair of trainers of your choice.
8. Complete the marketing mix chart for a product or service of your choice.
9. Complete the chart below by giving examples of products or services using each typeof advertising.
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 thismethod and state a reason for your choice.
Methods of Advertising Chart
Method Used to Advertise Reason for choice
Radio Pop songs Can play the song
Television Food Can see colour in the food
Cinema Drink Encourages audience to drink
Billboards McDonalds To attract passing motorists
On delivery vans Bread Pat the Baker is nationwide
Internet Computer upgrades Dedicated audience
Newspapers Airlines Wide circulation
Magazines Clothes Use of colours
Type of Advertising Examples of products or services that use this type
Informative Bus Éireann bus times
Generic Fáilte Ireland – holiday in Ireland
Persuasive Cosmetic companies
Competitive Car manufacturers
Four Ps of Marketing Name of ProductProduct
Price
Promotion
Place
Four Ps of Marketing Name of Product
Product Trendy trainers – all leather
Price Ranges from €17.99 to €65.99
Promotion T. V. advertisements
Place All leading shoe shops
Product/Service Possible Target Markets
Mobile Phones Teenagers
Irish Times Business people
Farmers’ Journal Farmers
Business Studies Texts Business studies students
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11. Complete the chart below by giving your own examples of products or services that use thepromotional methods.
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 ofMurray Ltd.
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 ofBannon Ltd.
Chapter 34 Financial Recording and Filing
1. Complete the following document sequence charts by inserting the correct document in spacesA and B.
General Ledger of Bannon Ltd
Date Details F Total€
Date Details F Total€
2005 2005
Advertising A/C (p1)
12/5/ Bank ACB 23,000
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 Murray Ltd
Date Details F Total€
Date Details F Total€
2005 2005
Advertising A/C (p1)
12/5/ Bank ACB 23,000
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
Method Example
Sales Promotion Mobile phone companies – free credit
Branding Levis; Toyota
Sponsorship Flancare – Longford Town
Merchandising Supermarkets – new product displays
Public Relations GAA; Irish Racing Board
Letter of Enquiry
Quotation
Order
Invoice
→→
→
A.
B.
2. Indicate with a tick 0 which of the following documents would be sent by a seller to a customer who made a complaint.
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 relevantbook of first entry. (One source document does not apply.)
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:
6. State which account is receiving and which account is giving in the following transactions of agrocer.
Transactions Receiving Account Giving Account
Paid an employee €500 by cheque Wages Bank
Norah purchased a van on credit from Fast Motors Ltd Van Fast Motors Ltd
Sold goods to Carey for €65 cash Cash Sales
Took out €100 cash from the bank Cash Bank
Transactions Accounts
Purchased land by cheque €500,000 Land and Bank
Sold motor van for cash €9,000 Cash and Motor van
Put €3,000 into the bank Bank and Capital
Purchases car parts from Nissan Ltd Purchases and Nissan Ltd
1 2 3 4
C B E A
Column 1 Books of First Entry Column 2 Source Documents1. Analysed Cash Book A. Copy of Invoice sent
2. Sales Returns Book B. Copy of Credit Note sent
3. Purchase Book C. Receipt
4. Sales Book D. Credit Note received
E. Invoice received
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Invoice Credit Note Receipt0
0
0
0
0
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7. Record the following transaction in the ledger accounts of John below and extract a TrialBalance as on 1/3/2005: 1/3/2005 John gave Mary €500 cash.
Trial Balance as on ____________________
8. Record the following transaction in the ledger accounts of Bernadette below and extract a TrialBalance as on 14/8/2006: 14/8/2006 Bernadette gave Patrick €1,500 cash.
Trial Balance as on ____________________
9. Record the following transaction in the ledger accounts of Josephine below and extract a TrialBalance as on 14/8/2006: 14/8/2006 Martin gave Josephine €3,100 cash.
Ledger of Josephine
Date Details F Total€
Date Details F Total€
2006 2006
Cash A/C
14/8/ Martin GL 3,100
Martin A/C
14/8/06 Cash GL 3,100
Debit (DR) Credit (CR)
Cash 1,500
Patrick 1,500
1,500 1,500
Ledger of Bernadette
Date Details F Total€
Date Details F Total€
2006 2006
Cash A/C
14/8/06 Patrick GL 1,500
Patrick A/C
14/8/ Cash GL 1,500
Debit (DR) Credit (CR)
Cash 500
Mary 500
500 500
Ledger of John
Date Details F Total€
Date Details F Total€
2005 2005
Cash A/C
1/3/05 Mary GL 500
Mary A/C
1/3/ Cash GL 500
1/3/2005
14/8/2006
Trial Balance as on ____________________
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.
Trial Balance as on ____________________
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.
Trial Balance as on ____________________
Debit (DR) Credit (CR)
Cash 4,300
Graham 4,300
4,300 4,300
Ledger of Claire
Date Details F Total€
Date Details F Total€
2007 2007
Cash A/C
16/2/ Graham GL 4,300
Graham A/C
16/2/ Cash GL 4,300
Debit (DR) Credit (CR)
Cash 1,750
Emily 1,750
1,750 1,750
Ledger of Philip
Date Details F Total€
Date Details F Total€
2007 2007
Cash A/C
7/7/ Emily GL 1,750
Emily A/C
7/7/ Cash GL 1,750
Debit (DR) Credit (CR)
Cash 3,100
Martin 3,100
3,100 3,100
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7/7/2007
16/2/2007
14/8/2006
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12. Balance the following cash account.
13. Balance the following cash account.
14. Balance the following cash account.
Date Details F Total Date Details F Total
2007 € 2007 €Cash A/C
1/10/ Balance c/d 500 4/10/ Purchases 1,000
3/10/ Owner 3,200 7/10/ Machinery 5,200
7/10/ Sales 4,444 12/10/ Expenses 700
12/10/ Balance c/d 1,244
8,144 8,144
13/10/ Balance b/d 1,244
Date Details F Total Date Details F Total
2007 € 2007 €Cash A/C
1/8/ Owner 2,500 2/8/ Purchases 2,400
3/8/ Sales 1,320 4/8/ Insurance 760
6/8/ Sales 890 8/8/ Purchases 1,100
8/8/ Balance c/d 4504,710 4,710
9/8/ Balance b/d 450
Date Details F Total Date Details F Total
2006 € 2006 €Cash A/C
1/6/ Sales 700 2/6/ Expenses 660
3/8/ Owner 1,200 6/6/ Purchases 800
9/6/ Sales 1,800
9/6/ Balance c/d 2,240
3,700 3,700
10/6/ Balance b/d 2,240
Chapter 35 Business Documents I
Order Completion1. 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 AV8’s @ €32 a pair.
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.
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ORDER Order No. 70Lambe Footware LTDDrogheda, Co. Louth Tel: (041) 232343
Fax: (041) 232 344e-mail: [email protected] Reg. IE218450
To: Date:
Please supply the following goods as per quotation no. 468 the following:
Goods to be delivered to the above address within 10 days.
Signature Position
QUANTITY DESCRIPTION UNIT PRICE €
3020
Pairs of bootsAV8’s
€12€32
ORDER Order No. 45Tee Shirts For All LTD
Ennis, Co. Clare Tel: (065) 20066Fax: (065) 20067e-mail: [email protected] Reg. IE765672
To: Date:
Please supply the following goods as per quotation no. 281
Goods to be delivered to the above address within 10 days.
Signature Position
QUANTITY DESCRIPTION UNIT PRICE €
60100
Multicolour t-shirtsSmall training tops
€13€12
Dubarry Ltd
Ballinasloe
Co. Galway
1/7/2005
Larry Lambe
Balwin Designs 1/10/2006
Coronation Drive
Siobhan Kelly
Roscommon
Purchasing Manager
Purchasing Manager
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3. Winters Stationery Ltd, Lismore, Co. Waterford, ordered the following goods from LeavesLtd, 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.
Ordinary Level4. Maura Burke is the purchasing manager of Maura’s Alcohol-Free Drinks Ltd, Ballyjamesduff,
Co. Cavan. On 28 March 2007 she orders the following goods from the manager of Soft DrinkWholesaler 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 Order No. 13Winters Stationary LTDLismore, Co. Waterford Tel: (051) 543217
Fax: (051) 543718e-mail: [email protected] Reg. IE888653
To: Date:
Please supply the following goods as per quotation no. 127
Goods to be delivered to the above address within 10 days.
