Explain and account for the distinction between principal and income in the context of estate and trust accounting.

Q: When recording the inventory of an estate, the assets of the estate are recorded net of the…

A: Inventory is regarded as the items that are kept in a business that are used for sales or the…

Q: What assets are normally included as estate properties?

A: Probate laws: After the death of a decedent, in order to seek the problems of how his property…

Q: accounting income and taxable income?

A: Accounting Income -: Accounting Income is the revenue a firm earns or keeps after paying off all…

Q: At what value are the assets within an estate reported?

A: Assets: Assets are those items that provide value for money and future economic benefit for an…

Q: What capital gains are subject to capital gains taxation?

A: The  сарitаl  gаins  tаx  is  the  levy  оn  the  рrоfit  frоm  аn  investment  thаt  is  inсurred…

Q: Required: Determine the net taxable estate and the estate tax due.

A: Mr Lago A Philippines resident died on 30th Nov., 2020. We are given a list of the properties owned…

Q: What is the net effect of the foreclosing entries on the balance of the owner's capital account?

A: Owner’s capital account is the one that shows the net amount that the owner has invested in the…

Q: Explain and what is the calculation of the following. Total Assessable income Deductions Total…

A: Tax has to be paid by all people and entities whose income or earnings crosses that minimum tax…

Q: Types of Trusts?

A: The types of trusts as follows: Living trust: One of the usually shaped trust is an inter vivos…

Q: What do the financial statements of the acquirer include?

A: In consolidation or merger or acquisition there is an acquirer and an acquiree The acquire purchases…

Q: Define Charitable remainder trust.

A: Trust: Trust is normally created by the decent person that establishes a trust that holds the…

Q: kable income and accounting inco epreciation expense terest expense

A: Taxable income refers to the money earned by an entity on which the government levied a mandatory…

Q: What transactions are normally viewed as changes in the principal of an estate? What transactions…

A: Change in Principal:  The most common adjustments to the principal of the estate are:  Improvement…

Q: Explain the distinction/s between custodial funds and trust funds. What financial statements…

A:

Q: How can the Gains and Losses on Depreciable Assets be determined?

A: For calculation of gains or losses on depreciable assets, written down value of the assets at the…

Q: Income Taxation What did you learn in the subject income taxation

A: Learning from income tax   1) Income tax collection is maintained by the internal revenue services…

Q: Accounting for property dividends and accounting for property payables explanation and example.

A: Answer: Accounting for Property dividends covers the dividend paid to investors in form of assets.…

Q: What is the income under accrual basis?

A: Accrual basis is method used by the company to record its transaction in the books. In this method,…

Q: What is the role of trusts in estate planning?

A: The process of managing the assets of an individual or an organization until the death of the…

Q: Why is the distinction between principal and income so important in accounting for most trusts?

A: Meaning of trusts A trust refers to a legal arrangement between the trustee or third party and the…

Q: How do you identify an asset with reference to AASB? How should an asset be recognized in the…

A: Assets are those which have future economic benefit which flow into the organisation. These must be…

Q: Which of the following accounts are used as income statement-like accounts in investment trust…

A: An income statement is one of the important financial statements of the company. It can be defined…

Q: the purpose of grossing up of Interests in calculating taxable income from Int

A: Taxable income refers to the sum value of money gained by an entity on which the government implies…

Q: What are the general requirements regarding income, investments, and dividends with which a REIT…

A: Introduction: Real estate investment trust is a company that owns or primarily operates real estate…

Q: Please discuss the deductibility of real property taxes.

A: Local governments and municipal corporations collect property taxes annually from landowners.

Q: Describe the financial statements and journal entries utilized to account for estate and trust…

A:

Q: erence between financial income and taxable income?

A: 7 Correct answer :- A Premium paid for officers life insurance   8 Correct answer :- C The…

Q: How much must be received by the creditors, respectively

A: In the event of bankruptcy, creditors are paid in a proper order prescribed. First secured creditors…

Q: Why are claims against an estate put into an order of priority? To help the executor determine the…

A: There is a rule followed when someone passes away. The deceased assets are secured and distributed…

Q: income taxation of estates from the income taxation of trusts?

A:

Q: Explain the following terms. Include the definition, how they are calculated, treated in the…

A: In addition to salaries, many companies offer other benefits to their employees such as pension…

Q: Compare and contrast the basis of property acquired via purchase, conversion from personal use to…

A: Cost basis for personal assets converted to business assets:Cost basis refers to the unrealized cost…

Q: What is the permanent difference between pretax accounting income and taxable income?

A: A permanent difference is a difference between pretax financial income and taxable income in an…

Q: Explain the principles and purpose of taxation.

A: Principles form a basis for running of taxation system while purpose determines the need for…

Q: Valuation is applied to this specific object so that a proper computation of rental charges can be…

A: It's true valuation is made of some object like building, office, machines or land etc. All these…

Q: Explain the difference between pretax financial income and taxable income.

A: Pretax financial income: Income that is computed based on the records and documents presented by an…

Q: Describe the method of Accounting for Depreciation and Income Taxes?

A: Generally Accepted Accounting Principles (GAAP): Generally Accepted Accounting Principles are the…

Q: Determine the amount of recognized gain or loss. Explain whether the gain or loss is capital or…

A: Recognized Gain/loss on asset  = 325,000+196,000-605,000-27,000+315,000 = 204,000

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.