SUBJECT: FINANCIAL ACCOUNTING - VII

Project Guidelines –
1) All questions are compulsory and carry equal marks
2) Write new question on new page.
3) Working notes are compulsory wherever applicable.
4) Project to be in HANDWRITTEN Form only and after scanning submit as per the instructions.

Q1 The following are the balances of Harry Insurance Co. Ltd. As on 31 st March, 2022
Particulars Rs. Rs. '000
Capital   32,000
Balances of Funds as on 1-4-2021    
Fire   80,000
Marine   95,000
Miscellaneous   21,865
Unclaimed Dividend   85
Amount due to other insurance Cos.   3,450
Sundry Creditors   7,250
Deposit and Suspense A/c. (Cr.)   2,280
Profit and Loss A/c. (Cr.)   8,040
Agent Balances (Dr)   13,500
Interest accrued but not due (Dr.)   2,250
Due from other insurance companies   6,450
Cash in hand   350
Balance in Current A/c. With Bank   7,480
Furniture and Fixtures WDV) (Cost 10,000)   5,800
Stationery Stock   140
Expenses of Management    
Fire 28,000  
Marine 16,000  
Miscellaneous 4,000  
Others 3,000 51,000
Foreign Taxes - Marine   800
Outstanding Premium   8,200
Donation paid (No 80G Benefit)   1,000
Transfer Fees   100
Reserve for Bad Debts   1,170
Income Tax Paid   9,000
Mortgage Loan (Dr)   97,500
sundry Debtors   2,500
Govt. Securities Deposited with RBI   3,700
Govt. Securities (11,02,000)   1,02,000
 Debentures   46,550
Eq. Shares of Joint Stock Co.   22,500
Claims Less Re-insurance    
Fire 45,000  
Marine 35,890  
Miscellaneous 6,800 87,690
Premium less re-insurance    
Fire 1,76,250  
Marine 1,02,250  
Miscellaneous 26,225 3,04,725
Interest and Dividends received on Investments   5,850
Tax Deducted at Source   1,170
Commission    
Fire 50,000  
Marine 35,000  
Miscellaneous 8,000 93,000

You are required to make the following provisions

Depreciation on Furniture 10% of Original Cost
Depreciation on Investments of Joint Stock Companies Shares – 1,000
Transfer to General Reserve 1,000
Outstanding claims as on 31-3-2022
Fire – 20,000; Marine – 5,000 and Miscellaneous – 3,250
Provision for Taxation 50%, Proposed dividend @ 20%

You are required to prepare Revenue A/c., Profit and Loss A/c. and Balance Sheet as on 31-3-2022.

Q2 From the following particulars of HCL Insurance Company Ltd., prepare Revenue A/c. Profit and
Loss A/c. for the year ended 31-3-2022 and a balance sheet as on that date in the statutory
formats.
Particulars Dr. Cr.
Share Capital (4000 shares of Rs. 100 each)   400000
Reserve for Unexpired Risk on 1-4-2021    
Marine   212620
Fire   113380
Claims admitted but not paid    
Marine   9808
Fire   4620
Due to Re-insurers    
Marine   4143
Fire   2471
Premium Received    
Marine   859960
Fire   356418
 Creditors   44962
Investments 506980  
Buildings 345016  
Agents' Balance 46212  
sundry Debtors 17918  
Interest and Dividend   19512
Income tax thereon 4513  
Other Receipts   807
Claims paid and outstanding    
Marine 261512  
Fire 102412  
Expenses of Management    
Marine 142218  
Fire 96512  
Commission    
Marine 62857  
Fire 34921  
Interest Accrued 919  
Office Furniture 114761  
Preliminary Exps 90212  
Cash and Bank Balances 201738  
202870 202870
  1 1
Adjustments
1) Premium outstanding on 31-3-2022 Marine : 800; Fire 700
2) Taxation provision of Rs. 2,000 is required
3) Provision for unexpired risk is to be made at 50% on Marine and 40% on Fire
4) Provide 1,500 for survey expenses for Marine Insurance Claims.

Q.3
Q4