Exam 15: Accounting for Colleges and Universities

Prepare in general journal form the entries required for each of the following selected transactions of Northern University,a state-funded public institution engaged only in business-type activities.Some of these transactions are related and some are not. 1)A generous alumnus donated $300,000 that can only be used for research on diabetes.The full $300,000 was received in FY 2014. 2)During FY 2014,expenses of $150,000 were made in cash for diabetes research (see item 1 above). 3)$2,000,000 in long-term bonds was issued to construct a new parking garage on campus. 4)During FY 2014,the parking garage (see item 3 above)was partially completed at a total cash expenditure of $1,800,000. 5)During 2014,interest was paid in the amount of $120,000 on the long-term bonds issued for the parking garage project (see item 3 above).

During the years ended June 30,2014 and 2015,Jackson University,a private university,conducted a cancer research project financed by a $1,000,000 gift from an alumnus.The entire amount was pledged by the donor on July 10,2013,although she paid only $200,000 at that date.The gift was restricted to the financing of this particular research project.During the two-year research period,Jackson's gift receipts and research expenses related to the research project were as follows for each fiscal year (FY): FY 2014 FY 2015 Gift receipts $200,000 $800,000 Cancer research expenses $100,000 $900,000 How much contribution revenue should Jackson University report for the year ended June 30,2015?

A private college would record a federal grant received to test a medical device that the federal government intends to patent as Contributions-Temporarily Restricted.

Tuition refunds are recorded by debiting Tuition and Fees-Unrestricted.

The Uniform Prudent Management of Institutional Funds Act (UPMIFA)applies primarily to colleges and universities.

Tuition scholarships for which there is no intention of collection from the student should be classified by a private university as

Public colleges and universities that use business-type reporting must present segment information in the notes to the financial statements.

Which of the following measures may be useful to decision makers evaluating the financial condition of a college or university?

During the year ended June 30,2014,Hopkins College,a private college,received a federal government grant of $800,000 for research on the role of music in improving math skills for students.Expenses for this research amounted to $100,000 during the same year.Under FASB standards,which of the following best represents how Hopkins College would report this nonexchange transaction in the net assets section for the year ended June 30,2014?

State educational appropriations received by a public university are classified as which of the following on the statement of revenues,expenses,and changes in net position?

Contributions or grants restricted by an external donor for a particular operating purpose would be reported as increases to restricted fund balances by a public college or university engaged only in business-type activities and as an addition to temporarily restricted net assets by a private college or university.

Which of the following statements usually will not be included in the annual financial report of a governmentally owned public university engaged only in business-type activities?

An alumnus donates securities to a private college and stipulates that the principal be held in perpetuity and income from the securities be used for faculty travel.Dividends received from the securities should be recognized as increases in

A college has collected returnable dormitory room deposits from students.How would these deposits be reported by the college?

Which of the following is required as part of a complete set of financial statements for a private college or university?

FASB standards applicable to private colleges and universities require that their financial statements include

Assets set aside for an endowment by a university governing board would be reported as unrestricted.

The following are key terms in Chapter 15 that relate to accounting for colleges and universities: A.Term endowments B.Annuity agreements C.Collections D.Pooled life income agreements E.Spending rate F.Total return

A statement of cash flows is required by GAAP for both private colleges and universities and public colleges and universities engaged in business-type activities.

If a private university receives $1,000,000 in fiscal year 2014 as a grant restricted for a specific research project and makes expenditures amounting to $400,000 during fiscal year 2014 properly chargeable to the grant,how much should be reported as revenues in fiscal year 2014? Explain.