Problem 4. From the following information pertaining to Nonesuch Insurance Company for the year ended 31e December 2019 Particulars Amount (in R.O.) Claims under policies 60,000 Commission on direct business 30,000 Other commission paid 3,000 Other expenses of management: Salaries 24,000 Rent and Repairs 10,000 Salaries to director 14,000 Premiums after re-insurance 176,250 Interest, dividends on their 2,340 investments Commission on reinsurance ceded 4,500 Share Capital 120,000 Investments 100,000 Furniture and fixtures 60,000 Agents Balances 2,090 22 The following information is also available: Outstanding claims at the end of the period 31. Dec. 2018 5,000 Premiums collected in advance 25,000 Depreciation to be provided on Furniture 2,000 Rent and repairs outstanding for the 5,000 current year Required: (a) Ascertain the net profit earned by the company by preparing income statement (b) Prepare Balance Sheet as on 31. December 2019

Problem 4. From the following information pertaining to Nonesuch Insurance Company for the year ended 31e December 2019 Particulars Amount (in R.O.) Claims under policies 60,000 Commission on direct business 30,000 Other commission paid 3,000 Other expenses of management: Salaries 24,000 Rent and Repairs 10,000 Salaries to director 14,000 Premiums after re-insurance 176,250 Interest, dividends on their 2,340 investments Commission on reinsurance ceded 4,500 Share Capital 120,000 Investments 100,000 Furniture and fixtures 60,000 Agents Balances 2,090 22 The following information is also available: Outstanding claims at the end of the period 31. Dec. 2018 5,000 Premiums collected in advance 25,000 Depreciation to be provided on Furniture 2,000 Rent and repairs outstanding for the 5,000 current year Required: (a) Ascertain the net profit earned by the company by preparing income statement (b) Prepare Balance Sheet as on 31. December 2019

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

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Problem 4. From the following information pertaining to Nonesuch Insurance
Company for the year ended 31e December 2019
Particulars
Amount (in R.O.)
Claims under policies
60,000
Commission on direct business
30,000
Other commission paid
3,000
Other expenses of management:
Salaries
24,000
Rent and Repairs
10,000
Salaries to director
14,000
Premiums after re-insurance
176,250
Interest, dividends on their
2,340
investments
Commission on reinsurance ceded
4,500
Share Capital
120,000
Investments
100,000
Furniture and fixtures
60,000
Agents Balances
2,090
22
The following information is also available:
Outstanding claims at the end of the
period 31. Dec. 2018
5,000
Premiums collected in advance
25,000
Depreciation to be provided on
2,000
Furniture
Rent and repairs outstanding for the
5,000
current year
Required:
(a) Ascertain the net profit earned by the company by preparing income statement
(b) Prepare Balance Sheet as on 31st December 2019

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