Signature Position
QUANTITY DESCRIPTION UNIT PRICE
200
750
Business studies record books
42-page copies
€1.50
€3.40
ORDER No. 345
Tel: (049) 37625 VAT Reg. IE7326825Fax: (049) 37666e-mail: [email protected]
MAURA’S ALCOHOL FREE DRINKS Ltd.Ballyjamesduff, Co. Cavan
Date :To:
Please supply the following goods:
Signature Position
QUANTITY DESCRIPTION UNIT PRICE
150300400
Bottles of CidonaBottles of Coco ColaBottles of Fanta
80 cent45 cent34 cent
Leaves Ltd
Kathleen Winters Purchasing Manager
Purchasing ManagerMaura Burke
Soft Drink Wholesaler Ltd
Corrib Industrial Park
Galway
28/5/2007
Branch Avenue,
Kildare
14/5/2007
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 JJPaints Ltd.
6. Connolly Sports Ltd sold the following goods to the Kerry County Board, FitzgeraldStadium, 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 theKerry County Board.
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Crown Paints Ltd. Athlone, Co. WestmeathDELIVERY DOCKET No. 2
Order No. 45 VAT Reg. IE12367821To: Tel: (090) 6452779
Fax: (090) 6452779e-mail: [email protected]:
Received the above goods in good condition.
Signed (For Purchaser)
Quantity Description
300120
Litres white emulsionLitres exterior varnish
Connolly Sports Ltd. Oranmore, Co, GalwayDELIVERY DOCKET No. 7
Order No. 67 VAT Reg. IE12367821GTo: Tel: (091) 4563721
Fax: (091) 4563722e-mail: [email protected] :
Received the above goods in good condition.
Signed (For Purchaser)
Quantity Description
300250
HurleysHelmets
J.J Paints LtdNewtown ForbesLongford
Stephen Brennan
Cooper Quilter
Kerry County BoardFitzgerald StadiumKillarney, Co. Kerry
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Chapter 36 Business Documents II
Ordinary Level
1. Techno Supplies Ltd, The Curragh Industrial Estate, Kildare, received an order No. 54 fromDigicomp 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 is20% on all goods.
(Junior Certificate Ordinary Level 2001 Q5 amended)
2. Hardwood Furniture, Forest Lane, Cork, received an order No. 231 from Yorke HomeSupplies, 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 June2007. Complete the following blank invoice. Please note that Trade Discount is 20% andVAT is 10% on all goods.
Techno Supplies Ltd.The Curragh Industrial Estate, Kildare
INVOICE No. 7621
To:
Order No:
Tel: 045-4399221Fax: 045-4399762e-mail: [email protected] VAT Reg. No. IE139868WDate:
Quantity Description Model No. Unit Price € Total €
30 Clarity Scanners SC22 125 3,750
20 Viscount VDUs VT 245 4,900
75 Soft Touch keyboards KB48 62 4,650
Total (Excluding VAT)Trade DiscountSubtotalVAT
E & OE Total (Including VAT)
13,300
1,330
11,970
2,394
14,364
Digicomp Ltd
Retailers of Computer Equipment
Astral Shopping Centre
Naas, Co. Kildare
54
16/5/2006
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3. Indicate with a tick � which of the following statements are true or false.
(a) VAT is added before trade discount is deducted in aninvoice
(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)
(b)
(c)
5. List three procedures used by the buyer on receiving credit notes.
(a)
(b)
(c)
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
When the buyer sends a
of the seller issues a credit note. The
buyer records the credit note received in the .
Hardwood Furniture LtdForest Lane, Cork
INVOICE No. 3445
To:
Order No:
Tel: 021-821687Fax: 021-821688e-mail: [email protected] Reg. No. IE145673CDate:
Quantity Description Model No. Unit Price € Total €
12 Kitchen tables HF2 230 2,760
130 Bedroom lockers HF7 20 2,600
60 Computer desks HF9 40 2,400
Total (Excluding VAT)Trade DiscountSubtotalVAT
E & OE Total (Including VAT)
7,760
1,552
6,208
620.80
6,828.80
True
�
False
�
�
Yorke Home Supplies
Carrick-on-Shannon
Co, Leitrim
Check the name and address
Check the calculations
File a copy
Check the calculations
Record in the Purchases Returns Book
File the credit note
Book.
complaint
Purchases Returns Book
letter
Sales
invoice.
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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.
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.
Mayo Paints Ltd.Forest Lane, Cork
INVOICE No. 411
To:
Order No:
Tel: 021-537281Fax: 021-537284e-mail: [email protected] Reg. No. IE678321Date:
Quantity Description Unit Price € Total(Ex VAT) €
20 5 litre tins of gloss paint 50 1,000
50 2 litre tins of varnish 10 500
Total (Excluding VAT)Trade DiscountSubtotalVAT
E & OE Total Due
1,500
300
1,200
252
1,452
1/5/2006
23
Dungarvan
Co, Waterford
DIY Ltd
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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:
Order No:
Tel: 0503-81789Fax: 0503-81788e-mail: [email protected] Reg. No. IE678321Date:
Quantity Description Unit Price € Total(Ex VAT) €
8 HP35 Batteries 50 400
10 ICRX Batteries 60 600
Total (Excluding VAT)Trade DiscountSubtotalVAT
E & OE Total Due
1,000
300
700
147
553
Crossan Electric Ltd.Longford
INVOICE No. 47
To:
Order No:
Tel: 043-43218Fax: 043-43219e-mail: [email protected] Reg. No. IE654453Date:
Quantity Description Unit Price € Total(Ex VAT) €
10 Solara Flat TVs 550 5,500
5 Sony DVD Players 600 3,000
Total (Excluding VAT)Trade DiscountSubtotalVAT
E & OE Total Due
8,500
1,700
6,800
1,428
8,228
Power Electric Ltd
Waterford
47
Quilter Service Station
Tralee
Co, Kerry
93
10/8/2007
20/3/2007
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10. On 23 May 2006 Jones Ltd, Dublin Road, Galway issued a credit note No. 23 to SparksLtd, 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.
11. On 17 May 2006 Barry Ltd, Sea Road, Sligo issued a credit note No. 67 to Cavan StoresLtd, 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:
Order No:32
Tel: 073-32217Fax: 073-32218e-mail: [email protected] Reg. No. IE325467Date:
Quantity Description Unit Price € Total(Ex VAT) €
10 Chairs 12 120
Broken
Total (Excluding VAT)Trade DiscountSubtotalVAT
E & OE Total Due
120
30
90
18.90
108.90
Jones Ltd.Dublin Road, Galway
CREDIT NOTE No. 23
To:
Order No:32
Tel: 091-21355Fax: 091-2136e-mail: [email protected] Reg. No. IE790023Date:
Quantity Description Unit Price € Total(Ex VAT) €
6 TV Aerials 60 360
Faulty
Total (Excluding VAT)Trade DiscountSubtotalVAT
E & OE Total Due
360
90
270
56.70
326.70
Sparks Ltd
Longford
Cavan Stores Ltd
Cavan
17/5/2006
23/5/2006
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12. On 16 February 2007 Brooks Ltd, Castlebar, Co. Mayo issued a credit note No. 45 to BKLtd, 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.
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.
2. Write out the following abbreviations in full:(i) DR (v) CR
(ii) DL (vi) GL
(iii) CL (vii) B/D
(iv) C/D
Source Document Book of First Entry
Invoice sent Sales Book
Credit Note received Purchases Returns Book
Invoice received Purchases Book
Credit Note sent Sales Returns Book
Brooks Ltd.Castlebar Co. Mayo
CREDIT NOTE No. 45
To:
Order No:19
Tel: 094-26686Fax: 094-26785e-mail: [email protected] Reg. No. IE325467Date:
Quantity Description Unit Price € Total(Ex VAT) €
5 Bicycles 75 375
Unordered
Total (Excluding VAT)Trade DiscountSubtotalVAT
E & OE Total Due
375
93.75
281.25
59.06
340.31
BK Ltd
Cork
Debit
Debtors Ledger
Creditors Ledger
Credit
General Ledger
Brought Down
Carry Down
16/2/2007
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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)
(b)
(c)
4. On 25 May 2006, Nolan Ltd, Station Road, Kildare, Co. Kildare sent an Order No. 65 toKelly 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. AnInvoice No. 78 accompanies the goods.
SALES BOOK (p1)
Date Details Invoice No F Net € VAT € Total €
18/6/05 Walshe Ltd 31 DL 5,200 1,092 6,292
Morris Electric Ltd.Main Street, Cork
INVOICE No. 31
To:
Order No:
Tel: 021-826178Fax: 021-826188e-mail: [email protected] Reg. No. IE333568Date:
Quantity Description Unit Price € Total(Ex VAT) €
50 Sony Walkmans 110 5,500
10 Nut DVDs 100 1,000
Total (Excluding VAT)Trade DiscountSubtotalVAT
E & OE Total Due
6,500
1,300
5,200
1,092
6,292
Walshe Ltd
Mallow
Co. Cork
7
18/6/2005
Check the name and address;
Check stock and credit rating of buyer;
File copy of order.
