Question 1

The estate of Kent Talbert reported the following information:  Required:
Prepare a schedule to show the amount of the taxable estate.

Accepted Answer

The answer of The estate of Kent Talbert reported the...

Question 2

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 decedent resided in a state that does not treat a demonstrative legacy shortfall as a general legacy.How much would James have received from the estate?

Accepted Answer

A)  $50,000. 
B)  $40,000. 
C)  $25,000. 
D)  $45,000. 
E)  $30,000.

Question 3

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 4

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.
-Administrative expenses of $13,000 were paid.Prepare the journal entry to record the transaction.

Accepted Answer

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

Question 5

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

Accepted Answer

A)  1 only. 
B)  2 only. 
C)  3 only. 
D)  1 and 2. 
E)  1, 2, and 3.

Question 6

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

Accepted Answer

A)  Principal grantee. 
B)  Corpus benefitor. 
C)  Estate receiver. 
D)  Remainderman. 
E)  Estate distributee.

Question 7

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 decedent resided in a state that does not treat 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.

Question 8

A gift that is specified in a will as "I leave $5,000 in cash from my checking account to my daughter" is a

Accepted Answer

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

Question 9

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.

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

Accepted Answer

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

Question 11

Assume that Bob Smith dies on May 25, 2018.Mr.Smith's assets include the following: ABC Stock costing $30,000 but valued at $40,000; a house costing $280,000 but valued at $620,000; life insurance in the amount of $600,000; and cash from various sources totaling $50,700.Three credit cards in Mr.Smith's name had balances totaling $8,530 on the date of death.The estate paid funeral and final medical expenses in the amount of $50,492.There were no charitable gifts designated by the will, and Mr.Smith was single at the time of his death.What is the amount of the taxable estate?

Accepted Answer

A)  $ 901,678. 
B)  $1,251,678. 
C)  $1,268,738. 
D)  $1,310,700. 
E)  $ 651,678.

Question 12

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.

Question 13

Jim Bowie died on April 1, 2018.The estate has the following gross asset valuation information:  The estate tax will be calculated based on:

Accepted Answer

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

Question 14

What is meant by "an individual dies intestate"?

Accepted Answer

The answer of What is meant by "an individual dies...

Question 15

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?

Accepted Answer

A)  $ 320,000. 
B)  $ 520,000. 
C)  $ 550,000. 
D)  $1,480,000. 
E)  $1,520,000.

Question 16

Executor's fees and court costs for settling an estate usually

Accepted Answer

A)  Must be apportioned between the principal and the income of the estate. 
B)  Are adjustments to the principal of the estate. 
C)  Are adjustments to the income of the estate. 
D)  Are subtracted from life insurance proceeds. 
E)  Are ignored.

Question 17

Which type of trust requires that income generated from its assets be recognized, for federal income tax purposes, by the grantor during his or her lifetime, and reported in his or her individual income tax return?

Accepted Answer

A)  Inter vivos trust. 
B)  Grantor trust. 
C)  Revocable living trust. 
D)  Family trust. 
E)  Irrevocable life insurance trust.

Question 18

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 James is a

Accepted Answer

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

Question 19

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

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

Question 20

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.

Exam 19: A: Accounting for Estates and Trusts

The estate of Kent Talbert reported the following information: Required: Prepare a schedule to show the amount of the taxable 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

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

A gift that is specified in a will as "I leave $5,000 in cash from my checking account to my daughter" is a

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

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

Jim Bowie died on April 1, 2018.The estate has the following gross asset valuation information: The estate tax will be calculated based on:

What is meant by "an individual dies intestate"?

Executor's fees and court costs for settling an estate usually

Which type of trust requires that income generated from its assets be recognized, for federal income tax purposes, by the grantor during his or her lifetime, and reported in his or her individual income tax return?

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