Exam 11: College and University Accounting Private Institutions

Private colleges and universities use the same accounting and reporting standards as public colleges and universities.

NACUBO guidelines treat estimates of uncollectible accounts as reductions in revenue.

According to the FASB,plant acquired by colleges and universities with either unrestricted or restricted resources are recorded as:

With respect to colleges and universities,academic or athletic tuition waivers are accounted for as expenses.

According to the rules for accounting for colleges and universities under the jurisdiction of the FASB,an institution may decide not to capitalize museum and other inexhaustible collections.

With respect to colleges and universities,if a tuition or fee reduction is an employee benefit it should be treated as a compensation expense,rather than a discount.

Investor-owned proprietary schools are subject to the standards issued by the FASB

A Charitable lead trust is a type of split-interest agreement.

Private universities follow the authoritative standards of _____ and use the _____ basis of accounting.

Private colleges and universities recognize contribution revenue in the year in which the payment is received.

When a private college is the recipient of a perpetual trust held by a third party,the initial contribution revenue is recorded in the permanently restricted net asset class,and income received from the trust is recorded as either unrestricted or temporarily restricted investment income,depending on the trust agreement.

If a donor were to contribute money with instructions that the funds be invested for a period of time and then released to be used for any purpose,this would be called a(n):

Private colleges are required to report net assets in the following categories:

On December 1,2014 St.Sebastian University,a private college,received cash of $ 2,000 and a pledge for another $ 5,000 to be paid in January 2015.The amounts are to establish an endowment to provide scholarships for music majors.How should this event be recorded on December 1,2014?

When a private college or university has a foundation,and that foundation receives contributions specifically directed for the benefit of the college or university,

A Charitable gift annuity is a type of split-interest agreement.

Ethan Allen University is a private university following FASB standards for reporting.The following transactions took place during the year ended June 30,2014. (1)EAU had received $600,000 in tuition in June 2014 for the summer session that runs from June 16 to August 14,2013 and had deferred $ 390,000 (65%)at June 30,2013. (2)EAU received in cash tuition of $3,320,000; unrestricted contributions of $320,000; contributions permanently restricted by donor agreement for the endowment of $ 910,000,unrestricted interest income on endowments of $250,000; and auxiliary enterprise revenue of $2,200,000. (3)Contributions for student scholarships were received in the amount of $425,000.$380,000 was awarded to students during the year.Students receiving these scholarships are required to work 10 hours a week (institutional support). (4)Expenses amounted to $1,400,000 for instruction,$800,000 for research,$600,000 for public service,$2,000,000 for auxiliary enterprises,$300,000 for student services,and $890,000 for institutional support.Included in these amounts is $460,000 of depreciation.All other expenses ($ 5,530,000)were paid in cash.Plant assets are classified as unrestricted. (5)EAU received $400,000 in tuition in mid June 2014 for the summer session ending in mid August 2014.(65% relates to the next fiscal year) (6)At year-end,endowment investments were determined to have a fair value of $14,000 in excess of their recorded amounts.No restrictions apply to this income. Required: (a)Prepare journal entries to record these events including closing entries. (b)Prepare a Statement of Unrestricted Revenues,Expenses and Other Changes in Unrestricted Net Assets. (c)Prepare a Statement of Activities for the year ending June 30,2014,assuming the June 30,2013 balances in net assets are: $1,020,000 unrestricted,$30,000 temporarily restricted,and $8,000,000 permanently restricted.

Ballard University,a private not-for-profit,billed four students for tuition and fees each in the amount of $ 8,400 each for fall semester.The University estimates 25% of tuition and fees will prove to be uncollectible.The University collected $ 10,010 as follows: Required: Prepare the journal entries to record the billing and subsequent collection or write-off for the transactions listed above.

A private university received $18,000,000 in tuition and fees during an academic year.Graduate assistantships,for which services were required,were awarded in the amount of $1,400,000.Scholarships,for which no services were required,were awarded in the amount of $1,200,000.The net tuition and fees that would be reported in the Statement of Activities would be:

Tuition revenue for summer classes spanning two fiscal periods must be recorded in the period when the drop date passes and refunds are no longer an option.