Chapter 11 – College and University Accounting – Private Institutions
11-1
CHAPTER 11 College and University Accounting – Private Institutions
11-1. ANSWERS WILL VARY DEPENDING ON STATEMENTS OBTAINED.
11-2.
A. PUBLIC (GOVERNMENT–OWNED) COLLEGES AND UNIVERSITIES.
1. GASB
2. STATEMENT OF NET POSITION, STATEMENT OF REVENUES, EXPENSES AND CHANGES IN
3. NET INVESTMENT IN CAPITAL ASSETS, RESTRICTED NET POSITION, AND UNRESTRICTED NET
POSITION.
1. FASB
2. STATEMENT OF FINANCIAL POSITION, STATEMENT OF ACTIVITIES, AND STATEMENT OF
3. UNRESTRICTED NET ASSETS, TEMPORARILY RESTRICTED NET ASSETS, AND PERMANENTLY
1. FASB
2. STATEMENT OF FINANCIAL POSITION (BALANCE SHEET), INCOME STATEMENT, STATEMENT
3. PAID IN CAPITAL AND RETAINED EARNINGS.
11-3.
A. THE THREE NET ASSET CLASSIFICATIONS, REQUIRED BY FASB STANDARDS, ARE (1)
UNRESTRICTED, (2) TEMPORARILY RESTRICTED, AND (3) PERMANENTLY RESTRICTED.
Chapter 11 – College and University Accounting – Private Institutions
11-2
11-3 (C) (CONTINUED).
C. ENDOWMENTS MAY BE CLASSIFIED AS PERMANENTLY RESTRICTED, TEMPORARILY
RESTRICTED OR UNRESTRICTED:
• PERMANENTLY RESTRICTED: AN ENDOWMENT IS A PERMANENT FUND, A FUND THAT WILL
D. 1. WHEN AN ENDOWMENT GIFT IS RECEIVED IN CASH, AN ENTRY IS MADE DEBITING CASH
(OR OTHER ASSETS) AND CREDITING CONTRIBUTIONS–PERMANENTLY RESTRICTED (A
2. IN 2014, THE GIFT WOULD BE RECORDED AS A DEBIT TO CASH (OR OTHER ASSET) AND A
CREDIT TO CONTRIBUTIONS–TEMPORARILY RESTRICTED, A REVENUE ACCOUNT. IN 2015,
3. IN 2014, THE GIFT WOULD BE RECORDED AS A DEBIT TO CASH (OR OTHER ASSET) AND A
CREDIT TO CONTRIBUTIONS–TEMPORARILY RESTRICTED, A REVENUE ACCOUNT. WHEN
Chapter 11 – College and University Accounting – Private Institutions
11-3
11-4.
A. A CHARITABLE LEAD TRUST IS A SPLIT–INTEREST AGREEMENT WHEREBY A NOT–FOR–PROFIT
ORGANIZATION WILL RECEIVE PERIODIC PAYMENTS, AND AT THE END OF THE TRUST
AGREEMENT, THE TRUST PRINCIPAL WILL REVERT TO THE DONOR OR A BENEFICIARY. IF THE
NOT–FOR–PROFIT RECEIVES THE TRUST ASSETS, IT WILL RECORD THOSE ASSETS AT FAIR
VALUE IN THE TEMPORARILY RESTRICTED NET ASSET CLASS, A REVENUE EQUAL TO THE
ORGANIZATION HOLDS THE ASSETS, THE ASSETS WOULD BE RECORDED AT FAIR VALUE
WHEN RECEIVED. THE PRESENT VALUE OF THE ANTICIPATED PAYMENTS TO THE DONOR OR
BENEFICIARY WOULD BE RECORDED AS A LIABILITY; THE REMAINDER WOULD BE RECORDED
AS A TEMPORARILY RESTRICTED REVENUE. YEAR TO YEAR CHANGES WOULD BE RECORDED
AS CHANGES IN THE VALUE OF SPLIT–INTEREST AGREEMENTS.
Chapter 11 – College and University Accounting – Private Institutions
11-5 (A).
DEBITS
CREDITS
1.
