2011 Paper 1 Business Exam Answers JC-Learn JC-Learn · PDF fileList the four P’s of marketing (the marketing ... born on 5 August 1971, lives at Barracks Street, Athlone, ... 2011

2011 Paper 1 Business Exam Answers JC-Learn

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JC-Learn

Business Studies

Higher Level

2011 Exam - Paper 1


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SECTION A (80 marks)

Answer all 20 questions. Each question carries 4 marks.

1. The following initials are used in Banking. What do they stand for?

APR

ATM

PIN

2. Identify one example of regular income for each of the following:

Employed Person

Unemployed Person

Retired Person

3. Complete the Balance Sheet (extract) below by filling in the three unshaded areas,

numbered (i) to (iii):

Balance Sheet (extract) as on 31-12-2010

€ €

Fixed Assets (i)

Current Assets 490,000

Less Current Liabilities (ii)

(iii) 120,000

Total Net Assets 840,000

4. Identify two responsibilities of an employer towards their employees:


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(i)

(ii)

5.

The following figures appear in a company’s Final Accounts:

Gross Profit €180,000 Sales €720,000 Total Expenses €60,000

Net Profit Percentage is calculated as follows: Net Profit × 100

Sales 1

Using the above figures, calculate the Net Profit Percentage.

Show your workings.

Workings:

Answer:

%

6. Explain two factors that a company would take into account before deciding on a

suitable delivery system for their goods:

(i)

(ii)

7. On 7 June 2011, T. Smyth bought goods on credit from J. Foley for €8,120. There

was no VAT on these goods.

Complete the following ledger accounts of T. Smyth showing the names of the

accounts and the relevant details, numbered (i) to (iv):

(i) A/c

Dr

Cr

Date Details € Date Details €

2011 (ii) 8,120

June 7


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Dr

(iii) A/c

Cr

Date

Details

€

Date

€

Details

2011 (iv)

8,120

June 7

8. Complete and balance the Debtors Control Account on 31 May 2011 from the

following information:

€

Debtors balance on 1 May 2011 4,900

Total credit sales for May 5,900

Total cash received from debtors in May 6,100

Dr

Debtors Control Account

Cr


OR (Alternative Format)


Date Details Dr Cr Balance

€ € €


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9. Explain the term ‘Inflation’.

10. Tick () the appropriate column(s) to indicate where in the Final Accounts of a

Doctor (service business) the following items should be entered on 31/12/2010:

Operating Statement Balance Sheet

Income from Patients

Equipment

Stock of Medicines 31/12/2010

11. State two principles of the Sale of Goods and Supply of Services Act 1980 relating to

goods. (i)

(ii)

12. Enter the following balances in the partially completed General Journal of Barr Ltd:

1 January 2011 Premises €600,000

Creditors €42,000

Ordinary Share Capital €583,000


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Barr Ltd – General Journal

Date Details F Dr Cr

€ €

Bank CB1 25,000

Premises GL1

Creditors CL1

Ordinary Share Capital GL2

Assets, Liabilities and Share Capital of Barr Ltd on this date.

13.

On 1 May 2011, a Petty Cashier had an imprest of €250. During the month of May, he spent €56

on stationery, €93 on postage and €90 on refreshments.

(i) Explain the term ‘Imprest’.

(ii) Calculate the amount the Petty Cashier will require to restore the

imprest. Show your workings.

Workings:

Answer:

€


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14. List the four P’s of marketing (the marketing mix).

(i)

(ii)

(iii)

(iv)

15. Explain two reasons for Purchases Returns.

(i)

(ii)

16. Identify one example of Government Current Income and one example of Government

Current Expenditure:

CURRENT INCOME

CURRENT EXPENDITURE

17. Enter the following transaction in the Purchases Book of Violet Ltd:

On 12 June 2011, Violet Ltd purchased goods €3,500 from Rose Ltd (Invoice

No. 5). The VAT rate on these goods was 21%.

Violet Ltd – Purchases Book

Date

Details

Invoice F

Net VAT Total

No.

€ € €


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18. Explain the term ‘Collateral/Security’.

19. Column 1 is a list of information technology terms. Column 2 is a list of statements that

can be matched to these terms.

(One statement does not refer to any of the information technology terms.)

Information Technology Terms Statements

1. Electronic Mail (e-mail) A. Controller/Heart of the computer.

2. Central Processing Unit B. Visual Display Unit.

3. Spreadsheet C. Program used to perform mathematical and

financial calculations.

4. Monitor D. Program used to keep computerised

records.

E. Method of sending messages between

computers over the internet.

Match the two lists by placing the letter of the most appropriate statement under the

relevant number below:

1. 2. 3. 4.


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20. Calculate which carton size of Fruity Orange Juice is the best value for money.

Fruity

Fruity

Fruity

Orange

Orange Orange

Juice

Juice Juice

€1. 60 €2.00 €2.50

Size 200g Size 300g Size 400g

Tick () the correct box

200g Workings

300g

400g


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1. This is a Household Budget Question

Answer all parts of this question: (A) (Please note: a page for rough work is provided on page 9 of Section A if required.)

The following should be taken into account:

John expects to earn an extra €150 in overtime in July and September and expects to

get a Christmas bonus of €100 in December.

Paula will job share for June, July and August while the children are on school holidays.

This will result in a 40% reduction in her salary for those three months, but she will

return to full-time work and full salary again on 1 September.

The Maher household is receiving monthly child benefit but this will be reduced by

€187 per month from 1 October, when their eldest daughter reaches 18.

The house mortgage will increase by €50 per month from 1 July.

Car insurance is payable monthly and will increase to €60 per month from 1 October as

they plan to get their daughter covered under the family car insurance.

Household costs are expected to remain at the same level, except for the

month of December, when they will increase by 20%.

Car running costs are expected to remain at €130 per month with an additional cost of

€200 for a service in September and €50 for the NCT in October.

Telephone costs for the twelve months (Jan – Dec 2012) are expected to be €700.

Lighting costs are paid every second month and are expected to remain at the same

level. A fill of oil for €800 in September is expected to be the only heating cost.

Entertainment will average at €150 per month for the remaining nine months of the year.

The household expect to spend €210 on birthday presents in the autumn and

€600 on Christmas presents.

The Maher household holiday, in July, is expected to cost €2,200. The balance must be

paid in June.

B. Answer the following in the spaces provided on page 11 of Section A.

(i) Explain the term ‘job share’ in the Maher Household Budget.

(ii) Outline one reason why the repayments on the mortgage might increase.

(iii) At the end of March 2012, what will be the expected closing cash balance for the

Maher household?


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2. This is a Club Account Question

Answer all parts of this question:

Park Hockey Club had an opening stock of €5,900 in the shop on 1 January 2010.

The following is a summary of the Club’s financial transactions for the year

ending 31 December 2010:

Receipts: €

Club Lotto 22,400

Shop Sales 14,300

Competition Fees 6,100

Subscriptions 17,800

Annual Sponsorship 3,500

Payments: €

Competition Prizes 4,900

General Expenses 5,600

Light and Heat 6,850

Pitch Maintenance 4,300

Purchase of Equipment 7,400

Shop Purchases 9,850

Insurance 8,970

Club Lotto Expenses 16,220

Additional information on 31 December 2010:

(i) Shop Stock € 8,120

(ii) Insurance prepaid €1,495

(iii) Subscriptions due € 700

(iv) General Expenses due € 325

(v) Equipment to be depreciated by 15%.

A. Prepare: (i) A Shop Trading Account for the year ending 31 December 2010.

(ii) An Income and Expenditure Account for the year ending 31 December 2010.

B. At the AGM the Club Officer who prepares the accounts presents them with a report.

(i) Identify the officer who prepares the accounts in a club.

(ii) List three items included in the report.


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3. This is a Factors of Production and Trade Question


A. State and explain the four Factors of Production giving one example in each case.

B. (i) Outline three reasons why Ireland imports goods.

(ii) Explain ‘invisible imports’. Give one example of an invisible import.

(iii) The following data relates to the international trade of a country for 2010:

€

Visible Imports 790 million

Invisible Exports 780 million

Visible Exports 730 million

Invisible Imports 880 million

(a) From the above data, calculate the Balance of

Trade and the Balance of Payments. Show your

workings.

