Exam 19: A: Accounting for Estates and Trusts

A gift of any remaining estate property is a

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

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 for claims of $100,000 made against the estate for various debts incurred before the decedent's death, and $20,000 for funeral expense bills.

What choices does an executor of an estate have in determining the values of assets included in the estate for tax purposes?

A demonstrative legacy is a

The provisions of a will currently undergoing probate are: "One thousand shares of Wal-Mart Stores stock to my son; $10,000 in cash from my Astoria Savings Bank account to my brother; $5,000 in cash to my daughter; and any remaining property divided equally between my son and daughter." -What is the remaining principal to be divided equally between the son and the daughter?

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

The executor of the estate of Yelbert Toper recorded the following information: Assets discovered at death (at fair value): Debts of $22,100 still remain to be paid.The shares of Dell Technologies stock were conveyed to the appropriate beneficiary.Executor fees are allocated based on total charges for principal and for income. Required: Prepare a charge and discharge statement for this estate.

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

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 interest of $5,000 that was earned on the bonds of the estate.Of this amount, $2,000 had been earned prior to death.

The provisions of a will currently undergoing probate are: "Two thousand shares of Dorn stock to my son; $30,000 in cash from my Atlas Savings Bank account to my brother; $50,000 in cash to my daughter; and any remaining property divided equally between my son and daughter." -Assume that the estate included 1,200 shares of Dorn stock, $22,000 cash in the savings account, and $70,000 in cash from other sources.The decedent resided in a state that treats a demonstrative legacy shortfall as a general legacy..What would the daughter have received from the settlement of the estate?

The provisions of a will currently undergoing probate are: "One thousand shares of Wal-Mart Stores stock to my son; $10,000 in cash from my Astoria Savings Bank account to my brother; $5,000 in cash to my daughter; and any remaining property divided equally between my son and daughter." -Assuming at the time of death the estate included 1,400 shares of Wal-Mart Stores stock and $25,000 cash in the savings account, what would the son have received from the settlement of the estate?

How may real property be treated in identifying estate property subject to probate?

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 payment of $20,000 in funeral expenses.

The provisions of a will currently undergoing probate are: "Two thousand shares of Dorn stock to my son; $30,000 in cash from my Atlas Savings Bank account to my brother; $50,000 in cash to my daughter; and any remaining property divided equally between my son and daughter." -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?

What is the purpose of the Uniform Probate Code?

The terms of a will currently undergoing probate are: "A gift to my brother David of $25,000 cash; to my son James, $50,000 from my Harbor Savings Bank account; and to my daughter Lila, all of my remaining property." At the time of death, the balance in the savings account was $40,000, and there was additional cash (after payment of funeral expenses and all claims against the estate) of $70,000. -The gift to David is a

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. -The life insurance policy was collected.Prepare the journal entry to record the transaction.

The provisions of a will currently undergoing probate are: "One thousand shares of Wal-Mart Stores stock to my son; $10,000 in cash from my Astoria Savings Bank account to my brother; $5,000 in cash to my daughter; and any remaining property divided equally between my son and daughter." -.Assuming at the time of death the estate included 1,000 shares of Wal-Mart Stores stock and $6,000 cash in the savings account, what would the brother have received from the settlement of the estate?

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 property of the estate.