Case: 4 (10 Marks) Muscat Insurance Company SAOG provides a wide range of insurance products and services to corporate, SME and individual customers. The company was formerly known as Muscat National Holding Company SAOG with two wholly-owned subsidiaries Muscat Insurance Company SAOC (MIC) offering all classes of general insurance and Muscat Life Assurance Company SAOC (MLAC) offering life and health insurance products. The following balances were extracted from the books of the MLAC Life Insurance SAOC as on 31 March 2019. Amount OMR 100,000 Particulars Investment Amount OMR 2,492,200 Particulars Share Capital Life insurance fund as on 31 March 2018 Audit fees Claims by death Office rent Management expenses Surrender value essment-timetable-041620 2,112.700 7,000 194,700 11,600 30,000 31,500 Furniture and fittings Loans to other companies Cash on deposits Freehold premises Other assets Law charges Bonus in reduction of 40,000 141.400 27,000 305,000 2.300 2,000 + Aitto page ID Page view A Read aloud The following balances were extracted from the books of the MLAC Life Insurance SAOC as on 31 March 2019. Amount OMR 100,000 Particulars Investment Amount OMR 2,492,200 Particulars Share Capital Life insurance fund as on 31 March 2018 Audit fees Claims by death Office rent Management expenses Surrender value 2,112,700 7,000 194,700 11,600 30,000 31.500 40,000 141,400 27,000 305,000 2,300 2,000 Furniture and fittings Loans to other companies Cash on deposits Freehold premises Other assets Law charges Bonus in reduction of premium Miscellaneous expenses Commission on reinsurance accepted Agents balances Dividends Premium 15,000 200,000 2,500 10,500 Re-insurance Premium Interest and dividends received 36,500 972,300 20,000 15,800 You are appointed as an accountant in Muscat Insurance Company and required to prepare the final accounts for the company. You are also provided with additional information about Claims have been counta + Fit to page D Page view A Read aloud Surrender value 31,500 2,000 Dividends Premium 15,000 200,000 Law charges Bonus in reduction of premium Miscellaneous expenses Commission on reinsurance accepted Agents balances 2,500 10,500 Re-insurance Premium Interest and dividends received 36,500 972,300 20,000 15,800 You are appointed as an accountant in Muscat Insurance Company and required to prepare the final accounts for the company. You are also provided with additional information about the company which has not been adjusted by the previous accountant. Claims have been recorded in ledger accounts but outstanding claims at the end of the period 31st March 2019 have not been included i.e OMR 9,000 and outstanding management expenses were OMR 200. The company provided bonuses in the reduction of premium of OMR 5,000 and depreciation on furniture and fittings was decided to be 10% of the cost. Lastly, it was observed that interest received in advance OMR 19,300 was also to be recorded. 8 Page Jannouncements/final-assessment-timetable-041620 pur Ft to page D Page view Ad Read aloud 2 Add You are required to prepare: a) Revenue account for MLAC Life Assurance Company and determine the closing Life Assurance balance at the year-end. (5 Marks) b) Prepare Balance Sheet as on 31 March 2019 (3 Marks) c) Further Muscat Insurance Company arranges reinsurance with National Insurance Company for RO 180,000 during the year 2019-20. It was decided that the Commission on reinsurance would be 8%. In the same year, Muscat Insurance Company also accepts the business from Ahli Insurance Company for a commission of 12% per policy. Ahli Company shares 800 policies with Muscat insurance in the year with a premium of 150 OMR each Calculate the amount of commission paid and received by Muscat insurance company and comment on benefit Muscat Insurance Company would get upon the reinsurance (60 words minimum /2 Marks) ge/announcements/final-assessment-timetable-041620