Valix Finacc vol 2 Problem 1-23 and 24

Financial Accounting Volume 2 2008 Valix-Peralta
Chapter 1 Problem 1-23 and 24

Problem 1-23  Answer  B                                   Problem 1-24  Answer  B

Premiums distributed in 2009          5,500        Coupons to be redeemed

Estimated premiums in 2009              500              80% x 500,000)                         400,000 Total                                                             6,000        Less: Coupons redeemed          300,000

Less: Estimated premiums in 2008      200                Coupons outstanding        100,000

Premiums applicable to 2009          5,800

                                                                              Liability for unredeemed

Premium expense (5,800 x 60)     348,000           coupons (100,000 x 15)         1,500,000