Answered: . President dies on September 30, 20X6…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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4. ABC Corporation insures the life of its president for P6, 000, 000, the corporation is the beneficiary of an ordinary life policy. The annual premium of P144, 000 is payable every January 2nd of the year. The policy is dated January 2, 20X1, and carries the following year-end cash surrender values from 20X3 to 20X6 are 50,000, 60,000, 79,200, and 100,800, respectively. The corporation follows the calendar year as its fiscal period. President dies on September 30, 20X6 and policies are collected on December 2, 20X6. What is the gain on life insurance settlement?

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