On January 1,2020, ABC Company insured the life of its president for P 7,000,000, with an annual premium of P 150,000 payable in advance at the beginning of each year. The company is the designated beneficiary and has the right to cancel the policy at its own option The cash surrender value of the policy at the end of each year is as follows: 2020- PO 2021- 0 2022- 50,000 2023 - 68,000 2024- 98,000 The president died on April 1,2023 and ABC Company's accounting year is the calendar year. How much is the life insurance expense for the year ended December 31,2023? * O P 27,500 O P 19,500 O P 94,500 O P 150,000
Q: What is the interest cost for 2023? b. What is the projected benefit obligation on December 31,…
A:
Q: On September 1, 2018, Hazel Company offered special termination benefits which consisted of lump sum…
A: Balance sheet shows: Assets accounts Liabilities accounts Shareholder's equity accounts
Q: On January 1, 2019, Solano Incorporated amended its pension plan which caused an increase of…
A: Cost per service year = Prior costs / Number of employees worked during every year = $6,000,000 /…
Q: JJJ Company insured the life of its president for P2,000,000. The entity being the beneficiary of an…
A: SOLUTION- Insurance expenses are incurred by the policyholder.
Q: Papa, Inc. has a life insurance policy with its president as insured. Papa is the beneficiary of…
A: The correct answer is Option (c).
Q: Gumamela Company has a $5,000,000 life insurance policy on its CEO of which Gumamela is the…
A: Insurance expense is the expense which occurs when the policy is purchased or any premium or legal…
Q: How much must have been the cash surrender value of life insurance at Iris's December 31. 2020…
A: The answer for the multiple choice question and relevant explanation are presented hereunder : What…
Q: On January 1,2016 , Coke Company insured the life of its president for P4,000,000, with an annual…
A: Given: - Cash surrender value at the end of 2019= 49,000 Cash surrender value at the end 2020=…
Q: 3. On January 2, 2019, the corporation insured the life of its president for P2,000,000. The…
A: Insurance: It is the agreement between the insurance company which called insurer and person…
Q: What is the journal entry on Dec. 31, 2014 to recognized the cash surrender value and adjust the…
A: Journal: It is the first step of recording financial transactions. It is used to prepare the…
Q: On January 2021, ABC Co. insured the life of one of its key management personnel for 1,300,000. ABC…
A: Step 1 Journal is the Part of Book Keeping.
Q: ABC Corporation ensures the life of its Chief Executive Officer for P3,000,000, indicating the…
A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: On September 1, 2020, Reality Corporation offered special termination benefits to employees who had…
A: Special Termination Benefits are the short term benefits provided by the employer to the employee…
Q: ABC Corporation insures the life of its Chief Executive Officer for P3,000,000, indicating the…
A: Surrender value in insurance is the amount of cash that has to be paid by the insurance company to…
Q: 300,000. The employee is expected to retire in 10 years and the salary increases are expected to…
A: The calculation is given as,
Q: purchased a P5,000,000 life insurance policy on its president, of which Charm is the beneficiary.…
A: Advance premium paid 200000 Add : opening cash surrender value 435000 635000…
Q: Mancuso Corporation amended its pension plan on January 1, 2020, and granted $160,000 of prior…
A: Compute the cost per service year:
Q: ABC Corporation insures the life of its Chief Executive Officer for P3,000,000, indicating the…
A: The life insurance policy is a contract between two parties called insurer and insuree. The insurer…
Q: Rachel Company has established a defined benefit pension plan for its employees. Annual payments…
A: The question is related to Employees benefits. The employee benefits in which the employer do…
Q: ABC Corporation insures the life of its Chief Executive Officer for P3,000,000, indicating the…
A: The insurance firm (insurer) and the individual enter into a legal agreement known as insurance…
Q: any has established a defined benefit pension plan for its employees. Annual payments under the…
A: Company has to make provisions for the pension o the employee and has to make provision for that.
