Question 1

The decedent resided in a state that treats a demonstrative legacy shortfall as a general legacy.How much would Lila have received from the estate?

Accepted Answer

A)  $ 0. 
B)  $40,000. 
C)  $35,000. 
D)  $45,000. 
E)  $30,000. 
A)  $ 0. 
B)  $40,000. 
C)  $35,000. 
D)  $45,000. 
E)  $30,000.

Question 2

Which of the following is not subtracted to arrive at the taxable value of an estate?

Accepted Answer

A)  Liabilities. 
B)  Charitable bequests. 
C)  Funeral expenses. 
D)  Estate administration expenses. 
E)  Deduction for property conveyed to children of decedent. 
A)  Liabilities. 
B)  Charitable bequests. 
C)  Funeral expenses. 
D)  Estate administration expenses. 
E)  Deduction for property conveyed to children of decedent.

Question 3

The gift to David is a

Accepted Answer

A)  General legacy. 
B)  Specific legacy. 
C)  Demonstrative legacy. 
D)  Residual legacy. 
E)  Devise. 
A)  General legacy. 
B)  Specific legacy. 
C)  Demonstrative legacy. 
D)  Residual legacy. 
E)  Devise.

Question 4

In settling an estate, what is the meaning of the term devise?

Accepted Answer

A devise is a gift o

Question 5

Which of the following is not a type of trust used for estate planning?

Accepted Answer

A)  Minor's Section 2503(c) trust. 
B)  Alimony trust. 
C)  Credit shelter trust. 
D)  Qualified terminable interest property trust. 
E)  Grantor retained annuity trust. 
A)  Minor's Section 2503(c) trust. 
B)  Alimony trust. 
C)  Credit shelter trust. 
D)  Qualified terminable interest property trust. 
E)  Grantor retained annuity trust.

Question 6

The executor of the Estate of Kate Tweed discovered the following assets (at fair value):
The will of Kate Tweed had the following provisions:
-$195,000 in cash went to Victor Vickery.
-All shares of PepsiCo went to Duchess Doyle.
-The residence went to Louis Tweed.
-All other estate assets were to be liquidated with the resulting cash going to the Sacred Church of Liberty, Missouri.
-Debts of $52,000 were discovered.
Prepare the journal entry to record the transaction.

Accepted Answer

No entry is required

Question 7

What is the amount of the personal exemption on an estate income tax return?

Accepted Answer

A)  $ 0. 
B)  $100. 
C)  $300. 
D)  $500. 
E)  $600. 
A)  $ 0. 
B)  $100. 
C)  $300. 
D)  $500. 
E)  $600.

Question 8

In an executor's accounting for an estate, debts and other obligations are recorded

Accepted Answer

A)  At book value. 
B)  As a reduction of income. 
C)  On the date of payment. 
D)  As soon as discovered. 
E)  Only if they are past due. 
A)  At book value. 
B)  As a reduction of income. 
C)  On the date of payment. 
D)  As soon as discovered. 
E)  Only if they are past due.

Question 9

For each of the following situations, select the best answer concerning adjustments to principal and income of an estate.Assume that the will does not specify whether the item is to be classified as principal or income.
(A) Adjustment to the principal of the estate.
(B) Adjustment to the income of the estate.
(C) Allocated between the principal and income of the estate in some fair manner.
(D) Allocated between the principal and income of the estate determined by existence at date of death.
___ 1.Homestead allowance
___ 2.Insurance expenses
___ 3.Executor's fee
___ 4.Life insurance proceeds when estate is beneficiary
___ 5.Investment commissions
___ 6.Debts incurred prior to death
___ 7.Water and other utility expenses
___ 8.Liquidating dividends
___ 9.Dividend income
___ 10.Funeral expenses
___ 11.Extraordinary repairs on income-producing property
___ 12.Attorney fees
___ 13.Property taxes
___ 14.Gains and losses on the sale of securities
___ 15.Interest income
___ 16.Court costs
___ 17.Ordinary repairs on income-producing property
___ 18.Accounting fees

Accepted Answer

(1) A; (2) B; (3) C; (4) A; (5

Question 10

The executor of the Estate of Kate Tweed discovered the following assets (at fair value):
The will of Kate Tweed had the following provisions:
-$195,000 in cash went to Victor Vickery.
-All shares of PepsiCo went to Duchess Doyle.
-The residence went to Louis Tweed.
-All other estate assets were to be liquidated with the resulting cash going to the Sacred Church of Liberty, Missouri.
-Funeral expenses of $26,000 were paid.
Prepare the journal entry to record the transaction.

