Chapter 15 – Accounting for Colleges and Universities
15–16
Ch. 15, Solutions, 15-17 (Cont’d)
STEINER COLLEGE
GENERAL JOURNAL
Debits Credits
TUITION & FEES DISCOUNT AND ALLOWANCES 21,400
INSTRUCTION EXPENSE (trans. 1, 5 & 8) 121,880
Chapter 15 – Accounting for Colleges and Universities
15–17
Ch. 15, Solutions, 15-17 (Cont’d)
b. STEINER COLLEGE
STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2017
Temporarily
Permanently
Unrestricted
Restricted
Restricted
Total
Revenues and gains:
Student tuition and fees (net)*
$211,870
$211,870
Contributions
2,080
$ 550
$ 335
2,965
Investment income
1,890
2,070
3,960
Unrealized gain on investments
2,300
790
1,610
4,700
Net assets released from
restrictions
7,320
(7,320)
0
Total revenues and gains
225,460
(3,910)
1,945
223,495
Expenses and losses:
Educational and general
expenses:
Instruction
121,880
121,880
Academic support
31,220
31,220
Student services
37,700
37,700
Institutional support
28,500
28,500
Total expenses and losses
219,300
219,300
Total change in net assets
6,160
(3,910)
1,945
4,195
Net assets, beginning of the year
104,000
33,040
196,900
333,940
Net assets, end of the year
$110,160
$29,130
$198,845
$338,135
* net of $21,400 in Tuition & Fees Discount and Allowances
Chapter 15 – Accounting for Colleges and Universities
15–18
Ch. 15, Solutions, 15-17 (Cont’d)
c. STEINER COLLEGE
STATEMENT OF FINANCIAL POSITION
JUNE 30, 2017
Assets
Cash and cash equivalents
$ 7,758
Short-term investments
7,666
Tuition and fees receivable (net of doubtful accounts of $32)
710
Pledges receivable (net of doubtful pledges of $280)
5,602
Prepaid assets
830
Property, plant and equipment (net of accumulated depreciation
of $130,640)
255,004
Investments (at fair value, cost of $162,000)
163,100
Total assets
$440,670
Liabilities and Net Assets
Liabilities:
Accounts payable and accrued liabilities
1,935
Deposits held in custody for others
690
Unearned revenue
910
Bonds payable
99,000
Total liabilities
102,535
Net Assets:
Unrestricted
110,160
Temporarily restricted
29,130
Permanently restricted
198,845
Total net assets
338,135
Total liabilities and net assets
$440,670
General Problem Information: Private college transactions and FS
Learning Objective: 15-4
Topic: Reporting and Accounting Issues
Bloom’s Taxonomy: Apply
Accreditation Skills tag: AACSB: Knowledge Application, AICPA: FN: Reporting
Level of Difficulty: Hard
Chapter 15 – Accounting for Colleges and Universities
15–19
Ch. 15, Solutions (Cont’d)
15-18. a. ELIZABETH COLLEGE
GENERAL JOURNAL
Debits Credits
1. TUITION RECEIVABLE 5,254,000
TUITION & FEES DISCOUNT AND ALLOWANCES 69,600
INSTRUCTION EXPENSE 276,400
4. PLEDGES RECEIVABLE 1,090,000
CONTRIBUTIONS—TEMPORARILY RESTRICTED 790,000
CONTRIBUTIONS—PERMANENTLY RESTRICTED 300,000
(Note: pledges are collected in the future; therefore, pledges are subject to a
time (temporary) restriction)
Chapter 15 – Accounting for Colleges and Universities
15–20
Ch. 15, Solutions, 15-18 (Cont’d)
ELIZABETH COLLEGE
GENERAL JOURNAL
Debits Credits
8. EQUIPMENT 10,580
CASH 10,580
9. INSTRUCTION EXPENSE 3,566,040
ADADEMIC SUPPORT EXPENSE 1,987,000
NET ASSETS RELEASED FROM RESTRICTIONS—
TEMPORARILY RESTRICTED 450,000
NET ASSETS RELEASED FROM RESTRICTIONS—
UNRESTRICTED 450,000
Chapter 15 – Accounting for Colleges and Universities
15–21
Ch. 15, Solutions, 15-18 (Cont’d)
ELIZABETH COLLEGE
GENERAL JOURNAL
Debits Credits
INSTRUCTION EXPENSE 34,750
12. To close nominal accounts:
TUITION AND FEES⎯UNRESTRICTED 5,491,130
(trans. 1, 2 & 11)
CONTRIBUTIONS⎯UNRESTRICTED 1,891,000
AUXILIARY ENTERPRISES—UNRESTRICTED 94,370
UNREALIZED GAIN ON INVESTMENTS⎯
UNRESTRICTED 8,500
Chapter 15 – Accounting for Colleges and Universities
15–22
Ch. 15, Solutions, 15-18 (Cont’d)
ELIZABETH COLLEGE
GENERAL JOURNAL
Debits Credits
To reclassify Net Assets:
NET ASSETS—TEMPORARILY RESTRICTED 450,000
NET ASSETS RELEASED FROM RESTRICTIONS—
Chapter 15 – Accounting for Colleges and Universities
15–23
Ch. 15, Solutions, 15-18 (Cont’d)
b.
