Example 2: The undermentioned balances form part of the ledger balances of All People's Assurance Co Ltd. as on 31st March 2020 Amount Amount RO RO Amount of life Insurance fund at the beginning of the year Claims by death |Claims by maturity 1470562 Annuities 29,420 76,980 56,420 Bonus paid in cash Bonus paid in reduction of premium Cash 9,450 2500 Premiums 210,572 600 Expenses of management 19,890 Claims admitted but not 80,034 paid at the end of year Annuities due but not paid Capital Paid up Commission 26,541 22,380 Consideration for annuities granted Interest dividends and rent 10,620 400,000 52,461 Government securities 1,490,890 Income tax paid on profits Fines collected 3,060 Other Assets 509,110 92 | Surrenders 21,860 Prepare Revenue Account and Balance Sheet after taking into account the following: (a) Claims covered under reinsurance RO 10,000 (b) Further claims initiated RO 8,000 (c) Further bonus utilized in reduction of premium RO 1500 (d) Interest Accrued RO 15,400 (e) Premiums outstanding RO 7,400

Example 2: The undermentioned balances form part of the ledger balances of All People's Assurance Co Ltd. as on 31st March 2020 Amount Amount RO RO Amount of life Insurance fund at the beginning of the year Claims by death |Claims by maturity 1470562 Annuities 29,420 76,980 56,420 Bonus paid in cash Bonus paid in reduction of premium Cash 9,450 2500 Premiums 210,572 600 Expenses of management 19,890 Claims admitted but not 80,034 paid at the end of year Annuities due but not paid Capital Paid up Commission 26,541 22,380 Consideration for annuities granted Interest dividends and rent 10,620 400,000 52,461 Government securities 1,490,890 Income tax paid on profits Fines collected 3,060 Other Assets 509,110 92 | Surrenders 21,860 Prepare Revenue Account and Balance Sheet after taking into account the following: (a) Claims covered under reinsurance RO 10,000 (b) Further claims initiated RO 8,000 (c) Further bonus utilized in reduction of premium RO 1500 (d) Interest Accrued RO 15,400 (e) Premiums outstanding RO 7,400

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter8: Current And Contingent Liabilities

Section: Chapter Questions

Problem 2MCQ

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