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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