1. Bonus in Reduction of Premium: Instead of paying bonus in cash, the corporation may deduct the bonus from the premiums due from the insured. This is known as bonus in reduction of premium. It is shown both on the debit side (as an expense) and credit side (by adding to the premium) of revenue account.
2. Surrender value is the amount that a policyholder can get immediately in cash back from the life assurance company if he stops paying premiums. It is the present cash value of the policy. The other option to the policyholder is to get the policy.
Wilfykil answered the question on February 11, 2019 at 09:28
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Determine:
i). Revenue accounts for the year ended 31 December 2008
ii). Income statement for the year ended 31 December 2008
iii). Statement of financial position as at...
(Solved)
Date posted:
February 11, 2019
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Answers (1)
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Determine:
a) Fire and marine insurance revenue account for the year ended 31 October 2010
b) Statement of comprehensive income for the year ended 31 October 2010
c)...
(Solved)
The following trial balance was extracted from the books of Umoja Insurance Company limited as at 31 October 2010
Date posted:
February 11, 2019
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Answers (1)
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Explain the following terms
(i) Insurance contract.
(ii) Commission ceded
(iii) Surrender value
(iv) Endowment policy
(Solved)
Explain the following terms
(i) Insurance contract.
(ii) Commission ceded
(iii) Surrender value
(iv) Endowment policy
Date posted:
February 11, 2019
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Answers (1)
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Determine:
a) Crop account, poultry account and dairy account for the year ended 31 March 203.
b) General profit and loss account for the year ended 31st...
(Solved)
The following information was extracted from the books of Moses Kiprono, a farmer, for the year ended 31 March 2003.
Date posted:
February 11, 2019
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Answers (1)
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Determine:
a) Crop account for the year ended 31 December 2006.
b) Livestock account for the year ended 31 December 2006.
c) Poultry account for the year ended...
(Solved)
The following trial balance was extracted from the books of Mkulima Halisi, a farmer, as at December 2006:
Date posted:
February 11, 2019
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Answers (1)
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Determine:
i) Crop and livestock revenue accounts, in columnar format, for the year ended 31 March 2012.
ii) General income statement for the year ended 31 March...
(Solved)
The following balances were extracted from the books of Shamba Ltd. as at 31 March 2012:
Date posted:
February 11, 2019
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Answers (1)
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Explain the circumstances under which an entity should recognize a biological asset or agricultural produce in the context of International Accounting Standard (IAS) 41, Agriculture.
(Solved)
Explain the circumstances under which an entity should recognize a biological asset or agricultural produce in the context of International Accounting Standard (IAS) 41, Agriculture.
Date posted:
February 11, 2019
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Answers (1)
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Determine:
(i) A schedule showing the profit (or loss) which should be recognized in the profit and loss account of Mwako and Mjengo for each of...
(Solved)
Mwako and Mjengo is a firm building contractors. The following information pertains to its uncompleted contracts as at 31 December 2003:
Date posted:
February 11, 2019
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Answers (1)
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In the context of accounting for long-term construction contracts, briefly explain the following terms:
(i) Retention money
(ii) Escalation clause
(Solved)
In the context of accounting for long-term construction contracts, briefly explain the following terms:
(i) Retention money
(ii) Escalation clause
Date posted:
February 11, 2019
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Answers (1)
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Determine:
(i) Trading, profit and loss account for the year ended 31 March 2006.
(ii) Balance sheet as at 31 March 2006
(Solved)
Kopesha Limited has been in business for several years dealing in electronic goods. All the firm’s goods are sold on hire purchase terms. The following trial balance extracted from the books of the firm as at 31 March 2006:
Date posted:
February 11, 2019
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Answers (1)
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Distinguish between “leasing” and “hire purchase” highlighting how each is accounted for.
(Solved)
Distinguish between “leasing” and “hire purchase” highlighting how each is accounted for.
Date posted:
February 11, 2019
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Answers (1)
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Determine:
a) The value of closing stock as at 31st March 2007
b) Hire purchase debtors account as at 31 March 2007
c) Trading and profit and loss...
(Solved)
Maridadi company ltd,sells high resolution television sets on both cash basis and hire purchase terms each television costs sh 16,000 and is sold at sh20,000 on cash basis. If a television set is sold on hire purchase terms a deposit of sh5,000is paid followed by ten installments of sh2,000 each . The company recognizes gross profit on television sets sold on hire purchase terms based on cash collected in the period and excludes television sets n hire-purchase terms from its closing stock. The company has a policy of valuing television sets repossessed from hire-purchase customers who have defaulted on payment at 60% of the unpaid installments. Repossessed television sets are sold on cash basis at the same gross profit rate television sets sold on cash
basis. Provided below is the trial balance of the company as at 31` March 2007
Date posted:
February 11, 2019
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Answers (1)
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Using the percentage of completion method, prepare the following in the books of Ujenzi contruction ltd
i) Profit and loss account for each of the three...
(Solved)
On 1 January Ujenzi construction Ltd was awarded a contract for the construction of a road .The contract was for a three year period. The contract price was sh 250 million. The following information has been extracted from the books of the company
Date posted:
February 11, 2019
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Answers (1)
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Explain the following methods used in accounting for construction contracts
i. Completed contract method
ii. Percentage of completion method
(Solved)
Explain the following methods used in accounting for construction contracts
i. Completed contract method
ii. Percentage of completion method
Date posted:
February 11, 2019
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Answers (1)
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Prepare the following in the books of Witu ltd
i) Consignment account
ii) Goods sent on consignment account
iii) Goods damaged in transit account
(Solved)
Witu ltd, operates in Mombasa and deals in electronic goods, Most of these goods are sold through consignee of these consignees Mbaka Ltd,operates in Kitui town.
Witu ltd received the following account sales from Mbaki Ltd.
The account sales of 240 television sets received from the sold on account of Witu ltd of
Mombasa
Date posted:
February 11, 2019
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Answers (1)
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For each of the years ended 31 December 2006, 2007 and 2008, prepare extracts of financial statements using the percentage of completion approach in line...
(Solved)
Date posted:
February 11, 2019
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Answers (1)
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Juhudi Contractors carried out work on four construction contracts during the financial year ended 30 September 2009.
(Solved)
Juhudi Contractors carried out work on four construction contracts during the financial year ended 30 September 2009.
Date posted:
February 11, 2019
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Answers (1)
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Wonderful Bikes Ltd. is a retail outlet which sells motorbikes both on cash and hire purchase terms.
The following information was extracted from the books of...
(Solved)
Wonderful Bikes Ltd. is a retail outlet which sells motorbikes both on cash and hire purchase terms.
The following information was extracted from the books of account of Wonderful Bikes Ltd. as at 31 August 2011:
Date posted:
February 11, 2019
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Answers (1)
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Differentiate between defined benefit and defined contribution plans
(Solved)
Differentiate between defined benefit and defined contribution plans
Date posted:
February 11, 2019
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Answers (1)
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(Solved)
Date posted:
February 11, 2019
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Answers (1)