The following trial balance was extracted from the books of Bima Insurance Ltd as at 30 June 2006 Sh
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The following trial balance was extracted from the books of Bima Insurance Ltd as at 30 June 2006
|
Sh’000’ |
Sh’000’ |
|||
|
Net earned premiums: |
Fire |
139,668 |
||
|
Motor |
259,456 |
|||
|
Net commissions: |
Fire |
3,466 |
||
|
Motor |
6,938 |
|||
|
Net earned paid: |
Fire |
55,784 |
||
|
Motor |
111,562 |
|||
|
Net claims outstanding as at 1 July 2005: |
Fire |
72,036 |
||
|
Motor |
144,074 |
|||
|
Management expenses to be charged to revenue accounts |
155,108 |
|||
|
Management expenses not to be charged to revenue accounts |
20,000 |
|||
|
Bad debts |
5,000 |
|||
|
Treasury bills |
199,100 |
|||
|
Treasury bonds |
11,386 |
|||
|
Deposits in banks |
474,100 |
|||
|
Motor vehicles (net book value-1 July 2005) |
1,000 |
|||
|
Equipment (Net book value – 1 July 2005) |
14,414 |
|||
|
Amounts due to other insurance companies |
4,000 |
|||
|
Amounts due from other insurance companies |
6,940 |
|||
|
Bank overdraft |
16,000 |
|||
|
Share capital |
120,000 |
|||
|
Investment income |
72,000 |
|||
|
Other income |
17,564 |
|||
|
Revaluation reserves |
50,000 |
|||
|
Retained earnings as at 1 July 2005 |
30,000 |
|||
|
Unearned premium reserves as at 1 July 2005: |
Fire |
40,000 |
||
|
Motor |
100,00 |
|||
|
1,064,798 |
1,064,798 |
Additional information:
1 Management expenses are to be apportioned to revenue accounts on the basis of net earned premiums
2 The management made the following estimates as at 30 June 2006:
Sh’000’
Net claims outstanding: Fire 90,000
Motor 158,000
3 Reserve for unexpired risks as at 30 June 2006 is to be maintained at 50% of the respective net earned premiums for both the fire and motor businesses
4 Depreciation on motor vehicles and equipment is to be provided using the reducing balance method at the rates of 20% and 10% per annum respectively
Required:
(i) Revenue accounts for the year ended 30 June 2006
(ii) Profit and loss account for the year ended e0 June 2006
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