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Advanced Accounting
12th Edition
ISBN: 9781305084858
Author: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Publisher: Cengage Learning
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Chapter 20, Problem 4E
To determine
Principal and income distribution in trust: Trusts are not the company and it does not have its own property. The property that comes from the decedent is the property for trust and it has two components, they are principle and income.It is important to identify which is under principal and which is under income. Income distribution is not restricted and could be received easily but principal is restricted and its distribution is only made if beneficiary requires the support for health, education or maintenance.
The distribution principal and incomebalances.
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