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dangina [55]
3 years ago
13

When a policyowner cash surrenders a Universal Life insurance policy in it's early years, this may be considered a red flag for

Business
1 answer:
alexira [117]3 years ago
3 0
When a policy owner<span> cash surrenders a Universal Life insurance policy in </span>its<span> early years, this may be considered a red flag for the government. The pre – death distribution of an insurance policy is taxable. Therefore, when an owner surrenders his life insurance in its early years, he is trying to avoid the possible taxes.</span>
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Suppose that on January 6, 2018, Excel Motors paid $240,000,000 for its 45% investment in Dynamic Motors. Excel has significant
Ivenika [448]

Answer: provided in the explanation segment

Explanation:

To begin we will answer each part accordingly.

For Requirement 1 :  

I would say that Excel Motors should use the Equity method to account for its investment in Dynamic Motors, because the investment results in significant influence over the investment company.

For Requirement 2 :  

In the books of Excel Motors: we have that;

Transaction/ Event   Date Accounts&Explanation   Debit ($

)  Credit($

)

    1.     Jan 6, 2018   Investment in Associate 240,000,000    

                                                        Cash                            240,000,000

Accnt&Explan: To record cash paid for equity investment in Dynamic Motors.  

   

    2.              Cash ( $ 15,000,000 x 45%)      6,750,000  

                        Investment in Associate                         6,750,000

Accnt&Explan:To record dividend received in cash from Dynamic Motors  

   

3. Investment in Associate ( $ 10,000,000 x 45%) 4,500,000  

                                           Investment Revenue                        4,500,000

Accnt&Explan:To record income earned on equity investment

For Requirement 3:

 Equity Investment in Dynamic Motors:

               Cash      240,000,000           Cash                 6,750,000

Investment Income 4,500,000  

                                                                       Ending Balance 237,750,000

                                      244,500,000  244,500,000

The balance would be classified as a non-current asset on the balance sheet dated December 31, 2018

cheers i hope you understand, this is actually in a tabular form.

8 0
2 years ago
Marilyn County operates on a calendar year basis. It uses a Capital Projects Fund to account for major capital projects and a De
mr Goodwill [35]

Answer:

Marilyn County

1. Journal Entries:

1. January 1, 2013,

Debit Capital Projects Fund $1,000,000

Credit General Obligation Bonds Payable $1,000,000

To record the issuance of bonds, payable in 20 equal semiannual installments of $50,000 over a 10-year period commencing October 1, 2013, with interest of 4 percent per annum paid on the outstanding debt.

2. May 1,

Debit Capital Projects Fund $20,000

Credit General Fund $20,000

To fund the additional project costs.

3. July 1

Debit Construction of Community Center $1,020,000

Credit Capital Projects Fund $1,020,000.

To record the payment to the contractors for completed construction of Community Center with estimated 20 years useful life.

4. September 30, 2013

Debit Debt Service Fund $70,000

Credit General Fund $70,000

To transfer funds for debt service.

5. October 1:

Debit Bonds Payable $50,000

Debit Interest on Bonds Expense $20,000

Credit Debt Service Fund $70,000

To record the payment of the debt service with semi-annual interest.

2. Governmental activities column of the government- wide financial statements:

Capital assets $1,020,000

Reduction of Liabilities $950,000 ($1,000,000 - $50,000)

Payment of debt service and interest $70,000

3. December 31, 2013, government-wide statement of net position

Investment in capital assets, $1,020,000

Related debt                              (950,000)

Invested capital assets, net       $70,000

4. December 31, 2014, government-wide statement of net position

Investment in capital assets, $1,020,000

Related debt                              (850,000)

Invested capital assets, net      $170,000

Explanation:

a) Data and Analysis:

1. January 1, 2013, Capital Projects Fund $1,000,000 General Obligation Bonds Payable $1,000,000

2. May 1, Capital Projects Fund $20,000 General Fund $20,000

3. July 1 Construction Contract $1,020,000 Capital Projects Fund $1,020,000.

4. September 30, 2013 Debt Service Fund $70,000 General Fund $70,000  

5. October 1, Bonds Payable $50,000 Interest on Bonds Expense $20,000 ($1,000,000 * 4% * 6/12) Debt Service Fund $70,000

4 0
3 years ago
Having the skill to coordinate different people and different tasks to work towards one goal is necessary for which of the follo
san4es73 [151]

Answer:

C. Manager

Explanation:

The job of a manager is to organize all the units in the business for proper functioning

4 0
2 years ago
A stock produced returns of 14 percent, 17percent, and -1 percent over three of the past four years, respectively. The arithmeti
mariarad [96]

Answer:

11.23%

Explanation:

Arithmetic return = Total return/Total time period  

6% = (14% + 17% - 1% + x%) / 4

(6%*4) =30% + x

24% = 30% + x

x = (24% - 30%)

x = -6%

<em>For the standard deviation, we need to use </em><u><em>stdev.s function</em></u><em> in Ms Excel</em>

Standard deviation = stdev.s (14%,17%,-1%,-6%)

Standard deviation = 0.112249722

Standard deviation = 11.23%

So, the standard deviation of the stock's returns for the four-year period is 11.23%.

3 0
2 years ago
Karen Austin Inc. has issued three types of debt on January 1, 2020, the start of the company’s fiscal year.(a) $10 million, 10-
icang [17]

Answer:

Explanation:

Yield rate on unsecured bonds=12%

Yield rate on zero coupon bond=12%

Yield rate on 10% mortgage bonds=12%

Total debt value=10m+25m+20m=55m

Weight of unsecured bonds=10/55=0.182

Weight of zero coupon bonds=25/55=0.455

Weight of 10% mortgage bonds = 20/55= 0.363

Cost of debt=0.182*12+ 0.455*12+0.363*12=12%

3 0
3 years ago
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