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W1-2-60-1-6

JOMO KENYATTA UNIVERSITY


OF
AGRICULTURE AND TECHNOLOGY
UNIVERSITY EXAMINATIONS 2016/2017

YEAR 3 SEMESTER II EXAMINATION FOR THE DEGREE OF BACHELOR OF


COMMERCE

HBA 2306: TRUST AND EXECUTORSHIP ACCOUNTING

DATE: December 2016 TIME: 2 HOURS

INSTRUCTION: Answer Question ONE And Any Other Two Questions.

QUESTION ONE (30 marks)

a) I come from a polygamous family, the firstborn from my deceased fathers second wife.
Before his death, father had made a WILL produced after his death. My younger
brother and I were not considered in this WILL even though we are entirely dependent
on him. No explanation was given though, according to our mother we were deemed lazy
and indiscipline, thus the disentitlement. I would like to know whether the court can
interfere with the provisions of the written WILL for our sake.
Required;
Draft a reply to the above question. (10marks)
b) Jacob Juma (deceased) died on 31/10/2014 and left his estate as follow

Ksh

Household furniture 45,000


10,000 ordinary shares of shs 10
each in BAT (K) ltd 150,000
Cash 126,000
Investments at 5% on freehold
Property shares (interest thereon paid
on 30/6/2014 200,000
Shares in business of Jacob Juma 613,200
Debtors 10,000
Liabilities and Funeral expenses 7,500

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Additional information
i) Shs10,000 was bequeathed to his executor and was paid on 28/1/2015
ii) Household furniture sold on 15/12/2015 for shs48,000
iii) Shares were sold on 15/12/2014 at shs14.50 Ex-dividend, a dividend being
received on 25/1/2015 for the year ended 31/12/2015
iv) Interest on investment in Freehold property was received on 31/12/2014
v) The shares of Jacob Juma Business was received on 31/12/2014 with interest of
5% p.a.
vi) The liabilities and funeral expenses were discharged on 20/12/2014 on which date
shs8,000 of the debtors due were received
Required
a) Journal entries to record the above transaction (5marks)
b) Estate CAPITAL accounts (8marks)
c) Estate cash A/c (5marks)
d) Estate income A/c (2marks)

QUESTION TWO (20 marks)

a) Write short notes on the following;


i) Will (2marks)
ii) Testate succession (2marks)
iii) Intestate succession (2marks)
iv) Probate (2marks)
v) Abatement (2marks)
b) Discuss why some Testamentary gifts may fail. (10marks)

QUESTION THREE (20 marks)

a) With reference to Kenya law, discuss various types of Trusts (10marks)


b) Discuss the certainities that must be met for a trust to be valid (10marks)
QUESTION FOUR (20 marks)

Mr. Ole Tipis (deceased) estate comprises

a) Personal effects shs2,200,000


b) Net intestate estate ksh11,000,000

Ole Tipis Beneficiaries are as follows

House Name of children

Jane (alive) David, Daniel and Damaris

Josephine (alive) John, and James

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Janet (alive) No children

Jackline (deceased) Elvis, Emmanuel and Emmaculate

Required;

Distribute Ole Tipis estate using the law of succession Cap 160 laws of Kenya.
(20marks)

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