ELIZABETH COLLEGE
STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2017
Temporarily
Permanently
Unrestricted
Restricted
Restricted
Total
Revenues and gains:
Student tuition and fees (net)*
$5,421,530
$ 5,421,530
Contributions
1,891,000
$1,365,200
$1,300,000
4,556,200
Auxiliary Enterprises
94,370
94,370
Unrealized gain on investments
8,500
3,040
11,540
Net assets released from
restrictions
450,000
(450,000)
0
Total revenues and gains
7,865,400
915,200
1,303,040
10,083,640
Expenses and losses:
Educational and general
expenses:
Instruction
4,327,190
4,327,190
Academic support
1,999,450
1,999,450
Student services
87,980
87,890
Institutional support
501,130
501,130
Total educational and
general expense
6,915,750
6,915,750
Auxiliary enterprises
133,410
133,410
Total expenses and losses
7,049,160
7,049,160
Total change in net assets
816,240
915,200
1,303,040
3,034,480
Net assets, beginning of the year
7,518,000
200,000
5,000,000
12,718,000
Net assets, end of the year
$8,334,240
$1,115,200
$6,303,040
$15,752,480
* net of $69,600 in Tuition & Fees Discount and Allowances
General Problem Information: Private college transactions and FS
Learning Objective: 15-4
Topic: Reporting and Accounting Issues
Bloom’s Taxonomy: Apply
Accreditation Skills tag: AACSB: Knowledge Application, AICPA: FN: Reporting
Level of Difficulty: Hard
Chapter 15 – Accounting for Colleges and Universities
15–24
Ch. 15, Solutions (Cont’d)
15-19 a. SOUTH STATE UNIVERSITY
GENERAL JOURNAL
Debits Credits
1. ACCOUNTS RECEIVABLE—TUITION AND FEES 1,250,000
TUITION AND FEES DISCOUNT AND ALLOWANCES 250,000
REVENUES—TUITION AND FEES 1,500,000
3. NO JOURNAL ENTRY IS RECORDED—THE ELIGIBILITY REQUIREMENT
HAS NOT BEEN MET.
4. CASH 3,000,000
REVENUES—STATE APPROPRIATIONS 3,000,000
Chapter 15 – Accounting for Colleges and Universities
15–25
Ch. 15, Solutions, 15-19 (Cont’d)
SOUTH STATE UNIVERSITY
GENERAL JOURNAL
Debits Credits
9. EXPENSES—GENERAL 4,684,000
EXPENSES—RESEARCH 37,000
ACCOUNTS PAYABLE 4,721,000
Chapter 15 – Accounting for Colleges and Universities
15–26
Ch. 15, Solutions, 15-19 (Cont’d)
SOUTH STATE UNIVERSITY
GENERAL JOURNAL
Debits Credits
12. REVENUES—TUITION AND FEES 1,412,000
REVENUES—STATE APPROPRIATIONS 3,000,000
REVENUES—GIFTS AND GRANTS 837,000
REVENUES—CHANGES IN FAIR VALUE OF
INVESTMENTS 12,000