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Trade discount is 20% and the tiles are subject to VAT at 13½%.(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)
(b)
(c)
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 13½%.(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)
PURCHASES BOOK (p1)
Date Details Invoice No F Net € VAT € Total €
28/05/06 Kelly Tiles 78 CL 2,800 378 3,178
Kelly Tiles Ltd.Cross Street, Carlow
INVOICE No. 78
To:
Order No:
Tel: 0503-41658Fax: 0503-41659e-mail: [email protected] Reg. No. IE678321Date:
Quantity Description Unit Price € Total(Ex VAT) €
30 Ceramic Tiles 50 1,500
20 Floor Tiles 100 2,000
Total (Excluding VAT)Trade DiscountSubtotalVAT
E & OE Total Due
3,500
700
2,800
378
3,178
Check the name and address;
Check stock levels and credit rating of buyer;
File copy of order.
Nolan Ltd
28/5/2006
65
Station Road
Kildare
Co. Kildare
Check the name and address;
Check the calculations;
Record in Purchases Book.
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(b)
(c)
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)
SALES BOOK (p1)
Date Details Invoice No F Net € VAT € Total €
15/3/07 Daly Ltd 57 DL 2,800 378 3,178
Cronin Paints Ltd.Naas, Co. Kildare
INVOICE No. 57
To:
Order No:
Tel: 045-826178Fax: 045-826179e-mail: [email protected] Reg. No. IE333568Date:
Quantity Description Unit Price € Total(Ex VAT) €
100 White emulsion 20 2,000
40 Wood gloss 50 2,000
Total (Excluding VAT)Trade DiscountSubtotalVAT
E & OE Total Due
4,000
1,200
2,800
378
3,178
Daly Ltd
24
15/3/2007
Howth
Co. Dublin
Check the name and address;
Check the calculations;
Record the invoice in the Sales Book.
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(b)
(c)
Integrated Credit Note Exercises
7. On 12 June 2004, East Ltd, Wexford, a computer manufacturer, received a letter of complaintfrom a customer, Young Ltd, Gate Street, Navan, Co. Meath. In the letter from Young Ltd, itwas stated that four printers, which had been delivered, were black instead of coloured. Theprice 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 notsatisfied with the printers you received and requesting a reduction in the amount owed.
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
Shine Jeans Ltd.Centre Street, Sligo
INVOICE No. 87
To:
Order No:
Tel: 071-44032Fax: 071-9144033e-mail: [email protected] Reg. No. IE545678Date:
Quantity Description Unit Price € Total(Ex VAT) €
50 Levi men’s jeans 45 2,250
70 Kearns men’s jeans 60 4,200
Total (Excluding VAT)Trade DiscountSubtotalVAT
E & OE Total Due
6,450
1,612.50
4,837.50
1,015.90
5,853.40
Burke Ltd
Ballina
Co. Mayo
3
28/1/2005
(b)
(c)
8. On 17 May 2004, South Ltd, Waterford, a shoe manufacturer, received a letter of complaintfrom one of their customers, Foot Ltd, Toe Street, Kinsale, Co. Cork. In the letter from FootLtd, it was stated that fifteen pairs of shoes, which had been delivered, were scratched. Theprice 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.
PURCHASES RETURNS BOOK (p1)
Date Details Credit Note No F Net € VAT € Total €
23/6/04 East Ltd 45 CL 300 63 363
East Ltd.Wexford.
CREDIT NOTE No. 45
To:
Order No: 76
Tel: 053-2213345Fax: 053-2213346e-mail: [email protected] Reg. No. IE234345Date:
Quantity Description Unit Price € Total(Ex VAT) €
4 Computer printers 100 400
Black instead of colour
Total (Excluding VAT)Trade DiscountSubtotalVAT
E & OE Total Due
400
100
300
63
363
Young Ltd
Gate Street
Navan
Co. Meath
23 June 2004
(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 wereblack 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.
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Purchasing Manager
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(b)
(c)
9. On 20 June 2004, North Ltd, Donegal, a shirt manufacturer, received a letter of complaintfrom one of their customers, Back Ltd, Arm Street, Thurles, Co. Tipperary. In the letter fromBack 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
Sales Return Book (p1)
Date Details Credit Note No F Net € VAT € Total €
23/6/04 Foot Ltd 67 DL 600 126 726
South Ltd.Waterford
CREDIT NOTE No. 67
To:
Order No: 100
Tel: 051-460383Fax: 051-460385e-mail: [email protected] Reg. No. IE768545Date:
Quantity Description Unit Price € Total(Ex VAT) €
15 Pairs of shoes 50 750
Shoes scratched
Total (Excluding VAT)Trade DiscountSubtotalVAT
E & OE Total Due
750
150
600
126
726
Foot Ltd
23/6/2004
Toe Street
Kinsale
Co. Cork
(a) • Check the name and address• Check that the details of the complaint are true• Check calculations• Record in Sales Returns Book
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(b)
(c)
Chapter 38 Continuous Balancing Ledgers and Statements
In Q1-Q6, record the following information using the T Ledger formats and ContinuousBalancing Ledger formats provided.
Debtors Ledgers1. Quinn Ltd Account
1/3/2005 Balance (dr) €12,000 4/3/2005 Sales €65,0006/3/2005 Sales returns €11,500 8/3/2005 Sales €23,500
T Ledger format
Date Details F Total Date Details F Total
2005 2005
Quinn Ltd A/C
1/3/ Balance b/d 12,000 6/3/ Sales returns SRB 11,500
4/3/ Sales SB 65,000 8/3/ Balance c/d 89,000
8/3/ Sales SB 23,500
100,500 100,500
9/3/ Balance b/d 89,000
PURCHASES RETURNS BOOK (p1)
Date Details Credit Note No F Net € VAT € Total €
23/6/04 North Ltd 45 CL 900 189 1,089
North Ltd.Donegal.
CREDIT NOTE No. 45
To:
Order No: 101
Tel: 074-567891Fax: 074-567892e-mail: [email protected] Reg. No. IE990764Date:
Quantity Description Unit Price € Total(Ex VAT) €
30 Shirts 40 1,200
Missing buttons
Total (Excluding VAT)Trade DiscountSubtotalVAT
E & OE Total Due
1,200
300
900
189
1,089
Back Ltd
Arm Street
Thurles
Co. Tipperary
23/6/2004
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2. Aldemero Ltd Account1/7/2006 Balance (dr) €17,300 6/7/2006 Sales €35,0008/7/2006 Sales returns €10,700 10/7/2006 Sales €54,000
Creditors Ledgers3. Agusto Ltd Account
1/3/2006 Balance (cr) € 6,000 7/3/2006 Purchases €47,0009/3/2006 Purchases returns € 9,500 16/3/2006 Purchases €38,200
T Ledger format
Date Details F Total Date Details F Total
2006 2006
Agusto Ltd A/C
9/3/ Purchase returns SRB 9,500 1/3/ Balance b/d 6,000
7/3/ Purchases PB 47,000
16/3/ Balance c/d 81,700 16/3/ Purchases PB 38,200
91,200 91,200
17/3/ Balance b/d 81,700
Continuous Balancing Ledger format
Aldemero Ltd A/C
Date Details F Dr debit Cr credit Balance
2006
1/7/ Balance b/d 17,300
6/7/ Sales SB 35,000 52,300
8/7/ Sales returns SRB 10,700 41,600
10/7/ Sales SB 54,000 95,600
T Ledger format
Date Details F Total Date Details F Total
2006 2006
Aldemero Ltd A/C
1/7/ Balance b/d 17,300 8/7/ Sales returns SRB 10,700
6/7/ Sales SB 35,000 10/7/ Balance c/d 95,600
10/7/ Sales SB 54,000
106,300 106,300
11/7/ Balance b/d 95,600
Continuous Balancing Ledger format
Quinn Ltd A/C
Date Details F Dr debit Cr credit Balance
2005
1/3/ Balance b/d 12,000
4/3/ Sales SB 65,000 77,000
6/3/ Sales returns SRB 11,500 65,500
8/3/ Sales SB 23,500 89,000
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4. Ryan Ltd Account1/11/2007 Balance (cr) €17,000 6/11/2007 Purchases €52,000
19/11/2007 Purchases returns €9,500 27/11/2007 Purchases €34,800
5. Yorke Ltd Account1/8/2007 Balance (cr) € 83,600 11/8/2007 Purchases returns €52,000
16/8/2007 Purchases € 24,900 23/8/2007 Purchases returns € 7,600
T Ledger format
Date Details F Total Date Details F Total
2007 2007
Yorke Ltd A/C
11/8/ Purchases returns PRB 52,000 1/8/ Balance b/d 83,600
23/8/ Purchases returns PRB 7,600 16/8/ Purchases PB 24,900
23/8/ Balance c/d 48,900
108,500 108,500
24/8/ Balance b/d 48,900
Continuous Balancing Ledger format
Ryan Ltd A/C
Date Details F Dr debit Cr credit Balance
2007
1/11/ Balance b/d 17,000
6/11/ Purchases PB 52,000 69,000
19/11/ Purchases returns PRB 9,500 59,500
27/11/ Purchases PB 34,800 94,300
T Ledger format
Date Details F Total Date Details F Total
2007 2007
Ryan Ltd A/C
19/11/ Purchases returns PRB 9,500 1/11/ Balance b/d 17,000
6/11/ Purchases PB 52,000
27/11/ Balance c/d 94,300 27/11/ Purchases PB 34,800
103,800 103,800
28/11/ Balance b/d 94,300
Continuous Balancing Ledger format
Agusto Ltd A/C
Date Details F Dr debit Cr credit Balance
2006
1/3/ Balance b/d 6,000
7/3/ Purchases PB 47,000 53,000
9/3/ Purchases returns PRB 9,500 43,500
16/3/ Purchases PB 38,200 81,700
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Statement Completion6. 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.
