You Are Serving as the Trustee for the Paul Porter

question 2

Essay

You are serving as the trustee for the Paul Porter testamentary income trust.The trust was created by Paul's will.All of his assets were transferred to the trust to cover the living expenses of his wife,Paula.Upon her death,the assets are to be sold,with the proceeds distributed to his brother,Saul.If Saul is not alive when Paula passes,the proceeds are to go to the Porter Scholarship in Business Administration.
The probate court has ruled that all personal effects and household items could be excluded from the estate.All taxes have been paid,and the following assets remain to be transferred to the trust:
$\begin{array}{lcc}\text { Asset } & \text { Cost } & \text { Fair Market Value } \\\text { Cash } & \$ 160,000 & \$ 160,000 \\\text { Certificates of deposit } & 75,000 & 75,000 \\\text { ExTech Company common stock } & 22,000 & 216,000 \\\text { Rentall common stock } & 42,000 & 40,000 \\\text { Lake house (his share) } & 149,000 & 170,000 \\\text { Personal residence (his share) } & 226,000 & 280,000 \\\text { Antique sports car } & 35,000 & 46,000 \\\text { Coin collection } & 7,000 & 12,000\end{array}$
Required:
Prepare the journal entries for the creation of the trust.

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Definitions:

Direct Labor Hours

The sum of hours dedicated by employees directly linked to producing products or offering services.

Manufacturing Costs

Manufacturing costs refer to the total expenses involved in the process of producing goods, including direct materials, direct labor, and manufacturing overhead.

Journal Entries

The method used in bookkeeping to record all the financial transactions of a business.

Raw Materials

Fundamental substances used in the creation or manufacturing of goods.