Mr. Cruz was an employee of ABC Trading. He was killed by a co-employee in one of their regular “inuman" session. A case was filed by theheirs of Mr. Cruz against the co-employee. The court decided in favor ofthe heirs and awarded them the following:DescriptionAmountCompensatory damagesMoral damagesExemplary damagesFor attorney's fees and cost of lawsuitConsequential damages representing the loss of thevictim's earning capacityP400,000800,000200,000500,0001,300,000How much of the above is return of capital?P3,200,000O P2,400,000P2,200,000P1,900,000

Solution Return of capital is defined as the amount that is not taxable. Description Amount…

Answered: Mr. Cruz was an employee of ABC…

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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Watson agreed to buy Ingram’s house for $355,000. The contract provided that Watson deposit $15,000 as earnest money and that “in the event of default by the Buyer, earnest money shall be forfeited to Seller as liquidated damages, unless Seller elects to seek actual damages or specific performance.” Because Watson did not timely comply with all of the terms of the contract, nine months after the Watson sale was to occur, Ingram sold the house to a third party for $355,000. Is Ingram entitled to Watson’s $15,000 earnest money as liquidated damages? Explain.
On May 1, 2020, Anthony was in an automobile accident while on his way to work. Following doctor’s advice, Anthony stayed home for six months to recover from his injuries. While at home, Anthony filed a lawsuit against the other driver. On December 1, 2020, the lawsuit was settled and Anthony received the following amounts: Compensation for lost wages $30,000 Personal injury damages (none of which was for punitive damages) 50,000 How much of the settlement must Anthony include in ordinary income on his 2020 tax return?
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A comprehensive general liability policy includes property damage coverage for which of the following incidents? An insured intentionally causes a fire that burns down the building in which he is the sole tenant. An insured personal property on the premises destroyed by a fire An insured repair a boiler for a dry cleaner that explodes and causes extensive damage to the building An insured leases a computer that is subsequently damaged by an employee.
29. Brenda filed suit against her insurance company for deceptive trade practices. She seeks $5,000 in damages; $12,000 for mental anguish; and $10,000 for attorney fees. Her insurance company countersues for slander and seeks $10,000. If the court awards both parties what they are asking, how much would Brenda receive in most jurisdictions? a. $10,000 ob. $17,000 OC. $28,000 Od. $30,000
Oswald, while walking down the street, is hit by a reckless driver. Oswald sues the driver and recovers the following damages: $20,000 to reimburse Johnny for medical expenses previously incurred (but not previously deducted), $10,000 for pain and suffering, $5,000 for emotional distress stemming from the accident, and $2,500 in punitive damages How much of Oswald's recovery is included in gross income?
Bret, a resident of Nevada, wants to bring a tort claim (a type of civil lawsuit) against Steve, a resident of Tennessee, for damage to Bret's house in Nevada. To use a long-arm statute to obtain personal jurisdiction over Steve, the Nevada court must find that Multiple Choice Steve committed a crime in Nevada Steve also damaged property in Tennessee and owns a home in Tennessee Steve has committed prior torts in Nevada Steve committed the tort in Nevada
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(1).Suppose you are in a contributory negligence state and you are the victim in an accident in which you are injured and you sustain $100,000 worth of damages in the form of medical bills and another $100,000 for loss of consortium. You sue the responsible party and a jury decides that you were 20% at fault and the defendant was 80% at fault. How much would you collect from the defendant in this state? A. $200,000 B. $160,000 C. $40,000 D. $0 (2).Leah and Barrett are held jointly and severally liable for Abby’s injury. The court determines that Leah is 10% at fault while Barrett is 90% at fault. The medical expenses that Abby incurs amount to $5,000. Under the joint and several liability law, what is the maximum amount that Leah might be required to pay? A. $500 B. $0 C. $5,000 D. $4,500

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