INSTRUCTIONS FOR FORM 2
ESTATE CASH RECEIPTS AND DISBURSEMENTS RECORD
When to Complete Form 2
The estate Cash Receipts and Disbursements Record (Form 2) is a combination checkbook-journal. A separate Form 2 should be maintained for each checking account, savings account, or Certificate of Deposit. No Form 2 is necessary until the bank account is opened.
Rollovers of individual Certificate of Deposits should be reported on the same Form 2. Should the trustee choose to keep any other type of account or investment vehicle, such choice should be discussed in advance of implementation with the United States Trustee and arrangements should be made for record keeping and reporting.
All transactions must be entered on Form 2, in chronological order, as soon as they occur. The trustee should not wait and enter transactions from the monthly bank statements.
Form 2 submissions should contain all transactions from the beginning of the case until the end of the reporting period.
How to Complete Form 2
The trustee should enter the case number, case name, tax identification number, period ending date, trustee name, bank name, account number and bond amount (per case limit if blanket bond and amount of separate bond, if applicable). Individual debtor social security numbers should not be listed as the estate tax identification number.
Column 1: Transaction Date
Column 1 is the date that the transaction occurred. For deposits, it is the date that the funds were sent or taken to the bank for deposit, rather than the date that the funds were received by the trustee or the date that the deposit cleared the bank. For disbursements, it is the date the trustee wrote (or printed) the check, rather than the date that the check cleared the bank.
Column 2: Check or Reference Number
Column 2 is the check number if the entry is for a payment made from estate funds or the reference number entered on Form 1, if the entry is for a deposit or an item returned for insufficient funds ("NSF").
Column 3: Paid to/Received From
Column 3 is the name of the payer or payee.
Column 4: Description of Transaction
Column 4 is a complete description of the transaction, for example: "payment to auctioneer per 3/2/98 order," "sale of 1995 Dodge Intrepid subject to National Bank security interest per 4/15/98 notice," or "transfer of funds to savings account #09-43-02."
If the trustee receives a "net" check, that is, one which represents the gross sale price minus such deductions as lien pay-offs, exemptions or expenses, Column 4 should list the gross amount of the sale and all individual deductions. In that way, Column 4 will contain the information needed to reconcile the net amount received by the trustee with the gross sales price shown on Form 1. This situation most often arises when a broker or attorney receives the gross proceeds of sale and makes distributions for liens and expenses prior to presenting a net check to the trustee. In this type of situation, do not enter the gross amount in Column 5 Deposit because the amount shown as being deposited will not correspond to any bank statement. The net amount received by the trustee should be entered in Column 5.
For Certificates of Deposit, if the CD number changes when the CD is renewed or rolled over, the new CD number is recorded in Column 4.
Column 5: Deposit
Column 5 records the deposits received in the case.
Certificate of Deposit interest should only be recorded on Form 2 when earned and deposited in the bank account. It should not be estimated and recorded on Form 2 when the CD maturity date does not coincide with the reporting cut-off date.
Transfers into the account from another estate account are recorded in Column 5.
If a deposited item is returned for insufficient funds ("NSF") or an item was deposited in error to the estate, the reversal or correction should be recorded as a negative figure in Column 5 and the the entry should be explained in Column 4, Description of Transaction.
Column 6: Disbursement
Column 6 records the disbursements made in the case. Transfers out of the account to another estate account are also recorded in Column 6.
If it is necessary to void a disbursement check, the reversal/correction should be recorded as a negative amount in Column 6 and the entry should be explained in Column 4, Description of Transaction.
Column 7: Checking, Savings, or Certificate of Deposit Balance
Column 7 is the running balance in the checking, savings or certificate of deposit account.
At the end of the Form 2 for each account, the trustee should enter subtotals for Columns 5 and 6 and then show the deduction of bank transfers and payments to debtors to arrive at the net receipts and net disbursements for the account. On the last page of all Form 2s, the trustee should recap the net receipts, net disbursements, and account balances for all estate accounts in the case. These calculations will assist in determining trustee compensation and bonding requirements. The computations are illustrated in the sample Form 2s.
Handbook for Chapter 7 Trustees
Page Last Updated on March 19, 1999.
United States Trustee Program/Department of Justice