Answer:
c. $455.75
Explanation:
The calculations for the quarterly payments are as follows:
= Remaining balance ÷ PVIFA factor for 2.5% over 12 years
Here,
Remaining balance is
= $5,500 - $5,500 × 15%
= $5,500 - $825
= $4,675
And the PVIFA factor for 2.5% across 12 years is 10.2578.
Refer to the PVIFA table.
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= $4,675 ÷ 10.2578
= $455.75
Considering quarterly payments, the rate is divided by four and the time frame becomes four times as long.
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Complete Question:
James Stilton serves as the CEO of RightLiving, Inc., a corporation that purchases life insurance policies at a reduced price from terminally ill individuals and sells them to investors. RightLiving compensates terminally ill patients with a percentage of the future death benefits (typically 65%) and subsequently sells the policies to investors for 85% of the future benefit amount. The patients receive funds to assist with their medical and other expenses, while the investors are assured a positive return on their investments. The difference between the purchase and retail prices represents RightLiving's profit.
Stilton is aware that some sick patients might acquire insurance policies through deceit (by concealing their illness on the application). If an insurance company uncovers such fraud, it will annul the policy and withhold payment. While Stilton is confident that most of the policies he has acquired are legitimate, he recognizes that a few may not be.
Requirement:
What additional ethical dilemmas might Stilton encounter?
Answer with Explanation:
Stilton's ethical challenges include:
- Should he disclose potential fraud to investors prior to executing sales?
- What policies should be established to ensure that legitimate individuals can easily sell their policies, and how would lack of such policies be unfair for RightLiving, Inc.?
- Stilton also faces ethical issues because the business model benefits from the early deaths of clients, which raises moral questions.
$100,000.
Since Kathy and Annise are a married duo filing jointly, their adjusted gross income (AGI) is computed by subtracting a net loss from their initial AGI.
Currently, AGI amounts to $120,000, with a rental loss of $30,000 and a partnership gain of $10,000.
The revised AGI becomes Current AGI - Net Loss, or 120,000 – 20,000, leading to a revised AGI of $100,000.
Calculating the net loss: Rental loss – partnership gain equals $30,000 - $10,000, resulting in a net loss of $20,000. Notably, Kathy and Annise may claim this $20,000 loss against other income, as they actively engage in rental activities.
The net capital expenditure for Beta is 95.
Explanation:
To determine Beta's net capital expenditure, use the formula below
Closing PP&E + Depreciation Expense - Opening PP&E
= 170 + 75 - 150
= 95
In this computation, the depreciation expense is added, and the PP&E balance is subtracted from the closing PP&E balance to obtain a precise figure.
Alternatively, it can be calculated based on the capital expenditures derived from a company's income statement and balance sheet. Check for the depreciation expense recorded for the current period in the income statement and find the current period’s property, plant, and equipment in the balance sheet.
Answer:
Lopez Sales Company
1. The gross margin recorded by Lopez is as follows:
Sales total = $81,600
Deducting cost of sales = $38,400
Gross Margin = $43,200
2. The gain on the land sale recognized by Lopez amounts to:
Land details:
Selling price = $81,000
less cost = $43,200
Gain on sale = $37,800
Explanation:
a) The gross margin represents the difference between the selling price and the cost price of a good. It indicates profit prior to accounting for operational expenses to determine net income or margin.
It gauges whether the business can generate sufficient income to meet typical operating costs such as rent, utilities, and employee wages.
b) The gain from the sale of any capital asset is the difference between the selling price and the book value (cost). Such a gain is separately presented in the income statement and may be subject to capital gains tax.
