FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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51

.Mrs. A took out a life insurance policy for 500,000 naming her son as beneficiary. Under the
terms of the policy, the insurer, Filipinas Insurance Corporation will pay Mrs. A the amount of
500,000 after the 25th year of the policy, or her beneficiary should she die before that date. Mrs.
A outlived the policy and received the proceeds. The premium paid on the policy was 400,000.
The proceeds from the life insurance policy of Mrs. A is *
O Exempt from income tax
O Taxable to the extent of 100,000
O Taxable in full
O Taxable to the extent of 400,000
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Transcribed Image Text:.Mrs. A took out a life insurance policy for 500,000 naming her son as beneficiary. Under the terms of the policy, the insurer, Filipinas Insurance Corporation will pay Mrs. A the amount of 500,000 after the 25th year of the policy, or her beneficiary should she die before that date. Mrs. A outlived the policy and received the proceeds. The premium paid on the policy was 400,000. The proceeds from the life insurance policy of Mrs. A is * O Exempt from income tax O Taxable to the extent of 100,000 O Taxable in full O Taxable to the extent of 400,000
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