(b) Indicate in each case whether it is a surplus or a deficit balance.

(iv) If the above country imported extra raw materials to the value of €40m how

would the Balance of Payments be affected? Show your workings.

C. Explain the term ‘import substitution’.


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4. This is an Insurance Question


John Craven, born on 5 August 1971, lives at Barracks Street, Athlone, Co. Roscommon. He is

a self-employed plumber. He wants to take out Life Assurance to the value of €200,000 on his

own life, as he recently got married. He has a quote from his insurance company for Whole

Life Assurance and Endowment Assurance. He has decided to purchase an Endowment Policy.

John does not drink or smoke and has no health problems. In his spare time he likes to play

rugby and go mountain climbing. He wants to pay his premium monthly by standing order.

A. (i) Explain the difference between Whole Life Assurance and Endowment Assurance.

(ii) State and explain a relevant principle of insurance that John needs to be

aware of when taking out Endowment Assurance.

(iii) Explain the following terms: (a) Premium

(b) Policy

(iv) Assume you are John, using today’s date, complete the proposal form on page 12 of

Section A.

B. John already has house insurance but his annual premium is due for renewal. His insurance

company has given him a quote of €14 per €10,000 for the house and €18 per €5,000 for the

contents. His house is valued at €250,000 but John only insures it for €200,000. The contents are

insured for their full value of €125,000. He will get a 5% reduction for having a house alarm.

(i) Calculate the insurance premium that John will have to pay. Show your

workings.

(ii) If flooding caused €40,000 damage to the house and €15,500 damage to

the contents, calculate the amount of compensation to which John would be

entitled, given that there is a policy excess of €200. Show your workings.

Explain your answer.


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5. This is a Banking Question


Emma Hogan has a current account with AIB, Sligo.

She received the following Bank Statement on 3 May 2011:

AIB Tel: 071-265397

Statement of Account Fax: 071-265399

Main Street Branch Code: 93-71-51

Sligo Branch ID Code: AIBSLIE4D

Account Name: Emma Hogan No.1 Account

Ms Emma Hogan Account Number: 50591961

Dublin Road IBAN: IE39 AIBSL 9371505919 61

Sligo Statement Date: 30 April 2011

Statement Number: 505

Date Transaction Details Dr Cr Balance

€ € €

01 Apr 2011 Balance Forward 120.00

05 Apr 2011 SO - ESB 80.00 40.00

10 Apr 2011 ATM – AIB, Ballina 100.00 60.00 Dr

11 Apr 2011 Paypath 750.00 690.00

14 Apr 2011 INET – AIB Visa 100.00 590.00

18 Apr 2011 Cheque No. 500177 92.00 498.00

21 Apr 2011 Credit Transfer 70.00 568.00

27 Apr 2011 DD - Vodafone 52.00 516.00

30 Apr 2011 Interest 2.00 514.00

30 Apr 2011 Bank Charges 16.00 498.00


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A.

(i) Is Emma’s bank account a deposit or current account? Give

one reason for your answer.

(ii) Explain why ‘Dr’ appears in the Balance column on the 10 April 2011.

(iii) Explain ‘Paypath’ and state two advantages of ‘Paypath’ to Emma.

(iv) Explain the transaction on 14 April 2011.

(v) Explain the difference between the transactions that occurred on 5

April 2011 and 27 April 2011.

(vi) State one reason why interest of €2 appears on the Bank

Statement on the 30 April 2011.

(B) (i) Emma’s Bank Statement does not include the following two items:

a cheque (No. 500178) of €1,994 written by Emma

on 21 April 2011.

a credit transfer of €1,500 on 30 April 2011.

Calculate her closing bank balance after taking both of the above

items into consideration. Show your workings.

(ii) Emma is considering starting a regular saving scheme.

Outline three factors Emma should consider before deciding where to

invest her money.


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6. This is a People at Work Question


(A) Andrew Tudor recently commenced work at Val Ltd. On his first day, he was

invited by the local trade union representative to join the trade union in case he

had a dispute with his employer.

(i) What title is normally used to identify the local trade union representative

in Val Ltd?

Outline two services this person can offer to Andrew.

(ii) Outline two possible reasons why Andrew could be in dispute

with Val Ltd.

