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ololo11 [35]
2 years ago
9

JKL Insurance Company reported the following information on its accounting statements last year:

Business
1 answer:
sdas [7]2 years ago
7 0

Answer:

1. $90, 000, 000/ $100, 000, 000

= 0.9  

2. $5, 000, 000 + $30, 000, 000 / $10, 000, 000

= 3.5

3. = ($90, 000, 000 + $5, 000, 000 + $30, 000, 000) / $100, 000, 000

= 1.25

= $10, 000, 000 / $90, 000, 000

= 0.1111

5.. = ($5, 000, 000 + $30, 000, 000 + $90, 000, 000) / $100, 000, 000 + $10, 000, 000

= 1.136

Explanation:

1. Loss ratio is the losses an insurer incurs due to paid claims as a percentage of premiums earned. A loss ratio is the difference between an insurance company's premiums compared to how much it pays out in claims

This is the formula to calculate the loss ratio:

The ratio is calculated by dividing the amount of premiums by the amount of premiums collected.

A low ratio means the insurance company is profitable. A high ratio means the company is less profitable. If the ratio is 1 or 100%, that means that the company is unprofitable.

JKL’s loss ratio:

Premiums written: $90, 000, 000

Premiums earned: $100, 000, 000

$90, 000, 000/ $100, 000, 000 = 0.9  : 1

2. Expense ratio measures how much of a fund's assets are used for administrative and other operating expenses. An expense ratio is determined by dividing a fund's operating expenses by the average dollar value of it assets (the total market value of the investments that a person or entity manages on behalf of clients.

JKL’s Expenses Ratio:  

            =    Total Fund Expenses / Total Fund Assets

            =     $5, 000, 000 + $30, 000, 000 / $10, 000, 000

            =      3.5  : 1

3. Combined Ratio:  measures an insurer’s profitability. it is merely a combination of the loss ratio and expense ratio. It measures the losses and expenses incurred in relation to the premiums earned.

JKL’s Combined Ratio:  

= ($90, 000, 000 + $5, 000, 000 + $30, 000, 000) / $100, 000, 000

= 1.25  : 1

4. Investment Ratio: is the ratio that an insurer uses in order to measure the company’s net investments to its premiums earned. The ratio compares the income from investments to income from its other activities. This ratio is also a measure of profitability.

= $10, 000, 000 / $90, 000, 000

= 0.1111  : 1

5. Overall Operating Ratio: this is the ratio that a insurer to show his profitability realized before taxation, taking into account investment income.

= ($5, 000, 000 + $30, 000, 000 + $90, 000, 000) / $100, 000, 000 + $10, 000, 000

= 1.136  : 1

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Flounder Inc. issues 500 shares of $10 par value common stock and 100 shares of $100 par value preferred stock for a lump sum of
ipn [44]

Answer:

a.

Journal Entries

Dr. Cash ___________________$104,000

Cr. Common Stock ___________$5,000

Cr. Preferred stock ___________$10,000

Cr. Paid in capital Common Stock $78,200

Cr. Paid in capital Preferred stock $10,800

b.

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Cr. Common Stock ___________$5,000

Cr. Preferred stock ___________$10,000

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Cr. Paid in capital Preferred stock $5,000

Explanation:

a.

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Allocation to

Common stock = $104,000 x $82,000 / $102,500 = $83,200

Preferred stock = $104,000 x $20,500 / $102,500 = $20,800

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Par Values

Common stock = 500 shares x $10 = $5,000

Preferred stock = 100 shares x $100 = $10,000

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Preferred stock = $20,800 - $10,000 = $10,800

b,

Value of common stock = $178 per share x 500 shares = $89,000

Additional paid in capital

Common stock = $89,000 - $5,000 = $84,000

Preferred stock = $104,000 - $89,000 - $10,000 = $10,000

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8 months ago
The following partially completed process cost summary describes the July production activities of Ashad Company. Its production
xeze [42]

Answer:

Units Transferred Out $ 663750

Work In Process Ending $ 30440

Direct Materials Costs  $ 11.5 per EUP   Conversion  Costs$6.2 per  EUP

Explanation:

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Weighted Average Method

Cost Of Production Report

Equivalent Units of Production

                                                      Direct Materials           Conversion

Units transferred out                       37,500 EUP                 37,500 EUP

<u>Units of ending work in process      2,000 EUP                    1,200 EUP</u>

<u>Equivalent units of production          39,500 EUP                38,700 EUP</u>

Costs Added

                                                    Direct Materials           Conversion

Costs of beginning work in

process                                               $13,450                    $1,860

<u>Costs incurred this period               440,800                      238,080</u>

<u>Total costs                                       $454,250                   $239,940 </u>

<u />

Costs per EUP

                                                Direct Materials           Conversion

                                $454,250/ 39,500 EUP         $239,940/38,700 EUP

                                     =  $ 11.5 per EUP                        = $6.2 per  EUP

Dividing the costs with EUP gives cost per EUP.

Costs Accounted For

Units Transferred Out $ 663750

Materials = $ 11.5 * 37500=$  431250

Conversion= $ 6.2 * 37500=$ 232500

Total = $ 663750

Work In Process Ending $ 30440

Materials = $ 11.5 * 2000=$  23000

Conversion= $ 6.2 * 1200=$ 7440

Total = $ 30440

Now adding the costs of Transferred out units and the ending work in process inventory equals the total of the costs added.

$ 663750+$ 30440 = $454,250 + $239,940

$ 694190 = $ 694190

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