Joyce Passed Away on January 3 While on an Extended

question 26

Multiple Choice

Joyce passed away on January 3 while on an extended holiday cruise celebrating a very successful, and most profitable, previous year. Joyce was the chief executive officer of the Quillip Corporation. After the independent audit of Quillip's last year's financial statements was completed in February of this year, Joyce's estate received a $1,000,000 bonus check resulting from last year's corporate profits. Joyce's estate also sold Quillip stock for $500,000 in February of this year. Joyce originally purchased this stock eight years ago for $10,000. The stock was valued at $495,000 on her date of death. Solely based on the above facts, how much income in respect of a decedent should Joyce's estate report in the current year?

• A)$1,485,000
• B)$1,000,000
• C)$485,000
• D)$5,000

---

Definitions:

Account Balances

The total amounts in financial accounts, reflecting the sum of all transactions like deposits and withdrawals, at any given time.

Exchange Rates

The valuation of one currency in terms of its equivalent in another currency.

U.S. Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, within the United States.

Accumulated Depreciation

The total amount of a tangible asset's cost that has been allocated as depreciation expense since the asset was put into use.