Carin, a Widow, Elected to Receive the Proceeds of a $150,000

question 24

Multiple Choice

Carin, a widow, elected to receive the proceeds of a $150,000 life insurance policy on the life of her deceased husband in 10 installments of $17,500 each.Her husband had paid premiums of $60,000 on the policy.In the first year, Carin collected $17,500 from the insurance company.She must include in gross income:

• A)$0.
• B)$2,500.
• C)$10,000.
• D)$25,000.
• E)None of these.

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Definitions:

Central Executive

A component of working memory model responsible for directing attention and coordinating mental resources.

Phonological Loop

A component of working memory model that deals with auditory information and preserves it in a verbal form.

Visuo-Spatial Sketchpad

A component of the working memory model that processes and stores visual and spatial information, used for navigation and understanding spatial relationships.

Working Memory

A cognitive system responsible for temporarily holding information available for processing, important for reasoning and the guidance of decision-making and behavior.