You serve as the executor for the estate of Jeff Carpenter, who passed away on August 25,

Question:

You serve as the executor for the estate of Jeff Carpenter, who passed away on August 25, 2013, at the age of 102. Jeff's estate consisted of two certificates of deposit totalling $800,000 and a $15,000 balance in his checking account. Total accrued interest on the CDs at the date of death amounted to $7,000. Jeff left a valid will, which provided that most of the estate be inherited by his sole surviving nephew, J. J. Kara. The will further provided that $100,000 be transferred to a trust account for his faithful dog, Sooner XXV. Income from the trust would be used to care for Sooner. Upon Sooner's demise, the trust would end, and remaining trust principal would transfer to J. J. Kara. Jeff's personal effects were minimal and excluded from the estate. Ms. Colleen Ryan, a trust officer at the Oxford National Bank, serves as estate executrix and as fiduciary for the trust. Ms. Ryan determines that no federal or state inheritance taxes are due. The limited estate income is also free from any federal or state income tax. The following transactions occur during September 2013:

a. On September 12, received a check in the amount of $11,500, representing the normal semiannual interest payment on the certificates of deposit.

b. On September 13, cashed out the certificates of deposit for $800,000.

c. On September 15, transferred $100,000 to a trust account at Oxford National Bank to provide care for Sooner XXV. Also, on the way to the bank, sooner was dropped off at Puppy Paradise, his new home.

d. On September 18, paid funeral expenses for Jeff in the amount of $7,200.

e. On September 20, paid herself the $2,500 executor's fee specified in Jeff's will.

f. On September 28, finalized the estate and transferred the balance of the estate assets to Jeff's nephew, J. J. Kara.

REQUIRED

1. Prepare an estate inventory at the date of death.

2. Prepare journal entries to record the estate transactions during September.

3. Prepare the estate closing entries on September 28.

4. Prepare the charge-discharge statement for the estate of Jeff Carpenter for the period August 25 through September 28, 2013.

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Advanced Accounting

ISBN: 978-0133451863

12th edition

Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith

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