(iii) Identify two steps in the resolution of an industrial dispute in Val Ltd.

(B) Andrew will be paid a basic wage of €912 for a 38-hour week. Overtime will be

paid at time and a half for the first six hours and double time for work in excess

of that. He will negotiate his own benefit in kind.

(i) Explain the term ‘benefit in kind’ and give two examples.

(ii) Explain the difference between ‘basic pay’ and ‘overtime’.

The following additional information is available about Andrew Tudor’s

first week’s earnings:

He worked a total of 46 hours his first week. He pays PRSI and Universal Social Charge at

11%. He pays income tax (PAYE) at the rate of

41%.

His annual tax credits are €3,900.

(iii) Calculate his net wage for that week. Show your workings.


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JC-Learn

Business Studies

Higher Level

2011 Exam Answers - Paper 1


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SECTION A

Q.1 APR: Annual Percentage Rate ATM: Automated Teller Machine

PIN: Personal Identification Number

Q.2 Employed: Wages/Salary/Children’s Allowance Unemployed: Social Welfare/Jobseekers Allowance/Dole

Retired: Pension

Q.3 (i) €720,000 (ii) €370,000

(iii) Working Capital

Q.4 Comply with all employment law

Give a written contract of employment Fair wage/at

least the minimum wage Safe working conditions Treat all employees equally Give workers their entitlements to holidays and maternity leave.

Q.5

Answer: Workings: (1)*

16.6% Net Profit 180,000 – 60,000

120,000 × 100 = 16.66

720,000

Q.6

Nature of the consignment e.g. big or small, light or heavy. Distance to

be transported e.g. local or overseas. Cost of the various available systems.

Safety of the goods transported e.g. fragile or precious. Convenience

of the system e.g. scheduled or any time. Does it operate door to

door? Availability of various systems.

Will the goods arrive safely at their destination? Reliability a

guarantee that the goods will arrive.

Q.7 (i) Purchases

J.Foley/Creditors

J.Foley

Purchases


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Q.8



01/05/11 Balance b/f 4,900 31/05/11 Cash/Bank 6,100

31/05/11 Credit Sales5,900 31/05/11 Balance c/d 4,700

10,800 10,800

01/06/11

Balance

b/d4,700

Or


Date Details Dr Cr Balance

€ € €

01/05/11 Balance b/d 4,900

31/05/11 Credit Sales 5,900 10, 800

31/05/11 Cash/Bank 6,100 4,700

Q.9 Inflation is increasean in the general level of prices over a time period usually one

year.

Q.10

Operating Statement Balance Sheet

Income from Patients

Equipment

Stock of Medicine

Q.11 Goods sold must be of merchantable quality.

Goods must be fit for the purpose intended. The goods must match their description/correspond to the sample shown.

Services must be provided by a competent person, and use quality materials.

The contract is between the customer and the seller.

Q.12

General Journal

Date Details F Dr Cr

01/01/11 € €

Bank CB1 25,000

Premises GL1 600,000

Creditor CB1 42,000

Ordinary Share Capital GL2 583,000

Assets, Liabilities & Share Capital of

625,000 625,000


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Crowe Ltd on this date.

Q.13 (i) Imprest: Is a fixed amount of cash provided to the petty cashier at the

beginning of each month to cover small expenses. This fixed balance is

(ii)

sometimes described as a float.

Workings: (1)*

Answer:

€239 56 + 93 + 90 = 239

Q.14

Product, Place, Price, Promotion.

Q.15 Goods were not ordered or didn’t correspond to sample or match description.

Goods arrived damaged/faulty. Excess quantity supplied. Goods did not arrive on an agreed date.

Q.16 Current Income: PAYE, VAT, DIRT, Corporation Tax, Customs & Excise Duty,

Profit from Lottery and State Companies.

Current Expenditure: Social Welfare, wages of public servants, running costs of

state buildings, e.g. light and heat, repairs to school hospitals, libraries.

Q.17 Violet Ltd Purchases Book

Date Details Invoice No. F Net VAT Total

€ € €

12/06/11 Rose Ltd 5 CL1 3,500 735 4,235

Q.18

It is an item of value given by a borrower to a lender/financial institution which may be sold/kept should the borrower fail to pay back the loan e.g. deed to property, share

certificates, life assurance policy.