7. Complete the statement provided which was sent by Aaron Ltd to Daly Ltd, Cassidy Drive,Sligo on 31 May 2007.
2007 €
1/5/ Balance (dr) 7,600
8/5/ Invoice No. 5 issued to Farrell Ltd 78,000
12/5/ Credit note No. 34 issued to Farrell Ltd 24,100
19/5/ Invoice No. 19 issued to Farrell Ltd 67,920
31/5/ Credit Note No. 89 issued to Farrell Ltd 24,800
STATEMENT No. 45
Darren Ltd, Athlone Road, Wexford
To : Tel : 053-421234Fax : 053-421235VAT No. IE768652Account No. 23Date:
Date Details Debit € Credit € Balance €
1/5/2006 Balance b/d 12,300
5/5/ Invoice no. 5 45,000 57,300
8/5/ Credit note no. 34 11,400 45,900
14/5/ Invoice no. 19 33,880 79,780
31/5/ Credit note no. 89 5,600 74,180
2006 €
1/5/ Balance (dr) 12,300
5/5/ Invoice No. 5 issued to Farrell Ltd 45,000
8/5/ Credit note No. 34 issued to Farrell Ltd 11,400
14/5/ Invoice No. 19 issued to Farrell Ltd 33,880
31/5/ Credit Note No. 89 issued to Farrell Ltd 5,600
Continuous Balancing Ledger format
Yorke Ltd A/C
Date Details F Dr debit Cr credit Balance
2007
1/8/ Balance b/d 83,600
11/8/ Purchases returns PRB 52,000 31,600
16/8/ Purchases PB 24,900 56,500
23/8/ Purchases returns PRB 7,600 48,900
Farrell LtdReynolds AvenueWaterford
31/5/2006
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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 McCarthy’s account in the Debtors Ledgerof Murphy Ltd.
4/5/2006 Murphy Ltd sent an invoice no. 8 to McCarthy Ltd € 1,8009/5/2006 Murphy Ltd sent an invoice no. 32 to McCarthy Ltd €16,000
14/5/2006 Murphy Ltd received a cheque from McCarthy Ltd € 5,60018/5/2006 Murphy Ltd sent an invoice no. 78 to McCarthy Ltd € 8,20024/5/2006 Murphy Ltd sent a credit note no. 43 to McCarthy Ltd € 4,50031/5/2006 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 : Tel : 056-421234Fax : 056-421235VAT No. IE7686524Account No. 23Date
Date Details Debit € Credit € Balance €
1/5/2006 Balance b/d 376
4/5/ Invoice no. 8 1,800 2,176
9/5/ Invoice no. 32 16,000 18,176
14/5/ Cheque 5,600 12,576
18/5/ Invoice no. 78 8,200 20,776
24/5/ Credit note no. 43 4,500 16,276
STATEMENT No. 22
Aaron Ltd, The Square, Donegal
To : Tel : 074-421234Fax : 074-421233VAT No. IE332214Account No. 23Date:
Date Details Debit € Credit € Balance €
1/5/2007 Balance b/d 7,600
8/5/ Invoice no. 5 78,000 85,600
12/5/ Credit note no. 34 24,100 61,500
19/5/ Invoice no. 19 67,920 129,420
31/5/ Credit note no. 89 24,800 104,620
31/5/ Invoice no. 89 7,900 24,176
31/5/2007
Daly LtdCassidy DriveSligo
Check the name and address
McCarthy Ltd
9 Centre StreetDublin
31/5/2006
Check the calculations
Check statement details against Creditors Ledger
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9. The following details refer to the sale of goods on credit by Victory Ltd to Lyons Ltd, ShaneRoad, Longford for the month of May 2007.On 1 May 2004 there was a balance of €250 in Lyons’ account in the Debtors Ledger ofVictory Ltd.
5/5/2007 Victory Ltd sent an invoice no. 4 to Lyons Ltd € 2,3008/5/2007 Victory Ltd sent an invoice no. 29 to Lyons Ltd €13,000
16/5/2007 Victory Ltd received a cheque from Lyons Ltd € 9,50019/5/2007 Victory Ltd sent an invoice no. 46 to Lyons Ltd € 9,50026/5/2007 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
(a) Should cash sales be entered in the statement? Yes No
(b) Complete the following statement No. 98 sent by Victory Ltd on 31 May 2007.
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 Cox’s account in the Debtors Ledger ofMacken Ltd.
2/5/2008 Macken Ltd sent an invoice no. 3 to Cox Ltd € 2,7006/5/2008 Macken Ltd sent an invoice no. 54 to Cox Ltd €12,900
11/5/2008 Macken Ltd received a cheque from Cox Ltd € 8,50017/5/2008 Macken Ltd sent an invoice no. 61 to Cox Ltd € 7,70027/5/2008 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?
(b) Complete the following statement No. 100 sent by Macken Ltd on 31 May 2008.
STATEMENT No. 98
Victory Ltd, Athlone Road, Galway.
To : Tel: 091-444331Fax: 091-444332VAT No. IE7686524Account No. 45Date:
Date Details Debit € Credit € Balance €
1/5/2007 Balance b/d 250
5/5/ Invoice no. 4 2,300 2,550
8/5/ Invoice no. 29 13,000 15,550
16/5/ Cheque 9,500 6,050
19/5/ Invoice no. 46 9,500 15,550
26/5/ Credit note no. 12 2,800 12,75031/5/ Invoice no. 57 8,300 21,050
Lyons Ltd
Shane Road
Longford31/5/2007
Cox Ltd should compare the
statement with Macken Ltd account in the Creditors Ledger.
�
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Other Continuous Balancing Ledger ExercisesRecord the following expense and gains transactions in the Continuous Balancing Ledgers.
11. On 23 January 2007 paid rent by cheque €500.
12. On 15 May 2007 paid insurance by cheque €1,200.
13. On 26 June 2008 received interest from bank €3,200. This was lodged in the bank.
14. On 19 August 2008 received commission from Nissan Ireland of €15,500. This was lodgedin the bank.
Commission Receivable A/C
Date Details F Dr debit Cr credit Balance
2008
1/8/ Balance b/d 6,000
19/8/ Bank ACB 15,500 21,500
Interest Receivable A/C
Date Details F Dr debit Cr credit Balance
2008
1/6/ Balance b/d 900
26/6/ Bank ACB 3,200 4,100
Insurance A/C
Date Details F Dr debit Cr credit Balance
2007
1/5/ Balance b/d 200
15/5/ Bank ACB 1,200 1,400
Rent A/C
Date Details F Dr debit Cr credit Balance
2007
1/1/ Balance b/d 2,000
23/1/ Bank ACB 500 2,500
STATEMENT No. 100
Macken Ltd, Hanlon Lane, Monaghan.
To : Tel : 047-7729617Fax : 047-7729618VAT No. IE7987654Account No. 123Date
Date Details Debit € Credit € Balance €
1/5/2008 Balance b/d 700
2/5/ Invoice no. 3 2,700 3,400
6/5/ Invoice no. 54 12,900 16,300
11/5/ Cheque 8,500 7,800
17/5/ Invoice no. 61 7,700 15,500
27/5/ Credit note no. 21 3,200 12,300
31/5/ Invoice no. 74 6,100 18,400
31/5/2008
Cox Ltd
Tullamore
Co. Offaly
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Chapter 39 Analysed Cash Books
1. Please tick � the correct answer in each of the following statements.
(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
(b) A cheque is
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.
