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Trust fund Worksheet

Open Posted By: ahmad8858 Date: 08/01/2021 Graduate Dissertation & Thesis Writing

  

Background

An inter vivos trust was created by Isaac Posney. Isaac owned a large department store in Juggins, Utah. Adjacent to the store, Isaac also owned a tract of land that was used as an extra parking lot when the store was having a sale or during the Christmas season. Isaac expected the land to appreciate in value and eventually be sold for an office complex or additional stores. Isaac placed the land into a charitable lead trust, which would hold the land for ten years until Isaac's son would turn 21. At that time, title would be transferred to the son.  The store will pay rent to use the land during the interim. The income generated each year from this usage will be given to a local church. The land was currently valued at $416,000.

During the first year of this arrangement, the trustee recorded the following cash transactions:

  

Cash inflow:


 

Rental income


$78,000

 

Cash outflows:


 

Insurance


$ 5,200

 

Property taxes


7,800

 

Paving (considered an   extraordinary repair)


5,600

 

Maintenance


10,400

 

Distribution to income   beneficiary


39,000

Instructions

Prepare all required journal entries on the Trust Fund table for this trust fund including the entry to create the trust. 

  

Land



 

Trust – Principal 



 



 

Cash – Income



 

Trust – Income 



 



 

Insurance Expense – Income 



 

Cash – Income



 



 

Property Taxes Expense – Income 



 

Cash – Income



 



 

Land Improvements



 

Cash – Income



 



 

Due from Trust – Principal



 

Due to Trust – Income 



 



 

Maintenance Expense – Income



 

Cash – Income



 



 

Equity in Income: Beneficiary



 

Cash – Income



Category: Arts & Education Subjects: English literature Deadline: 12 Hours Budget: $120 - $180 Pages: 2-3 Pages (Short Assignment)