Accepted Answer

The answer of The executor of the Estate of Kate...

Question 11

The executor of Danny Mack's estate has listed the following properties at fair value: Cash $200,000, Life Insurance Receivable $500,000, Investment in Stocks and Bonds $50,000, Rental Property $100,000, and Personal Property $80,000. Additionally, the executor found $100,000 of various debts incurred before the decedent's death. The cost of Danny Mack's funeral was $20,000.
-Prepare a Charge and Discharge Statement for the estate.

Accepted Answer

The answer of The executor of Danny Mack's estate has...

Question 12

What is the purpose of the Uniform Probate Code?

Accepted Answer

The purpose of the Uniform Pro

Question 13

Which of the following is usually not accounted for as an adjustment to a trust's income?

Accepted Answer

A)  Ordinary repairs expense. 
B)  Rent expense. 
C)  Investment costs and commissions. 
D)  Insurance expense. 
E)  Property taxes. 
A)  Ordinary repairs expense. 
B)  Rent expense. 
C)  Investment costs and commissions. 
D)  Insurance expense. 
E)  Property taxes.

Question 14

Assume that, at the time of death, the estate included 1,200 shares of Dorn stock, $60,000 cash in the savings account, and $70,000 in cash from other sources.What would the son have received from the settlement of the estate?

Accepted Answer

A)  1,200 shares of Dorn stock and $35,000 cash. 
B)  2,000 shares of Dorn stock and $10,000 cash. 
C)  2,000 shares of Dorn stock and $25,000 cash. 
D)  1,200 shares of Dorn stock and $10,000 cash. 
E)  1,200 shares of Dorn stock and $25,000 cash. 
A)  1,200 shares of Dorn stock and $35,000 cash. 
B)  2,000 shares of Dorn stock and $10,000 cash. 
C)  2,000 shares of Dorn stock and $25,000 cash. 
D)  1,200 shares of Dorn stock and $10,000 cash. 
E)  1,200 shares of Dorn stock and $25,000 cash.

Question 15

A demonstrative legacy is a

Accepted Answer

A)  Gift of personal property that is directly identified. 
B)  Cash gift from a particular source. 
C)  Gift of estate property that remains after carrying out the other provisions of the will. 
D)  Gift of real property. 
E)  Gift of intangible property. 
A)  Gift of personal property that is directly identified. 
B)  Cash gift from a particular source. 
C)  Gift of estate property that remains after carrying out the other provisions of the will. 
D)  Gift of real property. 
E)  Gift of intangible property.

Question 16

What guidelines must be followed to classify a transaction as associated with the principal of an estate or as an income transaction?

Accepted Answer

A)  Generally accepted accounting principles. 
B)  Federal estate laws. 
C)  State estate laws. 
D)  The Internal Revenue Code. 
E)  The decedent's intentions or state laws. 
A)  Generally accepted accounting principles. 
B)  Federal estate laws. 
C)  State estate laws. 
D)  The Internal Revenue Code. 
E)  The decedent's intentions or state laws.

Question 17

The executor of Danny Mack's estate has listed the following properties at fair value: Cash $200,000, Life Insurance Receivable $500,000, Investment in Stocks and Bonds $50,000, Rental Property $100,000, and Personal Property $80,000. Additionally, the executor found $100,000 of various debts incurred before the decedent's death. The cost of Danny Mack's funeral was $20,000.
-Prepare the journal entry to record the distribution of $4,000 to Anna Lee, an income beneficiary.

