JUNIOR CERTIFICATE 2010 BUSINESS STUDIES PAPER 11 SUPPORT NOTES. GENERAL LEDGER of SMITH Ltd. Machinery A/C 1/6 Balance B/D GJ 250,000 1

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1 Q (A~C) Date 00 JUNIOR CERTIFICATE 00 BUSINESS STUDIES PAPER SUPPORT NOTES Book of First Entry, Ledger and Trial Balance of SMITH Ltd Details F Total Date Details F Total 00 GENERAL LEDGER of SMITH Ltd Machinery A/C /6 Balance B/D GJ 50,000 Ordinary Share Capital A/C /6 Balance B/D GJ 48,000 Wages A/C 8/6 Bank ACB 5,000 Purchases A/C 0/6 Total Net Creditors PB 0,000 0/6 Bank ACB 6,000 56,000 Sales A/C 0/6 Total Net Debtors SB 5,000 0/6 Bank ACB 60,000 95,000 VAT A/C 0/6 Credit Purchases PB 6,00 0/6 Credit Sales SB 7,50 + 0/6 Cash Purchases ACB 5,460 0/6 Cash Sales ACB, /6 Balance C/D 8,90 9,950 9,950 /7 Balance B/D 8,90 CREDITORS LEDGER of SMITH Ltd LARKIN Ltd A/C 0/6 Bank ACB 5,000 5/6 Purchases PB 6,00 + 0/6 Balance C/D,00 6,00 6,00 /7 Balance B/D,00 DEBTORS LEDGER of SMITH Ltd KENNY Ltd A/C /6 Balance B/D GJ 8,000 /6 Sales SB 8,50 6,50 Page of 0

2 Q continued DEBTORS LEDGER of SMITH Ltd Date 00 Details F Total Date 00 Details F Total CLARKE Ltd A/C /6 Sales SB 4,00 8/6 Bank ACB 0, /6 Balance C/D 4,00 4,00 4,00 /7 Balance B/D 4,00 ANALYSED CASH BOOK (DEBIT SIDE) of SMITH Ltd Date Details Receipt F Bank Sales VAT Debtors 00 No. 5/6 Sales GL 7,600 ½ 8/6 CLARKE Ltd DL 0,000 () 9,600 60,000,600 0,000 /7 Balance B/D,40 ANALYSED CASH BOOK (CREDIT SIDE) of SMITH Ltd Date 00 Details CH. No. F Bank Purchases VAT Creditors Wages /6 Balance B/D GJ 0,000 8/6 Purchases GL,460 6,000 ½ 8/6 Wages GL 5,000 0/6 LARKIN CL 5,000 8,460 6,000 5,460 5,000 5,000 0/6 Balance C/D,40 () 9,600 Trial Balance of SMITH Ltd as on 0/6/00 DR CR Machinery 50,000 ½ Wages 5,000 ½ Purchases 56,000 ½ Bank,40 ½ KENNY Ltd 6,50 ½ CLARKE Ltd 4,00 ½ Ordinary Share Capital 48,000 ½ Sales 95,000 ½ VAT 8,90 ½ LARKIN Ltd,00 ½ 6,490 6,490 s Summary Item Ledger 0 Analysed Cash Book 0 Trial Balance 5 Dates Folios Total 40 Page of 0

3 Q. (Ai) This is a Credit Sales, Business Document and Bookkeeping Question. Suitable Method of Checking Credit Rating Any two methods marks each Ask for a Trade Reference, from some other business who sold this new customer goods on credit, which will state that payment was made in full. Ask for a Bank Reference, from the new customer s bank manager, which will state that this customer has always being in good standing with the bank Other Method Use a Status Enquiry Service who could carry out checks on this customer (Aii) Impact on Net Profit of the Non Payment for Sales One marks There will be a reduction in the Net Profit of the business because the non payment will be treated as a bad debt i.e. an expensive mistake giving credit to an unsuitable customer. (Bi) Process for Statements Issued Any three of the marks each Check that the name and address of the debtor/ customer is correct Check that the details are the same as in the Debtors Ledger Check that all the calculations are correct 4 File a copy of the Statement Issued (Bii) See over (Biii) See over (Biv) see over Page 4 of 0

