question archive 1)The following information relates to non-current investments that Dragon Company placed in trust as required by underwriter of its bonds: Bond sinking fund balance, January 1, 2018, P2,000,000; Additional investment during 2018, P500,000; Interest revenue, P20,000; Administrative costs, P15,000, Carrying value of bonds payable, P3,000,000
1)The following information relates to non-current investments that Dragon Company placed in trust as required by underwriter of its bonds: Bond sinking fund balance, January 1, 2018, P2,000,000; Additional investment during 2018, P500,000; Interest revenue, P20,000; Administrative costs, P15,000, Carrying value of bonds payable, P3,000,000
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1)The following information relates to non-current investments that Dragon Company placed in trust as required by underwriter of its bonds: Bond sinking fund balance, January 1, 2018, P2,000,000; Additional investment during 2018, P500,000; Interest revenue, P20,000; Administrative costs, P15,000, Carrying value of bonds payable, P3,000,000.
What amount should Dragon Company report in its December 31, 2018 balance sheet related to its non-current investment for bond sinking fund requirements?
2. On January 1, 2015, Crane Company purchased a P4,000,000 ordinary life insurance policy on its president. Additional data for the year 1028 are: Cash surrender value, January 1, P200,000; Cash surrender value, December 31, P220,000; Annual insurance premium paid on January 1, 2018, P80,000; Dividend received August 1, P10,000. Crane Company is the beneficiary under the life insurance policy. Crane should report life insurance expense for 2018 of---------
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Answer:
1. Non current investment for bonds sinking fund balance as of December 31, 2018 = 2,500,000
(january 1 balance of 2,000,000 plus additional investment of 500,000)
2. LIfe insurance expense of Crane Company for 2018 = 70,000
(annual premium of 80,000 - less dividends received of 10,000 = 70,000)
Step-by-step explanation
1. Balance of investment is equal to initial investment plus additional investment during the year. amount of income or admin cost were charge against company's profit and loss for the period.
2. Cash surrender value of life insurance remains contigent or future benefits until the insurance policy were terminated or surrender
