Exam 19: Accounting for Estates and Trusts

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.

What is meant by estate accounting?

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 are the three goals of probate laws?

The party to receive a distribution of principal from an estate is legally called a(n):

Which of the following is normally viewed as an adjustment to the principal of an estate?

An executor will normally carry out all the following tasks except:

A gift that is specified in a will as "I leave $5,000 in cash to my son" 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. An additional savings account of $15,600 was located by the executor. Prepare the journal entry to record the transaction.

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 James have received from the estate?

A demonstrative legacy is a

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

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 the estate included 1,200 shares of Dorn stock, $22,000 cash in the savings account, and $70,000 in cash from other sources. What would the daughter 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 collection of rental income of $10,000. $1,000 had been earned prior to the decedent's death.

The estate of Bobbi Jones has the following provisions: total value of estate assets $2,000,000, amount specified to convey to a spouse $1,000,000, amount specified to convey to children $200,000, total debts 400,000, administrative expenses $50,000, and funeral expenses of $30,000. What is the value of the taxable estate?

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. Prepare the journal entry to record the property of the estate.

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 taxable income.

In a will, a devise is a

During the current year, an estate generates the following income amounts: Rental income $10,000, Interest income 4,000, Dividend income 6,000. The rental income is conveyed immediately to the beneficiary stated in the decedent's will. Dividends of $2,000 are donated to the decedent's church. What amount of federal income tax must be paid by the estate?

What are the goals of probate laws? (1) gather and preserve all of the decedent's property; (2) carry out an orderly and fair settlement of all debts; (3) discover and follow the decedent's intent for the remaining property.