116352f7a500da4b46977a659c/pages/a54b822ae1345f43e0e4c9ff519851bf2733a4364?returnurl=https%3A%2F%2Fconsole.pearson.com| McGraw Hill F FreshBooksContentmicrosoft M Gmail ► YouTubeApplication QuestionsSummary: Insurance Company OperationsQ SearchMapsup to1. Delta Insurance is a property insurer that entered into a surplus-share reinsurance treatywith Eversafe Re. Delta has a retention limit of $200,000 on any single building, andnine lines of insurance may be ceded to Eversafe Re. A building valued at $1,600,000 isinsured with Delta. Shortly after the policy was issued, a severe windstorm caused an$800,000 loss to the building.132a. How much of the loss will Delta pay?b. How much of the loss will Eversafe Rè pay?c. What is the maximum amount of insurance that Delta can write on a singlebuilding under the reinsurance agreement? Explain your answer.2. Liability Insurance Company writes a substantial amount of commercial liabilityinsurance. A large construction company requests $100 million of liability insurance tocover its business operations. Liability Insurance has a reinsurance contract with BermudaRe that enables the coverage to be written immediately. Under the terms of the contract,Liability Insurance pays 25 percent of the losses and retains 25 percent of the premium.Bermuda Repays 7575 percent of the losses and receives 75 percent of the premium, less aceding commission that is paid to Liability Insurance. Based on the preceding, answer thehpDun & Bradstreet -...=Bounceback Grant...2P Pearson Sign

Insurance is a contract between an individual or organization (the insured) and an insurance company…

Answered: Delta Insurance is a property insurer…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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On January 1, 2022, Yencay, Inc. signs a 10-year noncancelable lease agreement to lease a storage building from Thol Warehouse Company. Collectibility of lease payments is reasonably predictable and no important uncertainties surround the amount of costs yet to be incurred by the lessor. The following information pertains to this lease agreement. The fair value of the building on January 1, 2022 is P4,000,000; however, the book value to Holt is P3,300,000. The building has an estimated economic life of 10 years, with no residual value. Yencay depreciates similar buildings on the straight-line method. At the termination of the lease, the title to the building will be transferred to the lessee. Yencay's incremental borrowing rate is 11% per year. Thol Warehouse Co. set the annual rental to insure a 10% rate of return. The implicit rate of the lessor is known by Yencay, Inc. The yearly rental payment includes P10,000 of executory costs related to taxes on the property. The agreement…
Accounting SBITAS are accounted for similarly to leases. A city signs a three- year licensing agreement with a soft-ware company for use of a payroll management system in its electrical utility fund. Annual charges are $10,000 per year. It is the policy of the city to use a discount rate of 6 percent to value right- to- use assets when an interest rate is not explicitly stated in a lease or comparable agreement. It also depreciates all capital and similar assets on a straight- line basis. The subscription period runs from January 1, 20X1 through December 31, 20X3, with payment due on January 1 of each of the three years. 1. Prepare a journal entries to record the start of the licensing agreement on January 1, 20X1 in its electrical utility fund (a proprietary fund) as well as the first payment of $10,000. 2. Prepare an entry to record an appropriate journal entry on December 31, 20X1. 3. Prepare an entry to record the second payment of $10,000 on January 1, 20X2.
Oriole Co. purchases land and constructs a service station and car wash for a total of $472500. At January 2, 2021, when construction is completed, the facility and land on which it was constructed are sold to a major oil company for $510000 and immediately leased from the oil company by Oriole. Fair value of the land at time of the sale was $46500. The lease is a 10-year, noncancelable lease. Oriole uses straight-line depreciation for its other various business holdings. The economic life of the facility is 15 years with zero salvage value. Title to the facility and land will pass to Oriole at termination of the lease. A partial amortization schedule for this lease is as follows: Раyments Interest Amortization Balance Jan. 2, 2021 $510000.00 Dec. 31, 2021 $83000.15 $51000.00 $32000.15 477999.85 Dec. 31, 2022 83000.15 47799.99 35200.16 442799.69 Dec. 31, 2023 83000.15 44279.97 38720.18 404079.51 The total lease-related income recognized by the lessee during 2022 is which of the…
On January 2, 2018, Hernandez, Inc. signed a ten-year noncancelable lease for a heavy duty drill press. The lease stipulated annual payments of P300,000 starting at the beginning of the first year, with title passing to Hernandez at the expiration of the lease. Hernandez treated this transaction as a finance lease. The drill press has an estimated useful life of 15 years, with no salvage value. Hernandez uses straight-line amortization for all of its plant assets. Aggregate lease payments were determined to have a present value of P1,800,000, based on implicit interest of10%. In its 2018 income statement, what amount of interest expense should Hernandez report from this lease transaction?