CASH
ACCOUNTS RECEIVABLE
REVENUES-UNRESTRICTED-STUDENT TUITION AND FEES
REVENUES-UNRESTRICTED-STATE APPROPRIATION
REVENUES-UNRESTRICTED-SALES AND SERVICES OF
AUXILIARY ENTERPRISES
8,500,000
2,350,000
6,800,000
550,000
3,500,000
2.
TUITION DISCOUNT-UNRESTRICTED-STUDENT AID
ACCOUNTS RECEIVABLE
950,000
950,000
3A.
REVENUES-UNRESTRICTED-STUDENT TUITION AND FEES
ALLOWANCE FOR DOUBTFUL ACCOUNTS
25,000
25,000
3B.
ALLOWANCE FOR DOUBTFUL ACCOUNTS
ACCOUNTS RECEIVABLE
20,000
20,000
4.
CASH
REVENUES-UNRESTRICTED-CONTRIBUTIONS
REVENUES-TEMPORARILY RESTRICTED-CONTRIBUTIONS
REVENUES-PERMANENTLY RESTRICTED-CONTRIBUTIONS
3,900,000
600,000
2,000,000
1,300,000
5.
RECLASSIFICATION FROM TEMPORARILY RESTRICTED NET
ASSETS-EXPIRATION OF TIME RESTRICTIONS
RECLASSIFICATION FROM TEMPORARILY RESTRICTED NET
ASSETS-SATISFACTION OF PROGRAM RESTRICTIONS
RECLASSIFICATION TO UNRESTRICTED NET ASSETS–
EXPIRATION OF TIME RESTRICTIONS
RECLASSIFICATION TO UNRESTRICTED NET ASSETS–
SATISFACTION OF PROGRAM RESTRICTIONS
530,000
700,000
530,000
700,000
RESEARCH EXPENSE
CASH
700,000
700,000
6.
CASH
REVENUES-UNRESTRICTED–INVESTMENT INCOME ON
ENDOWMENTS
REVENUES-TEMPORARILY RESTRICTED-INVESTMENT
INCOME ON ENDOWMENTS
REVENUES-PERMANENTLY RESTRICTED-INVESTMENT
365,000
150,000
200,000
15,000
7.
CASH
REVENUES-TEMPORARILY RESTRICTED-CONTRIBUTIONS
2,000,000
2,000,000
Chapter 11 – College and University Accounting – Private Institutions
11-5 (A) (CONTINUED).
DEBITS
CREDITS
8.
PROPERTY, PLANT, AND EQUIPMENT
CASH
1,300,000
1,300,000
RECLASSIFICATIONS FROM TEMPORARILY RESTRICTED
NET ASSETS-SATISFACTION OF PLANT ACQUISITION
RESTRICTIONS
RECLASSIFICATIONS TO UNRESTRICTED NET
ASSETS-SATISFACTION OF PLANT ACQUISITION
RESTRICTIONS
1,300,000
1,300,000
9.
CASH
LONG-TERM INVESTMENTS
GAIN ON SALE OF LONG-TERM INVESTMENTS–
PERMANENTLY RESTRICTED
2,150,000
2,000,000
150,000
LONG-TERM INVESTMENTS
CASH
2,150,000
2,150,000
10.
INSTRUCTION EXPENSE
RESEARCH EXPENSE
PUBLIC SERVICE EXPENSE
ACADEMIC SUPPORT EXPENSE
STUDENT SERVICES EXPENSE
INSTITUTIONAL SUPPORT EXPENSE
AUXILIARY ENTERPRISE EXPENSE
CASH
ACCOUNTS PAYABLE
5,000,000
1,200,000
300,000
200,000
600,000
700,000
3,400,000
10,900,000
500,000
11.
INSTRUCTION EXPENSE
INSTITUTIONAL SUPPORT EXPENSE
AUXILIARY ENTERPRISE EXPENSE
ACCUMULATED DEPRECIATION-PROPERTY,
PLANT, AND EQUIPMENT
200,000
200,000
200,000
600,000
12.