4 Q contd. Q contd QUESTION (B ii) (4 s) STATEMENT No. KEOGH LTD, 0 Bridge Street, Navan To : HOGAN Ltd* Tel Bridge Street VAT Reg. No. E 5565 Navan Account No Date: /5/00 DATE DETAILS DEBIT CREDIT BALANCE /5/00 Balance,50 /5/00 Invoice No. 4 4,00 5, /5/00 Credit Note No. 56 7,60 8,90 + 8/5/00 Payment Receipt No. 7 5,000,90 + Amount Due *Allow full marks for Hogan Ltd QUESTION (Biii) (5 MARKS) KEOGH Ltd, 0 Bridge Street, Navan Date: 8/5/00 RECEIPT No. 7 Received from: HOGAN Ltd, 0 Bridge Street, Navan, Co. Meath The Sum of: Fifteen thousand euro 5,000 + With Thanks Signed: Andy Keogh (Accounts Department) QUESTION (Biv) (6 MARKS) Analysed Cash Book of KEOGH Ltd Date Details Receipt No. F Bank Debtor 8/5/00 HOGAN Ltd 7 DL 5,000 5,000 Page 5 of 0

5 Q. This is a Business Insurance and Report Question (Ai,ii,iii) ( marks) REPORT FORMAT FROM : Martin Kelly, New bridge Road, Waterford TO : Mary Greene, Onion Road, Carlow REPORT TITLE Answers to Insurance Questions DATE : 5 June 00 INTRODUCTION Further to your enquiry re insurance for your business please find my answers set out below MAIN BODY- ANSWERS (i) Adequate insurance is important so that all possible risks are insured for the correct amounts. 4 TO QUESTIONS (ii) Motor insurance is required by law* (iii) Public Liability in case a customer might make a claim against the business. Theft insurance in case goods are stolen.** + + FOLLOW UP (iv) Two non insurable risks include: Deliberate Damage by the owners of the business Loss due to bad management and mistakes I am available to discuss any questions that you may have re the above SIGNED BY Martin Kelly POSITION/ TITLE OF REPORT WRITER Insurance Consultant * Candidates can also give PRSI as a type of insurance required by law. ** Candidates can also give the following types of insurance with reasons: Bad Debts insurance, Goods in Transit, Fire insurance, Fidelity insurance, Cash in Transit, Employer s Liability. Q (B) Answer 0,000 5 If the answer is incorrect then award marks for Workings as follows Formula Workings Sum Buildings Insured For X Damage Value of Buildings 600,000 x 60, ,000 + Explanation of answer The buildings were only insured for 75% of their value so they were underinsured. The insurance company would only pay compensation for 75% of the damage i.e. 0,000. Page 6 of 0 4

6 Q 4. (A) This is a Final Accounts and Balance Sheet Question ½ + +½ Trading, Profit and Loss Appropriation Account of REILLY Ltd for the year ended // 009 (9) Sales 70,000 ½ Less Cost of Actual Sales //009 Opening Stock 8,000 ½ Purchases,00 ½ Carriage Inwards 5,000 ½ Add Carriage Inwards due 500 5,500 ½+½ Cost of Sales Available for Sale 56,700 0 //009 Less Closing Stock 5,000,700 ½ +0 Gross Profit 8,00 Add Gains Rent Receivable,800 ½ Add Rent Receivable due,000,800 ½+ ½ 4,00 0 Less Expenses Insurance 6,400 ½ Less Insurance Prepaid 400 6,000 ½+½ Advertising 54,000 ½ Add Advertising Due 00 54,00 ½+½ Depreciation : Buildings 40,000 ½ Motor Vehicles 7,00 47,00 07,500 ½+½+0 Net Profit 4,600 Less Dividends Declared 4,000 ½ 0,600 0 Add Opening Reserves 98,000 ½ Reserves 8,600 ½ Alternative Presentation of figures where Expenses are Deducted before Adding Gains Gross Profit 8,00 Less Expenses 07,500 4½ 0,800 0 Add Gains,800 plus,000,800 ½ Net Profit 4,600 Page 7 of 0

7 Q 4 (A) contd. ½ + +½ Balance Sheet of REILLY Ltd as on // 009 (6) Fixed Assets Cost Depreciation NBV Land 40, ,000 ½+½ Buildings 400,000 40,000 60,000 ½+½+½ Motor Vehicles 90,000 7,00 8,800 ½+½+½ Total Fixed Assets 60,000 47,00 58,800 ½+½+½ Current Assets Closing Stock 5,000 ½ Debtors,000 ½ Cash,500 ½ Insurance prepaid 400 ½ Rent Receivable due,000 79,900 ½+0 Less Current Liabilities Creditors 4,00 ½ Advertising due 00 ½ Bank Overdraft 4,000 ½ Carriage Inwards due 500 9,00 ½+0 Working Capital 50,800 0 Total Net Assets 6,600 ½ Financed By Authorised Issued 600,000 ordinary shares 600,000 60,000 + Add Reserves 8,600 ½ Add Long Term Liabilities 0 Year Loan 55,000 ½ Capital Employed 6,600 ½ (B) Three suitable types of advertising ++ Suitable types of advertising furniture Television; or Cinema; or Colour Magazines or Other Billboards s Summary Item s (A) Trading, Profit and Loss Appropriation Account 7½ Balance Sheet 6½ Presentation Total 5 (B) 5 Total for question 40 Page 8 of 0

