1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
ch4aika [34]
3 years ago
9

Duc has been employed by Longbow Corporation for 25 years. During that time, he bought an annuity at a cost of $50 per month ($1

5,000 total cost). The annuity will pay him $200 per month after he reaches age 65. When Duc dies, his wife, Annika, will continue to receive the annuity until her death. Duc turns 65 in April 2019 and receives 8 payments on the contract. Annika is age 60 when the annuity payments begin.
Required:
a. How much gross income does Duc have from the contract in the current year?
b. Assume that Duc dies on April 2, 2025. How does Annika account for the contract in 2025?
c. Assume the same facts as in part b and that Annika dies on August 4, 2032. How does the executor of Annika's estate account for the contract in the year of her death?
Business
1 answer:
Arte-miy333 [17]3 years ago
3 0

Answer:

a. How much gross income does Duc have from the contract in the current year?

According to the IRS, Duc's life expectancy is 90 years and 8 months, or 310 more months. This means that Duc can discount from his monthly income $15,000 / 310 = $48.39 (which we must round down to $48).

Duc received 8 x $200 = $1,600

deductions = 8 x $48 = $384

taxable income = $1,216

b. Assume that Duc dies on April 2, 2025. How does Annika account for the contract in 2025?

Annika should account for the contract in the same way as Duc did, and will also be able to discount $48 per month form her gross income. Since Annika will still file her taxes as married during 2025, she will report net income from this contract = ($200 - $48) x 12 months = $1,824

c. Assume the same facts as in part b and that Annika dies on August 4, 2032. How does the executor of Annika's estate account for the contract in the year of her death?

Both Duc and Annika received [(2032 - 2019) x 12] + 4 = 160 payments in total, so her estate is entitled to a tax deduction = (310 - 160) x $48 = $7,200

Since she died on August, her estate must also report income = ($200 - $48) x 8 = $1,216

You might be interested in
from a company's viewpoint, the existence of an active, liquid, well-organised market in existing shares:
garri49 [273]

From a company's viewpoint, the existence of an active, liquid, well-organized market in existing shares A. facilitates the raising of further capital in the secondary market.

<h3>What is a secondary market?</h3>

A secondary market is a securities market for the exchange of securities and assets among investors rather than with the issuing entities.

The types of secondary markets include:

  • Over-The-Counter Markets
  • Stock Exchanges
  • Auction markets
  • Dealer markets.

<h3>Answer Options:</h3>

A. facilitates the raising of further capital in the secondary market.

B. maintains the share price above the initial issue price.

C. encourages successful primary market issues.

D. is of little or no consequence.

Thus, from a company's viewpoint, the existence of an active, liquid, well-organized market in existing shares A. facilitates the raising of further capital in the secondary market.

Learn more about secondary markets at brainly.com/question/14484986

#SPJ12

4 0
2 years ago
Conducting research about an occupation, company, or job can increase your employability. Please select the best answer from the
UkoKoshka [18]
Your answer will be true! good luck
7 0
3 years ago
Read 2 more answers
you sell 300 laptops per week at $690 per laptop. You sell 432 tablets per week at $590 per tablet. Which generates more dollars
vitfil [10]
300 X $690 = $207,000

432 X $590 = $254,880

Hope this helps!
STSN
4 0
3 years ago
Read 2 more answers
JKL has 3 million shares of common stock outstanding and 80,000 bonds outstanding. The bonds pay semi-annual coupons at an annua
mylen [45]

Answer:

54.48%

Explanation:

The computation of the weight of equity is given below;

But before that we need to do the following calculations

Total Equity

= 3 million shares × $30

= $90 million

The Value of Debt,

Total Debt = 80,000 (1,000)(0.94)

= $75.2 million

Now the weight of equity is

= $90 million ÷ ($90 million + $75.2 million)

= 54.48%

8 0
2 years ago
Horace is seeking to exchange money in preparation for his trip to Uruguay. He will need 5,000 Uruguayan pesos, and the exchange
STatiana [176]

Answer:

d. $ 263.50

Explanation:

The Exchange  rate is 1 dollar = 19.924 Uruguayan Peso.

We need to buy 5000 Uruguayan pesos but the agent requires a comision of  a 5%  when converting currency, so really we will need to buy:

5,000 Uruguayan pesos + 5,000 Uruguayan pesos* 0.05 = 5,250 Uruguayan pesos.

Now if we apply the given exchange rate we will obtain the amount of US Dollars we need:

x U$S = (5,250 Ur.$)/(19,924 Ur.$/U$S)= 263,50 U$S needed

7 0
2 years ago
Other questions:
  • Is marketing an art form in the digital age? Why or why not?
    13·1 answer
  • Zytel Corporation produces cleaning compounds and solutions for industrial and household use. While most of its products are pro
    12·1 answer
  • A company’s total monthly sales (in millions of dollars) t months from now are given by:
    7·1 answer
  • The philosophical leaders of the quality movement, Philip Crosby, W. Edwards Deming, and Joseph M. Juran, had the same general m
    9·1 answer
  • A $200,000 loan amortized over 12 years at an interest rate of 10% per year requires payments of $21,215.85 to completely remove
    12·1 answer
  • Moody Corporation uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours. At the be
    10·1 answer
  • If a 10 percent increase in both capital and labor causes output to increase by less than 10 percent, the production function is
    5·1 answer
  • Which of the following statements about taxation is TRUE?
    12·1 answer
  • Which of the following best illustrates the purpose of labor laws?
    6·1 answer
  • a treasury bill has a face value of $65,000, an asked yield of 3.05%, and matures in 60 days. what is the price of this bill?
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!