FIRE LOSS-UNRESTRICTED
CASH
230,000
230,000
Chapter 11 – College and University Accounting – Private Institutions
11-5 (A) (CONTINUED).
DEBITS
CREDITS
13A.
REVENUES-UNRESTRICTED-STUDENT TUITION FEES
REVENUES-UNRESTRICTED-STATE APPROPRIATION
REVENUES-UNRESTRICTED-SALES AND SERVICES OF
AUXILIARY ENTERPRISES
REVENUES-UNRESTRICTED-CONTRIBUTIONS
REVENUES-UNRESTRICTED–INVESTMENT INCOME ON
ENDOWMENTS
RECLASSIFICATION TO UNRESTRICTED NET ASSETS–
EXPIRATION OF TIME RESTRICTIONS
RECLASSIFICATION TO UNRESTRICTED NET ASSETS–
SATISFACTION OF PROGRAM RESTRICTIONS
RECLASSIFICATION TO UNRESTRICTED NET ASSETS–
SATISFACTION OF PLANT ACQUISITION RESTRICTIONS
INSTRUCTION EXPENSE
RESEARCH EXPENSE
PUBLIC SERVICE EXPENSE
ACADEMIC SUPPORT EXPENSE
STUDENT SERVICES EXPENSE
INSTITUTIONAL SUPPORT EXPENSE
AUXILIARY ENTERPRISE EXPENSE
FIRE LOSS
TUITION DISCOUNT-UNRESTRICTED-STUDENT AID
NET ASSETS-UNRESTRICTED
6,775,000
550,000
3,500,000
600,000
150,000
530,000
700,000
1,300,000
5,200,000
1,900,000
300,000
200,000
600,000
900,000
3,600,000
230,000
950,000
225,000
13B.
REVENUES-TEMPORARILY RESTRICTED-CONTRIBUTIONS
REVENUES-TEMPORARILY RESTRICTED–INVESTMENT
INCOME ON ENDOWMENTS
RECLASSIFICATIONS FROM TEMPORARILY
RESTRICTED NET ASSETS-EXPIRATION OF TIME
RESTRICTIONS
RECLASSIFICATIONS FROM TEMPORARILY RESTRICTED
4,000,000
200,000
530,000
RESTRICTED
NET ASSETS-PERMANENTLY RESTRICTED
150,000
1,465,000
Chapter 11 – College and University Accounting – Private Institutions
11-5 (B).
ST. ANN’S COLLEGE
STATEMENT OF UNRESTRICTED REVENUES, EXPENSES AND
OTHER CHANGES IN UNRESTRICTED NET ASSETS
YEAR ENDED JUNE 30, 2015
UNRESTRICTED REVENUES:
NET TUITION AND FEES
STATE APPROPRIATION
CONTRIBUTIONS
INVESTMENT INCOME ON ENDOWMENTS
SALES AND SERVICES OF AUXILIARY ENTERPRISES
TOTAL REVENUES
$ 5,825,000
550,000
600,000
150,000
3,500,000
10,625,000
NET ASSETS RELEASED FROM RESTRICTIONS:
EXPIRATION OF TIME RESTRICTIONS
SATISFACTION OF PROGRAM RESTRICTIONS
SATISFACTION OF PLANT ACQUISITION RESTRICTIONS
TOTAL NET ASSETS RELEASED FROM RESTRICTIONS
TOTAL UNRESTRICTED REVENUES AND OTHER SUPPORT
530,000
700,000
1,300,000
2,530,000
13,155,000
EXPENSES AND LOSSES:
EDUCATION AND GENERAL:
INSTRUCTION
RESEARCH
PUBLIC SERVICE
ACADEMIC SUPPORT
STUDENT SERVICES
INSTITUTIONAL SUPPORT
TOTAL EDUCATIONAL AND GENERAL EXPENSES
AUXILIARY ENTERPRISES
TOTAL EXPENSES
5,200,000
1,900,000
300,000
200,000
600,000
900,000
9,100,000
3,600,000
12,700,000
Chapter 11 – College and University Accounting – Private Institutions
11-5 (C).
