Financial Accounting &

Analysis
Accounting for corporate entities,
preparation of Financial Statements
for corporate entities including
Banking and Insurance Companies
 (Financial Accounting & Analysis)

(Financial Statements of Insurance Companies)

This chapter will teach you about the accounting for corporate entities, and preparation of
financial statements for banking and insurance companies

Learning Objectives

At the end of this topic, you will be able to:

Understand the final accounts of Insurance using 3 examples
(Financial Accounting & Analysis)

(Financial Statements of Insurance Companies)

Example
Q1 From the following balances extracted from the books of Tushar Bank Ltd., Akola, prepare the Profit and Loss
Account for the year ended 31st March 2015 and the Balance Sheet as on that date.
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(Financial Statements of Insurance Companies)

Example

Adjustments :
1) Authorised share capital is Rs. 20,00,000 divided into 40,000 shares of Rs. 50 each.
2) Rebate on bills discounted amounted to Rs. 10,000.
3) Create a provision for taxation Rs. 2,00,000.
4) Provision for bad and doubtful debts is required to be made at Rs. 60,000.
5) Provide 5% depreciation on the original amount of premises.
(Financial Accounting & Analysis)

(Financial Statements of Insurance Companies)

Example
(Financial Accounting & Analysis)

(Financial Statements of Insurance Companies)

Example
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(Financial Statements of Insurance Companies)

Example
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(Financial Statements of Insurance Companies)

Example
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(Financial Statements of Insurance Companies)

Example 2
Q2 The following is the Trial Balance of Lalu Bank Ltd.,.
(Financial Accounting & Analysis)

(Financial Statements of Insurance Companies)

Example 2
The following information should be considered :
a) Provision for bad and doubtful debts is required, amounting to Rs. 50,000
b) Interest accrued on investments was Rs. 80,000
c) Unexpired discount amounts of Rs. 3,800
d) Endorsement made on behalf of customers totaled Rs. 11,50,000
e) Authorised capital was 80,000 equity shares of Rs. 100 each,
f) Rs. 1,00,000 were added to the premises during the year. Depreciation at 5% on the opening balance is required,
g) Market Value of Indian Government Securities was Rs. 39,00,000

Prepare Profit and Loss Account for the year ended 31st March 2015 and Balance Sheet as on that date in the
prescribed form.
(Financial Accounting & Analysis)

(Financial Statements of Insurance Companies)

Example 2
(Financial Accounting & Analysis)

(Financial Statements of Insurance Companies)

Example 2
(Financial Accounting & Analysis)

(Financial Statements of Insurance Companies)

Example 2
(Financial Accounting & Analysis)

(Financial Statements of Insurance Companies)

Example 3
Q3 Friends Bank Ltd. gives you the following particulars from their books for the year ended 31-3-2015. You are
required to prepare Balance Sheet as on 31-3-2015 in the prescribed form.
(Financial Accounting & Analysis)

(Financial Statements of Insurance Companies)

Example 3
Following further information is given.
a) Authorised Capital is Rs. 1,00,00,000 (2,00,000 Shares of Rs. 50 each.)
b) Issued Capital is half of the Authorised Capital. All Shares are fully subscribed on which Rs. 25 per share are
paid up.
c) Constituents ‘Liabilities for Acceptances and Endorsements Rs. 22,00,000.
d) Bills for collection Rs. 15,00,000.
e) Contingent liability for partly paid shares Rs. 2,00,000.
f) Provide for doubtful loans Rs. 20,000.
g) Market value of Investment on 31-3-2008 were
i) Shares in companies Rs. 5,25,000
ii) Government securities Rs. 6,00,000
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(Financial Statements of Insurance Companies)

Example 3
(Financial Accounting & Analysis)

(Financial Statements of Insurance Companies)

Example 3
(Financial Accounting & Analysis)

(Financial Statements of Insurance Companies)

Example 3
 (Financial Accounting & Analysis)

(Financial Statements of Insurance Companies)

Summary
In this topic, you learnt:
Understood the final accounts of Insurance using 3 examples