4. Assume you are Peggy Shields. Complete the cheque no. 450 below from the followingdetails:30/6/2007 Paid Holy Ltd €980.
True
�
False
�
�
proof of payment for goods and services received.
Vic
tory
Ltd
Victory Ltd
Three thousand, five hundered and sixty euro
Hol
y Lt
d
Holy Ltd
Nine hundred and eighty euro
3,56
016
/5/0
6
3,560
John Joyce
Peggy Shields
16/5/06
a method of payment where a current account holder instructs its bank
to make a payment to another person.
980
980
30/6
/07
30/6/07
I
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Receipt Completion
5. Assume you are Dara Carriage. Complete the receipt no. 23 on behalf of Bus Ltd belowfrom the following details:Issued a receipt to Dunne Car Repairs Ltd, Four Lane Avenue, Sligo, for €2,112 on 10March 2006.
6. Assume you are Mary Car, complete the receipt no. 67 on behalf of Car Ltd below from thefollowing details:Issued a receipt to Fiona Donnelly, Ilona Avenue, Longford, for €14,300 on 20 May 2007.
Chapter 40 Analysed Cash Books II/Monitoring Overheads
1. Complete the following statements.(i) Overheads are also known as
Examples of overheads include
(ii) Monitoring overheads involves
(iii) It is important to monitor overheads because
2. Complete the following statements:
(i) The Petty Cash Book is used to record
(ii) A Petty Cash Voucher shows
Car Ltd, Castlebar, Co. MayoReceipt No: 67
DATE: _________________Received with thanks
The sum of:
From:
Accounts Department
Bus Ltd, Castlebar, Co. MayoReceipt No: 23
DATE: _________________Received with thanks
The sum of:
From:
Accounts Department
€2,112
€14,300
10/3/2006
20/5/2007
Mary Car
Two thousand, one hundred and twelve euro
Dunne Car Repairs Ltd, Four Lane Avenue, Sligo
Dara CarriageSigned:
Signed:
Fourteen thousand, three hundred euro
Fiona Donnelly, Ilona Avenue, Longford
expenses.
wages; light and heat; insurances;
advertising; rent; carriage outwards.
it identifies the main overheads of
a business. It allows comparison between actual overheads and budgeted
overheads and allows changes to be made.
preparing budgets for each overhead and keeping records of actual overheads.
small cash payments made from the petty
cash.
what the money was spent on, who received it and
who authorised payment.
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(iii) The Petty Cash Imprest is
3. (i) Complete the partially completed budget comparison sheet provided from the followingdetails.
Budget Comparison Sheet for 2005
(ii) Tick � the appropriate box to indicate which is greater than or less than. If the actualoverheads are less than the budgeted figures, indicate this with a minus sign, eg – €3,500.Suggest suitable business reasons why there are differences.
4. (i) Complete the partially completed budget comparison sheet below from the followingdetails.
Budget Comparison Sheet for 2006
Overheads Budgeted € Actual € Difference €
Insurance 11,600 14,800 + 3,200
Carriage Outwards 13,200 22,800 +9,600
Rent 42,500 56,000 +13,500
Bad Debts 10,000 16,500 + 6,500
Actual Overheads 2006€
Insurance 14,800
Carriage Outwards 22,800
Rent 56,000
Bad Debts 16,500
Overheads Greater Than
Less Than
Possible Reason
Wages � Extra overtime worked
Light and Heat � Good weather required less heat
Advertising � Change in advertising media
Loan Interest � Increase in rate of interest
Actual Overheads Budgeted € Actual € Difference €
Wages 76,500 94,000 + 17,500
Light and Heat 48,000 34,000 – 14,000
Advertising 37,600 28,000 – 9,600
Loan Interest 11,900 14,500 + 2,600
Actual Overheads 2005 €
Wages 94,000
Light and Heat 34,000
Advertising 28,000
Loan Interest 14,500
the amount of cash the petty cashier has at the start
of each week.
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(ii) Tick � the appropriate box to indicate which is greater than or less than. If the actualoverheads are less than the budgeted figures, indicate this with a minus sign, eg – €3,500.Suggest suitable business reasons why there are differences.
5. The following table shows the Budgeted and Actual figures for a business’s overheads for2007.
Business Overheads for 2007
(i) List the overheads whose actual figures are greater than the budgeted figures and giveone possible business-related reason for the difference in each case.
(ii) List the overheads whose actual figures are less than the budgeted figures and give onepossible business-related reason for the difference in each case.
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. Passedby John West.
PETTY CASH VOUCHER
Voucher no: 1 Date: _______________For what Required Amount
Signature: Passed by:
Overheads Possible Reasons For Being Less Than
Bad Debts Introduced better credit control
Overheads Possible Reasons For Being Greater Than
Wages Extra staff taken on
Telephone Increased use of telesales
Carriage outwards Increase in motor insurance and tax
Postage Increase in cost of stamps
Overheads Budgeted € Actual €
Wages 67,000 78,000
Telephone 28,400 36,200
Carriage Outwards 27,500 41,000
Postage 17,600 19,860
Advertising 19,000 19,000
Bad Debts 15,000 13,000
Overhead GreaterThan
LessThan
Possible Reason
Insurance � Increase in insurance premiums
Carriage Outwards � Increase in sales to far-away places
Rent � Changes to new expensive premises
Bad Debts � Increase in credit sales
€6.40Tea and biscuits for the office
18/3/2005
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.
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.
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.
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 Date: _______________For what Required Amount
Signature: Passed by:
PETTY CASH VOUCHER
Voucher no: 231 Date: _______________For what Required Amount
Signature: Passed by:
PETTY CASH VOUCHER
Voucher no: 32 Date: _______________For what Required Amount
Signature: Passed by:
PETTY CASH VOUCHER
Voucher no: 76 Date: _______________For what Required Amount
Signature: Passed by:
€7.50
€11.50
€10
€17.42
Stationery
28/8/2005
Pat Shortt John Kenny
Taxi
Window cleaner
Stamps
Ronan Keating Louis Walsh
Tommy Tiernan Colin Farrell
11/9/2006
18/1/2006
18/3/2007
Hector Navan Niall Quinn
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Chapter 41 General Journal
1. Only one of the following statements is correct. Tick � the correct one.The General Journal is used to record:
(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 iscredited.
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 � the correct amount of the baddebt in each case.
(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
4. The following entries appeared in the General Journal of a grocer. Complete the GeneralJournal by writing an appropriate narration/explanation.
5. The following entries appeared in the General Journal of a business. Complete the GeneralJournal by writing an appropriate narration/explanation.
General Journal
Date Details F Dr € CR €
14/5/2006 Burns Ltd DL 17,500
Equipment GL 17,500
Narration:
Sold equipment on credit
General Journal
Date Details F Dr € CR €
21/3/2005 Machinery GL 50,000
Crown Machines Ltd CL 50,000
Narration:
Purchased machinery on credit
�
Debit
Machinery
Kelly Ltd
Bad debt
Credit
Bell Ltd
Computer
Lawlor Ltd
A � B � C �
€480 €1,920 � €2,400
€2,100 €1,400 � €4,900
€1,575 � €525 €1,500
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6. The following entries appeared in the General Journal of a business. Complete the GeneralJournal by inserting the appropriate figure opposite Clarke Ltd and an appropriatenarration/explanation.
7. The following entries appeared in the General Journal of a business. Complete the GeneralJournal by inserting the figure for Ordinary Share Capital and an appropriate narration/explanation.
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.
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. Theremainder was written off as a bad debt.
General Journal of Ryan Ltd
Date Details F Dr € CR €
7/7/07 Cash ACB 2,600
Bad debts GL 10,400
Connor Ltd DL 13,000
Narration:Connor Ltd declaredbankrupt, paid20 cent per euro owed
General Journal of Hynes Ltd
Date Details F Dr € CR €
3/10/06 Cash ACB 22,000
Bad debts GL 22,000
Kiernan Ltd DL 44,000
Narration:Kiernan Ltd declaredbankrupt, paid50 cent per euro owed
General Journal
Date Details F Dr € CR €
1/2/2007 Machinery GL 60,000
Bank Overdraft ACB 5,000
Ordinary Share Capital GL 55,000
Narration:Asset, liability andordinary share capital
60,000 60,000
General Journal
Date Details F Dr € CR €
30/3/2006 Cash ABC 6,000
Bad Debts GL 17,000
Clarke Ltd DL 23,000
Narration:Clarke Ltd declaredbankrupt, paid €6000cash
23,000 23,000
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Chapter 42 Combined Books of First Entry and Ledger
1. The following account appeared in the ledger of Given Ltd.
Complete the sentences below to explain these entries.
