Exam 11: College and University Accounting Private Institutions

Under NACUBO guidelines,tuition waivers resulting from work-study programs are deducted from revenue.

Which of the following is a required statement for a private college?

NACUBO has issued a position paper titled "Accounting and Reporting Scholarship Allowances to Tuition and Other Revenues by Higher Education" to address the issue of scholarship allowances. How are scholarships and allowances treated in the financial statements by private colleges and universities?

Inflows from self-supporting university operations,known as auxiliary enterprises,are unrestricted.

The following information applies to the next three questions: A private foundation made a multi-year pledge to a private college on December 31, 2014, the last day of the fiscal year. The pledge was to pay $15,000 per year each year for five years, beginning on December 31, 2015. The discount rate is 6%. The present value of five payments of $15,000 is $63,185. The present value of four payments of $15,000 is $51,977. No purpose or plant restrictions were involved. -The private college would:

Union Seminary uses the fund basis of accounting for internal record keeping. Presented below is the fully adjusted 12/31/2015 balance sheet for Union,prepared using funds and account groups.The following are fund descriptions: •Operating Fund - the fund used for transactions not falling within the definition of other funds. There are no restrictions on these resources. •Memorial Fund - Used to account for resources donated from outside parties for specific capital additions •Endowment Fund - Assets received from an outside donor for permanent investment,only the earnings may be expended. •Scholarship Fund - Cash set aside by the Seminary's governing board for use as scholarships and student aid. •Fixed Assets Account Group - A record of the Seminary's fixed assets and long-term debt. Required: Prepare a Statement of Financial Position following the guidelines provided in FASB Statements 116 and 117 for private not-for-profits and assuming Union does not classify plant assets as temporarily restricted.

Under NACUBO guidelines,tuition waivers associated with student work study programs should be reported as:

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

Tuition revenue for summer classes spanning two fiscal periods must be allocated on a pro-rata basis.

Student scholarships for which no service was required were applied to student accounts in the amount of $5,000.What is the journal entry to record this event?

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

An acceptable alternative to the Statement of Activities for a private college or university is to present a Statement of Unrestricted Revenues,Expenses and Other Changes in Unrestricted Net Assets and a Statement of Changes in Net Assets.

In addition to a Statement of Financial Position and a Statement of Activities,a private college or university is required to present:

Identify three types of restrictions placed on temporarily restricted net assets of a private sector college or university and outline the accounting requirements for each type.

Financial statements prepared for private colleges and universities present net assets as: unrestricted,restricted,or net investment in capital assets.

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,investments in stock with determinable fair values and all debt securities are reported at market value.

On January 1,2015,Antioch College,a private not-for-profit college,received $10,000,000 in cash to purchase an electron microscope. The microscope was delivered on July 1,2015 and payment was made. The microscope is expected to last 10 years and has no salvage value at the end of that time. The fiscal year end is December 31. a.Record the journal entries required on January 1,July 1,and December 31,2015 to record the receipt of the cash,the purchase of equipment,and one-half year's depreciation,assuming the plant assets are recorded as unrestricted assets at the time of purchase. b.Record the journal entries required on January 1,July 1,and December 31,2015 to record the receipt of the cash,the purchase of equipment,and one-half year's depreciation,assuming the plant assets are recorded as temporarily restricted assets at the time of purchase.

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.

A donor gave a gift of $40,000 cash to a private college in 2014 to support basic psychology research. The funds were expended in 2015. The private college would recognize the $40,000 as: