EUROBUSINESS. Questions Teacher s Edition

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1 EUROBUSINESS Questions Teacher s Edition Document description Supplementary questions for the Eurobusiness learning materials.

2 Chapter 2 1. Prepare the expenditure record for the Desmond Family for the six months January to June. Groceries 120 per month Mortgage 450 per month Entertainment 76 per month ESB 76 (Feb); 84 (April); 74 (June) Telephone 100 (Jan); 84 (Mar); 95 (May) Painting and decorating 467 (May) Car tax. 235 (Feb) Petrol 65 per month School expenses. 230 (Mar) Insurance 45 per month Holiday 2,500 (June) Desmond Family Jan Feb Mar Apr May June TOTAL PLANNED EXPENDITURE Fixed Subtotal Irregular Subtotal Discretionary Subtotal TOTAL EXPENDITURE

3 2. Explain the term Opportunity Cost. 3. Explain the term Impulse Buying.

4 Chapter 3 1. Calculate the total expenditure, net cash, opening cash and closing cash for the Morris family in the table below. Morris family July Aug. Sept. Oct. TOTAL TOTAL INCOME Fixed Expenditure - subtotal Irregular expenditure - subtotal Discretionary expendituresubtotal TOTAL EXPENDITURE Net Cash Opening Cash 500 Closing Cash

5 Chapter 4 1. Smith Family You are required to complete the personal budget form on the next page for the Smith Family for 2012 by filling in the figures for the Estimate May to December column and the Total for Year column. The following information should be taken into account: Liam Smith is due a salary increase of 8% from September 1 st and will do overtime in November and December which will earn him a total of 400 extra. Teresa Smith will continue to earn her present salary until September. She will receive an extra 210 per month from October 1 st. Child benefit will continue each month as for the first four months of the year. House mortgage is expected to increase by 40 a month from June 1 st. The car loan will be paid off at the end of October. House insurance per month will continue as for the first four months of the year. Annual car insurance will be 385 payable in October (Liam) and 420 payable in December (Teresa). Television licence will be renewed in June at a cost of 155. Household costs are expected to remain the same for each month until July but will increase by 50 per month from August 1 st and by a further 190 in December. There will be a car service in June costing 220 but otherwise car-running costs are expected to remain at 175 per month. Telephone costs for the 12 months (Jan - Dec) are estimated at 1,120. Presents for the remainder of the year will cost 300. Entertainment is expected to continue as before with an additional 250 in December. The family holiday in July is expected to cost 3,500.

6 PERSONAL BUDGET FORM Total Estimate Total Smith Family JAN. FEB. MAR. APR. Jan-Apr May-Dec For Year PLANNED INCOME Liam Smith - Salary Teresa Smith - Salary Child Benefit TOTAL INCOME PLANNED EXPENDITURE Fixed Mortgage Car Loan House Insurance Annual Car Insurance Television Subtotal Irregular Household Costs Car Running Costs Telephone Subtotal Discretionary Presents Entertainment Holiday Subtotal TOTAL EXPENDITURE Net Cash Opening Cash Closing Cash

7 Chapter 5 1. Collins Family From the following information, prepare an analysed cashbook for the Collins Family. Use the following analysis columns: Income: Wages; Child Benefit Expenditure: Mortgage; Groceries; Light and Heat; Holiday; Other July 1 Opening Cash Groceries 94 7 Theatre Tickets 86 8 ESB Bill Mortgage Weekend away Received wages 2, Groceries Gas Bill Deposit on summer holiday Entertainment New Clothes New light bulbs Groceries Received child benefit 140

8 Dr Analysed Cash Book Cr Date Details F Total Date Details F Total

9 2. Sonia Lyons From the following information, prepare an analysed cashbook for Sonia Lyons. Use the following analysis columns: Income: Expenditure: Wages; Child Benefit Household Bills; Motor; Entertainment; Insurance Apr 1 Opening Bank Overdraft 236 (Overdrawn) 5 Received wages directly into bank account 2,300 8 Paid ESB bill by cheque no Paid for tickets for the Ballet by cheque no Paid for groceries with cheque no Paid for petrol by cheque no Paid rent with cheque no Paid for family meal in restaurant with cheque no Paid TV licence with cheque no Received wages and lodged cheque in bank 1, Paid for house insurance by cheque no Received child benefit directly into bank account Paid for petrol by cheque no