(a) On 12/5/2005 Given Ltd
(b) On 18/5/2005 Given Ltd
2. The following account appeared in the ledger of O’Shea Ltd.
Complete the sentences below to explain these entries.
(a) On 1/5/2005 O’Shea Ltd
(b) On 28/5/2005 O’Shea Ltd
3. The following account appeared in the ledger of Carr Ltd.
Complete the sentences below to explain these entries.
(a) On 1/4/2006 Carr Ltd
(b) On 28/4/2006 Carr Ltd
DR Cunningham Ltd Account CR
Date2006
Details F Total€
Date2006
Details F Total€
22/4/ Bank ACB 14,500 1/4/ Balance b/d 16,000
DR Delivery Van Account CR
Date2005
Details F Total€
Date2005
Details F Total€
1/5/ Balance b/d 56,500
28/5/ Bank ACB 28,000
DR Purchases Account CR
Date2005
Details F Total€
Date2005
Details F Total€
12/5/ Bank ACB 14,500
18/5/ Total Creditors PB 23,600
purchases goods for resale by cheque €14,500.
purchased goods for resale on credit €23,600.
has delivery vans which cost €56,500.
purchased a new delivery van by cheque €28,000.
owes Cunningham Ltd €16,000.
paid by cheque €14,500 to Cunningham Ltd.
4. The following account appeared in the ledger of O’Brien Ltd.
Complete the sentences below to explain these entries.
(a) On 10/9/2006 O’Brien Ltd
(b) On 29/9/2006 O’Brien Ltd
5. The following account appeared in the ledger of Duff Ltd.
Complete the sentences below to explain these entries.
(a) On 12/11/2007 Duff Ltd
(b) On 30/11/2007 Duff Ltd
6. The following account appeared in the ledger of Kilbane Ltd.
Complete the sentences below to explain these entries.
(a) On 13/4/2007 Kilbane Ltd
(b) On 30/4/2007 Kilbane Ltd
DR Interest Receivable Account CR
Date2007
Details F Total€
Date2007
Details F Total€
13/4/ Bank ACB 3,500
30/4/ Balance c/d 1,000
DR Roy Ltd Account CR
Date2007
Details F Total€
Date2007
Details F Total€
12/11/ Balance b/d 20,000 30/11/ Bad Debt GL 20,000
DR Kerr Ltd Account CR
Date2006
Details F Total€
Date2006
Details F Total€
10/9/ Balance b/d ACB 14,500
29/9/ Sales SB 11,456
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is owed €14,500 by Kerr Ltd.
sold goods €11,456 on credit to Kerr Ltd.
is owed €20,000 by Roy Ltd.
wrote Roy Ltd off as a bad debt for the full amount owing.
bank.
received €3,500 in interest and this was lodged in the
is owed €1,000 interest from the bank.
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7. The following account appeared in the ledger of Reid Ltd.
Complete the sentences below to explain these entries.
(a) On 1/10/2007 Reid Ltd
(b) On 12/10/2007 Reid Ltd
Chapter 43 Control Accounts
1. Complete the Debtors Control Account below from the following data.
Total credit sales for June 2006 €45,000Total sales returns for June 2006 €3,400Total cash paid by debtors for June 2006 €31,000
2. Complete the Creditors Control Account below from the following data.
Total credit purchases for August 2006 €32,000Total purchases returns for August 2006 € 7,400Total cash paid to creditors for August 2006 €21,000
3. Complete the Debtors Control Account provided from the following data.
Total credit sales for May 2007 €67,000Total sales returns for May 2007 € 6,900Total cash paid by debtors for May 2007 €53,400
DR Creditors Control A/C CR
Date2006
Details F Total€
Date2006
Details F Total€
August Purchase returns PRB 7,400 August Purchases 32,000
August Bank ACB 21,000
August Balance c/d 3,600
32,000 32,000
September Balance b/d 3,600
DR Debtors Control A/C CR
Date2006
Details F Total€
Date2006
Details F Total€
30/6/ Sales SB 45,000 30/6/ Sales returns SBR 3,400
30/6/ Bank ACB 31,000
30/6/ Balance c/d 10,600
45,000 45,000
1/7/ Balance b/d 10,600
DR Bank Account CR
Date2007
Details F Total€
Date2007
Details F Total€
12/10/ Finnan Ltd DL 6,500 1/10/ Balance b/d 4,400
has a bank overdraft of €4,400.
received €6,500 from Finnan Ltd and this was lodged.
4. Complete the Creditors Control Account below from the following data.
Total credit purchases for March 2007 €37,000Total purchases returns for March 2007 €2,400Total cash paid to creditors for March 2007 €21,900
Chapter 44 Trading Account
Calculating the Average Stock1. Calculate the average stock from the following information.
(a) Opening stock €20,000; Closing Stock €40,000.
(b) Opening stock €16,000; Closing stock €36,000.
(c) Opening stock €18,000; Closing stock €12,000.
Calculating the Mark-up on Cost of sales2. Calculate the gross (profit) mark-up from the following information.
(a) Gross Profit €50,000; Cost of sales €250,000.
Answer %:20%
Workings50,000 x 100
250,000
Answer:€15,000
Workings€18,000 + €12,000
2
Answer:€26,000
Workings€16,000 + €36,000
2
Answer:€30,000
Workings€20,000 + €40,000
2
Creditors Control A/C
Date Details F Dr debit€
Cr credit€
Balance€
1/5/07 Balance €4,500
31/5/ Purchases PB 37,000 41,500
31/5/ Purchases returns PRB 2,400 39,100
31/5/ Bank ACB 21,900 17,200
Debtors Control A/C
Date Details F Dr debit€
Cr credit€
Balance€
1/5/07 Balance b/d €12,000
31/5/ Sales SB 67,000 79,000
31/5/ Sales returns SRB 6,900 72,100
31/5/ Bank ACB 53,400 18,700
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(b) Gross Profit €45,000; Cost of sales €160,000.
(c) Gross Profit €45,000; Cost of sales €180,000.
Calculating the Margin on Sales3. Calculate the gross (profit) margin from the following information.
(a) Gross Profit €39,000; Sales €300,000.
(b) Gross Profit €81,000; Sales €450,000.
(c) Gross Profit €82,800; Sales €345,000.
4. Close off the following accounts to the Trading Account in your copybook. Find the Gross Profitor 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 Details F Total€
Date Details F Total€
2006 2006
Sales A/C (p1)
31/3/ Trading 85,000 31/3/ Balance b/d 85,000
Purchases A/C (p2)
31/3/ Balance b/d 35,000 31/3/ Trading 35,000
Purchases Returns A/C (p3)
31/3/ Trading 5,000 31/3/ Balance b/d 5,000
Import Duty A/C (p4)
31/3/ Balance b/d 5,000 31/3/ Trading 5,000
Answer %:24%
Workings82,800 x 100
345,000
Answer %:18%
Workings81,000 x 100
450,000
Answer %:13%
Workings39,000 x 100
300,000
Answer %:25%
Workings45,000 x 100
180,000
Answer %:28.13%
Workings45,000 x 100
160,000
Trading account for year ending 31/3/2006
1/6/05
31/5/06
SalesLess cost of salesOpening stockPurchasesLess purchases returnsImport dutyCost of goods availableLess closing stockCost of actual salesGross profit
35,0005,000
16,000
30,0005,000
51,00014,000
85,000
37,00048,000
5. Close off the following accounts to the Trading Account in your copybook. Find the Gross Profitor 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.
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.
2. The Trading, Profit and Loss Account of a company showed a Net Profit of €54,000. It waslater realised that sales returns of €500 were omitted. Calculate the correct net profit whenthe error is corrected.
3. The Trading, Profit and Loss Account of a company showed a Net Profit of €102,000. Itwas later realised that the wages of €40,000 were entered twice. Calculate the correct netprofit when the error is corrected.
Answer:€142,000
Calculations€102,000 + €40,000
Answer:€53,500
Calculations€54,000 – €500
Capital Expenditure Revenue Expenditure
Machinery Carriage outwards
Vans Heating oil
Factory extension Loan interest
Computers Wages
Repairs to machinery
Date Details F Total€
Date Details F Total€
2007 2007
Sales A/C (p1)
31/5/ Trading 190,000 31/5/ Balance b/d 190,000
Purchases A/C (p2)
31/5/ Balance b/d 43,000 31/5/ Trading 43,000
Sales Returns A/C (p3)
31/5/ Balance b/d 11,000 31/5/ Trading 11,000
Carriage In A/C (p4)
31/5/ Balance b/d 9,000 31/5/ Trading 9,000
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Trading account for year ending 31/5/2007
1/6/06
31/5/07
SalesLess sales returnsLess cost of salesOpening stockPurchasesCarriage inwardsCost of goods availableLess closing stockCost of actual salesGross profit
190,00011,000
16,00043,0009,000
68,00014,000
179,000
54,000125,000
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4. The Trading, Profit and Loss Account of a company showed a Net Loss of €1,500. It waslater 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 iscorrected.
