Intermediate Accounting w/ Annual Report; Connect Access Card
8th Edition
ISBN: 9781259546860
Author: J. David Spiceland
Publisher: McGraw-Hill Education
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Question
Chapter 12, Problem 12.25Q
To determine
Cash surrender value: Companies purchase whole-life insurance policies on the lives of the key officers. In the usual process, the beneficiary receives the insurance proceeds aft her the officer dies. But if the insurance policy is surrendered when the insured is still alive, the amount received in exchange for the surrender, is referred to as cash surrender value.
To explain: The process of accounting for cash surrender value
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Chapter 12 Solutions
Intermediate Accounting w/ Annual Report; Connect Access Card
Ch. 12 - Prob. 12.1QCh. 12 - When market rates of interest rise after a...Ch. 12 - Does GAAP distinguish between fair values that are...Ch. 12 - When a debt investment is acquired to be held for...Ch. 12 - Prob. 12.5QCh. 12 - What is comprehensive income? Its composition...Ch. 12 - Why are holding gains and losses treated...Ch. 12 - Prob. 12.8QCh. 12 - Prob. 12.9QCh. 12 - Prob. 12.10Q
Ch. 12 - Prob. 12.11QCh. 12 - Prob. 12.12QCh. 12 - Do U.S. GAAP and IFRS differ in the amount of...Ch. 12 - Under what circumstances is the equity method used...Ch. 12 - The equity method has been referred to as a...Ch. 12 - In the application of the equity method, how...Ch. 12 - Prob. 12.17QCh. 12 - Prob. 12.18QCh. 12 - Prob. 12.19QCh. 12 - How does IFRS differ from U.S. GAAP with respect...Ch. 12 - What is the effect of a company electing the fair...Ch. 12 - Define a financial instrument. Provide three...Ch. 12 - Some financial instruments are called derivatives....Ch. 12 - Prob. 12.24QCh. 12 - Prob. 12.25QCh. 12 - Prob. 12.26QCh. 12 - (Based on Appendix 12B) Reporting an investment at...Ch. 12 - Prob. 12.28QCh. 12 - Explain how the CECL model (introduced in ASU No....Ch. 12 - Prob. 12.1BECh. 12 - Prob. 12.2BECh. 12 - Available -for-sale securities LO12-4 SL...Ch. 12 - Prob. 12.4BECh. 12 - Prob. 12.5BECh. 12 - Prob. 12.6BECh. 12 - Prob. 12.7BECh. 12 - Prob. 12.8BECh. 12 - Prob. 12.9BECh. 12 - Prob. 12.10BECh. 12 - Prob. 12.11BECh. 12 - Prob. 12.12BECh. 12 - Prob. 12.13BECh. 12 - Prob. 12.14BECh. 12 - Prob. 12.15BECh. 12 - Prob. 12.16BECh. 12 - Prob. 12.17BECh. 12 - Prob. 12.18BECh. 12 - Prob. 12.1ECh. 12 - Prob. 12.2ECh. 12 - Prob. 12.3ECh. 12 - Prob. 12.4ECh. 12 - Prob. 12.5ECh. 12 - Prob. 12.6ECh. 12 - Prob. 12.7ECh. 12 - Prob. 12.8ECh. 12 - Prob. 12.9ECh. 12 - Prob. 12.10ECh. 12 - Prob. 12.11ECh. 12 - Prob. 12.12ECh. 12 - Prob. 12.13ECh. 12 - Prob. 12.14ECh. 12 - Prob. 12.15ECh. 12 - Prob. 12.16ECh. 12 - Prob. 12.17ECh. 12 - Prob. 12.18ECh. 12 - Prob. 12.19ECh. 12 - Prob. 12.20ECh. 12 - Prob. 12.21ECh. 12 - Prob. 12.22ECh. 12 - Prob. 12.23ECh. 12 - Prob. 12.24ECh. 12 - Prob. 12.25ECh. 12 - Prob. 12.26ECh. 12 - Prob. 12.27ECh. 12 - Prob. 12.28ECh. 12 - Prob. 12.29ECh. 12 - Prob. 12.30ECh. 12 - Prob. 12.31ECh. 12 - Prob. 1CPACh. 12 - Prob. 2CPACh. 12 - Prob. 3CPACh. 12 - Prob. 4CPACh. 12 - Prob. 5CPACh. 12 - Prob. 6CPACh. 12 - Prob. 7CPACh. 12 - Prob. 8CPACh. 12 - Prob. 9CPACh. 12 - Prob. 10CPACh. 12 - Prob. 11CPACh. 12 - Prob. 12CPACh. 12 - Prob. 13CPACh. 12 - Prob. 1CMACh. 12 - Prob. 2CMACh. 12 - Prob. 3CMACh. 12 - Prob. 12.1PCh. 12 - Prob. 12.2PCh. 12 - Prob. 12.3PCh. 12 - Prob. 12.4PCh. 12 - Prob. 12.5PCh. 12 - Prob. 12.6PCh. 12 - Prob. 12.7PCh. 12 - Prob. 12.8PCh. 12 - Prob. 12.9PCh. 12 - Prob. 12.10PCh. 12 - Prob. 12.11PCh. 12 - Prob. 12.12PCh. 12 - Prob. 12.13PCh. 12 - P 12–14
Classifying investments
LO12–1 through...Ch. 12 - Prob. 12.15PCh. 12 - Prob. 12.16PCh. 12 - Prob. 12.17PCh. 12 - Prob. 12.18PCh. 12 - Prob. 12.1BYPCh. 12 - Prob. 12.2BYPCh. 12 - Case 12–4
Accounting for debt and equity...Ch. 12 - Prob. 12.6BYPCh. 12 - Prob. 12.7BYP
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Similar questions
