Chapter 15 – Accounting for Colleges and Universities
15–21
Ch. 15, Solutions, Exercise 15-19 (Cont’d)
ELIZABETH COLLEGE
GENERAL JOURNAL
Debits Credits
5. CASH 94,370
AUXILIARY ENTERPRISES—WITHOUT DONOR
RESTRICTIONS 94,370
7. INVESTMENTS 1,000,000
CASH 1,000,000
9. INSTRUCTION EXPENSE 3,566,040
ADADEMIC SUPPORT EXPENSE 1,987,000
10. INSTRUCTION EXPENSE 450,000
CASH 450,000
Chapter 15 – Accounting for Colleges and Universities
15–22
Ch. 15, Solutions, Exercise 15-19 (Cont’d)
ELIZABETH COLLEGE
GENERAL JOURNAL
Debits Credits
11. INSTITUTIONAL SUPPORT EXPENSE 7,200
ALLOWANCE FOR DOUBTFUL ACCOUNTS 7,200
INVESTMENTS 11,540
UNREALIZED GAIN ON INVESTMENTS—
WITHOUT DONOR RESTRICTIONS 8,500
UNREALIZED GAIN ON INVESTMENTS—
WITH DONOR RESTRICTIONS—ENDOWMENT 3,040
Chapter 15 – Accounting for Colleges and Universities
15–23
Ch. 15, Solutions, Exercise 15-19 (Cont’d)
ELIZABETH COLLEGE
GENERAL JOURNAL
Debits Credits
12. To close nominal accounts:
TUITION AND FEES⎯WITHOUT DONOR
RESTRICTIONS (trans. 1 & 2) 5,498,330
CONTRIBUTIONS⎯WITHOUT DONOR
RESTRICTIONS 1,891,000
TUITION & FEES DISCOUNT AND ALLOWANCES 69,600
INSTRUCTION EXPENSE (trans. 1 & 9-11) 4,327,190
ACADEMIC SUPPORT EXPENSE (trans. 9 & 11) 1,999,450
STUDENT SERVICES EXPENSE 87,980
CONTRIBUTIONS⎯WITH DONOR RESTRICTIONS
⎯GRANTS 575,200
CONTRIBUTIONS⎯WITH DONOR RESTRICTIONS
⎯CAPITAL CAMPAIGN 573,200
Chapter 15 – Accounting for Colleges and Universities
15–24
Ch. 15, Solutions, Exercise 15-19 (Cont’d)
ELIZABETH COLLEGE
GENERAL JOURNAL
Debits Credits
CONTRIBUTIONS⎯WITH DONOR RESTRICTIONS
⎯ENDOWMENT (trans. 3 & 4) 1,300,000
To reclassify Net Assets:
NET ASSETS—WITH DONOR RESTRICTIONS 450,000
NET ASSETS RELEASED FROM RESTRICTIONS—
WITHOUT DONOR RESTRICTIONS 450,000
NET ASSETS—WITHOUT DONOR RESTRICTIONS 450,000
Chapter 15 – Accounting for Colleges and Universities
15–25
Ch. 15, Solutions, Exercise 15-19 (Cont’d)
b.
ELIZABETH COLLEGE
STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2023
Without Donor
Restrictions
With Donor
Restrictions
Total
Revenues and gains:
Student tuition and fees (net)*
$5,428,730
$ 5,428,730
Contributions
1,891,000
$2,665,200
4,556,200
Auxiliary Enterprises
94,370
94,370
Unrealized gain on investments
Net assets released from
restrictions
450,000
(450,000)
Total revenues and gains
10,090,840
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
87,980
Institutional support
508,330
508,330
Total educational and
general expense
6,922,950
6,922,950
Auxiliary enterprises
133,410
133,410
Total expenses and losses
Total change in net assets
816,240
3,034,480
Net assets, beginning of the year
Net assets, end of the year
$8,334,240
* net of $69,600 in Tuition & Fees Discount and Allowances
General Problem Information: Private college transactions and FS
Learning Objective: 15-4
Topic: Transactions and Financial Statements for Private Colleges and Universities
Bloom’s Taxonomy: Apply
Chapter 15 – Accounting for Colleges and Universities
15–26
15-20 a. SOUTH STATE UNIVERSITY
GENERAL JOURNAL
Debits Credits
1. ACCOUNTS RECEIVABLE—TUITION AND FEES 1,250,000
3. NO JOURNAL ENTRY IS RECORDED—THE ELIGIBILITY REQUIREMENT HAS
NOT BEEN MET.
5. CAPITAL ASSETS 525,000
CASH 525,000
7. EXPENSES—INTEREST 48,000
CASH 48,000
8. REVENUES—TUITION AND FEES 113,000
CASH 113,000
Chapter 15 – Accounting for Colleges and Universities
15–27
Ch. 15, Solutions, Exercise 15–20 (Cont’d)
SOUTH STATE UNIVERSITY
GENERAL JOURNAL
Debits Credits
9. EXPENSES—GENERAL 4,684,000
EXPENSES—RESEARCH 37,000
ACCOUNTS PAYABLE 4,721,000
10. ACCRUED LIABILITIES 40,000
CASH 40,000
11. PROVISION FOR BAD DEBTS 2,000
ALLOWANCE FOR DOUBTFUL ACCOUNTS 2,000
EXPENSES—DEPRECIATION 90,000
ACCUMULATED DEPRECIATION 90,000
Chapter 15 – Accounting for Colleges and Universities
15–28
Ch. 15, Solutions, Exercise 15–20 (Cont’d)
SOUTH STATE UNIVERSITY
GENERAL JOURNAL
Debits Credits
12. REVENUES—TUITION AND FEES 1,412,000
REVENUES—STATE APPROPRIATIONS 3,000,000
INVESTMENTS 12,000
REVENUES—INVESTMENT INCOME 14,250
TUITION AND FEES DISCOUNT AND ALLOWANCES 250,000
EXPENSES—DEPRECIATION 90,000
PROVISION FOR BAD DEBTS 2,000
EXPENSES—INTEREST 48,000
To reclassify Net Position:
NET POSITION—UNRESTRICTED 435,000
NET POSITION—NET INVESTMENT IN
CAPITAL ASSETS 435,000
Chapter 15 – Accounting for Colleges and Universities
15–29
Ch. 15, Solutions, Exercise 15-20 (Cont’d)
b. SOUTH STATE UNIVERSITY
STATEMENT OF NET POSITION
JUNE 30, 2023
ASSETS
CASH $ 134,700
ACCOUNTS RECEIVABLE (NET OF
DOUBTFUL ACCOUNTS OF $17,000) 297,300
INTEREST RECEIVABLE 1,250
GRANT RECEIVABLE 37,000
LIABILITIES
ACCOUNTS PAYABLE 75,000
UNEARNED REVENUE 138,000
NET POSITION
NET INVESTMENT IN CAPITAL ASSETS 1,310,000
RESTRICTED 420,230
General Problem Information: Public university transactions
Learning Objective: 15-4
Topic: Transactions and Financial Statements for Private Colleges and Universities
Bloom’s Taxonomy: Apply
Accreditation Skills tag: AACSB: Knowledge Application, AICPA: FN: Reporting
Level of Difficulty: Hard
Chapter 15 – Accounting for Colleges and Universities
15–30
15-21 a. PRIVATE UNIVERSITY
Debits Credits
1. GRANT RECEIVABLE 500,000
2. CASH 500,000
CONTRIBUTIONS—WITH DONOR RESTRICTIONS
—ENDOWMENT 500,000
3. TUITION AND FEES RECEIVABLE 2,500,000
TUITION AND FEES—WITHOUT DONOR
RESTRICTIONS 2,500,000
4. TUITION AND FEES DISCOUNTS AND ALLOWANCES 12,600
TUITION AND FEES RECEIVABLE 12,600
6. RESEARCH EXPENSE 25,000
CASH 25,000
NET ASSETS RELEASED FROM RESTRICTIONS—
WITH DONOR RESTRICTIONS 25,000
Chapter 15 – Accounting for Colleges and Universities
15–31
Ch. 15, Solutions, Exercise 15-21 (Cont’d)
Debits Credits
7 INSTITUTIONAL SUPPORT EXPENSE 1,670
ALLOWANCE FOR DOUBTFUL ACCOUNTS 1,670
b. PUBLIC UNIVERSITY
Debits Credits
1. The grant must be used in the next fiscal year; therefore, the eligibility requirement
related to time has not been met and recognition is deferred.
3. ACCOUNTS RECEIVABLE—TUITION AND FEES 2,500,000
REVENUE—TUITION AND FEES 2,500,000
REVENUE—TUITION AND FEES 325,000
CASH 325,000