Question 1

When a person dies without leaving a valid will, how is the distribution of his or her property determined?

Accepted Answer

A)  in accordance with federal inheritance laws. 
B)  in accordance with generally accepted accounting principles. 
C)  in accordance with a plan developed by the executor of the estate. 
D)  in accordance with state inheritance laws. 
E)  in accordance with common law. 
A)  in accordance with federal inheritance laws. 
B)  in accordance with generally accepted accounting principles. 
C)  in accordance with a plan developed by the executor of the estate. 
D)  in accordance with state inheritance laws. 
E)  in accordance with common law. D

Question 2

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.

Accepted Answer

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

Question 3

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.
Cash of $195,000 was conveyed to the appropriate beneficiary.
Prepare the journal entry to record the transaction.

Accepted Answer

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

Question 4

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 5

A testamentary trust is a trust

Accepted Answer

A)  intended to protect the assets of a minor. 
B)  that is managed by the trustor. 
C)  that is managed by an estate. 
D)  established by a living person. 
E)  established by a will. 
A)  intended to protect the assets of a minor. 
B)  that is managed by the trustor. 
C)  that is managed by an estate. 
D)  established by a living person. 
E)  established by a will.

Question 6

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.

Accepted Answer

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

Question 7

The trustor is the

Accepted Answer

A)  income beneficiary of the trust. 
B)  ultimate recipient of the principal from the trust. 
C)  fiduciary who manages the assets in the trust. 
D)  person who funds the trust. 
E)  person who disposes of the assets in the trust. 
A)  income beneficiary of the trust. 
B)  ultimate recipient of the principal from the trust. 
C)  fiduciary who manages the assets in the trust. 
D)  person who funds the trust. 
E)  person who disposes of the assets in the trust.

Question 8

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...

Question 9

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.
Additional debts of $78,000 were discovered. Debts totaling $130,000 were paid.
Prepare the journal entry to record the transaction.

Accepted Answer

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

Question 10

What is the difference between an executor and an administrator?

Accepted Answer

An executor is a specific person named i

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 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.

Accepted Answer

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

Question 12

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 13

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 savings 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.
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 14

Jim Bowie died on April 1, 2013. The estate has the following gross asset valuation information:   The estate tax will be calculated using:

Accepted Answer

A)  $73,000. 
B)  $75,000. 
C)  $76,000. 
D)  $80,000. 
E)  $89,000. 
A)  $73,000. 
B)  $75,000. 
C)  $76,000. 
D)  $80,000. 
E)  $89,000.

Question 15

During the most recent year, an estate generated income of $26,000:   
The interest income was conveyed immediately to the beneficiary stated in the decedent's will. Dividends of $1,560 were given to the decedent's church.
Prepare a schedule to show the amount of federal income tax that must be paid.

Accepted Answer

The answer of During the most recent year, an estate...

Question 16

The provisions of a will currently undergoing probate are: "Two thousand shares of Dorn stock to my son; $30,000 in cash from my savings 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?

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 17

A gift that is specified in a will as "I leave my collection of baseball cards to my son" 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 18

The provisions of a will currently undergoing probate are: "One thousand shares of Wal-Mart stock to my son; $10,000 in cash from my savings account to my brother; $5,000 in cash to my daughter; and any remaining property divided equally between my son and daughter." At the time of death, the estate included 1,400 shares of Wal-Mart stock and $25,000 cash in the savings account.
What is the remaining principal to be divided equally between the son and the daughter?

Accepted Answer

A)  $10,000 cash 
B)  $15,000 cash 
C)  400 shares of Wal-Mart stock and $10,000 cash 
D)  400 shares of Wal-Mart stock and $15,000 cash 
E)  1,000 shares of Wal-Mart stock and $5,000 cash 
A)  $10,000 cash 
B)  $15,000 cash 
C)  400 shares of Wal-Mart stock and $10,000 cash 
D)  400 shares of Wal-Mart stock and $15,000 cash 
E)  1,000 shares of Wal-Mart stock and $5,000 cash

Question 19

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

Accepted Answer

A)  Minor's Section 2503(c) trust. 
B)  Alimony trust. 
C)  Credit shelter trust. 
D)  Revocable living trust. 
E)  Grantor retained annuity trust. 
A)  Minor's Section 2503(c) trust. 
B)  Alimony trust. 
C)  Credit shelter trust. 
D)  Revocable living trust. 
E)  Grantor retained annuity trust.

Question 20

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.

When a person dies without leaving a valid will, how is the distribution of his or her property determined?

A testamentary trust is a trust

The trustor is the

What is the difference between an executor and an administrator?

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

Jim Bowie died on April 1, 2013. The estate has the following gross asset valuation information: The estate tax will be calculated using:

During the most recent year, an estate generated income of $26,000: The interest income was conveyed immediately to the beneficiary stated in the decedent's will. Dividends of $1,560 were given to the decedent's church. Prepare a schedule to show the amount of federal income tax that must be paid.

A gift that is specified in a will as "I leave my collection of baseball cards to my son" is a

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

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

The Equity Method of Accounting for Investments

Consolidation of Financial Information

Consolidations - Subsequent to the Date of Acquisition

Consolidated Financial Statements and Outside Ownership

Consolidated Financial Statements Intra-Entity Asset Transactions

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

Consolidated Financial Statements - Ownership Patterns and Income Taxes

Segment and Interim Reporting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Worldwide Accounting Diversity and International Accounting Standards

Financial Reporting and the Securities and Exchange Commission

Accounting for Legal Reorganizations and Liquidations

Partnerships: Formation and Operation

Partnerships: Termination and Liquidation

Accounting for State and Local Governments

Accounting for State and Local Governments

Accounting and Reporting for Private Not-For-Profit Organizations

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Exam 19: Accounting for Estates and Trusts

When a person dies without leaving a valid will, how is the distribution of his or her property determined?

A testamentary trust is a trust

The trustor is the

What is the difference between an executor and an administrator?

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

Jim Bowie died on April 1, 2013. The estate has the following gross asset valuation information: The estate tax will be calculated using:

During the most recent year, an estate generated income of $26,000: The interest income was conveyed immediately to the beneficiary stated in the decedent's will. Dividends of $1,560 were given to the decedent's church. Prepare a schedule to show the amount of federal income tax that must be paid.

A gift that is specified in a will as "I leave my collection of baseball cards to my son" is a

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

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

The Equity Method of Accounting for Investments

Consolidation of Financial Information

Consolidations - Subsequent to the Date of Acquisition

Consolidated Financial Statements and Outside Ownership

Consolidated Financial Statements Intra-Entity Asset Transactions

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

Consolidated Financial Statements - Ownership Patterns and Income Taxes

Segment and Interim Reporting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Worldwide Accounting Diversity and International Accounting Standards

Financial Reporting and the Securities and Exchange Commission

Accounting for Legal Reorganizations and Liquidations

Partnerships: Formation and Operation

Partnerships: Termination and Liquidation

Accounting for State and Local Governments

Accounting for State and Local Governments

Accounting and Reporting for Private Not-For-Profit Organizations

Filters