Question 1
Taylor Collins & Co., solicitors, are instructed by the executors of Doyle, deceased, to act in the administration of the estate generally. The whole of the net estate has been left to the widow of Doyle, and consists of a house valued at £50,000 and personalty valued at £42,000. There are various debts due by the estate, amounting to £1,496, together with a bank loan of £5,000 which is secured on the house. During the administration the following events take place:
| 1 March | Probate fees of £50 are paid by cheque. |
| 4 March | Grant received and registered with the bank, which transfers all moneys due by it to the deceased, amounting to £896, to the firm's bank account. |
| 5 March | At the request of the widow of Doyle, the executors instruct the firm to sell the house for £50,000, together with some of the contents, and, when feasible, to send a bank draft for £5,000 to a firm in Spain, which is dealing with the purchase of a villa for the widow. |
| 8 March | Cheque drawn on a client account for £20 in respect of statutory advertisements. The cost of the local advertisement (£12) is met out of petty cash. |
| 11 March | Proceeds of life policy (£3,500) received, together with cheque from the Portsmouth Building Society for £18,000 which closes that account. |
| 12 March | Some of the contents of the house are sold and a cheque for £3,250 is received in respect thereof. |
| 18 March | Exchanged contracts for the sale of the house, the deposit of £5,000 having been paid to the estate agent by the prospective purchaser. |
| 22 March | Paid the debts of £1,496 together with funeral expenses of £485. |
| 29 March | Received cheque (£11,900) in respect of the sale of units held in a unit trust by the deceased. |
| 12 April | Bank draft in respect of the widow's villa sent to firm in Spain, the full cost of the draft (£5,012) being charged to the firm's client bank account. |
| 16 April | The sale of the house is completed and a bank draft (£45,000) for the balance of purchase money is received. The bank loan is repaid which, together with accrued interest, amounted to £5,340. Received same day, from estate agents, the balance of the deposit on the house, less commission of £1,150 (including VAT). |
| 19 April | Bills of costs for the sale of the house, and for administration of the estate are agreed with the executors. The bill of costs for the sale of the house shows profit costs of £280 (plus VAT). The bill of costs for the administration of the estate shows profit costs of £600 (plus VAT) and disbursements. |
| 22 April | All moneys due to the firm from the estate are transferred to office account. |
| 23 April | Interest allowed by the firm of £410 is transferred to client account. The balance due is paid to Mrs Doyle. |
The rate of VAT is to be taken as 17.5%.
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Question 1
Show the account of the executors of Doyle, deceased. (Law Society Final Examination, amended.) Use this Word document to compile your answer. Have you completed the account? |