ST. ANN’S COLLEGE
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED JUNE 30, 2015
TOTAL UNRESTRICTED REVENUES
NET ASSETS RELEASED FROM RESTRICTIONS
TOTAL UNRESTRICTED EXPENSES AND LOSSES
INCREASE IN UNRESTRICTED NET ASSETS
$10,625,000
2,530,000
(12,930,000)
225,000
TEMPORARILY RESTRICTED NET ASSETS:
CONTRIBUTIONS
INVESTMENT INCOME ON ENDOWMENTS
NET ASSETS RELEASED FROM RESTRICTIONS
INCREASE IN TEMPORARILY RESTRICTED NET ASSETS
4,000,000
200,000
(2,530,000)
1,670,000
PERMANENTLY RESTRICTED NET ASSETS:
CONTRIBUTIONS
INVESTMENT INCOME ON ENDOWMENTS
GAIN ON LONG-TERM INVESTMENTS
INCREASE IN PERMANENTLY RESTRICTED NET ASSETS
1,300,000
15,000
150,000
1,465,000
INCREASE IN NET ASSETS
NET ASSETS, JULY 1, 2014
NET ASSETS, JUNE 30, 2015
3,360,000
2,080,000
$ 5,440,000
Chapter 11 – College and University Accounting – Private Institutions
11-6.
CALVIN COLLEGE
GENERAL JOURNAL
YEAR ENDED JUNE 30, 2015
DEBITS
CREDITS
1.
CASH
REVENUES-PERMANENTLY RESTRICTED-CONTRIBUTIONS
800,000
800,000
INVESTMENTS
CASH
800,000
800,000
2.
CASH
REVENUES-UNRESTRICTED-CONTRIBUTIONS
400,000
400,000
INVESTMENTS
CASH
400,000
400,000
NET ASSETS: UNRESTRICTED: UNDESIGNATED
NET ASSETS: UNRESTRICTED: DESIGNATED FOR
QUASI-ENDOWMENT
400,000
400,000
3.
CASH
REVENUES-TEMPORARILY RESTRICTED-INVESTMENT
INCOME
REVENUES-UNRESTRICTED–INVESTMENT INCOME
54,000
36,000
18,000
4.
INVESTMENT
GAINS ON LONG-TERM INVESTMENTS-TEMPORARILY
RESTRICTED
12,000
12,000
YEAR ENDED JUNE 30, 2016
5.
RESEARCH EXPENSE
CASH
36,000
36,000
RECLASSIFICATIONS FROM TEMPORARILY RESTRICTED NET
ASSETS-SATISFACTION OF PROGRAM RESTRICTIONS
RECLASSIFICATIONS TO UNRESTRICTED NET ASSETS–
SATISFACTION OF PROGRAM RESTRICTIONS
36,000
36,000
Chapter 11 – College and University Accounting – Private Institutions
11-7.
CARNEGIE COLLEGE
GENERAL JOURNAL
2015
DEBITS
CREDITS
1.
CONTRIBUTIONS RECEIVABLE
REVENUES-TEMPORARILY RESTRICTED-CONTRIBUTIONS
20,000
20,000
2.
CASH
REVENUES-TEMPORARILY RESTRICTED-CONTRIBUTIONS
8,000
8,000
3.
RESEARCH EXPENSE
CASH
50,000
50,000
RECLASSIFICATIONS FROM TEMPORARILY RESTRICTED NET
ASSETS-SATISFACTION OF PROGRAM RESTRICTIONS
RECLASSIFICATIONS TO UNRESTRICTED NET ASSETS–
SATISFACTION OF PROGRAM RESTRICTIONS
50,000
50,000
NOTE: UNDER FASB GUIDELINES, THE PRESUMPTION IS THAT RESTRICTED FUNDS MUST
BE USED FIRST, IF THOSE FUNDS ARE AVAILABLE. THE INSTITUTION HAS NO
CHOICE.
4.
RECLASSIFICATIONS FROM TEMPORARILY RESTRICTED NET
ASSETS-EXPIRATION OF TIME RESTRICTIONS
RECLASSIFICATIONS TO UNRESTRICTED NET ASSETS–
EXPIRATION OF TIME RESTRICTIONS
65,000
65,000
5.
