Part 57

REVIEW QUESTIONS ON THE SUBJECT OF TRUSTEES' ACCOUNTS; STOCK BROKERS' ACCOUNTS

1. From an accounting standpoint, into what two classes can business be divided? What is the position of the trustee of an estate, as against the public?

2. Describe the essential features of the accounting of an executor.

3. In what two forms may an executor's accounts be kept? By what term are his accounts with properties known?

4. What are the proper classifications of an executor's accounts?

5. Two trustees collect in one year an income of $50,000.00 for a beneficiary, at an expense of $3,100.00. If each trustee receives an equal share, what commission should each receive, and what amount will be paid to the beneficiary, under the New York law? Prepare a complete solution of this problem.

6. Prepare a solution of the following: Four trustees collect and pay out of an estate the sum of $416,000.00, the total debts of the estate being $201,000.00. What commission will each trustee receive?

7. Prepare a statement of the executor's accounts—from the particulars given on Pages 17 and 18—showing the balance due each legatee.

8. What is a realization and liquidation account? How is it made up?

9. What is a statement of affairs? In what respect does it differ from a balance sheet?

10. How does a statement of affairs of a bankrupt differ from that of a going concern?

11. What is the purpose of a deficiency account?

12. Wm. Andrews, finding himself on July 1st unable to meet his obligations, asks you to make up his statement of affairs for submission to his creditors, and a deficiency account for his own information. You find from his books and other sources the following facts regarding his business:

Unsecured creditors $9,000.00 Fully secured creditors 2,300.00 Holding securities of the value of $3,000.00 Partly secured creditors 35,000.00 Holding securities of the value of $20,000.00 Preferred claims 800.00 Bills payable 20,000.00 Accounts receivable, home office (good) 1,000.00 " " (doubtful) $200.00, estimated to realize 75.00 " " (bad) $300.00 Stock, Home Office, cost $1,500.00, estimated to realize 1,200.00 Stock and accounts receivable, less sundry liabilities, at branches 36,000.00 Of which it is estimated there will be a loss on realization of stock $6,000.00, of accounts receivable $9,000.00. Buildings and equipment at branches, cost $40,000.00, estimated to realize 20,000.00 Office furniture $300.00, estimated to realize 200.00 Cash in office 4.00 Cash in bank 80.00 Bonds held by fully secured creditors 3,000.00 Stocks held by partly secured creditors 20,000.00

Six years ago Andrews' capital was $42,000.00. The profits for the first three years appear to have been $3,000.00, $4,000.00, and $5,284.00, and the losses for the three subsequent years $1,500.00, $2,500.00, and $3,000.00, after allowing $2,000.00 a year for interest on capital. His withdrawals have been at the rate of $4,000.00 a year. From these particulars, prepare a statement of affairs and a deficiency account.

13. What differences exist between a transaction for the purchase or sale of stock, and the purchase or sale of grain?

14. Explain a ring settlement.

15. What is necessary to post to the customer's ledger account, and from what sources do you post?

16. Show form of margin book and explain how it is kept.

17. In what cases should interest be charged? What is it charged for?

18. What should be entered in the general cash book?

19. Explain fully the handling of office cash.

20. If A bought 5,000 bushels of wheat at $1.20, and sold 12,000 bushels at $1.21, how much cash would he be obliged to deposit to secure the fulfillment of his orders?

21. What is the cash which he deposits called?

22. Write an order form for the sale of 25,000 bushels of corn @ 76¼c made upon the orders of Mr. D.

23. Show what acknowledgment must be made to Mr. D.

24. What is the daily record sheet? For what purpose is it used? Explain the entries in this book.

25. Explain how stock purchases should be handled, what records should be kept, and what information in regard to them is necessary.