Andy, Bobby, and Charlie are cousins. They decided to form an investment club. E

Question

Andy, Bobby, and Charlie are cousins. They decided to form an investment club. Each contributed $5,000 and the club purchased IBM stock.  Andy died last year.  At the time of his death, the stock had doubled in value.  How much will be included in his estate?  

Andy, Bobby, and Charlie are cousins. They decided to form an investment club. Each contributed $5,000 and the club purchased IBM stock. Andy died last year. At the time of his death, the stock had doubled in value. How much will be included in his estate?

Explanation / Answer

Since assets=liabilities+equity and the club presumably had no liabilities, the total initial equity of the club was 5000*3=15000. Since the stock purchased doubled, the club's value totaled 30000. Since Andy had a 1/3 stake in the club, the value of his stake at the time of his death was %10,000, which should be included in his estate

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---