Dhofar Insurance company is one of the leading insurance companies in the Sultanate of Oman and always on the lookout for talented, committed, and qualified people who are driven to achieve profitable growth for the company as well as motivated to progress in their career. You are a fresh accounting graduate and joined the company. As a part of your training, the manager of the company asked you to join as an assistant to the actuaries. As you are a trainee, actuaries explained to you that the Revenue account or Balance sheet of a life insurance company does not disclose the profit or loss for a given period. To ascertain profits or losses of a life insurance company a Valuation Balance Sheet is prepared once in every two years. He provided you with amounts of balances of Life assurance funds for the previous year and current year respectively OMR 7,365,250 as on 31st December 2018 and OMR 4,034,000 on 31st December 2019 and the net liability as per actuary's valuation OMR 5,895,200 The following information also relates to the current period 31st December 2019: an interim bonus paid during the period OMR 156,230; Dividend still unpaid for the 31st December 2018 was OMR 62,300 and Surplus brought forward from the period 2018 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 2019 whereas, there is no change in Balance of Life Assurance Fund and other information related to the current year. You are asked to prepare: c) Comment on the changes of surplus earned for 2019 and explain the effect of reduction of net liability. (50 Words minimum/1 Mark)