Life Shield 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 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 current year and previous year respectively OMR 12,160,000 as on 31st March 2018, OMR 10,601,000 as on 31st March 2017 and the net liability as per actuary's valuation OMR 11,160,000. The information relating to the current period shows claims for the current period at OMR 245,000, an interim bonus paid during the period OMR 47,000; the dividend still unpaid for the 31st March 2018 was OMR 30,000. Surplus to carry to 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 31s March 2018 whereas there is no change in net liability and other information related to the current year. You are asked to prepare: a) Valuation Balance Sheet for Life Shield Insurance Company as at 31st March 2018 (2 Marks) b) Find the Deficit / Surplus earned by the company for the period 2018 (2 Marks) c) Comment on the changes of surplus earned for 2018 and explain is it advisable to create (50 Words minimum/1 Mark) a new reserve. Life Shield 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 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 current year and previous year respectively OMR 12,160,000 as on 31st March 2018, OMR 10,601,000 as on 31st March 2017 and the net liability as per actuary's valuation OMR 11,160,000. The information relating to the current period shows claims for the current period at OMR 245,000, an interim bonus paid during the period OMR 47,000; the dividend still unpaid for the 31st March 2018 was OMR 30,000. Surplus to carry to 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 31s March 2018 whereas there is no change in net liability and other information related to the current year. You are asked to prepare: a) Valuation Balance Sheet for Life Shield Insurance Company as at 31st March 2018 (2 Marks) b) Find the Deficit / Surplus earned by the company for the period 2018 (2 Marks) c) Comment on the changes of surplus earned for 2018 and explain is it advisable to create (50 Words minimum/1 Mark) a new reserve