PROPERTY, PLANT, AND EQUIPMENT
CASH
620,000
620,000
RECLASSIFICATIONS FROM TEMPORARILY RESTRICTED NET
ASSETS-SATISFACTION OF PP&EQ ACQUISITION
RESTRICTIONS
RECLASSIFICATIONS TO UNRESTRICTED NET ASSETS–
SATISFACTION OF PP&EQ ACQUISITION RESTRICTIONS
500,000
500,000
Chapter 11 – College and University Accounting – Private Institutions
11–11
11-8 (A)
LEE COLLEGE
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31, 2015
REVENUES
UNRESTRICTED
TEMPORARILY
RESTRICTED
PERMANENTLY
RESTRICTED
TOTAL
NET TUITION AND FEES
$ 10,625,000
$ 10,625,000
CONTRIBUTIONS
100,000
$ 1,500,000
$ 2,540,000
4,140,000
UNRESTRICTED INCOME ON ENDOWMENTS
40,000
40,000
SALES AND SERVICES OF AUXILIARY ENTERPRISES
5,500,000
5,500,000
GRANT REVENUE
970,000
970,000
GAINS ON LONG–TERM IN VESTMENTS
750,000
750,000
NET ASSETS RELEASED FROM RESTRICTION
SATISFACTION OF PLANT ACQUISITION RESTRICTION
1,080,000
(1,080,000)
–
SATISFACTION OF PROGRAM RESTRICTIONS
720,000
(720,000)
–
TOTAL REVENUES
18,065,000
670,000
3,290,000
22,025,000
EXPENSES
INSTRUCTION EXPENSES
7,000,000
7,000,000
RESEARCH EXPENSES
4,500,000
4,500,000
PUBLIC SERVICE EXPENSE
1,200,000
1,200,000
AUXILIARY ENTERPRISES
3,725,000
3,725,000
STUDENT SERVICES
150,000
150,000
INSTITUTIONAL SUPPORT
1,600,000
1,600,000
TOTAL EXPENSES
18,175,000
18,175,000
INCREASE (DECREASE) IN NET ASSETS
(110,000)
670,000
3,290,000
3,850,000
NET ASSETS JANUARY 1
1,000,000
300,000
1,760,000
3,060,000
NET ASSETS DECEMBER 31
$ 890,000
$ 970,000
$ 5,050,000
$ 6,910,000
Chapter 11 – College and University Accounting – Private Institutions
11–12
11-8 (B).
LEE COLLEGE
STATEMENT OF UNRESTRICTED REVENUES, EXPENSES AND
OTHER CHANGES IN UNRESTRICTED NET ASSETS
YEAR ENDED JUNE 30, 2015
UNRESTRICTED REVENUES:
NET TUITION AND FEES
$ 10,625,000
CONTRIBUTIONS
100,000
UNRESTRICTED INCOME ON ENDOWMENTS
40,000
SALES AND SERVICES OF AUXILIARY ENTERPRISES
5,500,000
TOTAL REVENUES
16,265,000
NET ASSETS RELEASED FROM RESTRICTIONS:
SATISFACTION OF PROGRAM RESTRICTIONS
720,000
SATISFACTION OF PLANT ACQUISITION RESTRICTIONS
1,080,000
TOTAL NET ASSETS RELEASED FROM RESTRICTIONS
1,800,000
TOTAL UNRESTRICTED REVENUES AND OTHER SUPPORT
18,065,000
EXPENSES AND LOSSES:
EDUCATIONAL AND GENERAL:
INSTRUCTION
7,000,000
RESEARCH
4,500,000
PUBLIC SERVICE
1,200,000
STUDENT SERVICES
150,000
INSTITUTIONAL SUPPORT
1,600,000
TOTAL EDUCATIONAL AND GENERAL EXPENSES
14,450,000
AUXILIARY ENTERPRISES
3,725,000
TOTAL EXPENSES
18,175,000
INCREASE (DECREASE) IN UNRESTRICTED NET ASSETS
($110,000)