| 1) | A magazine company sells a 1-year subscription for $23.88 and a 2-year | |||||||||||||||
| subscription for $38.16 on January 1, 2009. | ||||||||||||||||
| Create the journal entry to record both the sale and the associated | ||||||||||||||||
| adjusting entry on January 31, 2009 | (check figure: balance of unearned subscription revenue after all transactions = 58.46) | |||||||||||||||
In: Accounting
A 40-year-old man in the U.S. has a 0.245% risk of dying during the next year . An insurance company charges $260 per year for a life-insurance policy that pays a $100,000 death benefit. What is the expected value for the person buying the insurance? Round your answer to the nearest dollar.
Expected Value:
In: Statistics and Probability
Corp. discovered an error made in Year 1 while preparing Year 2 financial statements.
Fifteen months worth of insurance costs, totaling $15,000, were expensed in Year 1.
Company policy requires all insurance payments to be recorded initially as Prepaid Insurance.
A reconciliation of insurance showed the correct amount had been expensed in Year 2. Corp.'s tax rate in both years was 30%.
Year 1 ending retained earnings was reported at $86,000.
Year 2 net income was $45,000 & $10,000 of dividends were declared & paid in Year 2.1
1) Mkae a JE showing total insurance expensed in year 1
2) Make JE showing proper amount of insurance expensed in year 1
3) Make the appropriate journal entry to correct this error
4) Prepare the Statement of Retained Earnings for year 2 year end
In: Accounting
An insurance company charges a 21-year-old male a premium of $500 for a one-year $ 100 comma 000 life insurance policy. A 21-year-old male has a 0.9985 probability of living for a year. a. From the perspective of a 21-year-old male (or his estate), what are the values of the two different outcomes? The value if he lives is nothing dollars. The value if he dies is nothing dollars. b. What is the expected value for a 21-year-old male who buys the insurance? The expected value is nothing dollars. c. What would be the cost of the insurance if the company just breaks even (in the long run with many such policies), instead of making a profit? nothing dollars d. Given that the expected value is negative (so the insurance company can make a profit), why should a 21-year-old male or anyone else purchase life insurance? A person who buys a one-year policy will expect to make a profit. Insuring the financial security of loved ones compensates for the negative expected value.
In: Statistics and Probability
In: Accounting
13. There is a 0.9988 probability that a randomly selected 33-year-old male lives through the year. A life insurance company charges $194 for insuring that the male will live through the year. If the male does not survive the year, the policy pays out$120 comma 000 as a death benefit. Complete parts (a) through(c) below.
a. From the perspective of the 33-year-old male, what are the monetary values corresponding to the two events of surviving the year and not surviving?
The value corresponding to surviving the year is $______
The value corresponding to not surviving the year is$______
(Type integers or decimals. Do not round.)
b. If the 33-year-old male purchases the policy, what is his expected value?
The expected value is $______
(Round to the nearest cent as needed.)
c. Can the insurance company expect to make a profit from many such policies? Why?
(Yes,No,) because the insurance company expects to make an average profit of $_____ on every 33- year dash old male it insures for 1 year.
(Round to the nearest cent as needed.)
In: Statistics and Probability
the difference between the 30 year mortgage rate and the 30-year treasury bond rate is primary attribute to
a. interest rate risk
b. reinvestment rate risk
c. credit risk
d. insurance risk
In: Finance
BeBe had a tough year! She had two different unfortunate casualties during the year. First, her car was in an accident. Her car had a value of $20,000. Her basis (her cost) had been $30,000. After the accident, the value was reduced to only $10,000. Her insurance company reimbursed her for $3,000 only. Second, she had a separate free-standing storage she on her property, which burned down. The shed had a fair market value of $4,000, and a cost adjusted basis to BeBe of $3,500. Her insurance company reimbursed her $3,000 for her loss. If BeBe's adjusted gross income is $60,000, what is her deductible casualty loss, if any?
In: Accounting
BeBe had a tough year! She had two different unfortunate casualties during the year. First, her car was in an accident. Her car had a value of $20,000. Her basis (her cost) had been $30,000. After the accident, the value was reduced to only $10,000. Her insurance company reimbursed her for $3,000 only. Second, she had a separate free-standing storage she on her property, which burned down. The shed had a fair market value of $4,000, and a cost adjusted basis to BeBe of $3,500. Her insurance company reimbursed her $3,000 for her loss. If BeBe's adjusted gross income is $60,000, what is her deductible casualty loss, if any?
Show even very simple and obvious calculations.
In: Accounting
"SunlandCompany leased equipment to the Polan Company on July 1, Year 18, for a 10-year period expiring June 30, Year 28. Equal annual payments under the lease are $246000 and are due on July 1 of each year. The first payment was made on July 1, Year 18. The rate of interest contemplated by Sunland and Polan is 8%. The lease receivable before the first payment is$1740000 and the cost of the equipment on Sunland s accounting records was $1548000. Assuming that the lease is appropriately recorded as a sale for accounting purposes by Sunland, what is the amount of profit on the sale and the interest revenue that Sunland would record for the year ended December 31, Year 18?"
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$0 and $0 |
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$192000 and $139200 |
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$192000 and $119520 |
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$192000 and $59760 |
Which of the following is an advantage of leasing?
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Protection against obsolescence. |
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Leases often do not require any down payment. |
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Lease agreements may contain less restrictive provisions than other debt agreements. |
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All of these answer choices are correct. |
A lessee with a finance lease containing a bargain purchase option should depreciate the leased asset over the
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"life of the asset or the term of the lease, whichever is longer." |
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term of the lease. |
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period ending with the bargain purchase option date. |
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asset's remaining economic life. |
In: Accounting