Chapter 11 – College and University Accounting – Private Institutions
11–13
11-8 (B CONTINUED).
LEE COLLEGE
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED JUNE 30, 2015
TOTAL UNRESTRICTED REVENUES
$ 16,265,000
NET ASSETS RELEASED FROM RESTRICTION
1,800,000
TOTAL UNRESTRICTED EXPENSES AND LOSSES
(18,175,000)
INCREASE (DECREASE) IN UNRESTRICTED NET ASSETS
(110,000)
TEMPORARILY RESTRICTED NET ASSETS:
CONTRIBUTIONS
1,500,000
GRANT INCOME
970,000
NET ASSETS RELEASED FROM RESTRICTIONS
(1,800,000)
INCREASE IN TEMPORARILY RESTRICTED NET ASSETS
670,000
PERMANENTLY RESTRICTED NET ASSETS:
CONTRIBUTIONS
2,540,000
GAINS ON LONG TERM INVESTMENTS
750,000
–
INCREASE IN TEMPORARILY RESTRICTED NET ASSETS
3,290,000
INCREASE IN NET ASSETS
3,850,000
NET ASSETS, JULY 1, 2014
3,060,000
NET ASSETS, JULY 30, 2015
$ 6,910,000
Chapter 11 – College and University Accounting – Private Institutions
11–14
11-9 (A). SOLUTIONS TO THE EXCEL BASED EXERCISES ARE ALSO AVAILABLE IN EXCEL ON
THE INSTRUCTOR’S WEBSITE
KORNER COLLEGE
GENERAL JOURNAL – YEAR ENDED JUNE 30, 2015
JOURNAL ENTRIES
DEBITS
CREDITS
1
CASH
6,416,000
ACCOUNTS RECEIVABLE
1,227,000
ACCRUED INTEREST RECEIVABLE
49,000
CONTRIBUTIONS RECEIVABLE – OTHER
3,085,000
CONTRIBUTIONS RECEIVABLE – PP&EQ
1,900,000
LOANS TO STUDENTS AND FACULTY
155,000
2
ACCOUNTS PAYABLE
130,000
LONG-TERM DEBT: CURRENT INSTALLMENT
150,000
CASH
280,000
3
CASH
33,690,000
ACCOUNTS RECEIVABLE
3,500,000
ACCRUED INTEREST RECEIVABLE
50,000
REVENUES-UNRESTRICTED-TUITION AND FEES
21,740,000
REVENUES-UNRESTRICTED-UNRESTRICTED INCOME
ON ENDOWMENT INVESTMENTS
400,000
REVENUES-UNRESTRICTED-OTHER INVESTMENT INCOME
300,000
REVENUES-UNRESTRICTED-SALES AND SERVICES OF
AUXILIARY ENTERPRISES
14,800,000
4
TUITION DISCOUNT-UNRESTRICTED-STUDENT AID
2,700,000
ACCOUNTS RECEIVABLE
2,700,000
5
CASH
7,020,000
CONTRIBUTIONS RECEIVABLE
5,280,000
REVENUES-UNRESTRICTED-CONTRIBUTIONS
4,900,000
REVENUES-TEMPORARILY RESTRICTED-CONTRIBUTIONS
5,400,000
REVENUES-PERMANENTLY RESTRICTED-CONTRIBUTIONS
2,000,000
6
ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
50,000
ALLOWANCE FOR UNCOLLECTIBLE CONTRIBUTIONS
20,000
ACCOUNTS RECEIVABLE
50,000
CONTRIBUTIONS RECEIVABLE
20,000
REVENUES-UNRESTRICTED-TUITION AND FEES
175,000
REVENUES-UNRESTRICTED-CONTRIBUTIONS
30,000
ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
175,000
ALLOWANCE FOR UNCOLLECTIBLE CONTRIBUTIONS
30,000
Chapter 11 – College and University Accounting – Private Institutions
11–15
7
INSTRUCTION EXPENSE
18,460,000
RESEARCH EXPENSE
1,980,000
PUBLIC SERVICE EXPENSE
1,910,000
ACADEMIC SUPPORT EXPENSE
990,000
STUDENT SERVICES EXPENSE
1,310,000
INSTITUTIONAL SUPPORT EXPENSE
1,050,000
AUXILIARY ENTERPRISE EXPENSE
13,500,000
FLOOD LOSS
600,000
CASH
39,200,000
