Grant University is a private university that is subject to Financial Accounting
ID: 2472529 • Letter: G
Question
Grant University is a private university that is subject to Financial Accounting Standards Board (FASB) accounting and reporting principles. The following transactions took place during the fiscal year ended June 30, 20x7 which affected unrestricted resources.
(1) Grant had received $578,000 in tuition in early June 20x6 for the summer session ending in August 20x6. Grant did not recognize the revenue in the fiscal year ending June 30, 20x6.
(2) Grant received $615,000, in cash, tuition in early June 20x7 for the summer session ending in August 20x6.
(3) Grant received, in cash, tuition of $6,355,000 during fiscal year 20x6-20x7. This amount was in addition to the amounts discussed previously. The university also received unrestricted gifts and bequests of $580,000, unrestricted interest income on endowments of $540,000, and auxiliary enterprise revenues of $2,425,000.
(4) Grant received cash of $735,000 for pledges received for the fiscal year ended June 30, 20x6, that were unrestricted as to purpose but were intended to be expended during the fiscal year ended June 30,20x7.
(5) Grant received cash of $650,000 for contributions received for the fiscal year ended June 30, 20x6, that were restricted as to purpose. Of that amount, $375,000 was expended for research and $275,000 was expended for scholarships and fellowships, as required by the donors, during the year ended June 30, 20x7.
(6) Grant received $350,000 in cash from a donor who had pledged the amount the previous fiscal year for the purpose of purchased at the beginning of the fiscal year and was expected to last eight years with no salvage value. Grant has the policy of recording fixed assets in the unrestricted net asset class. Depreciation should be charged to research.
(7) In addition to other expenses discussed with prior entries, expenses amounted to $6,125,000 for instruction, $635,000 for research, $725,000 for public service, $330,000 for student services, $265,000 for institutional support, $1,050,000 for operation and maintenance of physical plant, $825,000 for scholarships and fellowships, and $2,345,000 for auxiliary enterprises. All expenses were paid in cash, except for $475,000 in accumulated depreciation, which related to the operation and maintenance of physical plant.
(8) The books were closed for the fiscal year.
REQUIRED:
(1) Record the above transactions, in proper general journal form, on the books of Grant University for the fiscal year ending June 30, 20x7. Be sure to indicate which net asset class(es) are affected by the transaction. Omit explanations. Use the number of the transaction as the date.
Explanation / Answer
Date::::::::::::::Particulars:::::::::::::::::::::::::::::::::::::::::::::::::::::LF::::::::Debit:::::::::::Credit
1):::::::::::::::::Cash A/c Dr::::::::::::::::::::::::::::::::::::::::::::::::N/A:::::$578,000
::::::::::::::::::::::::To unrecognize Revenue A/c::::::::::::::::::::::::::::::::::::::::::::::::::::::::::$578,000
_________________________________________________________________________________
2):::::::::::::::::::Accured Income A/c Dr:::::::::::::::::::::::::::::::::N/A:::::$615,000
::::::::::::::::::::::::::::To Cash A/c::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::;::$615,000
_________________________________________________________________________________
3):::::::::::::::::Cash Received A/c Dr::::::::::::::::::::::::::::::N/A::::::::$6,355,000
:::::::::::::::::::::::::::To unrestricted gifts A/c:::::::::::::::::::::::::::::::::::::::::::::::::::::::$580,000
:::::::::::::::::::::::::::To interest income on endowments A/c::::::::::::::::::::::::::::::::::$540,000
:::::::::::::::::::::::::::To auxiliary enterprise revenues A/C::::::::::::::::::::::::::::::::::::: $2,425,000
:::::::::::::::::::::::::::To Tutition Fees A/c :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::$2,810,000
($6,355,000 - $580,000 -$540,000 -$2,425,000 =$2,810,000)
__________________________________________________________________________________
4)::::::::::::::::::::::::Pledge Receivable A/c Dr ::::::::::::::::::::::::N/A::::$735,000
To Pledge Income A/c ::::::::::::::::::::::::::::::::::::::::::::::::::::::$735,000
__________________________________________________________________________________
5)::::::::::::::::::::::::Research A/c Dr ::::::::::::::::::::::::::::::::::::N/A::::::::::::$375,000
:::::::::::::::::::::::: Scholarships and fellowships A/c Dr:::::::::::::::::::::::::::$275,000
::::::::::::::::::::::::::::::To Contribution Revenue A/c ::::::::::::::::::::::::::::::::::::::::::::::::::::::$650,000
________________________________________________________________________________________
6)::::::::::::::::::::::::Pledge Receivable A/c Dr ::::::::::::::::::::::::N/A::::$$350,000
:::::::::::::::::::::::::::::: To Pledge Income A/c :::::::::::::::::::::::::::::::::::::::::::::::::::::$350,000
________________________________________________________________________________________
7):::::::::::::::::::::: Instruction A/c Dr:::::::::::::::::::::::::::::::::N/A:::::::::$6,125,000:
:::::::::::::::::::::::: Research A/c dr::::::::::::::::::::::::::::::::::::::::::::::::::::::$635,000
:::::::::::::::::::::::::::::Student services A/c Dr:::::::::::::::::::::::::::::::::::::::$330,000
:::::::::::::::::::::::::::::Public service A/c Dr:::::::::::::::::::::::::::::::::::::::::::$725,000
:::::::::::::::::::::::::::: Institutional support A/c Dr:::::::::::::::::::::::::::::::::::$265,000
:::::::::::::::::::::::::::: operation and maintenance A/c Dr:::::::::::::::::::::::$1,050,000
:::::::::::::::::::::::::::: Scholarships and fellowships A/c Dr:::::::::::::::::::::$825,000
::::::::::::::::::::::::::::: Auxiliary enterprises A/c Dr::::::::::::::::::::::::::::::::$2,345,000
:::::::::::::::::::::::::::::::::To Cash a/c::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::$12,300,000
___________________________________________________________________________________________
7::::::::::::::: Depreciation A/c Dr::::::::::::::::::::::::::::::::::::::::::::::N/A:::::::::: $475,000
::::::::::::::::::::::::::::::::::Accumulated Depreciation A/c Dr:::::::::::::::::::::::::::::::::::::::::::::::::::::::::$475,000
_________________________________________________________________________________________
8)::::::::::::::::::::::::Revenue A/c Dr::::::::::::::::::::::::::::::::::::::::::N/A:::::::::::::::::::::::::::::$8,090,000
:::::::::::::::::::::::::::::::To Income Summary A/c ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::$8,090,000
(6,355,000 + $735,000(pledge)+ $350,000(pledge)+$650,000(contribution)=:$8,090,000)
::::::::::::::::::::::::::::Income summary a/c Dr:::::::::::::::::::::::::::::::N/A::::::::::::::::::::::::::::$12,300,000
:::::::::::::::::::::::::::::::::::To Expensens A/c :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::$12,300,000
Check 7 transactions for expense details)
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