Julia, Age 57, Purchases an Annuity for $33,600

question 656

Multiple Choice

Julia, age 57, purchases an annuity for $33,600. Julia will receive $400 per month for the rest of her life. The expected return multiple is 20.0. At age 88, the amount that Julia may exclude from income is

• A) $4,800.
• B) $0.
• C) $3,120.
• D) $1,680.

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Definitions:

Sales Journal

The Sales Journal is a specialized accounting journal used to record all sales of merchandise on credit.

General Journal

The primary journal where all types of transactions are first recorded in chronological order before posting to accounts.

Cash Sales Return

Refunds issued to customers for goods returned that were originally purchased with cash, impacting both the company's inventory and its cash balances.

Cash Payments Journal

A financial journal that records all disbursements of cash, including expenses, asset purchases, and debt payments.