ACCOUNTS PAYABLE
600,000
8
INSTRUCTION EXPENSE
700,000
INSTITUTIONAL SUPPORT EXPENSE
700,000
AUXILIARY ENTERPRISE EXPENSE
700,000
ACCUMULATED DEPRECIATION
2,100,000
9
CASH
55,000
ACCRUED INTEREST RECEIVABLE
10,000
REVENUES-TEMPORARILY RESTRICTED-OTHER INVESTMENT INCOME
30,000
REVENUES-PERMANENTLY RESTRICTED-OTHER INVESTMENT INCOME
35,000
10
RESEARCH EXPENSE
1,700,000
PROPERTY, PLANT, AND EQUIPMENT
1,400,000
CASH
3,100,000
11
RECLASSIFICATIONS FROM TEMPORARILY RESTRICTED NET ASSETS:
– EXPIRATION OF TIME RESTRICTIONS
1,600,000
– SATISFACTION OF PROGRAM RESTRICTIONS
1,700,000
– SATISFACTION OF PP&EQ ACQUISITION
1,400,000
RECLASSIFICATIONS TO UNRESTRICTED NET ASSETS:
– EXPIRATION OF TIME RESTRICTIONS
1,600,000
– SATISFACTION OF PROGRAM RESTRICTIONS
1,700,000
– SATISFACTION OF PP&EQ ACQUISITION
1,400,000
12
CASH
1,770,000
LONG-TERM INVESTMENTS
1,700,000
GAIN ON LONG-TERM INVESTMENTS-TEMPORARILY RESTRICTED
40,000
GAIN ON LONG-TERM INVESTMENTS-PERMANENTLY RESTRICTED
30,000
13
LONG-TERM INVESTMENTS
3,970,000
LOANS TO STUDENTS AND FACULTY
200,000
CASH
4,170,000
14
LONG-TERM INVESTMENTS
2,000,000
CASH
2,000,000
NET ASSETS-UNRESTRICTED-UNDESIGNATED
2,000,000
NET ASSETS-UNRESTRICTED-BOARD DESIGNATED
2,000,000
Chapter 11 – College and University Accounting – Private Institutions
11–16
15
LONG-TERM INVESTMENTS
530,000
GAIN ON LONG-TERM INVESTMENTS-UNRESTRICTED
300,000
GAIN ON LONG-TERM INVESTMENTS-TEMPORARILY RESTRICTED
30,000
GAIN ON LONG-TERM INVESTMENTS-PERMANENTLY RESTRICTED
200,000
16
LONG–TERM DEBT NON–CURRENT PORTION
150,000
LONG–TERM DEBT –CURRENT PORTION
150,000
11-9 (A) (CONTINUED – CLOSING ENTRIES).
CLOSING ENTRIES
DEBITS
CREDITS
UNRESTRICTED
REVENUES-UNRESTRICTED-TUITION AND FEES
21,565,000
REVENUES-UNRESTRICTED-UNRESTRICTED INCOME ON ENDOWMENTS
400,000
REVENUES-UNRESTRICTED-OTHER INVESTMENT INCOME
300,000
REVENUES-UNRESTRICTED-SALES AND SERVICES OF AUXILIARY ENTERPRISES
14,800,000
REVENUES-UNRESTRICTED-CONTRIBUTIONS
4,870,000
GAIN ON LONG-TERM INVESTMENTS
300,000
RECLASSIFICATIONS TO UNRESTRICTED NET ASSETS–
EXPIRATION OF TIME RESTRICTIONS
1,600,000
SATISFACTION OF PROGRAM RESTRICTIONS
1,700,000
SATISFACTION OF PP&EQ ACQUISITION RESTRICTIONS
1,400,000
TUITION DISCOUNT-UNRESTRICTED-STUDENT AID
2,700,000
INSTRUCTION EXPENSE
19,160,000
RESEARCH EXPENSE
3,680,000
PUBLIC SERVICE EXPENSE
1,910,000
ACADEMIC SUPPORT EXPENSE
990,000
STUDENT SERVICES EXPENSE
1,310,000
INSTITUTIONAL SUPPORT EXPENSE
1,750,000
AUXILIARY ENTERPRISE EXPENSE
14,200,000
FLOOD LOSS
600,000
NET ASSETS-UNRESTRICTED–UNDESIGNATED
635,000
Chapter 11 – College and University Accounting – Private Institutions
11–17
TEMPORARILY RESTRICTED
REVENUES-TEMPORARILY RESTRICTED-CONTRIBUTIONS
5,400,000
REVENUES-TEMPORARILY RESTRICTED-OTHER INVESTMENT INCOME