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%.
2. Calculate the retained earnings (reserves) from the following information:Net Profit €70,000; Issued Share Capital €180,000; Rate of dividend paid 25%.
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%.
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 ending31/12/2006 €130,000; Issued Share capital €400,000; Rate of dividend paid 20%.
5. Complete the following Profit and Loss Appropriation Account for the year ended 31/5/2007from 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 € 187,000
Less dividends 77,000
€ 110,000
Add opening RE € 75,000
Retained earnings € 185,000
Answer:€100,000
CalculationsDividends 20% of €400,000 = €80,000Retained earnings €130,000 – €80,000 = €50,000€50,000 + €50,000 = €100,000
Answer:€90,000 (Dividends)€30,000 (RE)
CalculationsDividends 30% of €300,000 = €90,000Retained earnings = €120,000 – €90,000 = €30,000
Answer:€45,000
Calculations25% of €180,000 = €45,000
Answer:€30,000
Calculations15% of €200,000 = €30,000
Answer:€7,100Net profit
Calculations– €1,500 + €12,000 – €200 – €3,200 = Net profit €7,100
6. Complete the following Profit and Loss Appropriation Account for the year ended 31/5/2007from 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
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 Fixed Assets Current Assets20-year loan Dividends due Machinery Cash
Bank overdraft Equipment Closing stock
Creditors
Net profit €210,000
Less dividends €104,500
€105,500
Add opening RE €36,000
Retained earnings €141,500
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0
0
0
0
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Chapter 48 Adjustments to Final Accounts
1. Indicate with a tick 0which of the following statements are true or false. Explain your answer.
(a) Amounts prepaid are always added in the profit and loss account.
Explanation
(b) Closing stock of stationery is treated as an amount due.
Explanation
(c) Amounts due to a firm are treated as current assets.
Explanation
2. An annual insurance premium is paid on 1 April 2006. Close off and balance the insuranceaccount for the year ended 31/12/2006. Show clearly the amount to be transferred to the Profitand Loss account.
3. A business owed €230 for repairs on the 31/12/2007. Close off and balance the repairsaccount for the year ended 31/12/2007. Show clearly the amount to be transferred to the profit and loss account.
Date Details F Total Date Details F Total
2007 € 2007 €
Repairs A/C1/12/ Bank ACB 1,800 31/12/ P. Loss Account 2,030
31/12/ Balance c/d 230
2,030 2,030
1/1/08 Balance b/d 230
Date Details F Total Date Details F Total
2006 € 2006 €
Insurance A/C1/4/ Balance b/d 1,600 31/12/ P. Loss Account 4,000
1/4/ Bank ACB 3,200 31/12/ Balance c/d 800
4,800 4,800
1/1/07 Balance b/d 800
True False
0
True False
0
True
0
False
They are always deducted as they belong to another trading period.
prepaid expense.
Closing stock of stationery will be used in another trading period, so it’s a
Amounts due to a firm are owed to the firm (i.e. by debtors).
4. A business owed €670 for wages on the 31/12/2007. Close off and balance the wages accountfor the year ended 31/12/2007. Show clearly the amount to be transferred to the profit and lossaccount.
5. The following is an extract from the profit and loss account of a business for the year endingDecember 2007.
(a) What is the figure for electricity used during the year?
(b) What is the figure for electricity paid for during the year?
6. The following is an extract from the profit and loss account of a business for the year endingMarch 2007.
(a) What is the figure for advertising used during the year?
(b) What is the figure for advertising paid for during the year?
7. The following is an extract from the profit and loss account of a business for the year endingJuly 2007.
(a) What is the figure for interest used during the year?
(b) What is the figure for interest recieved for during the year?
Profit and Loss Account for year ending 31/7/2007Interest receivable 4,500
Add interest receivable due 1,500 6,000
Profit and Loss Account for year ending 31/3/2007Advertising 4,200
Less advertising prepaid 900 3,300
Profit and Loss Account for year ending 31/12/2007Electricity 1,200
Add electricity due 800 2,000
Date Details F Total Date Details F Total
2007 € 2007 €
Wages A/C1/12/ Bank ACB 18,500 31/12/ P. Loss Account 19,170
31/10/ Balance c/d 670
19,170 19,170
1/1/08 Balance b/d 670
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€2,000
€1,200
€3,300
€4,200
€6,000
€4,500
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Chapter 49 Final Accounts and Balance Sheet with Adjustments
1.
(a) What is the Working Capital figure of McGrath Ltd? €
(b) What is the Capital Employed figure of McGrath Ltd? €
2. 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.
3. Show how the following adjustments are entered in the Trading, Profit and Loss Account andBalance Sheet extracts below.Machinery €300,000, Motor vans €120,000. Depreciation: Machinery 15%; Motor Vans12½%.
Balance Sheet as on 31 May 2006
Fixed Assets Cost Deprecation NBV
Machinery 300,000 45,000 255,000
Motor vans 120,000 15,000 105,000
420,000 60,000 360,000
Trading, Profit and Loss and Appropriation Account for the year ended 31 May 2006Less Expenses
Depreciation: machinery 45,000
motor vans 15,000 60,000
Adjustment Added inTPLA
Subtracted inTPLA
Current Assetsin Balance Sheet
Current Liabilitiesin Balance Sheet
Dividends due 0 0Wages due 0 0Insurance prepaid 0 0Interest receivable prepaid 0 0Carriage inwards due 0 0Rent receivable due 0 0Advertising prepaid 0 0Interest due 0 0Closing stock 0 0
Balance Sheet of McGrath Ltd as on 31 May 2006
Fixed Assets 200,000
Current Assets 75,000
Less Current Liabilities 45,000
30,000
230,000
Financed By Authorised Issued
400,000 Ordinary Shares 400,000 175,000
Add reserves 35,000 210,000
Long term Liabilities 20,000
230,000
30,000
230,000
4. Enter the following adjustments in the partially completed Trading, Profit and Loss Accountand Balance Sheet below.Interest Receivable due €500, Advertising due €1,500, Insurance prepaid €700.
Chapter 50 Assessing a Business
1. Given a cost price of €150 and a selling price of €200, calculate the percentage mark-up.
2. Given a cost price of €200 and a selling price of €250, calculate the percentage margin on sale.
3. A company has a net profit of €250,000 and a capital employed of €500,000.Calculate the return on capital employed.
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%
€240,000= 25%
Answer:
__________%
Workings€250,000 x 100%
€500,000 = 50%
Answer:
__________%
Workings€250 – €200 = €50 margin€50 x 100% = 20%
€250
Answer:
__________%
Workings€200 – €150 = €50 mark-up
€50 x 100% = 33.33%150
Balance Sheet as on 31 May 2007Current Assets
Interest receivable due 500
Insurance prepaid 700 1,200
Current Liabilities
Advertising due 1,500
Working capital (300)
Trading, Profit and Loss and Appropriation Account for the year ended 31 May 2007Gross Profit 200,000
Add gains
Interest Receivable 7,500
Add interest due 500 8,000
208,000
Less Expenses
Advertising 12,000
Add advertising due 1,500 13,500
Insurance 6,500
Less insurance prepaid 700 5,800 19,300
Net Profit 188,700
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33.33
20
50
25
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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.
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.
7. Calculate the rate of Stock Turnover from the following data.Opening Stock €40,000, Closing Stock €30,000, Cost of Sales €175,000.
8. Examine the following balance sheets and state if the companies are solvent or insolvent.
Give a reason for your answer in each case.
9. (a) Explain the terms:
(i) Overtrading
(ii) Solvent
Answer:17.5 times
Workings€175,000 = €175,000
€40,000 + €30,000 €10,000= 17.5 times
Answer:2.06:1
Workings(€47,000 – €12,000) : 17,000
€35,000 : 17,0002.06 :1
Answer:2.37:1
Workings€11,000 : €4,650
2.37 :1
Balance Sheet of D&D as on 31/5/2006 Balance Sheet of M&M as on 31/5/2006
Fixed Assets 400,000 Fixed Assets 300,000
Current Assets 60,000 Current Assets 40,000
Less Current Liabilities 50,000 Less Current Liabilities 95,000
Total Net Assets 410,000 Total Net Assets 245,000
Financed By Financed By
Share Capital 350,000 Share Capital 130,000
Loan 60,000 Loan 115,000
Capital Employed 410,000 Capital Employed 245,000
Answer: D&D are solvent Answer: M&M are solvent
Reason: Total assets greater than total liabilities€460,000 greater than €110,000
Reason: Total assets greater than total liabilities€340,000 greater than €210,000
This is where a company is operating without enough permanent
capital. It tries to produce more than it is capable of.
