Concept explainers
a.
Prepare journal entries to record the transactions for the year ended June 30, 2020.
a.
Explanation of Solution
Prepare journal entries to record the transactions for the year ended June 30, 2020:
Date | Particulars | Post. Ref. | Debits | Credits |
1 | Tuition and fees receivable | $223,100 | ||
Tuition & fees discount and allowances | $21,400 | |||
Tuition & fees - without donor restrictions | $244,500 | |||
( To record the receipt of tuition fees ) | ||||
Tuition & fees -without donor restrictions | $11,200 | |||
Cash | $11,200 | |||
( To record the refund of tuition fees ) | ||||
Instruction expense | $17,300 | |||
Accounts payable and accrued liabilities | $17,300 | |||
( To record the waiver of tuition fees ) | ||||
2 | Cash | $3,235 | ||
Pledges receivable | $550 | |||
Contributions without donor restrictions | $2,080 | |||
Contributions-without donor restrictions – time | $550 | |||
Contributions-with donor restrictions - endowment | $335 | |||
Pledges receivable | $820 | |||
( To record the receipt of contributions) | ||||
3 | Cash | $222,600 | ||
Tuition and fees receivable | $222,600 | |||
(To record the receipt of tuition fees) | ||||
4 | Deposits held in custody for others | $10 | ||
Cash | $10 | |||
(To record the return of net deposits) | ||||
5 | Instruction expense | $86,100 | ||
Academic support expense | $23,300 | |||
Student service expense | $37,700 | |||
Institutional support expense | $28,500 | |||
Cash | $170,290 | |||
Prepaid assets | $534 | |||
Accounts payable and liabilities | $4,776 | |||
( To record the expenses incurred) | ||||
Net assets released from restrictions - with donor restrictions | $7,320 | |||
Net assets released from restrictions – without donor restrictions | $7,320 | |||
(To record the release of net assets with donor restrictions) | ||||
6 | Accounts payable and accrued liabilities (1) | $41,271 | ||
Cash | $41,271 | |||
( To record the payment made to accounts payable) | ||||
7 | Cash | $3,960 | ||
Investment income - without donor restrictions | $1,890 | |||
Investment income - with donor restrictions - scholarships | $2,070 | |||
(To record the receipt of investment earnings) | ||||
8 | Tuition and fees - without donor restrictions | $20 | ||
Allowance for doubtful accounts | $20 | |||
(To record the allowance for doubtful debts) | ||||
Instruction expense | $18,480 | |||
Academic support expense | $7,920 | |||
$26,400 | ||||
(To record the depreciation expense) | ||||
Tuition and fees - without donor restrictions | $10 | |||
Unearned revenue | $10 | |||
(To record the unearned tuition revenue) | ||||
Investments | $4,700 | |||
Unrealized gain on investments – without donor restrictions | $2,300 | |||
Unrealized gain on investments – with donor restrictions- scholarships | $790 | |||
Unrealized gain on investments - with donor restrictions - endowment | $1,610 | |||
(To record the increase in fair value of investments) | ||||
9 | Tuition and fees without donor restrictions | $233,270 | ||
Contributions - without donor restrictions | $2,080 | |||
Investment income - without donor restrictions | $1,890 | |||
Unrealized gain on investments - without donor restrictions | $2,300 | |||
Net assets - without donor restrictions | $1,160 | |||
Tuition & fees discount and allowances | $21,400 | |||
Instruction expense | $121,880 | |||
Academic support expense | $31,220 | |||
Student services expense | $37,700 | |||
Institutional support expense | $28,500 | |||
(To record the closing of nominal accounts) | ||||
Contributions - with donor restrictions - time | $550 | |||
Investment income - with donor restrictions scholarships | $2,070 | |||
Donor restrictions-scholarships | $790 | |||
Net assets-with donor restrictions | $3,410 | |||
(To record the closing of net assets with donor restrictions) | ||||
Contributions - with donor restrictions- endowment | $335 | |||
Unrealized gain on investments- with donor restrictions - endowment | $1,610 | |||
Net assets - with donor restrictions | $1,945 | |||
(To record the closing of net assets with donor restrictions) | ||||
Net assets - with donor restrictions | $7,320 | |||
Net assets released from restrictions-without donor restrictions | $7,320 | |||
Net assets - without donor restrictions | $7,320 | |||
Net assets released from restrictions – with donor restrictions | $7,320 | |||
(To record the classification of net assets) |
Table (1)
Working note 1: Calculate total accounts payable settled during the year:
It is given that opening balance is $21,130, increase during the year $17,300 (for instruction expense) and $4776 (for academic expenses). Closing balance is $1,935
Accounts payable is opening balance plus increase during the year minus closing balance.
b.
Prepare a statement of activities of College S for the year ended June 30, 2020.
b.
Explanation of Solution
Statement of activities: Statement of activities is the operating statement that reports revenues, expenses, and other financing sources.
Prepare a statement of activities for the year ended June 30, 2020:
College S | |||
Statement of Activities | |||
For the year ended June 30, 2020 | |||
Particulars | Without Donor Restrictions | With Donor Restrictions | Total |
Revenues and gains: | |||
Student tuition and fees (net) | $211,870 | $211,870 | |
Contributions | $2,080 | $885 | $2,965 |
Investment income | $1,890 | $2,070 | $3,960 |
Unrealized gain on investments | $2,300 | $2,400 | $4,700 |
Net assets released from restrictions | $7,320 | ($7,320) | $0 |
Total revenues and gains | $225,460 | ($1,965) | $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 | ($1,965) | $4,195 |
Net assets, beginning of the year | $104,000 | $229,940 | $333,940 |
Net assets, end of the year | $110,160 | $227,975 | $338,135 |
Table (2)
c.
Prepare
c.
Explanation of Solution
Statement of financial position: Statement of financial position is a balance sheet that reports the assets, deferred outflow of resources, liabilities, deferred inflow of resources and the residual amount or net position of the government at the end of the fiscal year.
Prepare statement of financial position of College S for the year ended June 30, 2020:
College S | |
Statement of Financial position | |
For the year ended June 30, 2020 | |
Particulars | Amount |
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: | |
Without donor restrictions | $110,160 |
With donor restrictions | $227,975 |
Total net assets | $338,135 |
Total liabilities and net assets | $440,670 |
Table (3)
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