Q: 13. Ann Company sold one of its factories on January 1, 2020 for ₱7,000,000. The entity received a…
A: Ann Company sold one of its factories on January 1, 2020 for ₱7,000,000. The entity received a cash…
Q: ABC Company insured the life of one of its officers. Yearly premium amount to P 75,000. At the end…
A: Surrender value of Policy: Give up esteem is the sum that a policyholder gets from the existence…
Q: Continuing from the previous number and assuming further that P3,000,000 was received from the…
A: Journal: It is the first step of recording financial transactions. It is used to prepare the…
Q: On September 1, 2020, SMD Company borrowed P5,000,000, 10% interest-bearing note due in five years.…
A: The correct answer is Option (c).
Q: On September 1, 2020, SMD Company borrowed P5,000,000, 10% interest-bearing note due in five years.…
A: Notes payable: Notes Payable is a written promise to pay a certain amount on a future date, with…
Q: December 31, 2020. Cash surrender value of life insurance, December 31, 2020 -
A: Life insurance seems to be an agreement between an insurance policy owner as well as an insurance…
Q: ABC Corporation insures the life of its Chief Executive Officer for P3,000,000, indicating the…
A: The amount business spends on insurance will affect the numbers on balance sheet, but balance sheet…
Q: The balance of the cash surrender value of life insurance policy maintained on the life of the…
A: Expenses means the amount spent on running the business where as income means the amount earned…
Q: Chilli Inc. insured the life of its president for P8,000,000, the corporation being the beneficiary…
A: The calculation of gain on the life insurance policy is as follows: Insurance policy P8,000,000…
Q: On September 1, 2020, Howe Company offered special termination benefits to employees who had reached…
A: The pension benefit is the amount that the individual receives after retirement from employment at…
Q: On Jan. 1, 2010, ABC entered into an insurance contract covering the life of its founder. The…
A: Cash surrender value to be recognized at the end of December 31, 2014 is P 80,000 On that date the…
Q: ABC Company insured the life of one of its officers. Yearly premium amount to P 75,000. At the end…
A: Explanation: The cash surrender value refers to the amount of money a policyholder or an annuity…
Q: Garrulous Company insured the life of the president for P2,000,000, the entity being the beneficiary…
A: Solution A journal is a company's official book in which all business transaction are recorded in…
Q: . What is the journal entry on Dec. 31, 2014 to recognized the cash surrender value and adjust the…
A: Journal: It is the first step of recording financial transactions. It is used to prepare the…
Q: Jelline Company insured the life of its president for P2,000,000, the entity being the beneficiary…
A: Life insurance protects your loved ones' future by providing a lump sum payment in the event of a…
Q: In January 2019, Cordova Company entered into a contract to acquire a new machine for its factory.…
A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…
Q: On January 2, 2019, Ivan got the franchise of PPP Inc. The franchise agreement provides a P500,000…
A: For Calculating the Earned Franchise Fees which are included with the details of the down payment…
Q: On January 1, 2020, Physanto Corp. received in exchange for equipment sold to Viva Inc., an 8%…
A: The following calculations are done in the records of Physanto Corporation to evaluate the equipment…
Q: Lewis Industries adopted a defined benefit pension plan on January 1, 2021. By making the provisions…
A: Requirement 1: Compute the Projected benefit obligation (PBO) as of December 31.
Q: Rachel Company has established a defined benefit pension plan for its employees. Annual payments…
A: SOLUTION PENSION IS A TAX EFFICIENT WAY TO PUT MONEY ASIDE FOR LATER IN LIFE TO PROVIDE INCOME FOR…
Q: HANGANG Park has life insurance policies on its officers’ lives. Annual premiums amount to P50,000.…
A: The amount of money received when an insurance policy or annuity has been cancelled is known as cash…
Q: On Jan. 1, 2010, ABC entered into an insurance contract covering the life of its founder. The…
A: Journal: It is the first step of recording financial transactions. It is used to prepare the…
Q: JJ Company insured the life of its president for P2,000,000. The entity being the beneficiary of an…
A: Insurance expenses are incurred by the policyholder.
