Multiple Choice Questions Indicate the best answer for each of the following: 1. For the spring semester

Question:

Multiple Choice Questions
Indicate the best answer for each of the following:
1. For the spring semester of 20X4, Lane University assessed its students $3,400,000 (net of refunds) of tuition and fees for educational and general purposes. However, only $3,000,000 was expected to be realized because scholarships totaling $300,000 were granted to students, and tuition remissions of $100,000 were allowed to faculty members€™ children who were attending Lane. How much should Lane include in educational and general revenues from student tuition and fees?
a. $3,400,000
b. $3,300,000
c. $3,100,000
d. $3,000,000

2. During the years ended June 30, 20X6, and 20X7, Sampson University conducted a diabetes research project financed by a $2,000,000 gift from an alumnus. This entire amount was pledged by the donor on June 10, 20X4, although he paid only $500,000 at that date. The gift was restricted to the financing of this particular research project. During the two-year research period Sampson€™s related gift receipts and research expenditures were as follows:

How much gift revenue should Sampson report for the year ended June 30, 20X7?
a. $0
b. $800,000
c. $1,100,000
d. $2,000,000

3. On January 2, 20X6, Tim Brooks established a $500,000 trust at Wyndham National Bank, the income from which is to be paid to Mansfield University for general operating purposes.
The Wyndham National Bank was appointed by Brooks as trustee of the fund. What journal entry is required on Mansfield€™s books?

4. The carrying value of the Annuities Payable account of a college
a. Should be adjusted to reflect changes in actuarial assumptions such as life expectancies or yield estimates.
b. Should be adjusted only for benefit payments made and investment income earned.
c. Must be adjusted annually to the present value of the required payments.
d. A and c.

Questions 5, 6, and 7 are based on the following scenario:
Assume that a wealthy alumnus donated $1 million to Chavis University to provide loans to qualifying students. Though not required by the donor, the university€™s Board of Trustees voted to supplement the initial establishment of the loan fund with $500,000 of the university€™s own unrestricted resources. Further assume that any interest earned on the loan funds is to be added to the underlying principal of the fund and that both the original principal and that from earnings may be loaned.
5. What amount of the principal would be reported in GAAP-based financial statements as assets restricted for loans on the date of donation?
a. $0
b. $500,000
c. $1,000,000
d. $1,500,000

6. What amount of revenues would be reported in GAAP-based financial statements on the date of donation?
a. $0
b. $500,000
c. $1,000,000
d. $1,500,000

7. How would this loan fund be reported in the net position classifications?
a. As nonexpendable restricted net position, $1,000,000, and unrestricted net position, $500,000
b. As expendable restricted net position, $1,000,000, and unrestricted net position, $500,000
c. As nonexpendable restricted net position
d. As expendable restricted net position

Questions 8, 9, and 10 are based on the following scenario:
Steines College, an institution considered to be governmental in nature, had the following events occur during the year:
€¢ Tuition scholarships of $45,000 were granted during the year and $7,500 of tuition waivers were granted.
€¢ An alumnus donated land valued at $750,000 for the new administration building that is planned for next year.
€¢ Student aid from unrestricted resources was paid to qualifying students in the amount of $300,750.

8. How will the tuition scholarships and waivers be reported on the college€™s operating statement?
a. Expenses of $7,500 will be reported for the waivers, and $45,000 will be reported as a revenue deduction for the scholarship allowances.
b. Expenses of $52,500 will be reported.
c. Revenue deductions of $52,500 will be reported.
d. Expenses of $45,000 for scholarship allowances and revenue deductions of $7,500 for tuition waivers will be reported.

9. How should the donated land be recorded in the college€™s general ledger?

10. How should the student aid payments be recorded in the college€™s generalledger?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...