The Following Selected Transactions Affecting the Annuity and Life Income

question 40

Essay

The following selected transactions affecting the Annuity and Life Income Funds of Tremper State University (public) occurred during the current fiscal year.
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a.Upon his death, John Sooner, a local businessman, donates a portfolio of stock with a cost basis of $100,000 and a market value of $125,000.John's wife is to receive an annuity of $8,000 per year for life.Her life expectancy is ten years.An estimated rate of return of 8% yields a present value of $53,681 for the annuity.​
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b.Dividends of $7,500 are received from Life Income Fund investments.​
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c.Annuity fund investments with a book value of $6,000 are sold for $6,500.​
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d.The beneficiary of the life income investments described in part (b) are paid.​
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e.Interest is recorded on the annuity in part (a) and the first annuity payment to John Sooner's wife is made.​
Required:
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Make the journal entries necessary to record the transactions.

Distinguish between philosophical views on income distribution (Utilitarianism, Liberalism, Libertarianism) and their policy implications.

Understand the criticisms and defenses of minimum wage laws and other income support measures.

Evaluate the role of incentives and behavior changes in response to income redistribution policies.

Assess the ethical and utility-based arguments for and against government intervention in income distribution.

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Definitions:

Future Directions

Suggested paths or developments in research or projects that indicate where efforts or studies might head next.

Theoretical Rationale

The logical basis derived from existing theories to support a research study or hypothesis.

Research Report

A document presenting the methodology, findings, and conclusions of a research project.

Research Reports

Documents that present the methodology, findings, and conclusions of a research project.