Q: On December 31, 2020, Stormy & Co. started a defined benefit plan for its president. The plan…
A: In the given question, Stormy & Co. started a defined benefit plan for its president. The plan…
Q: On Jan. 1, 2010, ABC entered into an insurance contract covering the life of its founder. The…
A: The cash surrender value of a policy or annuity is the amount of money paid by an insurance company…
Q: On January 1,2020, ABC Company insured the life of its president for P 7,000,000, with an annual…
A: Formula: Change in cash surrender policy = Current year amount - previous year amount.
Q: On September 1, 2020 , Reality Corporation offered special termination benefits to employees who had…
A: Total liability for termination benefits on December 31, 2020 is computed as follows :
Q: On September 1, 2019, Iligan Company offered special termination benefits to employees who had…
A: Here in this question, we are required to calculate liability for termination benefits. Termination…
Q: Lewis Industries adopted a defined benefit pension plan on January 1, 2018. By making the provisions…
A: 1) Compute the Projected benefit obligation (PBO) as of December 31.
Question 36
Choose the correct answer from the choices.
Step by step
Solved in 2 steps
- On July 1, 2019, Aldrich Company purchased as an available-for-sale security 200,000 face value, 9% U.S. Treasury notes for 194,000. The notes mature July 1, 2020, and pay interest semiannually on January 1 and July 1. The notes were sold on December 1, 2019, for 199,000. Aldrich normally uses straight-line amortization on all of its notes. In its income statement for the year ended December 31, 2019, what amount should Aldrich report as a gain on the sale of the available-for-sale security? a. 2,500 b. 3,500 c. 5,000 d. 6,000On January 1, 2019, Boater Company issues a 20,000 non-interest-bearing, 5-year note for equipment. Neither the fair value of the note nor the equipment is determinable. Boaters incremental borrowing rate is 9%. The asset has a useful life of 7 years. Prepare the journal entry for Boater to record the issuance of the note on January 1.On January 2021, ABC Co. insured the life of one of its key management personnel for1,300,000. ABC Co. is the beneficiary. The insurance requires annual payments of P62,000 at the start ofeach year. Information on the cash surrender value is shown below:Policy year Cash Surrender ValueDecember 31, 2021 0December 31, 2022 0December 31, 2023 21,000December 31, 2024 26,000December 31, 2025 32,000Additional Information: ABC Co received Php12,000 dividend from life insurance on March 20, 2024. The employee died on March 12, 2026.Requirement: Provide the journal entries from the inception of the life insurance up to the death of theemployee.
- On January 1,2016 , Coke Company insured the life of its president for P4,000,000, with an annual premium of P120,000 payable in advance at the beginning of each year. The company is the designated beneficiary and has the right to cancel the policy at its own optionThe cash surrender value of the policy at the end of each policy year is as follows:Cash surrender value2016 - 02017 - 02018 - 36,0002019 - 49,0002020 - 62,000The president died on October 1, 2020. Coke Company's accounting year is the calendar year.How much is the life insurance expense for the year ended December 31, 2020? a. P120,000 b. P107,000 c. P 90,000 d. P 80,250On Jan. 1, 2010, ABC entered into an insurance contract coveringthe life of its founder. The P100,000 annual insurance premium ispayable at the start of the year. By the end of the fifth year, theinsurance will have a cash surrender value and it was as follows forthe following years:Year Cash Surrender Value2014 P80,0002015 100,0002016 130,0002017 180,000 1. What is the journal entry on Dec. 31, 2014 to recognized thecash surrender value and adjust the related accounts?Parenthetical solutions would suffice. 2. If the founder died on Mar 31, 2017, what is the journalentry to update the cash surrender value on the said date? 3. Continuing from the previous number and assuming furtherthat P3,000,000 was received from the insurance, what isthe journal entry to record the gain on settlement and makethe final adjustment to the insurance expense?On Jan. 1, 2010, ABC entered into an insurance contract coveringthe life of its founder. The P100,000 annual insurance premium ispayable at the start of the year. By the end of the fifth year, theinsurance will have a cash surrender value and it was as follows forthe following years: Year Cash Surrender Value2014 P80,0002015 100,0002016 130,0002017 180,000 A. What is the journal entry on Dec. 31, 2014 to recognized thecash surrender value and adjust the related accounts?Parenthetical solutions would suffice. B. If the founder died on Mar 31, 2017, what is the journalentry to update the cash surrender value on the said date? C. Continuing from the previous number and assuming furtherthat P3,000,000 was received from the insurance, what isthe journal entry to record the gain on settlement and makethe final adjustment to the insurance expense?