10 Dr Analysed Cash Book Cr Date Details F Total Date Details F Total

11 3. James Lynch From the following information, prepare an analysed cashbook for James Lynch. Use the following analysis columns: Income: Expenditure: Wages; Child Benefit Transport; Television; Groceries; Holiday; Entertainment Nov. 1 Opening Bank Overdraft 210 (Overdrawn) 4 Received wages directly into bank account 1,800 8 Paid for monthly bus ticket with cheque no Paid for tickets for a concert with cheque no Paid for groceries with cheque no Paid for weekend away with cheque no Paid TV Licence with cheque no Paid for family meal in McDonalds with cheque no Paid SKY subscription with cheque no Received wages and lodged cheque in bank 1, Paid for groceries with cheque no Received child benefit directly into bank account Paid for deposit on summer holiday with cheque no. 30 2,000

12 Dr Analysed Cash Book Cr Date Details F Total Date Details F Total

13 4. Buckley Family From the following information, prepare an analysed cashbook for the Buckley Family. Use the following analysis columns: Income: Expenditure: Wages; Other Groceries; Car; School; Mortgage; Other Apr 1 Opening Cash Balance 68 1 Opening Bank Overdraft Purchased groceries and paid by cheque no Received salary by cheque 1,800 5 Paid for petrol in cash 15 6 Withdrew cash from bank 50 8 Purchased school texts and paid in cash 35 9 Entry fee to Lottery syndicate Paid mortgage by cheque no Bought groceries and paid by cheque no Paid for petrol in cash Paid examination fees by cheque no Bought groceries and paid by cheque no Paid ESB bill by cheque no Purchased motor oil and paid in cash 5 26 Paid telephone bill by cheque no Purchased meat, fish and eggs by cash Paid for car service by cheque no Lottery win in cash Lodged all cash in bank

14 Dr Analysed Cash Book Cr Date Details F Total Date Details F Total

15 Chapter 9 1. Banking Crossgrid Solve the clues below to complete the banking crossgrid. Across 1. AIB and Bank of Ireland are examples of this type of bank (10) 2. Cheques you can use abroad (10) 3. Automated... Machine (6) 4. An account where you earn interest (7) 5. MasterCard and Visa are types of these cards (6) 6. A method of paying regular bills, where the amount varies (6,5) 7. The person who issues a cheque (6) 8. This is added each year to money held in a deposit account (8) 9. To sign the back of a cheque (7) 10. For storing money safely after hours (9)

16 Chapter 10 1 (i) Ms. Leeming saved 4,230 at 5.6% compound interest. How much will she have in her account after the following time periods? 1 Year 2 Years 3 Years (ii) Mrs. Khan saved 8,600 at 5.5% compound interest. How much will she have in her account after the following time periods? 1 Year 2 Years 3 Years 2. The McCarthy's are considering saving for a family visit to America in five years time. Suggest a suitable place to invest their savings. Give a reason for your answer. 3. A 50 investment matured to 52 after 6 months. Calculate the annual percentage rate of return. 4. Apart from banks, name two other institutions or agencies where people can place the money they have saved. (i) (ii) 5. Calculate the balance in Harry Moran s account after 1 year if he saved 1,300 at 8% simple interest. Assume a DIRT rate of 10%.

17 Chapter Dan Taylor is a student aged 19 who wants to take out third party insurance on his car. The car is valued at 3,000 and it has an alarm. Dan has a provisional licence and has no previous driving experience. Calculate his yearly and monthly premium using the schedule of charges below for 'Rest Easy Insurance' Ltd. Basic premium 30 per 1,000 value Comprehensive charge 150 Provisional Licence - 10% Loading Under 25 years of age - 40% loading No claims bonus - 10% for each year up to 50% maximum Car alarm / immobiliser - 5% discount (1) All additions are calculated as a percentage of the basic premium. (2) All reductions are calculated as a percentage of the basic premium. (3) No claims bonus is calculated as a percentage of the total cost of the policy after taking into account all additions and reductions. 2. Name two types of insurance a farmer should have: (a) (b)

