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Problem 4. From the following information pertaining to Nonesuch Insurance Company for the year ended 31"December 2020 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 The following information is also available: Outstanding claims at the end of the period 31 Dec. 2020 5,000 Premiums collected in advance 25,000 Depreciation to be provided on Furniture 2,000 5,000 Rent and repairs outstanding for the current year Required: (a) Ascertain the net profit earned by the company by preparing income statement (b) Prepare Balance Sheet as on 31 December 2020

Problem 4. From the following information pertaining to Nonesuch Insurance Company for the year ended 31"December 2020 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 The following information is also available: Outstanding claims at the end of the period 31 Dec. 2020 5,000 Premiums collected in advance 25,000 Depreciation to be provided on Furniture 2,000 5,000 Rent and repairs outstanding for the current year Required: (a) Ascertain the net profit earned by the company by preparing income statement (b) Prepare Balance Sheet as on 31 December 2020

FINANCIAL ACCOUNTING
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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Problem 4. From the following information pertaining to Nonesuch Insurance Company for the year ended 31 December 2020 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 The following information is also available: Outstanding claims at the end of the period 31 Dec. 2020 5,000 Premiums collected in advance 25,000 Depreciation to be provided on 2,000 Furniture Rent and repa soutstanding 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 31s December 2020
Transcribed Image Text:Problem 4. From the following information pertaining to Nonesuch Insurance Company for the year ended 31 December 2020 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 The following information is also available: Outstanding claims at the end of the period 31 Dec. 2020 5,000 Premiums collected in advance 25,000 Depreciation to be provided on 2,000 Furniture Rent and repa soutstanding 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 31s December 2020
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