Determining annuity payments

Assignment Help Accounting Basics
Reference no: EM13130988

On January 1, 2010, Andrea purchased a 20-year annuity for $160,000 from LUKE LIBERTY (an established insurance company). Under the annuity, Andrea will receive payments of $1,480 for each month of annuity's life. How much of the annuity payments may be excluded from Andrea's Gross Income for 2010 (assume all 12 monthly payments were made in 2010)?

a. $0

b. $8,000

c. $9,760

d. $17,760

Reference no: EM13130988

Questions Cloud

Sodium carbonate vs calcium carbonate : Why Do I Require More CaCO3 to Raise pH than Predicted? If you can remember back to a discussion and inquiry we exchanged last week concerning the use of sodium carbonate vs. calcium carbonate
How many grams of water can be cooled : How many grams of water can be cooled from 37 C to 20 C by the evaporation of 45 gm of water?
Explain quality assurance and improve inspection process : What is wrong with only inspecting the peaches on the top of the barrel? How could you improve your inspection process?
Equation-expression and set : It is estimated that y , the number of items of a particular commodity (in millions)sold in the united States in year x represents the number of years since 1990 , is given the formula y=1.38x+3.49.
Determining annuity payments : On January 1, 2010, Andrea purchased a 20-year annuity for $160,000 from LUKE LIBERTY (an established insurance company). Under the annuity, Andrea will receive payments of $1,480 for each month of annuity's life. How much of the annuity payments ..
Prepare the current assets section of the balance sheet : Harding Corporation has the following accounts included in its December 31, 2012, trial balance: Accounts Receivable $110,000; Inventory $290,000; Allowance for Doubtful Accounts $8,000; Patents $72,000; Prepaid Insurance $9,500; Accounts Payable ..
What is the ph of the buffer : What is the pH of the buffer that results when 11 g of NaCH3CO2 is mixed with 85 mL of 1.0 M CH3CO2H and diluted with water to 1.0 L? (Ka of CH3CO2H = 1.8 ´ 10-5)
Compute the departmental overhead rates for uncle bruce : What is uncle Bruce's plantwide overhead rate? Compute the departmental overhead rates for uncle Bruce's three production lines. Round all answers to nearest cent.
Evaluate expressions with fractions : Place the following set of numbers in ascending order. Determine the maximum and minimum values of the following set of numbers. 36/7,-1,-2/3,-5,26/9

Reviews

Write a Review

Accounting Basics Questions & Answers

  Evaluating the risk of a model stock portfolio

Mary is evaluating the risk (return deviation) of a model stock portfolio she has constructed. She knows that an ex ante set of returns is a more useful approach. However, she decides to examine ex post returns because she knows that for a well-di..

  Write an analysis about test of liquidity

Write an analysis about test of liquidity that compare Best buy to Radio Shack and Conn's.

  Rules of the aicpa code of professional conduct

CPAs are allowed to advertise under the Rules of the AICPA Code of Professional Conduct.

  What is the gross profit for the period

A physical inventory on December 31 shows 2,000 units on hand. Holliday sells the units for $12 each. The company has an effective tax rate of 20%. Holliday uses the periodic inventory method. If the company uses FIFO, what is the gross profit for..

  Computing the pension expense

Bickner Company provides the following information about its defined benefit pension plan for the year 2010.

  Long-term borrowings

Burich Co. reported proceeds from short-term (non-payables) notes of $2.5 million, proceeds from long-term borrowings of $6.8 million,

  Trade deficits and trade surpluses

Many individuals believe that trade deficits are troubling economic condition which points out weakness in economy while trade surpluses are sign of strength and rising prominence for economy.

  Incremental analysis and decision making

Crone Enterprises uses a word processing computer to handle its sales invoices. Lately, business has been so good that it takes an extra 3 hours per night, plus every third Saturday, to keep up with the volume of sales invoices.

  Detailed examination of outstanding accounts

A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and their length of time past due is the:

  Divdends received deduction

A corporation's taxable income before the divdends received deduction (DRD) is $40,000. Included in this amount is dividend income of $60,000 from another corporation in which the taxpayer owns 90 percent of its stock outstanding.

  Show support for the bond payable discount by preparing

On June 1, 2002, a company purchased on the open market $20,000 of a company's non-convertible (or convertible) bonds (2% of $1,000,000 bonds outstanding) at a price of "60" ($12,000 cash) plus accrued interest.

  Operating sales-type leases

Finance Here Sales & Service provides leased-based financing for its full line of commercial generators. Sales of the generators are properly accounted for as operating sales-type leases.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd