Why is the cash surrender value of a life insurance policy on which the company is the

Question:

Why is the cash surrender value of a life insurance policy on which the company is the beneficiary carried as an investment? How does the company determine the increase in this amount and the amount of insurance expense determined each year?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Intermediate Accounting

ISBN: 978-0324300987

10th Edition

Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones

See More Books

Question Posted: Mar 12, 2012 03:16 AM

See More Questions

An elderly client has a life insurance policy worth $40,000 that upon her death pays $250,000 to her sole grandchild (or his estate). The client still retains ownership of the policy. Outline for her...
A life insurance policy is freely assignable to another party. Explain the following types of assignments: a. Absolute assignment b. Collateral assignment
How would the balance sheet of a life insurance company change if it offered to run a private pension fund for another company?
Net sales revenue, net income, and common stockholders' equity for Vallen Optical Corporation, a manufacturer of contact lenses, follow for a four-year period. Requirements 1. Compute trend...
You have been appointed the assistant-controller of a major manufacturer of newsprint, fine paper, and different types of specialty papers. Michaela, the controller, has been asked by the board of...
What are some of the determinants of demand for narrow-body commercial aircraft such as Boeing B-737 and Airbus A-320?
7. On January 1, Pop purchased 10 percent of Son Companys common stock. Pop purchased additional shares, bringing its ownership up to 40 percent of Sons common stock outstanding, on August 1. During...
Irrigation Supply is negotiating with a major hardware chain to supply heavy-duty sprinkler heads at $18,000 each year for 6 years. Irrigation Supply would need to retool at a cost of $20,000 to fill...
TIME FOR A LUMP SUM TO DOUBLE How long will it take $700 to double if it earns the following rates? Compounding occurs once a year. Round each answer to two decimal places. 5%. year(s) 10%. year(s)...
In Exercises 29-32, identify the level of measurement of the data as nominal, ordinal, interval, or ratio. Also, explain what is wrong with the given calculation. Social Security Numbers As part of a...
Discuss the appropriate accounting treatment to use when (a) An investor acquires enough additional common stock during a year to change from using the fair value method to using the equity method,...
What is a fund? Distinguish between a fund and an appropriation of retained earnings.
During the current year, Ron and Anne sold the following assets: Capital Asset Market Value Tax Basis Holding Period L stock $50,000 $41,000 > 1 year M stock 28,000 39,000 > 1 year N stock 30,000...
According to a recent study, 21% of American college students graduate with no student loan debt. Suppose we obtain a random sample of 106 American college students and record whether or not they...
Differentiate the following with respect to x: a. y=5x+2x + x + 15 b. y=4x+3x - 4x - 10 c. y = 3Sin(5x) d. y = 3Cos(3x) e. y=10e -25x f. y = log(6x)
Question 2. The rate of drug destruction by the kidneys is proportional to the amount of the drug in the body. The constant of proportionality is denoted by K. At time t the quantity of the drug in...
5. 6. -1 (4a) U u X2 1 X2 -2 x -1 -2 12 (4b) U -2 2 Y y 16 x2 X2 3 1 (4c) U u - x 2 Y y -8 Y y -20 5 x X2 2 Find the state space models of the three systems shown in Fig. 4a, Fig. 4b, and Fig. 4c,...
Given the following data for Mehring Company, compute total manufacturing costs, prepare a cost of goods manufactured statement, and compute cost of goods sold. Direct materials used $230,000...
Methods used to account for transactions between companies in different nations when goods are received on one date and the invoice is paid on another date include: a. Time-of-transaction method. b....
A line l passes through the points with coordinates (0, 5) and (6, 7). a. Find the gradient of the line. b. Find an equation of the line in the form ax + by + c = 0.
Select a firm and list three or four key success factors (e.g., advertising, distribution, engineering, sales) for that industry. Which firm(s), in your opinion, would be appropriate to benchmark?...
What are the major uses of the gross profit method?
What are the major uses of the gross profit method?
Distinguish between gross profit as a percentage of cost and gross profit as a percentage of sales prices. Convert the following gross profit percentages based on cost to gross profit percentages...
Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzerias owner has determined that the shop...
Which of the following statement regarding a post-closing trial balance is not true
What are the benefits and potential risks factors for undertaking derivative strategies compared to cash transactions

Why is the cash surrender value of a life insurance policy on which the company is the

Question:

Step by Step Answer:

Many insurance policies allow a portion of accumulated premiums to build up ...View the full answer

Intermediate Accounting

Students also viewed these Accounting questions