None
On January 1, 2023, Carla Vista Inc. sold a piece of equipment to Sunland Ltd. For $182,000, and immediately leased the equipment back. At the time, the equipment was carried on Carla Vista's books at a cost of $273,000, less accumulated depreciation of $109,000. The lease is a capital lease to Carla Vista, with a lease term of 5 years. The equipment under capital lease will be depreciated in Carla Vista's books over five years using double-declining balance depreciation. Calculate the amortization of the deferred gain on sale to be recorded at the end of 2023, if Carla Vista follows ASPE.
1. On December 31,2020 the account for Shane Oil Company's individually insignificant unproved properties had a balance of $600,000. The impairment allowance account had a balance of $100,000. Required Give the entries for each of the following transactions occurring in 2020 and 2021 (all transactions concern individually Insignificant unproved leases) a.Assuming Shane has a policy of maintaining a 60% allowance, i.e. 60% of gross unproved properties, give the entry to record impairment on December 31, 2020 b.During 2021 Shane surrendered leases that cost $200,000. c.During 2021,leases that cost $40,000 were proved d.Give the entry to record impairment on December 31, 2021.
Superfast Company used leases as a method of selling its products. In 2018, the company completed construction of a jet plane. On January 1, 2018, the jet plane was leased to Jett W. on a contract specifying that ownership of the jet will transfer to the lessee at the end of the lease period. Cost of the jet plane 800,000 Fair value of the jet plane at commencement of lease 1,300,000 Lease payments payable in advance 150,000 Estimated residual value 200,000 Implicit interest rate 12% Date of first lease payment January 1, 2018 Lease term 20 years PV of an annuity due of 1 at 12% for 20 periods 8.37 PV of an ordinary annuity of 1 at 12% for 20 periods 7.47 PV of 1 at 12% for 20 periods 0.10 Problem 1. What is the total interest that the company will earn over the lease term? A. 1,744,500 B. 1,924,500 C. 1,944,500 D. 2,200,000 Problem 2. What is the total income derived by the company from the lease for the year 2018? A. 455,500 B. 588,160 C. 606,160 D. 608,160
Franklin Co. leased its manufactured equipment to Parker Inc. for a four-year term. Franklin Co. reported a book value of $110,000 for the equipment in its inventory account. The lease commenced on January 1 with the first annual payment of $37,000 due immediately. The equipment has a useful life of four years, an estimated fair value of $137,760, and no residual or salvage value. The implicit rate of the lease is 5% and collectibility of the lease payments from Parker is probable. Record Franklin's journal entries at the commencement of the sales-type lease for the (1) lease receivable and (2) receipt of the first payment. • Note: Round your answers to the nearest whole dollar. Date 1) Jan. 1 2) Jan. 1 Account Name > To derecognize asset and record investment in lease To record cash lease payment Dr. 0 0 0 0 0 0 Cr. O O O O O O
A building valued at $300,000 in insured for $150,000 and there is an 80% co- insurance clause on the policy. The building sustained loss to one area and caused $60,000 worth of damage. The insured would receive a settlement of: $50,000 $60,000 $45,500 $37,500
On January 1, 2019, Caswell Company signs a 10-year cancelable (at the option of either party) agreement to lease a storage building from Wake Company. The following information pertains to this lease agreement: 1. The agreement requires rental payments of $100,000 at the beginning of each year. 2. The cost and fair value of the building on January 1, 2019, is $2 million. The storage building has not been specialized for Caswell. 3. The building has an estimated economic life of 50 years, with no residual value. Caswell depreciates similar buildings according to the straight-line method. 4. The lease does not contain a renewable option clause. At the termination of the lease, the building reverts to the lessor. 5. Caswell’s incremental borrowing rate is 14% per year. Wake set the annual rental to ensure a 16% rate of return (the loss in service value anticipated for the term of the lease). Caswell knows the implicit interest rate. 6. Executory costs of $7,000 annually,…
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