UM Accounting Worksheet

Assignment Question(s): (Marks 10)

Q1. The following financial transactions are related with a General Takaful Product:

i.          An amount of SAR 6,200 received as advanced contribution from new participants.

ii.         An amount of SAR 4,500 received as a contribution from new participants. 

iii.        Contribution renewal received from participants SAR 5,500.

You are required to prepare necessary journal entries.                                     (3 Marks)

Q2. Discuss the three primary methods used by Guaranty Fund to assess property and liability insurance using your own words.                                                                                              (2 Marks)                                                                                                                  

Q3. XYZ Company has the following financial data:                                                     (5 marks)

Particulars

Amounts (SAR)

Total Profit for the Year

377,500

General Takaful Assets (Year 2014)

1,390,000

General Takaful Assets (Year 2015)

1,517,500

Cash 

11,500

Short-term Investment

23,500

Short term liabilities

85,000

Underwriting Surplus Distributable to Participants/Participants’ Share of Profit

145,500

Gross Contribution

958,000

Net Contribution

662,500

Wakalah Fee

77,500

Commission Paid

28,300

Management Expense

58,000

Net Claim Incurred

287,500

Earned Contribution

632,500