8 Q 5 This a Delivery System and Wages Question A (i) Three marks each Three Factors that should be considered when deciding on a suitable delivery system Type of goods being transported Value of goods being transported Cost of delivery system Other Location of customer/ Destination, Safety/Security; Speed / Urgency A (ii) Two developments marks each Modern Developments in Delivery Systems in Ireland Tool Roads/ Bridges/ Bypasses Port Tunnel Other Barrier Free Toll Roads ; Luas / Extension to Luas lines; Bicycle Lanes; New Trains e.g. Train to Donboyne; Quality Bus Corridors; New Gas Pipe line; New newer alcohol limits for drivers (B) Cost of Transport for one day Section Answer Workings B(i) 700 klms = 0 litres; 5 litres 0 litres X.0 = B(ii) 50 Driver Wages 850 = 70 5 days Helpers Wages 400 = 80 5 days Total Cost of Labour 50 B(iii) 7 Insurance,560 = 8 0 days Motor Tax,600 = 5 0 days Motor Repairs,80 = 4 0 days Total Cost = 7 B (iv) 9 Total Cost of Transport for One Day Diesel Labour 50 Daily Annual Costs 7 Toll 40 Total Cost 9 Q 5 (C) contd. Week No. Employee s Name Wages Book of FASTFLOW Ltd Deductions Gross PAYE PRSI Pension Total Net Wage Wage Mary Harte Luke Kidney Page 9 of 0

9 Q. 6 This is a Cash Flow Forecast Question In part (B) there was an error of omission in Payments for April in which the figure for equipment of 0,000 was inadvertently omitted. There was also a typographical error in the Total Payments for April where the figure given should have read 69,500 instead of 69,000. These errors affected parts (B) and (C) of the question. The marking scheme takes account of these errors so that candidates are not disadvantaged. (A) Two reasons marks each Reasons To find out if a business can live within its means To find out if there will be any liquidity problems in the future Other To find out the timing and or amounts of any future shortfalls; Necessary for obtaining Investment; Necessary for obtaining Loans / Overdrafts Needed as part of Business Plan (B) Cash Flow Forecast of MORGAN Ltd for the Period March to August 0 March April May June July August Total Mar. to Aug. RECEIPTS Sales 40,000 40,000 40,000 40,000 40,000 48,000 48,000 Share Capital 0,000 0,000 EU Grant 0,000 0,000 40,000 A. Total Receipts 40,000 40,000 60,000 50,000 40,000 68, ,000 0 PAYMENTS Wages 0,500 0,500 0,500 0,500 0,500 0,500 6,000 Purchases 4,000 4,000 4,000 4,000 4,000 7,600 47,600 Loan Repayments,000,000,000,000,000 Equipment 5,000 5,000 Dividend 8,000 8,000 Advertising,000,000,000,000,000,840,840 B. Total Payments 9,500 69,000 9,500 9,500 89,500 9,940 87,440 0 C. Net Cash (A-B) 500 (9,500) 0,500 0,500 (49,500) 8,060 0,560 5 D. Opening Cash 4,00 4,700 (4,800) (4,00) 06,00 56,700 4,00 5 E. Closing Cash (C+D) 4,700 (4,800) (4,00) 06,00 56,700 84,760 4,760 5 The solutions given in the marking scheme are based on the printed figures. In order to ensure that candidates are not disadvantaged, accept Own Figures for all figures (except 4,00 in Total March to August Column) to Total in C, D and E, provided the procedure is correct. (C) New Closing Cash Figure for August = Own figure for Closing Cash less 8,000 As a result of the error referred to above, and to ensure that candidates are not disadvantaged as a result, accept candidates Own Figure for Closing Cash less 8,000 for full marks (6). Answer Workings Own Figure Own Figure- 8,000 6 Page 0 of 0

2010 Paper 2 Business Exam Answers JC-Learn. JC-Learn. Business Studies. Higher Level Exam - Paper 2. 1 P a g e

2010 Paper 2 Business Exam Answers JC-Learn. JC-Learn. Business Studies. Higher Level Exam - Paper 2. 1 P a g e JC-Learn Business Studies Higher Level 2010 Exam - Paper 2 1 P a g e 1. This is a Book of First Entry, Ledger and Trial Balance Question. Answer all parts of this question: SMITH Ltd, a clothing company,