MASENO UNIVERSITY

DEPARTMENT OF ACCOUNTING AND FINANCE

BAF 321: TRUST AND EXECUTORSHIP ACCOUNTS
TASK: CONTINUOUS ASSESSMENT TEST (PERSONAL)
Instructions:
(i) Attempt the Question on foolscap paper and present CLEAN scripts by 12th March,
2024 at 0900Hrs. Ensure you use a Ruler where applicable. Carelessly presented
work WILL NOT be collected.
(ii) Ensure you PERSONALLY collect and sign at the point of handing in the Answer Script.

Question
You are provided with the information below, relating to Mr. Michael Kebati’s estate. He passed
away on the 31 January, 2023;

Particulars Value at the time of

Testator’s death (Kshs)
Shareholding in Katumani (K) Ltd (Kshs.10 at par) 60,000,000
Savings at Housing Finance Ltd 10,084,000
House at Kileleshwa estate 48,000,000
Cash at Equity Bank Kenya Ltd 9,9330,000
Investment in shares at Kenya Airways Ltd(Kshs.10 at 70,000,000
par)
General assorted assets 7,200,000
10% Treasury bonds (Kshs.120,000,000 at par) 84,000,000
Total burial costs 2,092,000
Interest receivable from Housing Finance Ltd savings 78,000

It was established that he had left behind a will with his lawyer, which contained the following
details;
(i) The house at Kileleshwa estate, general assorted assets, entire shares held at
Katumani (K) Ltd and Kenya Airways Ltd were to be granted to his wife, Maximilla
(ii) Each of his sons, that is, Frank, Fred and Federico were to be given Kshs.2,400,000
each.
(iii) Maximilla was to be given Kshs.30,000,000 besides the property in (i) above.
Additionally, she was to be given the residue of the estate and any other money
accruing from the proceeds from his estate.
(iv) His brother and sister, Peter and Mildred were to be respectively given Kshs.10M from
Treasury bonds and Kshs.20,000,000 from general estate
(v) Angel, his daughter was to be given his yatch at Mombasa port, valued at
Kshs.42,000,000
(vi) His friend Bagamoyo was to be given Kshs.4,800,000

Before the will could be executed, the following discoveries were established;
(i) The yatch in Mombasa had been sold for Kshs.36,000,000 in 2021.
(ii) The 10% Treasury bills had been disposed off one year before the testator’s death
 (iii) Fred and Mildred had predeceased him, with Fred leaving behind Anthony and Rex
who were both working by the time Mr. Kebati passed on.
(iv) The events below took place by 1 May, 2023;
 By the last day of February, 2023, a dividend of Kshs.1 per share was received from
Kenya Airways, while on 31 March, 2023, a total of Kshs.82,000,000 arising from
sale of 10% Treasury Bonds was received.
 All burial costs and expenses among other outstanding debts were paid on 1 May,
2023. Also on the same day, all the interest accruing from investment at Housing
Finance Ltd together with another Kshs.5M was withdrawn from that account.
 The exercise of sharing off the entire instructions as contained in the Will was
finalized by close of business on 1 May, 2023.

Required;

Prepare Mr. Kebati’s

(a) Estate Capital Account
(b) Cash Account