30,000
GAINS ON LONG-TERM INVESTMENTS-TEMPORARILY RESTRICTED
70,000
RECLASSIFICATIONS FROM TEMPORARILY RESTRICTED NET ASSETS–
EXPIRATION OF TIME RESTRICTIONS
1,600,000
SATISFACTION OF PROGRAM RESTRICTIONS
1,700,000
SATISFACTION OF PP&EQ ACQUISITION RESTRICTIONS
1,400,000
NET ASSETS – TEMPORARILY RESTRICTED
800,000
PERMANENTLY RESTRICTED
REVENUES-PERMANENTLY RESTRICTED-CONTRIBUTIONS
2,000,000
REVENUES-PERMANENTLY RESTRICTED-OTHER INVESTMENT INCOME
35,000
GAINS ON LONG-TERM INVESTMENTS
230,000
NET ASSETS-PERMANENTLY RESTRICTED
2,265,000
Chapter 11 – College and University Accounting – Private Institutions
11–18
11-9 (B).
KORNER COLLEGE
STATEMENT OF UNRESTRICTED REVENUES, EXPENSES AND
CHANGES IN UNRESTRICTED NET ASSETS
FOR THE YEAR ENDED JUNE 30 2015
UNRESTRICTED REVENUES:
NET TUITION AND FEES
$
18,865,000
CONTRIBUTIONS
400,000
UNRESTRICTED INCOME ON ENDOWMENTS
300,000
OTHER INVESTMENT INCOME
14,800,000
SALES AND SERVICES OF AUXILIARY ENTERPRISES
4,870,000
GAIN ON LONG-TERM INVESTMENTS
300,000
TOTAL REVENUES
39,535,000
NET ASSETS RELEASED FROM RESTRICTIONS:
EXPIRATION OF TIME RESTRICTIONS
1,600,000
SATISFACTION OF PROGRAM RESTRICTIONS
1,700,000
SATISFACTION OF FIXED ASSET ACQUISITION RESTRICTIONS
1,400,000
TOTAL NET ASSETS RELEASED FROM RESTRICTIONS
4,700,000
TOTAL UNRESTRICTED REVENUES AND OTHER SUPPORT
44,235,000
EXPENSES AND LOSSES:
EDUCATIONAL AND GENERAL:
INSTRUCTION
19,160,000
RESEARCH
3,680,000
PUBLIC SERVICE
1,910,000
ACADEMIC SUPPORT
990,000
STUDENT SERVICES
1,310,000
INSTITUTIONAL SUPPORT
1,750,000
TOTAL EDUCATIONAL AND GENERAL EXPENSES
28,800,000
AUXILIARY ENTERPRISES
14,200,000
TOTAL EXPENSES
43,000,000
FLOOD LOSS
600,000
TOTAL EXPENSES AND LOSSES
43,600,000
INCREASE IN UNRESTRICTED NET ASSETS
$
635,000
Chapter 11 – College and University Accounting – Private Institutions
11–19
11-9 (C)
KORNER COLLEGE
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED JUNE 30 2015
TOTAL UNRESTRICTED REVENUES
$
39,535,000
NET ASSETS RELEASED FROM RESTRICTIONS
4,700,000
TOTAL UNRESTRICTED EXPENSES AND LOSSES
(43,600,000)
INCREASE IN UNRESTRICTED NET ASSETS
635,000
TEMPORARILY RESTRICTED NET ASSETS:
CONTRIBUTIONS
5,400,000
GAINS ON LONG-TERM INVESTMENTS
30,000
OTHER INVESTMENT INCOME
70,000
NET ASSETS RELEASED FROM RESTRICTIONS
(4,700,000)
INCREASE IN TEMPORARILY RESTRICTED NET ASSETS
800,000
PERMANENTLY RESTRICTED NET ASSETS:
CONTRIBUTIONS
2,000,000
GAINS ON LONG-TERM INVESTMENTS
35,000
INVESTMENT INCOME ON ENDOWMENT
230,000
INCREASE IN PERMANENTLY RESTRICTED NET ASSETS
2,265,000
INCREASE IN NET ASSETS
3,700,000
NET ASSETS, JULY 1, 2014
21,857,000
NET ASSETS, JULY 30, 2015
$
25,557,000
Chapter 11 – College and University Accounting – Private Institutions
11–20
11-9 (D).
