Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Assume that you are a trainee accountant, and joined a Global insurance company. The actuaries explained to you about the life insurance company and also

Assume that you are a trainee accountant, and joined a Global insurance company. The actuaries explained to you about the life insurance company and also about the Valuation Balance Sheet is prepared once in every two years. He provided you with the information of AXA insurance Company and ZAP Insurance company.

The following information relates to AXA insurance Company amounts of balances of Life assurance funds for the previous year and current year respectively OMR 7,365,250 as of31st December 2019 and OMR 4,034,000 on31st December 2020 and the net liability as per actuary's valuation OMR 5,895,200, an interim bonus paid during the period OMR 156,230; Dividend still unpaid for the 31st December 2020 was OMR 62,300 and Surplus brought forward from the period 2019 was OMR 198,300; Premiums collected for the current period OMR 263,250

Actuaries also told to prepare a valuation balance sheet with a reduction of 40% in of its net liability for the year-end of 31st December 2020 whereas, there is no change in the Balance of Life Assurance Fund and other information related to the current year.

The following information relates to ZAP insurance Company amounts with amounts of balances of Life assurance funds for the current year and previous year respectively OMR 13,160,000 as of31st March 2019, OMR 10,160,000as of31st March 2018, and the net liability as per actuary's valuation OMR 11,160,000. The current period shows claims for the current period at OMR 245,000, an interim bonus paid during the period OMR 47,000; thedividend still unpaid for the 31st March 2019 was OMR 30,000. Surplus to carry forward the next period OMR 283,000.

Actuaries also told you that the company is planning to create a reserve of 20% of its available Life Assurance fund at the end of 31st March 2019 whereas there is no change in net liability and other information related to the current year.

Question 21
Not yet answered
Marked out of 1.00
Not flaggedFlag question
Question text
Which of the following statements is correct with the effect of changes of surplus earned for 2020 after the reduction in net liability for AXA insurance company.

a.
It will result in surplus

b.
Deficit will increase

c.
Life Insurance fund will have any effect

d.
Net liability will not have any effect

Question 22
Not yet answered
Marked out of 1.00
Not flaggedFlag question
Question text
Which of the following statements is correct with the effect of changes of surplus earned for 2019 to create a new reserve for ZAP insurance company.

a.
Life Insurance fund will not have any effect

b.
Surplus will increase

c.
Net liability will have any effect

d.
It will result in a deficit

Question 23
Not yet answered
Marked out of 1.00
Not flaggedFlag question
Question text
Find the Deficit/Surplus earned by AXA insurance company for the period ending 31st December 2020.

a.
RO (1775,280)

b.
RO 2,166,430

c.
RO 1,164,730

d.
RO (2,166,430)

Question 24
Not yet answered
Marked out of 1.00
Not flaggedFlag question
Question text
Calculate the Surplus/Deficit for AXA Insurance Company as at 31st December 2020.

a.
Deficit RO 1,470,050

b.
Deficit RO 1,861,200

c.
Surplus RO 1,861,200

d.
Surplus RO 1,470,050

Question 25
Not yet answered
Marked out of 1.00
Not flaggedFlag question
Question text
What would be the effect on surplus on creating a new reserve for AXA insurance Company with the reduction of net liability?

a.
RO 496,880

b.
RO 1,675,920

c.
RO 5,007,170

d.
RO 3,828,080

Step by Step Solution

3.42 Rating (165 Votes )

There are 3 Steps involved in it

Step: 1

For AXA 1 Decrease in Net L... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fraud examination

Authors: Steve Albrecht, Chad Albrecht, Conan Albrecht, Mark zimbelma

4th edition

538470844, 978-0538470841

More Books

Students also viewed these Accounting questions

Question

47. If E[Y |X] = 1, show that Var(X Y ) Var(X)

Answered: 1 week ago

Question

Why financial statements do not work for digital companies?

Answered: 1 week ago