Accepted Answer

The answer of The executor of Danny Mack's estate has...

Question 18

When there are not enough assets in the estate to satisfy all legacies in the will, the distribution schedule goes through a process of:

Accepted Answer

A)  Ademption. 
B)  Amendment. 
C)  Abatement. 
D)  Accretion. 
E)  Aggregation. 
A)  Ademption. 
B)  Amendment. 
C)  Abatement. 
D)  Accretion. 
E)  Aggregation.

Question 19

What is the difference between an executor and an administrator?

Accepted Answer

An executor is a specific person named i

Question 20

An inter vivos trust was created by Isaac Posney.Isaac owned a large department store in Juggins, Utah.Adjacent to the store, Isaac also owned a tract of land that was used as an extra parking lot when the store was having a sale or during the Christmas season.Isaac expected the land to appreciate in value and eventually be sold for an office complex or additional stores.Isaac placed the land into a charitable lead trust, which would hold the land for ten years until Isaac's son would turn 21.At that time, title would be transferred to the son.The store will pay rent to use the land during the interim.The income generated each year from this usage will be given to a local church.The land was currently valued at $416,000.
During the first year of this arrangement, the trustee recorded the following cash transactions:
   Required:
Prepare all required journal entries for this trust fund including the entry to create the trust.

Accepted Answer

The answer of An inter vivos trust was created by...

Exam 19: Accounting for Estates and Trusts

The decedent resided in a state that treats a demonstrative legacy shortfall as a general legacy.How much would Lila have received from the estate?

Which of the following is not subtracted to arrive at the taxable value of an estate?

The gift to David is a

In settling an estate, what is the meaning of the term devise?

Which of the following is not a type of trust used for estate planning?

What is the amount of the personal exemption on an estate income tax return?

In an executor's accounting for an estate, debts and other obligations are recorded

What is the purpose of the Uniform Probate Code?

Which of the following is usually not accounted for as an adjustment to a trust's income?

Assume that, at the time of death, the estate included 1,200 shares of Dorn stock, $60,000 cash in the savings account, and $70,000 in cash from other sources.What would the son have received from the settlement of the estate?

A demonstrative legacy is a

What guidelines must be followed to classify a transaction as associated with the principal of an estate or as an income transaction?

When there are not enough assets in the estate to satisfy all legacies in the will, the distribution schedule goes through a process of:

What is the difference between an executor and an administrator?

The Equity Method of Accounting for Investments

A: the Equity Method of Accounting for Investments

Consolidation of Financial Information

A: Consolidation of Financial Information

Consolidations - Subsequent to the Date of Acquisition

A: Consolidations - Subsequent to the Date of Acquisition

Consolidated Financial Statements and Outside Ownership

A: Consolidated Financial Statements and Outside Ownership

Consolidated Financial Statements Intra-Entity Asset Transactions

A: Consolidated Financial Statements Intra-Entity Asset Transactions

Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

A: Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

Consolidated Financial Statements - Ownership Patterns and Income Taxes

A: Consolidated Financial Statements - Ownership Patterns and Income Taxes

Segment and Interim Reporting

A: Segment and Interim Reporting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

A: Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

A: Translation of Foreign Currency Financial Statements

Worldwide Accounting Diversity and International Accounting Standards

A: Worldwide Accounting Diversity and International Accounting Standards

Financial Reporting and the Securities and Exchange Commission

A: Financial Reporting and the Securities and Exchange Commission

Accounting for Legal Reorganizations and Liquidations

A: Accounting for Legal Reorganizations and Liquidations

Partnerships: Formation and Operation

A: Partnerships: Formation and Operation

Partnerships: Termination and Liquidation

A: Partnerships: Termination and Liquidation

Accounting for State and Local Governments, Part I

A: Accounting for State and Local Governments, Part I

Accounting for State and Local Governments, Part II

A: Accounting for State and Local Governments, Part II

Accounting for Not-For-Profit Entities

A: Accounting for Not-For-Profit Entities

A: Accounting for Estates and Trusts

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