18 3. Name two types of insurance a grocery shop should have: (a) (b) 4. Indicate by means of a tick the correct answer to the following: The surrender value of a life assurance policy is : a) The capital sum received when the policy matures b) The amount the insured receives if they have an accident c) The money value of the policy if cashed in before maturity d) The profit earned by the policy over the life of the policy 5. Mr. Lavelle and his neighbour Mr. O' Dwyer both received quotations for life assurance of 100,000 from the one insurance company. Mr. Lavelle has been quoted 36 per month while Mr. O Dwyer has been quoted 39 per month. List two possible reasons for the difference in premium. (a) (b) 6. Gerry Devlin wishes to insure his new boat. The insurance company says the premium will be 8 per 1,000 value. If the boat is worth 12,000, how much will the premium be? Choose the correct answer from the options below. (a) 800 (b) 8,000 (c) 980 (d) 96

19 Chapter Match the terms in column 1 with the correct explanations in column 2. Terms Explanations (a) Articles of Association (i) Document setting out the internal rules of a company (b) Memorandum of Association (ii) Document setting out the objectives of a company (c) Certificate of Incorporation (iii) Is evidence that a company has a separate legal identity (a) (b) (c) 2. True or False? True (i) Semi-State companies do not charge for their services. (ii) The owners of co-operatives are called shareholders. (iii) Aer Lingus is not a semi-state company. (iv) A shareholder in a co-operative with 1,000 worth of shares has 1,000 votes. False

20 Chapter From the following information relating to McMorrow & Daughter Ltd, prepare a cash flow statement for the four months January to April. Opening cash on January 1st is 3,700. Estimated Income Sales: Jan. 12,800; Feb. 14,100; Mar. 13,900; Apr. 18,750. Receipts from debtors: Jan. 7,200; Feb. 6,800; Mar. 6,300; Apr. 7,000. Govt Grant: Feb. 3,000 Estimated Expenditure Purchase of Materials: Jan. 12,000; Feb. 14,000; Mar. 11,300; Apr. 14,300. Payments to creditors: Jan. 3,400; Feb. 4,600; Mar. 3,700; Apr. 5,100 Rent & Rates: 1,600 per month Wages: 1,500 per month Telephone: Feb. 300; Apr. 450 Insurance: 1,000 in March Details Jan. Feb. Mar. Apr. Total Receipts Sales Debtors Govt Grant Total Receipts Payments Purchases Creditors Rent & Rates Wages Telephone Insurance Total Payments Net Cash Opening Cash Closing Cash

21 Chapter True or False? True (a) A taxi driver is part of the Services Industry. (b) A miner is part of the Manufacturing Industry. (c) A fisherman is part of the Extractive Industry. (d) A cash and carry wholesaler sells goods to the retailer on a cash basis only. (e) A Shopping Centre has only one shop. (f) A Supermarket is a self-service store. False 2. Write down whether each of the following forms of industry are Primary; Secondary or Services. (a) Furniture Making (b) Forestry (c) Insurance (d) Mining (e) Education (f) Motor Car Manufacture

22 Chapter Niall O Connor works at KCR Computers and is paid a monthly salary of 3,100. He is due a bonus at the end of May of 500. His tax credit is 210 per month and he pays tax at the rate of 42%. His pension contribution is 8% and PRSI/USC is 7.5% of his gross salary. He pays a health contribution of 80 per month. Employee: Niall O'Connor PAY: DEDUCTIONS Basic PAYE Bonus PRSI/USC Pension Medical Gross Pay Total Deductions Net Pay 2. Bryan Lane works a 40-hour week at Sunway Holidays and is paid 12 per hour. During the week ending February 3 rd he worked 10 hours overtime in addition to his standard hours. For this he is paid double time. He is also due a commission payment on sales of 3%. His total sales during that week were 5,000. His tax credit is 40 per week and he pays 2 union subscription and a pension contribution of 5% of gross wage. He pays medical insurance of 13 per week. He pays tax at 42% and PRSI/USC at 6%. Employee: Bryan Lane PAY: DEDUCTIONS Basic PAYE Overtime PRSI/USC Commission Union Net Pay Medical Pension Gross Pay Total Deductions

