Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Question
Chapter M, Problem 2C
1.
To determine
Determine the amount of interest earned.
2.
To determine
Evaluate Person J’s retirement decision.
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Mack Aroni, a bank robber, is worried about his retirement. He decides to start a savings account. Mack deposits annually his net share of the "loot," which consists of $75,000 per year, for 3 years beginning January 1, 2000. Mack is arrested on January 4, 2002, (after making his third deposit) and spends the rest of 2002 and most of 2003 in jail. He escapes in September of 2003. He resumes his savings plan with semiannual deposits of $30,000, the first one being made on January 1, 2004. Assume that the bank's interest rate was 9% compounded annually from January 1, 2000 through January 1, 2003, and 12 % annual rate compounded semiannually thereafter.When Mack retires on January 1, 2007 (6 months after his last deposit), what is the balance in his savings account?
30
After reviewing her financial affairs, Jasmine has determined that she would like the $75,000 death benefit from one of her insurance policies to go to a local registered charity. The whole life
policy in question has a $45,000 cash surrender value (CSV) and she pays an annual premium of $500. Jasmine's current cash flow situation is quite good. She is living a comfortable retirement.
However, she is worried as she has assets, that of the taxes that will be payable after her death will result in considerable capital gains.
She is unable to purchase a new life insurance to cover the income tax triggered at death because of her health.
What should Jasmine do to fulfill her desire to donate $75,000 to the registered charity and alleviate the taxes payable following her death?
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a. O Surrender the life insurance policy and donate the CSV.
b. O
Name the registered charity as beneficiary of the life insurance policy.
c. O
Assign the life insurance policy…
34.
Two years ago, your client, Tim, purchased a $100,000 whole life insurance policy on the life of his wife. He has made all of the premium payments from his separate checking account. The beneficiary of the policy is their only child.
If Tim dies within the next few months, what is the value of the policy that will be included in his gross estate?
A)
The cash surrender value of the policy because he will have purchased the policy within three years of his death
B)
The full death benefit value of the policy because the proceeds are paid to a family member
C)
The face value of the policy because he paid the premiums from his separate checking account
D)
The replacement value of the policy because he will have an incident of ownership at death
Chapter M Solutions
Intermediate Accounting: Reporting And Analysis
Ch. M - Explain interest.Ch. M - Prob. 2GICh. M - Prob. 3GICh. M - Prob. 4GICh. M - Prob. 5GICh. M - Prob. 6GICh. M - Prob. 7GICh. M - Prob. 8GICh. M - Prob. 9GICh. M - Prob. 10GI
Ch. M - Prob. 11GICh. M - Prob. 12GICh. M - Prob. 13GICh. M - Prob. 14GICh. M - Prob. 15GICh. M - Prob. 16GICh. M - Prob. 17GICh. M - Prob. 18GICh. M - Prob. 19GICh. M - Prob. 20GICh. M - Prob. 21GICh. M - Prob. 22GICh. M - What is a deferred ordinary annuity? How does it...Ch. M - Prob. 24GICh. M - Prob. 25GICh. M - Give two examples of assets and three examples of...Ch. M - Prob. 1MCCh. M - Prob. 2MCCh. M - Refer to the present value table information on...Ch. M - Refer to the present value table information on...Ch. M - On May 1, 2019, a company purchased a new machine...Ch. M - An office equipment representative has a machine...Ch. M - Prob. 7MCCh. M - For which of the following transactions would the...Ch. M - On July 1, 2019, James Rago signed an agreement to...Ch. M - On January 1, 2019, Ken Company sold a machine to...Ch. M - Prob. 1RECh. M - Based on the following annual interest rates, what...Ch. M - Prob. 3RECh. M - Prob. 4RECh. M - Next Level Potter wishes to deposit a sum that at...Ch. M - Prob. 6RECh. M - Prob. 7RECh. M - Prob. 8RECh. M - Prob. 9RECh. M - If 90,000 is invested in a fund on December 31,...Ch. M - Samuel Ames owes 20,000 to a friend. He wants to...Ch. M - Prob. 12RECh. M - Prob. 13RECh. M - Prob. 14RECh. M - Prob. 1ECh. M - Future Value Hugh Colson deposited 20,000 in a...Ch. M - Prob. 3ECh. M - Future Value of Annuity Using appropriate tables,...Ch. M - Prob. 5ECh. M - Prob. 6ECh. M - Prob. 7ECh. M - Cash Flow Amounts R. Lee Rouse borrows 10,000 that...Ch. M - Prob. 9ECh. M - Amount of an Annuity John Goodheart wishes to...Ch. M - Prob. 11ECh. M - Prob. 12ECh. M - Present Value of Leased Asset On January 1, 2019,...Ch. M - Amount of an Annuity Beginning December 31, 2023,...Ch. M - Prob. 1PCh. M - Prob. 2PCh. M - Prob. 3PCh. M - Determining Loan Repayments Jerry Rockness needs...Ch. M - Prob. 5PCh. M - Prob. 6PCh. M - Value of an Annuity Using the appropriate tables,...Ch. M - Serial Installments; Amounts Applicable to...Ch. M - Prob. 9PCh. M - Comprehensive Part a. Reproduced in the following...Ch. M - Prob. 11PCh. M - Present Value of an Annuity John Joshua wants to...Ch. M - Present Value of an Annuity Ralph Benke wants to...Ch. M - Compound Interest Issues You are given the...Ch. M - Cash Flow Amounts On January 1, 2019, Philip...Ch. M - Prob. 16PCh. M - Comprehensive The following are three independent...Ch. M - Prob. 18PCh. M - Asset Purchase Price BWP Inc. is considering the...Ch. M - Prob. 1CCh. M - Prob. 2CCh. M - Prob. 3CCh. M - Prob. 4CCh. M - Prob. 5C
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