A business is solvent if its total assets are greater than its external
liabilities.
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(b) The directors of Bridge Ltd, Main Street, Cork supplied the following figures for the years2005 and 2006.
Assume you are Kevin Scully, Management Consultant, Suspense Street, Waterford.Prepare a report in your copybook, on today’s date, for the directors of Bridge Ltd. Compareand 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.
2005 2006
€ €Sales 480,000 510,000
Gross Profit 200,000 280,000
Net Profit 100,000 180,000
Current Assets 48,000 54,000
Current Liabilities 18,000 39,000
Closing Stock 12,000 17,000
Capital Employed 520,000 580,000
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 2005and 2006. I used the following ratios: gross profit percentage; net profit precentage; return on capitalemployed; acid test ratio.My findings are as follows:
2005 2006Gross profit % 41.67% 54.90%Net profit % 20.83% 35.29%Return on capital employed 19.23% 31.03%Acid test ratio 2 : 1 0.95 : 1
The profitability of the company is very high and increasing. However, the acid test ratio is falling, whichis 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.
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11. (a) Why might a company have different mark-ups on its products in different parts of the country?
(b) The directors of Solo Ltd, Main Street, Cork supplied the following figures for the years2006 and 2007.
Assume you are Gerry Ryan, Management Consultant, Pop Parade, Mullingar, Co. Westmeath.Prepare a report in your copybook, on today’s date, for the directors of Solo Ltd. Compare andcomment 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.
2006 2007
€ €Sales 480,000 510,000
Gross Profit 200,000 280,000
Net Profit 100,000 180,000
Current Assets 48,000 54,000
Current Liabilities 18,000 39,000
Share Capital 350,000 350,000
Capital Employed 490,000 534,000
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 Chess Ltd, Main Street, Cork supplied the following figures for the years2006 and 2007.
Assume you are George Lee, Management Consultant, News Road, Wicklow.Prepare a report in your copybook, on today’s date, for the directors of Chess Ltd. Compareand 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.
2006 2007
€ €Sales 660,000 610,000
Gross Profit 320,000 260,000
Net Profit 140,000 90,000
Current Assets 65,000 58,000
Current Liabilities 25,000 43,000
Long Term 15% Loan 100,000 140,000
Capital Employed 580,000 700,000
Ratio analysis as follows
2006 2007
Gross profit % 48.49% 42.62%
Net profit % 21.21% 14.75%
Return on capital employed 24.14% 12.86%
Current ratio 2.6:1 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.
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Ratio analysis as follows
2006 2007
Gross profit % 41.67% 54.90%
Net profit % 20.83% 35.29%
Return on capital employed 20.41% 33.71%
Current ratio 2.67 : 1 1.39 : 1
(c) State, in the space provided above, the amount paid out in dividends each year if the rateof dividends is 12% in year 2006 and 10% in 2007.
Chapter 51 Club Accounts1. 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.)
2. Indicate with a tick 0 where each of the following receipts and expenditures are entered in theaccounts of a club.
Receipt/Expenditure Income and ExpenditureAccount
Receipts and PaymentsAccount
Bought a tractor 0Paid insurance 0 0Sold land 0Received interest on savings 0 0Won lotto prize of €500,000 0Received membership fees 0 0
1. 2. 3.
C D A
Column 1 Club Officers Column 2 Duties
1.
2.
3.
Treasurer
Secretary
Chairperson
A.
B.
C.
D.
Controls the meeting
Records the times of athletes at race meetings
Collects membership fees
Records decisions made at meetings
Answer: Dividends paid €42,000 €35,000
(12% of €350,000) (10% of €350,000)
The profitability is increasing and hopefully will continue. The current ratio has fallen below the recom-mended 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.
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Chapter 52 Club Accounts with Adjustments
1. Complete the following sentences.
(a) Wages due are entered under
in the Income and Expenditure and under inthe Balance Sheet.
(b) Opening cash and bank balances are entered in the
and in the
.
(c) The sale for cash of fixed assets is entered in the
but not in the
.
2. Name four possible costs of running a disco.
(i) (ii) (iii)
(iv)
3. Indicate with a tick 0 where each of the following receipts and expenditures are entered in the accounts of a club.
4. Complete the Bar Trading Account below from the following data.Bar purchases €35,000, Barperson’s wages €16,000, Barperson’s wages due €3,000,Closing stock of bar supplies €12,000.
Bar Trading Account for the year ended 31/5/2007Sales 340,000
Less cost of sales1/6/06 Opening Stock 11,000
Bar purchases 35,000
Barperson’s wages 16,000
Add wages due 3,000 19,000
65,00031/5/07 Less closing stock 12,000 53,000
Receipt /Expenditure Bar Trading Account
Income and ExpenditureAccount
Receipts and PaymentsAccount
Bought a tractor 0Paid insurance 0 0Sold land 0Received interest onsavings
0 0
Won lotto prize of€500,000
0
Received membershipfees
0 0
Bar profit 287,000
Expenditure
Current Liabilities
Analysed cash book debit side
Receipts and payments account debit side
Receipts and payments account
Income and expenditure account
DJ Tickets Hire of hall
Insurance
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Chapter 53 Farm Accounts
1. List four reasons why farmers should keep accounts.
(i) (ii)
(iii) (iv)
2. Name four possible examples of farm income.
(i) (ii)
(iii) (iv)
3. Name two possible examples of farm capital expenditure
(i) (ii)
and two possible examples of farm revenue expenditure.
(i) (ii)
Chapter 54 Service Firms
1. Give four examples of service firms.
(i) (ii)
(iii) (iv)
2. List four reasons why service firms should keep accounts.
(i) (ii)
(iii) (iv)
3. Name four possible examples of a service firm’s income. (Depends on type of business, e.g.hairdresser)
(i) (ii)
(iii) (iv)
4. Name two possible examples of a service firm’s capital expenditure.
(i) (ii)
and two possible examples of a service firm’s revenue expenditure.
(i) (ii)
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. 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
True
0
0
False
0
True
000
False
Required for taxes and grants To find out if the farm made a profit
To manage the farm better
Sale of milk Sale of cattle
Sale of sheep
Purchase of land
Light and heat
Banks Insurance companies
Decorators Hairdressers
Required by law
Needed for loan applications
Wash & blow dry
Style
Motor vans Equipment
Light and heat Telephone
Cut
Colour
To find out if the business is profitable
To manage the business better
Insurance
Purchase of machinery
EU grant
To find out what the farm is worth
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Junior Certificate Business Studies Workbook Teacher’s Manual
3. Write the following abbreviations out in full.
(a) WWW
(b) VDU
(c) ROM
(d) CAD
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 andpreparing accounts
Filing Information Preparing Accounts
(a) Spreadsheets
(b) Data base
(c) Word Processing
(d) Graphics
6. Purchased a computer system by cheque for €7,450 on 1 May 2006. Record this purchase inthe computer and bank accounts below.
7. Purchased a computer system by cheque for €9,800 on 1 May 2006. Record this purchase inthe computer and bank accounts below.
General Ledger
Date Details F Total Date Details F Total
Computer A/C (p1)
1/5/2006 Bank ACB 9,800
Bank A/C (p2)
1/5/2006 Computer ACB 9,800
General Ledger
Date Details F Total Date Details F Total
Computer A/C (p1)
1/5/2006 Bank ACB 7,450
Bank A/C (p2)
1/5/2006 Computer ACB 7,450
0
0
0
World Wide Web
Visual Display Unit
Read Only Memory
Computer Aided Design
Junior Certificate Business Studies Workbook Teacher’s Manual
350
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 accountsbelow.
8. Purchased a computer system on credit from Infocom Ltd for €25,000 on 1 May 2007. Recordthis purchase in the General Journal, the Computer and Infocom Ltd accounts below.
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
General Journal p1
Date Details F Dr debit1/5/2007 Computer GL 25,000
Infocom Ltd GL 25,000
Narration: Purchase of computeron credit
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
General Journal p1
Date Details F Dr debit1/6/2007 Computer GL 15,000
PK Computers Ltd 15,000
Narration: Purchase of computeron credit
Cr credit
Cr credit