Q.19 E A C B

Q.20 Answer: Workings: (1)*

400g 0.8c or 1.25g

0.67c or 1.5g

0.625c or 1.6g


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SECTION B Question 1 Household Budget

Jan

Feb

Mar

Total Estimate Total for

Jan-Mar Apr-Dec Year Jan-Dec

PLANNED INCOME € € € € € €

John Maher Salary 1700 1700 1700 5100 15,700 20,800

Paula Maher Salary 1500 1500 1500 4500 11,700 16,200

Child Benefit 487 487 487 1461 3,822 5,283

TOTAL INCOME 3687 3687 3687 11061 31,222 42,283

PLANNED EXPENDITURE

Fixed

Mortgage 800 800 800 2400 7,500 9,900

Car insurance 40 40 40 120 420 540

Annual house insurance 840 840 840

Subtotal 840 1680 840 3360 7,920 11,280

Irregular

Household costs 750 750 750 2250 6,900 9,150

Car running costs 130 440 130 700 1,420 2,120

Telephone 50 60 60 170 530 700

Light and heat costs 140 140 280 1,360 1,640

Subtotal 1070 1250 1080 3400 10,210 13,610

Discretionary

Entertainment costs 120 130 150 400 1,350 1,750

Presents 200 200 810 1,010

Holidays 500 500 1,700 2,200

Subtotal 120 830 150 1100 3,860 4,960

TOTAL EXPENDITURE 2030 3760 2070 7860 21,990 29,850

Net Cash 1657 -73 1617 3201 9,232 12,433

Opening Cash 250 1907 1834 250 3,451 250

Closing Cash 1907 1834 3451 3451 12,683 12,683


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(B) (i) Explain ‘Job Share’: Paula will only work some of her normal hours. Her job will be shared with

another worker. Her take home pay will be reduced.

(ii) Outline one reason why repayments on the mortgage increase

Interest rates may have increased.

They may have increased their mortgage for a house extension.

They may be trying to clear the loan quicker, and this will result in paying extra. The

type of mortgage e.g. variable/fixed.

(iii) Balance: € 3,451

Notes:

Exclude all totals and subtotals.

Estimate column 14 figures @ 1 mark each.

Totals column 15 figures @ 1 mark each

For net cash figures, check procedure e.g. total expenditure deducted from total income. Opening cash figures must be as per solution.

For closing cash figures, allow one mark only if both are the same following genuine

procedure.


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Question 2 Club Account

(A) (i)

SHOP TRADING ACCOUNT FOR YEAR ENDED 31/12/2010

Sales 14,300

Less: Cost of Sales

Opening Stock (1/1/10) 5,900

Purchases 9,850

15,750

Less: Closing Stock (31/12/10) 8,120 7,630

Shop Gross Profit 6,670

(A) (ii)

INCOME & EXPENDITURE ACCOUNT FOR YEAR ENDED 31/12/2010

INCOME: € € €

Shop Gross Profit 6,670

Club Lotto Receipts 22,400

Less Lotto Expenses 16,220 6,180

Competition Fees 6,100

Less: Prizes 4,900 1,200

Subscriptions 17,800

Add: Amount Due 700 18,500

Annual Sponsorship 3,500 [36,050]

LESS EXPENSES:

General Expenditure 5,600

Add: Amount Due 325 5,925

Light & Heat 6,850

Pitch Maintenance 4,300

Insurance 8,970

Less: Insurance Prepaid 1,495 7,475

Depreciation on Equipment 15% 1,110 [25,660]

Excess of Income/Surplus 10,390


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OR ALTERNATIVELY

INCOME AND EXPENDITURE ACCOUNT FOR YEAR ENDING 31/12/2010

Debit Credit

EXPENSES € € INCOME € €

Prizes 4,900 Shop 6,670

General Expenses 5,600 Lotto Receipts 22,400

Add Expenses due 325 5,925 Competition Fees 6,100

Light & Heat 6,850 Subscriptions Fees 17,800

Maintenance 4,300 Add Subscription Fees Due 700 18,500

Insurance 8,970 Sponsorship 3,500

Less Insurance Prepaid 1,495 7,475

Depreciation Equipment 1,110

Lotto Expenses 16,220

Excess of Income/Surplus 10,390

57,170 57,170

(B) (i) Treasurer

(ii) List 3 items: Summary of receipts & payments/cash account/cash position.