- A lender whose mortgagor has defaulted may be offered a deed in lieu of foreclosure. If he accepts, which of the following will be TRUE? a. Because it is voluntary, it will not be an adverse item on the buyer's credit. b. The lender will take the title subject to any junior liens. c. The lender will usually retain his rights under mortgage insurance or VA guarantee. d. The loan will still be assumable.arrow_forwardIn case of life insurance policies with profits, policy holders are given the right to participate in the profits of the business and for this purpose insurance company will pay: a. Claims to policy holders b. Bonus to policy holders c. Consideration to policy holders d. Annuity to policy holdersarrow_forwardThe _______________ problem is when customers who are most likely to have a claim against an insurance company are those quickest to apply for an insurance contract. Group of answer choices a. Capital adequacy b. Default risk c. Adverse selection d. Mismatched maturityarrow_forward
- One example of moral hazard in finance industry is "insurance policies often decreases incentive to take care of possession of its customers". How should people mitigate this problem?arrow_forwardSuppose Mylan could write an insurance contract whereby it is insured against all penalties resulting from misclassification. Would this affect their need to disclose? Group of answer choices No, because if they are fully covered, investors would find the loss contingency misleading since there is no receivable for the insurance Yes, because they would offset the loss contingency with a receivable which would net to zero No, because purchasing insurance does not relieve the purchaser of its obligation to make payments related to losses that result from risk. Yes, because it is impossible to insure loss contingenciesarrow_forwardNonearrow_forward
- Why do you think a speeding ticket or DUI would increase your insurance rate?arrow_forwardA Letter of Credit (LC) is a document that guarantees the buyer's payment to the sellers. It is issued by a bank and ensures timely and full payment to the seller. If the buyer is unable to make such a payment, the bank covers the full or the remaining amount on behalf of the buyer. Why would the bank pay the remaining amount on behalf of the buyer, and what would be the risk exposed to the bank? Please explain thoroughly.arrow_forwardWhat are the main parts of an insurance contract and what are they designed to accomplish? How are insurance contracts interpreted by the courts and regulatory bodies? In a dispute over coverage who has the burden of proof? What is subrogation as it relates to insurance? Consider a situation where a professional misrepresents information when acquiring an insurance policy and a third party is injured. What might happen if a claim is made against the insurance company that issued the policy based on fraudulent information? Will the insurance company be liable? Support your position with a specific case.arrow_forward
- One problem facing insurers is that there is a risk that a person will act differently if he/she does not bear all of the consequences of his/her actions. For instance, people with auto insurance policies may drive less carefully than they would drive if they were going to have to pay the full amount of any damages they caused/created. This problem is known as: A. Adverse selection B. Consumer deception C. Moral hazard D. Insurance fraudarrow_forwardIs disaster insurance unfair to insurance companies ? Explain your answer and provide an example.arrow_forwardInsurance planning is important to protect a person from an unforeseen event like premature death, disability, illness, property loss, liability or unemployment. However, conventional insurance is prohibited in the Shariah because _____ a. It involves conventional investment planner. b. It is against the faith of destiny (qada wa qadar) that everything is decided by Allah the almighty c. It involves uncertainty (gharar) in the transactionarrow_forward
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