The Following trial balance was extracted from the books of Protection Insurance Company Limited as at 31
Question:
The Following trial balance was extracted from the books of Protection Insurance Company Limited as at 31 December, 2018:
GHS | GHS | |
Ghana Government Treasury bills Provision for claims (1/1/18) Land and Buildings Motor Vehicle and Equipment Stated Capital Ghana Government Stocks Contingency Reserves Investment in Listed Companies Provision for unearned premium (1/1/18) Premium received (gross) Management expenses Exchange gain Retained Earnings (1/1/18) Bank and cash balances Commission paid Amount due to creditors(Payables) Amount due to agents Taxation (1/1/18) Deferred Acquisition cost Provision for depreciation: Motor vehicle and equipment Land and buildings Claims paid Amount de for Re-insurance Dividends paid Interest on Mortgage loans Amount due from Agents Mortgage Loans Sundry Receivables Interest on Treasury bills Amount due on Re-insurance | 6,162,385 1,352,030 1,267,170 292,500 663,550 1,068,580 838,155 151,275 615 359,590 2,013,055 1,268,935 521,815 835,915 147,645 16,943,215 | 3,081,195 650,000 318,590 1,466,460 4,868,720 18,220 453,120 97,960 1,996,850 336,225 43,985 1,907,890 562,500 440,250 701,250 16,943,215 |
The following information is also available:
- An amount of GHS121,000 was due to Ghana Re-insurance Company Limited for being an amount payable on reinsurance ceded.
- Deferred acquisition cost of GHS41,000 was incurred on premium collected during the year.
- Provision for unearned premium at the end of the year was GHS1,512,500.
- The provision for claims at the beginning of January 1, 2018 was made up as follows:
GHS
Provision for outstanding claims 1,339,000
Provision for claims incurred but not reported 1,742,195
- The outstanding claims provision as at 31 December 2018 was GHS2,436,075.
- A Claim of GHS160,000 as reinsurance recoveries is receivable from Ghana Reinsurance Company Limited.
- Divided proposed for the year was GHS422,500
- Commission receivable from other insurance companies for reinsurance with Ghana Reinsurance Company Limited was GHS37,500
- Company tax provision of GHS2,227,540 is to be made.
Required:
Prepare draft financial statements for the year ended 31 December, 2018 in accordance with the Companies code, 1963, Act 179 and the Insurance Law, 1989.
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott