Question

Jose Reyes surrendered an endowment policy and received $50,000 from the ABC Insurance Company. Over time Jose had paid $35,000 in premiums. In addition, over time Jose had collected $5,000 of dividends on the policy. How much gain (loss), if any, must Jose recognize from surrendering the endowment policy

Answer 1

$10,000

Step-by-step explanation:

Calculation for Jose Reyes gain (loss) recognize from surrendering the endowment policy.

Endowment policy $50,000

Premium $35,000

Dividend $ 5,000

Hence:

Endowment policy $50,000 -Premium $35,000

=$15,000

$15,000 - Dividend $ 5,000

=$10,000

Therefore the gain (loss), if any that Jose recognize from surrendering the endowment policy will be $10,000