<u>Solution and Explanation:</u>
a. <u>Accounting income is computed below:
</u>
Taxable interest 12,000.00
Rental income 30,000.00
Long term capital gain 0.00
Long term capital loss 0.00
Fees 0.00
Less: depreciation -2,800.00
Trust accounting income 39,200.00
<u>b.</u> One half of fiducary's fee = 6500 divided by 2 = 3250. This amount will be allocated to accounting income of the trust.
Taxable interest 12,000.00
Rental income 30,000.00
Long term capital gain 4,000.00
Long term capital loss -1,100.00
Fees -3,250.00
Depreciation -2,800.00
Trust accounting income 38,850.00
