Oxford Company obtained a P5 million insurance policy on the life of its CEO on January 1, 2019. The company follows calendar year reporting. The annual premium on the policy is P80,000. Information about dividends and cash surrender value are given below. 2021 5,000 2022 6,000 Dividend received on December 31 Cash surrender value 42,000 Life insurance expense 69,000 Based on the above and the result of your audit, answer the following: 1. The insurance expense in 2021 is? 2. The cash surrender value at December 31, 2022 is? 3. Assuming the president dies on July 1, 2022 and the face of the policy is collected on July 31, 2022, the gain on life insurance settlement is?
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- Tandang Sora Corp. purchased a P5,000,000 ordinary life insurance policy on its president. Tandang Sora is the beneficiary under the policy. The policy year and Tandang Sora's accounting year coincide. Additional data available for the year ended December 31, 2024 are as follows: Cash surrender value, January 1 Cash surrender value, December 31 Annual advance premium paid January 1 Dividend received on July 1 What amount should be reported as life insurance expense for 2024? 348,000 432,000 160,000 24,000JJ Company purchased a P2,000,000 ordinary life insurance policy on its president and the company is the named beneficiary. Additional data are available for the year ended December 31, 2019: Cash surrender value, January 1 P87,000 Cash surrender value, December 31 108,000 Annual premium paid in advance on January 1 40,000 Dividend received on July 1 6,000 How much should JJ Company report as life insurance expense for 2019?Silver Company purchased a 2,000,000 ordinary life insurance policy on its president and the company is the named beneficiary. Additional data are available for the year ended December 31, 2020.Cash surrender value: January 1 - 87,000; December 31 - 108,000 Annual premium paid in advance on January 1 - 40,000 Dividend received on July 1 - 6,000How much is Silver Company’s life insurance expense for 2020? A. 40,000 B. 34000 C. 19,000 D. 13,000
- In the course of your audit of Jurassic World Inc.'s December 31, 2021 liabilities the following schedule was presented to you by Jurassic World Inc.'s bookkeeper: Accounts payable P225,000 Estimated premiums liability ? Estimated warranties payable 320,750 Accrued salaries 240,400 Deferred tax liability ? Notes payable, 20% due 4/1/22 500,000 Serial bonds payable, 10% 1,000,000 Total ? Audit notes: Continuation in the photos* What is the correct accounts payable as of December 31, 2021In your audit of Pink Corporation’s liabilities accounts in relation to the company’s financial statements audit for the period ended December 31, 2020, an excerpt of the company’s unadjusted trial balance showed the following information: Accounts payable, net of a P12,000 debit balance P399,000 Accrued expenses 17,400 Provision for warranties 276,375 12% Notes payable, Bank due December 31, 2023 500,000 Audit notes: (A) Purchases cut-off procedure information: December Purchases Journal Entries RR Number Receiving Report Date Amount Particulars 82101 Dec. 26, 2020 P12,900 FOB Destination 82102 Dec. 28, 2020 15,200 FOB Shipping Point 82103 Dec. 29, 2020 11,900 On consignment 82105 Dec. 31, 2020 9,500 FOB Destination 82106 Jan. 2, 2021 13,200 Goods in transit; FOB Buyer 82107 Jan. 3, 2021 8,900 Goods in transit; FOB Shipping Point January Purchases…The balance sheet of Tulip Corporation reported the following long-term receivables as of December 31, 2019: Note receivable from sale of plant Note receivable from officer P6,000,000 1,600,000 In connection with your audit, you were able to gather the following transactions during 2020 and other information pertaining to the company's long-term receivables: The note receivable from sale of plant bears interest at 12% per annum. The note is payable in 3 annual installments of P2,000,000 plus interest on the unpaid balance every April 1. The initial principal and interest payment was made on April 1, 2020. a. b. The note receivable from officer is dated December 31, 2019, earns interest at 10% per annum, and is due on December 31, 2022. The 2020 interest was received on December 31, 2020. The corporation sold a piece of equipment to Yes, Inc. on April 1, 2020, in exchange for an P800,000 non-interest bearing note due on April 1, 2022. The note had no ready market, and there was no…
- On January 1, 2018, the Apex Company exchanged some shares of common stock it had been holding as aninvestment for a note receivable. The note principal plus interest is due on January 1, 2019. The 2018 incomestatement reported $2,200 in interest revenue from this note and a $6,000 gain on sale of investment in stock. Thestock’s book value was $16,000. The company’s fiscal year ends on December 31.Required:1. What is the note’s effective interest rate?2. Reconstruct the journal entries to record the sale of the stock on January 1, 2018, and the adjusting entry torecord interest revenue at the end of 2018. The company records adjusting entries only at year-endChain Co purchased 1M life insurance policy on its president, of which Chain is the beneficiary. Information regarding the policy for the year ended December 31, 2011 follows:Cash surrender value, January 1 87,000Cash surrender value, December 1 108,000Annual advance premium paid January 1 40,000 What amount should Chain report as life insurance expense for 2011?In the course of your audit of Jurassic World Inc.'s December 31, 2021 liabilities the following schedule was presented to you by Jurassic World Inc.'s bookkeeper: Accounts payable P225,000 Estimated premiums liability ? Estimated warranties payable 320,750 Accrued salaries 240,400 Deferred tax liability ? Notes payable, 20% due 4/1/22 Serial bonds payable, 10% Total ? Audit notes: Continuation in the photos* Assuming that the premuims are considered as a separate performance obligation under PFRS 15 (each t shirt has a stand alone sales price at 100 each), what is the correct unearned income as of December 31, 2021? A. 305,555 B. 95,486 C. 138,889 D. 444,444
- Jennica Company purchased a life insurance policy on its president, of which the entity is the beneficiary. The entity provided the following information for 2022: Cash surrender value - January 1 90,000 Cash surrender value – December 31 110,000 80,000 Annual premium paid on January 1 During 2022, dividend of P5,000 was applied to increase the cash surrender value of the policy. What amount should be reported as life insurance expense for 2022? A. 80,000 В. 60,000 C. 55,000 D. 65,000Sprite Company had the following liabilities at December 31, 2019:Trade accounts payable, net of debit balances totaling P65,000 in supplier’saccounts P1,125,000Accrued expenses 136,000Interest payable 96,000Income tax payable 150,000Mortgage payable due in equal annual instalments until October 31, 2024 750,000Share dividends declared but not yet issued 300,000Notes payable (due on January 1, 2021) 250,000 How much is the total current liabilities of Sprite to be shown on its December 31, 2019 statement of financial position?a. P1,722,000 c. P2,207,000b. P1,272,000 d. P2,022,000On July 1, 2022, an auditing firm obtained a three-year 10% note receivable for auditing services rendered. At that time, the market rate of interest was 12%. The face amount of the note is due on the maturity date while the interest is due every June 30 starting June 30, 2023.The formula to compute for the amount of interest income on December 31, 2022 i a. Face amount x 5% b. Face amount x 6% c. Present value of note on July 1, 2022 x 5% d. Present value of note on July 1, 2022 x 6%