Counsell Is a Simple Trust That Correctly Uses the Calendar

question 112

Essay

Counsell is a simple trust that correctly uses the calendar year for tax purposes.Its income beneficiaries (Kathie,Lynn,Mark,and Norelle) are entitled to the trust's annual accounting income in shares of one-fourth each.For the current calendar year,the trust has ordinary business income of $40,000,a long-term capital gain of $20,000 (allocable to corpus),and a trustee commission expense of $4,000 (allocable to corpus).Use the format of Exhibit 20.5 in the text to address the following items.
a.How much income is each beneficiary entitled to receive?
b.What is the trust's DNI?
c.What is the trust's taxable income?
d.How much is taxed to each of the beneficiaries?

Differentiate between favorable and unfavorable variances and understand their financial implications.

Evaluate the efficiency of resource use through the calculation of direct materials and direct labor variances.

Understand the principles of imputed interest and its applicability in financial transactions.

Recognize the GAAP requirements for recording accounts and notes receivable.

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