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How much is the gain on life insurance settlement

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Reference no: EM132907987

ABC Corporation insures the life of its Chief Executive Officer for P3,000,000, indicating the corporation as the beneficiary of an ordinary life policy. The annual premium of P100,000 is payable every January 2nd of the year.

The policy is dated January 2, 2021, and carries the following cash surrender values:

2021 -
2022 -
2023 60, 000
2024 70, 000
2025 89, 200
2026 110,800

  • The corporation follows the calendar year as its fiscal period. President dies on September 30, 2026, and policy is collected on December 2, 2026.

Answer the questions:

Problem 1: What is the amount of insurance expense to be shown in the statement of financial position on 2023, Compute the cash surrender value @ September 2026.

Problem 2: Determine be value of insurance expense on 2026.

Problem 3: On the year 2023, what is the amount to be decreased in retained earnings value, How much is the gain on life insurance settlement?

Reference no: EM132907987

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