Chapter 15 – Accounting for Colleges and Universities
15–27
Ch. 15, Solutions, 15-19 (Cont’d)
b. SOUTH STATE UNIVERSITY
STATEMENT OF NET POSITION
JUNE 30, 2017
ASSETS
CASH $ 134,700
ACCOUNTS RECEIVABLE (NET OF
DOUBTFUL ACCOUNTS OF $17,000) 297,300
INTEREST RECEIVABLE 1,250
LIABILITIES
ACCOUNTS PAYABLE 75,000
NET POSITION
NET INVESTMENT IN CAPITAL ASSETS 1,310,000
General Problem Information: Private university transactions
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
15–28
Ch. 15, Solutions (Cont’d)
15-20 a. PRIVATE UNIVERSITY
Debits Credits
1. GRANT RECEIVABLE 500,000
CONTRIBUTIONS—TEMPORARILY RESTRICTED 500,000
2. CASH 500,000
CONTRIBUTIONS—PERMANENTLY RESTRICTED 500,000
Chapter 15 – Accounting for Colleges and Universities
15–29
Ch. 15, Solutions, 15-20 (Cont’d)
b. PUBLIC UNIVERSITY
Debits Credits
1. The grant cannot be used until 2018; therefore, the time requirement has
not been met and recognition is deferred.
2. CASH 500,000
REVENUE—GIFTS AND GRANTS 500,000
(Note that public colleges and universities do not recognize the restriction
in the recording, but would report the $500,000 as restricted net position,
nonexpendable.)
Chapter 15 – Accounting for Colleges and Universities
15–30
Ch. 15, Solutions, 15-20 (Cont’d)
Debits Credits
(Note that public colleges and universities have a separate capital asset
classification for infrastructure.)
(Note that public colleges and universities often use the same NACUBO
(Note that private colleges and universities directly adjust the revenue
account for bad debts while public colleges and universities typically use a
contra-revenue account.)
General Problem Information: Public and private university transactions
Learning Objective: 15-1
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
15–31
Ch. 15, Solutions (Cont’d)
15-21. a. ALLEN UNIVERSITY
STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2017
Temporarily
Permanently
Unrestricted
Restricted
Restricted
Total
Revenues and gains:
Student tuition and fees
(net)*
$ 963,750
$ 963,750
Contributions
310,200
$177,000
$150,000
637,200
Grants and contracts
324,000
324,000
Investment income
50,500
29,500
80,000
Auxiliary Enterprises
153,560
153,560
Gain on sale of investments
70,000
70,000
Unrealized gain on
investments
125,440
17,920
35,840
179,200
Other revenue
13,250
13,250
Net assets released from
restrictions
426,850
(426,850)
0
Total revenues and gains
2,113,550
121,570
185,840
2,420,960
Expenses and losses:
Educational and general
expenses:
Instruction
1,044,630
1,044,630
Research
571,800
571,800
Academic support
240,560
240,560
Student services
193,000
193,000
Institutional support
203,360
203,360
Total educational and
general expense
2,253,350
2,253,350
Auxiliary enterprises
158,700
158,700
Total expenses and losses
2,412,050
2,412,050
Total change in net assets
(298,500)
121,570
185,840
8,910
Net assets, beginning of the
year
3,353,110
340,600
980,000
4,673,710
Net assets, end of the year
$3,054,610
$462,170
$1,165,840
$4,682,620
* net of $327,000 in Tuition & Fees Discount and Allowances.
Chapter 15 – Accounting for Colleges and Universities
15–32
Ch. 15, Solutions, 15-21 (Cont’d)
b.
ALLEN UNIVERSITY
STATEMENT OF FINANCIAL POSITION
JUNE 30, 2017
Assets
Cash and cash equivalents
$ 516,600
Tuition and fees receivable (net of doubtful accounts of $75,600)
296,800
Pledges receivable (net of doubtful pledges of $79,000)
144,000
Investments (at fair value)
3,200,000
Property, plant and equipment (net of accumulated depreciation
of $658,720)
1,537,440
Total assets
$5,694,840
Liabilities and Net Assets
Liabilities:
Accounts payable
103,000
Accrued liabilities
37,500
Deposits held in custody for others
17,570
Unearned revenue
62,150
Bonds payable
792,000
Total liabilities
1,012,220
Net Assets:
Unrestricted
3,054,610
Temporarily restricted
462,170
Permanently restricted
1,165,840
Total net assets
4,682,620
Total liabilities and net assets
$5,694,840
Chapter 15 – Accounting for Colleges and Universities
15–33
Ch. 15, Solutions, 15-21 (Cont’d)
c.
ALLEN UNIVERSITY
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2017
Cash Flows from Operating Activities:
Increase in net assets: $ 8,910
Adjustments to reconcile increase in net assets to net cash
used by operating activities:
Increase in tuition and fees receivable (net) (9,460)
Decrease in pledges receivable 1,560
Decrease in accounts payable (2,900)
General Problem Information: Private university trial balance to 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
15–34
Ch. 15, Solutions (Cont’d).
15-22. a. WILSON STATE COLLEGE
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
FOR THE YEAR ENDED JUNE 30, 2017
(AMOUNTS IN THOUSANDS)
Revenues:
Operating revenues:
Student tuition and fees (net of discount & allowances)
$ 22,530
Grants and contracts
18,196
Auxiliary enterprises
14,595
Total operating revenue
55,321
Expenses:
Operating expenses:
Academic support
58,940
Institutional support
26,268
Scholarships and fellowships expenses
7,664
Depreciation expense
5,580
Auxiliary enterprises
12,197
Total operating expenses
110,649
Operating loss
(55,328)
Nonoperating revenues (expenses):
State appropriation
44,894
Investment income
1,745
Interest expense
(378)
Net nonoperating revenues
46,261
Income before other revenues, expenses, gains or losses
(9,067)
Capital appropriations
12,785
Increase in net position
3,718
Net position, beginning of the year
285,662
Net position, end of the year
$289,380
Chapter 15 – Accounting for Colleges and Universities
15–35
Ch. 15, Solutions, 15-22 (Cont’d)
b. WILSON STATE COLLEGE
STATEMENT OF NET POSITION
AS OF JUNE 30, 2017
(AMOUNTS IN THOUSANDS)
Assets
Current assets:
Cash and cash equivalents
$ 3,278
Investments
29,387
Accounts receivable (net of allowance for uncollectible accounts
of $137)
1,820
Due from state
79,626
Inventories
869
Total current assets
114,980
Noncurrent assets:
Cash and cash equivalents-restricted
6,716
Restricted investments
71,883
Depreciable capital assets (net of accumulated depreciation of
$28,850)
155,770
Nondepreciable capital assets
89,481
Total noncurrent assets
323,850
Total assets
438,830
Liabilities and Net Position
Current liabilities:
Accounts payable
2,306
Accrued liabilities
2,039
Unearned revenue
13,789
Compensated absences—current portion
1,538
Total current liabilities
19,672
Noncurrent liabilities:
Compensated absences
37,662
Bonds Payable
92,116
Total noncurrent liabilities
129,778
Total liabilities
149,450
Net position:
Net investment in capital assets
153,135
Restricted for nonexpendable:
Endowment
39,959
Restricted for expendable:
Debt service
1,307
Capital projects
52,272
Unrestricted
42,707
Total net position
$289,380
Chapter 15 – Accounting for Colleges and Universities
15–36
Ch. 15, Solutions, 15-22 (Cont’d)
c. WILSON STATE COLLEGE
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2017
(DOLLARS IN THOUSANDS)
Cash Flows from Operating Activities
Cash received for tuition and fees (net)
$ 23,609
Grants and contracts
12,940
Cash received from auxiliary enterprises
13,765
Payments to employees
(58,220)
Payments to vendors
(21,711)
Payments for scholarships and fellowships
(7,664)
Net cash used in operating activities
(37,281)
Cash Flows from Noncapital Financing Activities
State appropriations
39,894
Cash Flows from Capital and Related Financing Activities
Capital appropriations
20,540
Purchases of capital assets
(20,634)
Interest paid on capital debt
(2,095)
Net cash used in capital and related financing activities
(2,189)
Cash Flows from Investing Activities
Investment income
1,503
Net increase in cash
1,927
Cash and cash equivalents, beginning of the year
1,351
Cash and cash equivalents, end of the year
$ 3,278
General Problem Information: Public university trial balance to FS
Learning Objective: 15-4
Topic: Reporting and Accounting Issues
Reconciliation of Net Operating Revenues (Expenses) to Net
Cash Used by Operating Activities
Operating loss
$(55,328)
Adjustments to reconcile net loss to net cash used by
operating activities:
Depreciation expense
5,580
Change in assets and liabilities:
Accounts receivable, net
(2,551)
Due from state
14,842
Inventories
(23)
Accounts payable and accrued liabilities
1,962
Unearned revenue
(1,763)
Net cash used in operating activities
$(37,281)
Chapter 15 – Accounting for Colleges and Universities
15–37
Ch. 15, Solutions, 15-22 (Cont’d)
Bloom’s Taxonomy: Apply
Accreditation Skills tag: AACSB: Knowledge Application, AICPA: FN: Reporting
Level of Difficulty: Hard