REFERENCE: Ref.19_02 The Provisions of a Will Currently Undergoing Probate Are: "Two

question 72

Multiple Choice

REFERENCE: Ref.19_02
The provisions of a will currently undergoing probate are: "Two thousand shares of Dorn stock to my son;$30,000 in cash from my savings account to my brother;$50,000 in cash to my daughter;and any remaining property divided equally between my son and daughter."
-Assume that Bob Smith dies on May 25,2008.Mr.Smith's assets include the following: ABC Stock costing $30,000 but valued at $40,000;a house costing $280,000 but valued at $620,000;life insurance in the amount of $600,000;and cash from various sources totaling $50,700.Three credit cards in Mr.Smith's name had balances totaling $8,530 on the date of death.The estate paid funeral and final medical expenses in the amount of $50,492.There were no charitable gifts designated by the will,and Mr.Smith was single at the time of his death.What is the amount of the taxable estate?

• A)$901,678.
• B)$1,251,678.
• C)$1,268,738.
• D)$1,310,700.
• E)$2,000,000.

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Definitions:

Journalizing

The procedure of logging company transactions in a journal, forming a part of the cycle of accounting.

Debit

An accounting entry showing an increase in assets or expenses or a decrease in equity, liabilities, or revenue.

Credit

An accounting entry that increases liabilities or equity, or decreases assets, reflecting the value of transactions where goods, services, or cash are received.

Cash Account

A financial account that tracks the amount of cash inflows and outflows, representing the company's liquid assets.