KORNER COLLEGE
STATEMENT OF FINANCIAL POSITION
AS OF JUNE 30, 2015
ASSETS
CASH AND CASH EQUIVALENTS
$
551,000
ACCOUNTS RECEIVABLE (NET OF ALLOWANCE FOR DOUBTFUL ACCOUNTS)
931,000
ACCRUED INTEREST RECEIVABLE
60,000
CONTRIBUTIONS RECEIVABLE (NET OF ALLOWANCE FOR UNCOLLECTABLES)
5,170,000
LOANS TO STUDENTS AND FACULTY
395,000
LONG-TERM INVESTMENTS
20,300,000
PROPERTY, PLANT, AND EQUIPMENT
16,850,000
LESS: ACCUMULATED DEPRECIATION
9,600,000)
TOTAL ASSETS
$
34,657,000
LIABILITIES AND NET ASSETS
ACCOUNTS PAYABLE
600,000
LONG-TERM DEBT: CURRENT INSTALLMENT
150,000
LONG-TERM DEBT: NONCURRENT
8,350,000
TOTAL LIABILITIES
9,100,000
NET ASSETS:
UNRESTRICTED: BOARD DESIGNATED
4,815,000
OTHER UNRESTRICTED
2,035,000
TOTAL UNRESTRICTED
6,850,000
TEMPORARILY RESTRICTED
6,355,000
PERMANENTLY RESTRICTED
12,352,000
TOTAL NET ASSETS
25,557,000
TOTAL LIABILITIES AND NET ASSETS
$
34,657,000
Chapter 11 – College and University Accounting – Private Institutions
11–21
11-9 (E).
KORNER COLLEGE
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
CHANGE IN NET ASSETS
$
3,700,000
ADJUSTMENTS TO RECONCILE CHANGE IN NET ASSETS
TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
DEPRECIATION
2,100,000
DECREASE IN ACCOUNTS RECEIVABLE (NET OF ALLOWANCE)
602,000
INCREASE IN ACCRUED INTEREST RECEIVABLE
(11,000)
DECREASE IN CONTRIBUTIONS RECEIVABLE (NET OF ALLOWANCE)
(265,000)
INCREASE IN ACCOUNTS PAYABLE
470,000
GAINS ON LONG-TERM INVESTMENTS
(600,000)
CONTRIBUTIONS RESTRICTED TO INVESTMENT IN PROPERTY, PLANT AND EQUIPMENT
(1,900,000)
CONTRIBUTIONS RESTRICTED TO LONG-TERM INVESTMENT IN ENDOWMENTS
(2,000,000)
CASH FLOWS FROM OPERATING ACTIVITIES
2,096,000
CASH FLOWS FROM INVESTING ACTIVITIES:
ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT
(1,400,000)
PURCHASE OF INVESTMENTS
(5,970,000)
SALE OF INVESTMENTS
1,770,000
DISBURSEMENT OF LOANS TO STUDENTS AND FACULTY
(200,000)
REPAYMENT OF LOANS TO STUDENTS AND FACULTY
155,000
CASH FLOWS FROM INVESTING ACTIVITIES
(5,645,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
PROCEEDS FROM CONTRIBUTIONS RESTRICTED FOR:
INVESTMENT IN PROPERTY, PLANT, AND EQUIPMENT
1,900,000
INVESTMENT IN ENDOWMENTS
2,000,000
PAYMENTS ON LONG-TERM DEBT
(150,000)
CASH FLOWS FROM FINANCING ACTIVITIES
3,750,000
NET INCREASE IN CASH AND CASH EQUIVALENTS
201,000
CASH AND CASH EQUIVALENTS, JULY 1, 2014
350,000
CASH AND CASH EQUIVALENTS, JUNE 30, 2015
$
551,000
Chapter 11 – College and University Accounting – Private Institutions
11–22
11-10. (A). SOLUTIONS TO THE EXCEL BASED EXERCISES ARE ALSO AVAILABLE IN EXCEL ON
THE INSTRUCTOR’S WEBSITE
PART A
PRIVATE COLLEGE
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 12-31-2015
