The Suarez Trust Generated Distributable Net Income (DNI) This Year

question 77

Multiple Choice

The Suarez Trust generated distributable net income (DNI) this year of $150,000, one-third of which was portfolio income, and the balance of which was exempt interest.Under the terms of the trust, Clara Suarez is to receive an annual income distribution of $30,000.At the discretion of the trustee, additional distributions can be made to Clara or to Clark Suarez III.This year, the trustee's distributions to Clara totaled $90,000.Clark also received $90,000.How much of the trust's DNI is assigned to Clara?

• A)$90,000.
• B)$78,000.
• C)$48,000.
• D)$30,000.

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Definitions:

Bad Debt Expense

An expense reported by businesses to cover accounts receivable that are unlikely to be collected.

Adjusting Entry

Journal entries made in the accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Written Instrument

A legal document delineating rights, duties, or liabilities, often used in financial and property transactions.

Formal

Pertains to actions, processes, or documents that are done in accordance with established or conventional rules.