Tandang Sora Corp. purchased a P5,000,000 ordinary life insurance policy on its president. Tandang Sorais the beneficiary under the policy. The policy year and Tandang Sora's accounting year coincide.Additional data available for the year ended December 31, 2024 are as follows:Cash surrender value, January 1Cash surrender value, December 31Annual advance premium paid January 1Dividend received on July 1What amount should be reported as life insurance expense for 2024?348,000432,000160,00024,000

Life Insurance Accounting In contrast hand, insurance accounting is regulated by unique accounting…

Answered: Tandang Sora Corp. purchased a…

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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Current Attempt in Progress The actuary for the pension plan of Oriole Company calculated the following net gains and losses: Incurred during the Year (Gain) or Loss 2025 $(675,000) 2026 246,000 2027 973,000
Refer to the following list of liability balances t December 31, 2024. $23,000 Accounts Payable Employee Health Insurance Payable Employee Income Tax Payable Estimated Warranty Payable (Due 2025) Long - Term Notes Payable (Due 2028) FICA-OASDI Taxes Payable Sales Tax Payable 450 1,100 1,000 38.000 660 870 Mortgage Payable (Due 2029) Bonds Payable (Due 2030) Current Portion of Long - Term Notes Payable 8,000 53,000 11,500 What is the total amount of current liabilities? O A. $27,080 O B. $38,580 OC. $25,980 OD. $24,980
On January 1, 2020, a company issued P10,000,000 bonds that will mature in 5 years. The management decided to set up a separate fund for the retirement of these bonds. The fund is to be placed in a separate account to be maintained in the company's depository bank.In a board resolution, it was decided that deposits of equal amounts will be made every June 30 and December 31, starting June 30, 2020 up to December 31, 2024. The company expects to earn an average interest of 10%, net of tax, on this investment. How much is the required semi-annual deposit that will accumulate P10,000,000 at the end of five years? A. P1,637,975 B. P1,295,052 C. P1,000,000 D. P 795,045
Included in Bonita Company’s December 31, 2020, trial balance are the following accounts: Accounts Payable $243,100, Pension Liability $378,400, Discount on Bonds Payable $34,200, Unearned Rent Revenue $50,800, Bonds Payable $406,100, Salaries and Wages Payable $28,700, Interest Payable $13,060, and Income Taxes Payable $37,400.Prepare the long-term liabilities section of the balance sheet.
Brite Company provided the following information on December 31, 2021: Accounts payable Note payable. 8% unsecured, due July 1, 2023 Accrued expenses Contingent liability Deferred tax liability Bonds payable. 7%, due December 31, 2022 Premium on bonds payable 550.000 4,000,000 350,000 450,000 250.000 5,000.000 500,000 The contingent liability is an accrual for possible loss on a P1,000,000 lawsuit filed against the entity. The legal counsel expects the suit to be settled in 2022 and has estimated that the entity will be liable for damages in the range of P450,000 to P750,000. The deferred tax liability is not related to an asset for financial reporting and is expected to reverse in 2022. What total amount should be reported as current liabilities on December 31.2021? a. 4,900,000 b. 5.350.000 c. 6.400,000 d. 6.850,000
Included in Adams Company’s December 31, 2020, trial balance are the following accounts: Accounts Payable $220,000, Pension Liability $375,000, Discount on Bonds Payable $29,000, Unearned Rent Revenue $41,000, Bonds Payable $400,000, Salaries and Wages Payable $27,000, Interest Payable $12,000, and Income Taxes Payable $29,000. Prepare the current liabilities section of the balance sheet.
ABC Company insured the life of one of its officers. Yearly premium amount to P 75,000. At the end of 2020, cash surrender value of the policies totaled P 200,000. Dividends received by ABC from the insurance company amounted to P 10,000 in 2020. The insurance expense recognized by ABC in 2020 was P 45,000. How much was the cash surrender value of life insurance at the beginning of the year? a. P 230,000 b. P 180,000 c. P 220,000 d. P 170,000
5. Soriano's Corporation's liability account balances at June 30, 2020, included a 10% notes payable in the amount of P3,600,000. The note is dated October 1, 2019, and is payable in three equal annual payments of P1,200,000 plus interest. The first interest and principal payment was made on October 1, 2020. In its June 30, 2021 financial statement, what amount should be recorded as accrue interest for this note?
Garrulous Company insured the life of the president for P2,000,000, the entity being the beneficiary of an ordinary life policy. The annual premium is P60,000. The policy was dated January 1, 2020 and carried the following cash surrender value: End of policy year Cash surrender value 2020 2021 2022 2023 2024 60,000 84,000 116,000 2000000 The entity followed the calendar year as the accounting period. The president died on June 30, 2024 and the policy was collected on July 31, 2024. Required: Prepare journal entries from January 1, 2020 to July 31, 2024.
On January 1, 2021, ABC Company acquired an equipment from DEF Company in lieu of cash payment, ABC Company gave DEF Company a 3-year, 3%, P2,000,000 interest-bearing note payable. The interest is payable every December 31 while the principal shall be payable as follows: December 31, 2021, P1,200,000; December 31, 2022, P400,000; and December 31, 2023, P400,000. The prevailing rate of interest for this type of note is 12%. How much is the carrying amount of the note of December 31, 2021? How much is the current portion of the note due on December 31, 2021?
Edible Chemicals Corporation owns a $4 million whole life insurance policy on the life of its CEO, naming EdibleChemicals as beneficiary. The annual premiums are $70,000 and are payable at the beginning of each year. Thecash surrender value of the policy was $21,000 at the beginning of 2018.Required:1. Prepare the appropriate 2018 journal entry to record insurance expense and the increase in the investmentassuming the cash surrender value of the policy increased according to the contract to $27,000.2. The CEO died at the end of 2018. Prepare the appropriate journal entry

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