American University is a private, nonprofit university. For the universitys calendar year. (I) prepare journal entries to
Question:
American University is a private, nonprofit university. For the university’s calendar year.
(I) prepare journal entries to record the transactions listed in a. through n. below
(II) prepare a trial balance based on your entries and the beginning balances listed at o. below, and
(III) a Statement of Activities and a Statement of Financial Position for the university, as well as a note disclosure with the matrix of functional expenses.
a. Tuition and fee revenue totaling $1,075,000 was collected.
b. A pledge of $250,000 made in the preceding year was received. When recorded as contribution revenue in the prior year, the gift was restricted for use in the current year. All donor restrictions have been satisfied.
c. Investment values increased by $26,000. There are no donor restrictions on changes in the value of the investments.
d. Supplies of $54,000 were consumed.
e. A contribution received in a prior year of $100,000 was used to purchase equipment for the computer lab, satisfying donor restrictions.
f. The university billed $178,000 to the U.S. Department of the Interior for contract work completed on an oceanography project.
g. The university paid faculty salaries and wages of $680,000 in cash and administrative staff salaries and wages of $197,000.
h. The university received a $500,000 endowment gift, which was invested in debt securities.
i. The university paid amounts previously accrued as accounts payable of $84,000.
j. The university purchased supplies of $15,000 on credit.
k. The university reported depreciation expense of $215,000, and 80% of this amount is related to programs.
l. The university incurred other operating costs for instructional purposes of $98,000, $80,000 of which was on credit and the remainder with cash.
m. A donor pledged $150,000 for next year’s operations. Donations like this are expected to be 94% collectible.
n. The university’s beginning of the year trial balance at January 1 was as follows:
American University Trial Balance As of January 1 | ||
Account | Debit | Credit |
Cash | $86,000 | |
Investments | 235,000 | |
Pledges receivable, net | 250,000 | |
Supplies | 76,000 | |
Property, plant, and equipment | 3,290,000 | |
Accumulated depreciation | $1,490,000 | |
Accounts payable | 84,000 | |
Net assets without donor restrictions | 2,013,000 | |
Net assets with donor restrictions | _________ | 350,000 |
Total | $3,937,000 | $3,937,000 |