23 3. Imelda Lyons works a 39-hour week at KC Fashions and is paid per hour. During the week ending September 9 th she worked 12 hours overtime in addition to her standard hours. For this she is paid double time. Her tax credit is 35 per week and she pays 4 union subscription and a pension contribution of 5% of gross wage. She pays tax at 20% and PRSI/USC at 6%. Her contribution to the V.H.I. is 8 per week. Employee: Imelda Lyons PAY: DEDUCTIONS Basic PAYE Overtime PRSI/USC Union Medical Pension Gross Pay Total Deductions Net Pay

24 Chapter Journey and Arrival Times Use the distance grid (Chapter 28, Page 253 of the Eurobusiness textbook) and the information below to calculate the journey time and arrival time in each case. Journey Departure Time Speed (km/hr) (a) Sligo to Ennis 4.25pm 65 (b) Carlow to Mullingar 6.10pm 62.5 Journey Time Arrival Time Calculations: 2. X -PRESS Couriers offer the following rates to its business customers: Within Dublin 18 Within Leinster 22 Rest of Ireland 28 Plus 50c per kg weight Using the above information, calculate the cost of the following deliveries by courier: (a) A package weighing 4kg from Cork to Galway (b) A package weighing 8.5kg from Dublin to Donegal

25 3. You own a flower growing business in Trim, Co. Meath and your product is to be sold in shops in Dublin. Briefly set out three factors, which would help determine a suitable delivery system for that product. (i) (ii) (ii) 4. The following is an extract from the timetable operated by Dublin Bus. 75 From Dun Laoghaire Dun Laoghaire Stillorgan SC Dundrum Nutgrove SC Knocklyon Road (i) At what time does the latest bus depart from Dun Laoghaire, which will reach Knocklyon Road before 11.00am? _ (ii) What is the earliest time you could reach Nutgrove SC if you were travelling from Dun Laoghaire? _ 5. List two costs which a business incurs in having its own fleet of delivery vans. (i) (ii)

26 Chapter Debtors Control Account From the information below, prepare a Debtors Control Account. May 1 Total Debtors Balance 134,000 May 31 Total Credit Sales including VAT 486,000 Total Returns including VAT 37,700 Total Cash Receipts from Debtors 212,000 Total Cheque Receipts from Debtors 143, Creditors Control Account From the information below, prepare a Creditors Control Account. Oct. 1 Total Creditors Balance 223,000 Oct. 31 Total Credit Purchases including VAT 213,800 Total Returns including VAT 12,566 Total Cash Payments to Creditors 67,500 Total Cheque Payments to Creditors 145,900

27 Chapter From the following information, prepare the profit and loss account for Abdul Nadeen for the year ended 31/12/11: Gross Profit 23,690; Administration Expenses 8,640; Selling Expenses 6,400; Carriage Outwards 2,700; Salaries & Wages 7,650; Light & Heat 3, From the following information, prepare the profit and loss account for Olivia McHugh for the year ended 31/12/11: Gross Loss 7,600; Insurance 4,300; Marketing & Advertising 2,450; Printing & Stationery 2,650; Carriage Outwards 2,450; Salaries & Wages 3,600; Bad Debts 120; Broadband From the following information, prepare the trading and profit & loss account for Cecile Bracken for the year ended 31/12/11: Sales 444,700; Purchases 231,500; Carriage Inwards 13,400; Customs Duties 13,560; Salaries 44,160; Carriage Outwards 12,750; Sales Returns 12,300; Rent Received 12,450; Light & Heat 13,400; Opening Stock 16,800; Closing Stock 17,200; Bank Interest paid 3,400; Marketing and Advertising 22,670; Postage & Stationery 3,400.

Junior Certificate. Eurobusiness. Second Edition. Teacher s Manual. John Taylor B.Comm HDE. Folens

Junior Certificate. Eurobusiness. Second Edition. Teacher s Manual. John Taylor B.Comm HDE. Folens Junior Certificate Eurobusiness Second Edition Teacher s Manual John Taylor B.Comm HDE Folens Editor: Sinéad Lawton Design and Layout: Gary Dermody 2006 John Taylor Folens Publishers, Hibernian Industrial