Reference no: EM13487063

Question:

Private College Transactions. Elizabeth College, a small private college, had the following transactions in fiscal year 2011.

1. Billings for tuition and fees totaled $5,600,000. Tuition waivers and scholarships of $61,500 were granted. Students received tuition refunds of $101,670.

2. During the year the college received $1,891,000 cash in unrestricted private gifts, $575,200 cash in temporarily restricted grants, and $1,000,000 in securities for an endowment.

3. A pledge campaign generated $626,000 in unrestricted pledges, payable in fiscal year 2012.

4. Auxiliary enterprises provided goods and services that generated $94,370 in cash.

5. Collections of tuition receivable totaled $5,380,000.

6. Unrestricted cash of $1,000,000 was invested.

7. The college purchased computer equipment at a cost of $10,580.

8. During the year the following expenses were paid:

9. Instruction provided $450,000 in services related to the temporarily restricted grant recorded in transaction 2.

10. At year-end, the allowance for uncollectible tuition and fees was increased by $7,200. The fair value of investments had increased $11,540; of this amount, $3,040 was allocated to permanently restricted net assets, the remainder was allocated to unrestricted net assets. Depreciation on plant and equipment was allocated $34,750 to instruction, $41,000 to auxiliary enterprises, and $12,450 to academic support.

11. All nominal accounts were closed.

Required

a. Prepare journal entries in good form to record the foregoing transactions for the fiscal year ended June 30, 2011.

b. Prepare a statement of activities for the year ended June 30, 2011. Assume beginning net asset amounts of $7,518,000 unrestricted, $200,000 temporarily restricted, and $5,000,000 permanently restricted.