LooseLeaf for Advanced Accounting (Irwin Accounting) - Standalone book
13th Edition
ISBN: 9781259444951
Author: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
Publisher: McGraw-Hill Education
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Question
Chapter 19, Problem 37P
a.
To determine
Pass
a.
Expert Solution
Explanation of Solution
The following journal entries to be made by Ms. S’s estate for the given transaction:
Date | Accounts title and Explanation | Post Ref. | Debit ($) | Credit ($) |
a. | For recording claims of $80,000 for various debts: | |||
(Entry is made only at the time of actual payment) | ||||
b. | Interest Income: | |||
Cash-principal | 5,000 | |||
Cash-Income | 7,000 | |||
Interest Receivable on Bonds | 5,000 | |||
Estate Income | 7,000 | |||
(Being out of total $12,000 interest income received $5,000 had been earned prior to death) | ||||
c. | Ordinary Repairs Paid: | |||
Estate Income ordinary Repairs | 6,000 | |||
Cash-Income | 6,000 | |||
(Being repairs costing $6,000 towards rental property is paid) | ||||
d. | All debts paid: | |||
Debts of the decent | 80,000 | |||
Cash-Principal | 80,000 | |||
(Being all the debt prior to death are paid off) | ||||
e. | Cash principal | 19,000 | ||
Stock | 16,000 | |||
Gain on Realization Principal | 3,000 | |||
(Being stock recorded at $16,000 sold at $19,000) | ||||
f. | Rental Income: | |||
Cash-principal | 2,000 | |||
Cash-Income | 12,000 | |||
Rental Income Receivable on Property | 2,000 | |||
Estate Income | 12,000 | |||
(Being out of $14,000 rental income $12,000 had been earned prior to death as decent realized) | ||||
g. | Cash distributed to Ms. J: | |||
Legacy-Ms. J | 6,000 | |||
Cash principal | 6,000 | |||
(Being cash distributed to Ms. J as beneficiary) | ||||
h. | Distribution of life Insurance policy collection to Ms. A:- | |||
Cash-principal | 200,000 | |||
Life Insurance policy Receivable | 200,000 | |||
Distribution: | ||||
Legacy to Ms. A | 200,000 | |||
Cash principal | 200,000 | |||
(Being proceeds as life insurance distributed as specified in will | ||||
i. | Funeral Expenses Paid: | |||
Funeral Expenses | 10,000 | |||
Cash principal | 10,000 | |||
(Being Funeral Expenses are paid) | ||||
j. | Principal Assets transferred to trustee: | |||
Principal Assets transferred to trustee | 534,000 | |||
Cash principal | 230,000 | |||
Personal Property | 130,000 | |||
Rental Property | 90,000 | |||
Investment in Stock | 84,000 | |||
(Being remaining assets transferred to the trustee) |
Table: (1)
b.
To determine
Prepare the charge and discharge statement.
b.
Expert Solution
Explanation of Solution
The charge and discharge statement is as follows:
Estate of R Charge and discharge statement | ||
Principal | Amount($) | Amount($) |
As to Principle | ||
Change myself with: | ||
Estate Principle | 820,000 | |
Gain on sale of Stock | 3,000 | |
Total Charge | 823,000 | |
Credited myself with: | ||
Debts | 80,000 | |
Funeral Expenses | 10,000 | |
Legacies Distributed: | ||
Ms. J (Cash) | 6,000 | |
Ms. A(Life insurance policy proceeding) | 200,000 | |
Total | 206,000 | |
Total Credits | 296,000 | |
Estate Principal | 527,000 | |
Estate Principal | ||
Cash | 230,000 | |
Investment in Stock | 84,000 | |
Rental Property | 90,000 | |
Personal Property | 130,000 | |
As to Income | ||
Change myself with: | ||
Interest income | 7,000 | |
Rental Income | 12,000 | |
Total charge | 19,000 | |
Credit myself with: | ||
Repair Expenses | 6,000 | |
Balance as to Income | 13,000 |
Table: (2)
Working Note:-
Principal Estate Calculation:
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Chapter 19 Solutions
LooseLeaf for Advanced Accounting (Irwin Accounting) - Standalone book
Ch. 19 - Prob. 1QCh. 19 - Prob. 2QCh. 19 - Prob. 3QCh. 19 - Prob. 4QCh. 19 - Prob. 5QCh. 19 - Prob. 6QCh. 19 - Prob. 7QCh. 19 - Prob. 8QCh. 19 - What claims against an estate have priority?Ch. 19 - Prob. 10Q
Ch. 19 - Prob. 11QCh. 19 - Prob. 12QCh. 19 - Prob. 13QCh. 19 - How is the federal estate tax computed?Ch. 19 - Prob. 15QCh. 19 - Prob. 16QCh. 19 - Prob. 17QCh. 19 - Prob. 18QCh. 19 - Prob. 19QCh. 19 - Prob. 20QCh. 19 - Prob. 21QCh. 19 - Prob. 22QCh. 19 - Prob. 23QCh. 19 - Prob. 24QCh. 19 - Prob. 25QCh. 19 - Prob. 26QCh. 19 - Prob. 27QCh. 19 - Prob. 28QCh. 19 - Prob. 29QCh. 19 - Prob. 30QCh. 19 - Prob. 1PCh. 19 - Prob. 2PCh. 19 - Prob. 3PCh. 19 - Prob. 4PCh. 19 - Prob. 5PCh. 19 - Prob. 6PCh. 19 - Prob. 7PCh. 19 - Prob. 8PCh. 19 - Prob. 9PCh. 19 - Prob. 10PCh. 19 - Which of the following is a specific legacy? a....Ch. 19 - Prob. 12PCh. 19 - Prob. 13PCh. 19 - Prob. 14PCh. 19 - Prob. 15PCh. 19 - Prob. 16PCh. 19 - Prob. 17PCh. 19 - Prob. 18PCh. 19 - Prob. 19PCh. 19 - Prob. 20PCh. 19 - Prob. 21PCh. 19 - Prob. 22PCh. 19 - Prob. 23PCh. 19 - Prob. 24PCh. 19 - Prob. 25PCh. 19 - Prob. 26PCh. 19 - Prob. 27PCh. 19 - Prob. 28PCh. 19 - Prob. 29PCh. 19 - Prob. 30PCh. 19 - Prob. 31PCh. 19 - Prob. 32PCh. 19 - Prob. 33PCh. 19 - Prob. 34PCh. 19 - Prob. 35PCh. 19 - Prob. 36PCh. 19 - Prob. 37PCh. 19 - Prob. 38PCh. 19 - Prob. 39PCh. 19 - Prob. 40PCh. 19 - Prob. 41PCh. 19 - Prob. 42PCh. 19 - Prob. 1DYSCh. 19 - Prob. 2DYSCh. 19 - Prob. 3DYSCh. 19 - Prob. 4DYSCh. 19 - Prob. 5DYS
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