CASH FLOWS FROM OPERATING ACTIVITIES
CASH RECEIVED FROM STUDENTS
$ 1,551,000
CASH RECEIVE FROM STATE APPROPRIATIONS
700,000
CASH RECEIVED ON INVESTMENTS
66,000
CASH RECEIVED FROM FEDERAL GRANTS
175,000
CASH PAID TO EMPLOYEES
(1,200,000)
CASH PAID TO SUPPLIERS
(597,300)
CASH PAID FOR INTEREST
(19,700)
NET CASH PROVIDED BY OPERATING ACTIVITIES
675,000
CASH FLOWS FROM FINANCING ACTIVITIES
CONTRIBUTIONS FOR ENDOWMENT
105,700
PAYMENT OF PRINCIPAL ON LONG–TERM DEBT
(93,000)
NET CASH PROVIDED BY L FINANCING ACTIVITIES
12,700
CASH FLOWS FROM INVESTING ACTIVITIES
PURCHASE OF ENDOWMENT INVESTMENTS
(100,000)
PURCHASES OF EQUIPMENT
(292,000)
NET CASH PROVIDED FROM INVESTING ACTIVITIES
(392,000)
INCREASE IN CASH
295,700
CASH AND CASH EQUIVALENTS BEGINNING OF YEAR
850,000
CASH AND CASH EQUIVALENTS END OF YEAR
$ 1,145,700
RECONCILATION OF CHANGE IN NET ASSETS
NET CASH PROVIDED BY OPERATING ACTIVITIES
CHANGE IN NET ASSETS
$ 204,500
DEPRECIATION EXPENSE
525,000
DECREASE IN STUDENT ACCOUNTS RECEIVABLE
43,000
INCREASE IN ACCOUNTS PAYABLE
8,700
DECREASE IN INTEREST PAYABLE
(500)
CONTRIBUTIONS TO PERMANENTLY RESTRICTED ENDOWMENTS
(105,700)
NET CASH PROVIDED BY OPERATING ACTIVITIES
$ 675,000
Chapter 11 – College and University Accounting – Private Institutions
11–23
11-10 PART B
PUBLIC COLLEGE
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 12-31-2015
CASH FLOWS FROM OPERATING ACTIVITIES
CASH RECEIVED FROM STUDENTS
$ 1,551,000
CASH RECEIVED FROM FEDERAL GRANTS
175,000
CASH PAID TO EMPLOYEES
(1,200,000)
CASH PAID TO SUPPLIERS
(597,300)
NET CASH PROVIDED BY OPERATING ACTIVITIES
(71,300)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
CASH RECEIVE FROM STATE APPROPRIATIONS
700,000
CONTRIBUTIONS FOR ENDOWMENT
105,700
NET CASH PROVIDED BY NONCAPITAL FINANCING ACTIVITIES
805,700
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
ACQUISITION OF CAPITAL ASSETS
(292,000)
PRINCIPAL PAID ON LONG–TERM DEBT
(93,000)
INTEREST PAID ON LONG–TERM DEBT
(19,700)
NET CASH PROVIDED FROM CAPITAL AND RELATED FINANCING ACTIVITIES
(404,700)
CASH FLOWS FROM INVESTING ACTIVITIES
PURCHASE OF ENDOWMENT INVESTMENTS
(100,000)
CASH RECEIVED ON INVESTMENTS
66,000
NET CASH PROVIDED FROM INVESTING ACTIVITIES
(34,000)
INCREASE IN CASH
295,700
CASH AND CASH EQUIVALENTS BEGINNING OF YEAR
850,000
CASH AND CASH EQUIVALENTS END OF YEAR
$ 1,145,700
RECONCILATION OF OPERATING INCOME (LOSS) TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
OPERATING INCOME
$ (648,000)
DEPRECIATION EXPENSE
525,000
DECREASE IN STUDENT ACCOUNTS RECEIVABLE
43,000
INCREASE IN ACCOUNTS PAYABLE
8,700
NET CASH PROVIDED BY OPERATING ACTIVITIES
$ (71,300)