Jason Jackson was killed in a mountain-climbing accident in British Columbia. As Jason’s trusted friend and CPA, you have been named executor of his estate and guardian to his minor child, Cody Jackson.
Jason’s estate consists of the following assets subject to probate:
Cash .. ... .. . . .. .. .. ... .. . . .. .. . .... .. .. .. . . . . . . . .. . . .. ... .... .. . . .. . . . . .... $ 15,000
Vacant land in Colorado.................................................................................. 130,000
Investment in Merkt stock. .. .. .. . . . . . .. .... .. .... . .. . . . . .. . . . . . .. .... .. . . . . . .. 54,000
Investment in GTE stock . . .. .. .. . . . . . .. .... .. .... . .. . . . . .. . . . . . .. .... .. . . . . . .. 13,000
Dividends declared on GTE stock .. . . . .. .. .... .. ... . . .. . . . . .. . . . .. .. .... .. . . . . . 1,000
Investment in Trident bond fund.. .. . . . .. .. .... .. ... . . .. . . . . .. . . . .. .. .... .. . . . . . 40,000
Accrued interest on Trident bond fund. . .... .. .. .. .. . . . . . .. . . .. . . . .... .. .. .. . . . . . 2,000
Royalties receivable.. ... .... .. . . .. . .. .... .. .. .. . .. . . . . .. . . .. . .. .... .. . . .. . .. 17,000
Required
Prepare journal entries to record the above inventory and the following events related to the estate principal and income:
1. Final medical and funeral expenses of $22,000 are paid.
2. An individual retirement account (IRA) naming Jackson’s estate as beneficiary and having a value of $37,000 subsequently is discovered.
3. Cash dividends of $1,000 on the GTE stock and $2,700 on the Merkt stock are received.
4. The vacant land in Colorado is sold for $150,000 less accrued property taxes of $2,000 and a broker’s commission of $8,000.
5. Interest of $2,400 is received on the Trident bond fund, and the royalty receivable is also collected.
6. Income taxes of $4,000 on the decedent’s final tax return are paid, along with $24,000 of other claims against the estate.
7. A legacy of $15,000 is paid to the High Adventure Climbing School.
8. Administrative expenses of $3,200 are paid, of which $100 is traceable to income.