The club’s Balance Sheet at year end/list of assets and

liabilities. Any item of major capital expenditure. Income and Expenditure account.

Financial plans & projections for the

future/fundraising/investing/borrowing. Membership and subscriptions Comment on the performance of the shop.


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Question 3 Economic Growth, and Trade

(A)

Land: It’s a natural resource, free gift of nature used in the production of goods and services e.g. land,

sea, forest, oil, minerals, clean air.

Labour:

Any work done by people/productive human effort, or the availability of human effort and their

skills for the production of goods and services e.g. computer programmers, nurses, labourers.

Capital: Items created by humans which are used in the production of goods and services e.g.

machines, roads, buildings.

Enterprise

Organising the other factors, into productive activity/setting up a business/company. It is risk taking involved in developing on opportunity/setting up a business e.g.

entrepreneurs, self employed people, shareholders.

(B) (i) Three Reasons why Ireland Imports Goods:

Climatic conditions prevent the production of certain products. Lack of natural resources prevents the production of some goods e.g. oil. Lack of

skills and tradition is a limiting factor in production. To give Irish consumers a variety of goods to choose from.

Ireland imports essential raw materials for processing in factories. Foreign

goods may be cheaper. Goods not available in Ireland e.g. cars, capital goods/it is not profitable to make some

goods in Ireland.

(ii) Invisible Imports

It’s the purchase of a service from a foreign country.

Example

Irish people holidaying overseas.

Foreign music bands performing in Ireland.

Purchase of insurance from foreign company.


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(iii)

Balance of Trade

Visible Exports 730m

Less Visible Imports 790m

Deficit 60m

Balance of Payments

Total Exports (730 + 780) 1,510m

Less Total Imports (790 + 880) 1,670m

Deficit 160m

(iv) Affect on Balance of Payments:

The deficit would increase by 40m or increase to 200m due to an increase in the trade deficit.

Workings:

Total Exports (730 + 780) 1510m

Total Imports (790 + 880 +40) 1710m

Deficit 200m

(C) Import Substitution:

The replacement of imported goods or services with Irish produced ones. Buying

Irish goods instead of imports.


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Question 4 Insurance

(A) (i) Whole Life Assurance: (2 + 1) This is where an agreed amount of money is paid to the

person’s dependants when the individual dies.

Endowment Assurance:

An agreed amount of money is paid when the insured reaches a certain age or on the

death of the insured, whichever occurs first.

(ii) State & Explain the Relevant Principle: Utmost Good Faith: He is obliged to answer all questions truthfully when completing

the proposal and disclose all relevant and material facts.

or Insurable Interest: John must have an insurable/financial interest in the person being

insured.

(iii) Explain ‘Premium’ The sum of money paid to the insurer in return for the insurance cover.

It is the cost of insurance.

Explain ‘Policy’

This is a document stating all the details of the risks covered, period covered value of

cover and other conditions of the contract. It is the contract of insurance.


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(iv) Proposal Form 8 marks (16 x ½)

Allied Life Insurance Limited Proposal Form

Please answer all questions fully and truthfully

Name John Craven

Address Barracks Street, Athlone, Co. Roscommon

Age

39 years

Single

Married

Sex

Male

Occupation – Self-employed plumber

Type of policy required (Please tick)

Endowment Policy

Whole Life Policy

Value of Life Assurance required € 200,000

Please tick the appropriate box

1. Are you in good health?

Yes

No

2. Do you smoke?

Yes

No

3. Do you consume alcohol? Yes No

4. Are you likely to engage in a

Yes

No

hazardous occupation or

If Yes, give details – Rugby,

hobby?

Mountain Climbing

Method of Payment Standing Order

Declaration: I declare that all the information given above is true and complete.