- Balintawak Inc. insured the life of its president for P4,000,000, the corporation being the beneficiary of an ordinary life policy. The monthly premium is P22,500 payable every first day of the month. The policy is dated January 1, 2019 and carries the following cash surrender values: End of policy year 2019 2020 2021 2022 2023 2024 Cash surrender value 94,500 112,500 148,500 189,000 The corporation follows the calendar year as its fiscal period. The president died on October 1, 2024. What is the gain on life insurance policy?Del Pilar Inc. insured the life of its president for P5,000,000, the corporation being the beneficiary of an ordinary life policy. The monthly premium is P18,000 payable every first day of the month. The policy is dated January 1, 2019 and carries the following cash surrender values: End of policy year Cash surrender value 2019 2020 2021 2022 2023 2024 125,600 140,000 168,800 201,200 The corporation follows the calendar year as its fiscal period. The president died on October 31, 2024. What is the gain on life insurance policy? January 2023On Jan. 1, 2010, ABC entered into an insurance contract coveringthe life of its founder. The P100,000 annual insurance premium ispayable at the start of the year. By the end of the fifth year, theinsurance will have a cash surrender value and it was as follows forthe following years: Year Cash Surrender Value2014 P80,0002015 100,0002016 130,0002017 180,000 a.) What is the journal entry on Dec. 31, 2014, to recognize thecash surrender value and adjust the related accounts?Parenthetical solutions would suffice. b )If the founder died on Mar 31, 2017, what is the journalentry to update the cash surrender value on the said date? c.) Continuing from the previous number and assuming furtherthat P3,000,000 was received from the insurance, what isthe journal entry to record the gain on settlement and makethe final adjustment to the insurance expense?
- Llanes Corp. insured the life of its CEO for P5,000,000. The corporation was the beneficiary of the life policy. The annual premium, which is paid every April 1, was P400,000. The policy was dated April 1, 2019 and carried the following cash surrender value: End of policy year March 31, 2020 March 31, 2021 March 31, 2022 March 31, 2023 March 31, 2024 March 31, 2025 Cash surrender value 400,000 600,000 810,000 900,000 The company follows the calendar year as its accounting period. The president died on June 30, 2024 and the face value of the policy was collected on July 30, 2024. Prepare the entries from 2019 to 2024.ABC Company insured the life of one of its officers. Yearly premium amount to P 75,000. At the end of 2020, cash surrender value of the policies totaled P 200,000. Dividends received by ABC from the insurance company amounted to P 10,000 in 2020. The insurance expense recognized by ABC in 2020 was P 45,000. How much was the cash surrender value of life insurance at the beginning of the year? a. P 230,000 b. P 180,000 c. P 220,000 d. P 170,000ABC Corporation insures the life of its Chief Executive Officer for P3,000,000, indicating the corporation as the beneficiary of an ordinary life policy. The annual premium of P100,000 is payable every January 2nd of the year. The policy is dated January 2, 2021, and carries the following cash surrender values: 2021 - 2022 - 2023 60, 000 2024 70, 000 2025 89, 200 2026 110,800 The corporation follows the calendar year as its fiscal period. President dies on September 30, 2026, and policy is collected on December 2, 2026. Determine the value of insurance expense on 2026.