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rusak2 [61]
2 years ago
14

Death benefit proceeds from a life insurance policy are included in a decedent's gross estate in which of the following circumst

ances:
The decedent gave the policy to his father four years ago, but retained the right to change the name of the beneficiary.
The policy beneficiary is a grantor trust of the decedent but the policy is owned by a closely-held corporation.
The decedent gave the policy to a charity seven years ago.
The decedent transferred the policy to an irrevocable life insurance trust five years ago with no retained incidents of ownership.

A. 2 and 3.
B. 1 and 2.
C. 3 and 4.
D. 1 and 4.
Business
1 answer:
Katarina [22]2 years ago
8 0

Answer:

B. 1 and 2.

Explanation:

Life insurance policy can be defined as a contract between a policyholder and an insurer, in which the insurer agrees to pay an amount of money to a specific beneficiary either upon the death of the insured person (decedent) or after a set period of time.

A decedent refers to a deceased person who is no longer able to control his or her properties (wealth).

Generally, insurance companies across the globe charge millions of their customers (insured) premiums every year. This gives them the privilege of having a pool of cash which can be used to cover the cost of losses and destruction to the asset of a small fraction or percentage of its customers.

This simply means that, since insurance companies collect premium from all of their customers for losses which may or may not occur, so they can easily use this cash to compensate or indemnify for losses incurred by those having high risk.

Death benefit proceeds from a life insurance policy are included in a decedent's gross estate in the following circumstances:

I. The decedent gave the policy to his father four years ago, but retained the right to change the name of the beneficiary.

II. The policy beneficiary is a grantor trust of the decedent but the policy is owned by a closely-held corporation.

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Answer:

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Explanation:

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<em>Because base pay is a system in which a worker gets payment as per hour. In base pay the employee or the worker can fix a particular rate per hour or per week or per month.</em>

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<h3>What is payday loan?</h3>

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Unlike other types of loans, the payday loans repayment period is usually shorter, a minimum of a month to a maximum of 24 months.

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Answer:

1.                 Longhorn Corporation

                     Income Statement

     For the year ended December 31, 2021

   Service Revenue        $71,700

<u>     Cost of goods sold         54,200</u>

    Gross profit               $17,500

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   Delivery expense         3,400

<u>   Salaries expense        6,300   </u>

   Operating income            $7,800

2.                                       Longhorn Corporation  

                                          Stockholder's Equity  

                                        As of December 31, 2021  

 

                      Capital            Retained Earnings     Total

1-Jan-21               $22,000              $9,400                   $ 31,400

Issuance of share 2,200                                                 2,200

<u>Net income                                7,800                        7,800</u>

31-Dec-21       $24,200              $17,200                     $41,400

3.                              Longhorn Corporation

                                       Balance Sheet

                              As of December 31, 2021

                                           Asset

Current Assets

   Cash        $1,300

<u>    Supplies  1,600                                           </u>

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Non-current assets

Equipment 20,000

<u>Buildings 22,000                                         </u>

Total non-current assets 42,000

<u>Total assets $44,900                                          </u>

Liabilities and Equity

Current liability

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<u>  Salaries payable      900                           </u>

Total current liabilities $3,500

<u>Total liabilities         $3,500                                </u>

Equity

Capital stock         $24,200

<u>Retained earnings    17,200                                    </u>

Total equity         $41,400

<u>Total liabilities and Equity $44,900                        </u>

Explanation:

1. Income Statement

In preparation of Income statement, we must closed all nominal accounts with it starts from revenue and deduct all expenses to arrive the operating income. It is important that we never forget the headings consists of Name of the company, What schedule to prepare and what period it is applicable for.

2.Statement of changes in Equity

In preparation of statement of changes equity, all transaction affecting the corporation's capital will be presented here. Begins with the capital, add additional issuance and the net income for the period that will be closed to retained earnings.

3. Balance sheet

This schedule presents the corporations real accounts. Started from assets, liabilities and the Equity.  It is important that we never forget the headings consists of Name of the company, What schedule to prepare and what period it is applicable for.

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