Signature: John Craven Date: 14th

June 2011


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(B) (i) Calculate the Premium:

House 200,000 × 14 =

€280

10,000

Contents

125,000 × 18 = €450

5,000

= €730

Less Discount 5% =

€36.50

Premium = €693.50

(ii) Calculate the Compensation:

House

40,000 × 20 = 32,000

25

Contents = 15,500

= 47,500

Less Excess = 200

Compensation = 47,300

Due to under insurance/average clause applied to the compensation as he was considered to be his own insurer for 1/5 of the property. A policy excess of €200 also applied.


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Question 5 Banking

A. (i) Current Account as there are cheques, bank charges, overdrafts, standing orders, direct debits and interest paid drawn against it.

(ii) ‘Dr’ indicates that the account went into overdraft as she withdrew a €100 and

now owes the bank €60.

(iii) Paypath is an electronic method of transferring wages from employers to the

bank account of their employees.

Two Advantages of Paypath: Emma has 24 hours access to her account/money. Paypath

is very safe & efficient.

It is convenient for her. It’s

confidential/private.

It reduces her overdraft quickly.

(iv) 14th

April 2011: Emma paid €100 off her visa bill using Internet banking.

(v) The Standing Order: on the 5th

April is an instruction by Emma to her bank to take out a fixed amount of €80 to pay the ESB bill on a specific date.

The Direct Debit: on the 27th

April is permission given by Emma to Vodafone to

withdraw variable amounts from her account to pay her telephone bill. The

date of payment can change.

(vi) This is interest charged by the bank for using her overdraft facility.

B. (i) Calculate the bank balance after the cheque and credit transfer are considered.

Workings:

Original Balance 30/04/11 498 Less: Cheques O/s (1,994)

Add: Credit Transfer O/s 1,496

1,500

Adjusted Balance 4

(ii) Outline three factors to be considered before deciding where to invest:

Security: is the institution safe? Is it covered by the government guarantee? Return: rate

of interest on the savings.


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Access: is it easy to withdraw savings if required or are penalties applied?

Convenience: is it convenient for making a regular lodgement e.g. opening hours?

TaxationDIRT: is interest earned subject to tax? Privacy: is the

institution confidential?

Other benefits e.g. ‘freebies,’ free banking/bonus if money is left in the bank for a certain length of

time/interest paid up front/access to loans/reason for saving.

Terms and conditions is there a minimum/maximum deposit required? She may need to

consider all charges to be paid.


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Question 6 People at Work

(A) (i) Shop Steward

Outline two services provided:

Inform him of his rights as a worker.

Help resolve problems with his employer.

Collects union subscriptions.

Passes on information received from Head Office. Inform him of any activity in the union e.g. Credit Union, social activities,

protests etc.

(ii) Outline two reasons for a dispute:

Working conditions are poor. Incorrect wage rates are being paid e.g. not getting the minimum wage.

Unfair treatment in the work place e.g. discrimination, bullying and harassment. Dismissed for no apparent reason, unfair dismissal.

Not being allowed to join a trade union.

Statutory conditions of e mployment not being met e.g. holiday time, maternity leave,

regular breaks. Lines of demarcation broken.

(iii) Identify two steps in the resolution of an industrial dispute:

Talks between the parties involved in the dispute. Talks between the Shop Steward and Management/HR.

Talks between Trade Union Official and Management.

LRC/Conciliation: A third party may bring the disputing parties together, and

help them to negotiate and reach a settlement. The outcome is not binding.

Labour Court/Arbitration: The disputing parties may seek the help of the labour court who will listen to both parties, makes a decision, and presents to a solution to them.

(B) (i) Benefits in kind: is a form of non-cash payments/non monetary income.

Give Two Examples: company car, medical insurance, subsidised meals

(ii) Basic Pay: is the amount of money earned for working a

normal/usual/standard/contracted working week which in

Andrew’s case is €912 for working 38 hours.

Overtime: is working more hours than normal.


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(iii)

Andrew Tudor’s Net Weekly Wage - Week 38

€

Basic Weekly Pay 912

Overtime

6 hours @ €36 216

2 hours @ €48 96

Gross Pay 1,224.00

Less: Tax Deductions

PRSI, USC (1224 × 11%) 134.64

PAYE (1224 × 41%) 501.84

Less: Tax Credits (3,900 /52) ( 75) 426.84

Total Tax Liability 561.48

Net Pay 662.52

Documents

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