Reference no: EM131525941
Question: During the year ended June 30, 2012, the following transactions were recorded by St. Ann's College, a private institution:
1. Tuition and fees amounted to $6,800,000, of which $4,500,000 was received in cash. A state appropriation was received in cash in the amount of $600,000. Sales and services of auxiliary enterprises amounted to $3,500,000, all of which was received in cash.
2. Student scholarships were awarded in the amount of $900,000. Recipient students were not required to provide services for this financial aid.
3. The provision for doubtful accounts for the year ended June 30, 2012, amounted to $25,000. During the year, doubtful accounts related to student fees were written off in the amount of $20,000.
4. During the year, contributions received, all in cash, amounted to: unrestricted, $600,000; temporarily restricted for use in the year ended June 30, 2013, $1,100,000 (unrestricted as to purpose); temporarily restricted for certain purposes, $900,000; and restricted for endowments, $1,000,000.
5. During the year, $500,000 was released from restrictions based on time, and $700,000 was released from restrictions for program purposes (research). The applicable research expense of $700,000 was paid in cash.
6. Investment income amounted to: unrestricted income from endowments, $150,000; income from endowments for purposes restricted by program, $200,000; and income from endowments required to be added to the endowment, $15,000.
7. During the year, St. Ann's received a gift of $1,500,000, which was to be used for the future construction of an addition to the library.
8. During the year, $1,300,000 was released from restriction for the construction of a new wing to the student services building. The building was constructed using the cash. St. Ann's records all fixed assets in the unrestricted net asset class.
9. Endowment long-term investments, carried at a basis of $2,000,000, were sold for $2,150,000. The total proceeds were reinvested. Income is to remain as permanently restricted.
10. Expenses for the year (in addition to expenses provided for in other parts of the problem) were instruction, $5,050,000; research, $1,300,000; public service, $300,000; academic support, $200,000; student services, $600,000; institutional support, $700,000; and auxiliary enterprises, $3,400,000. Of this, $10,950,000 was paid in cash and $600,000 was credited to Accounts Payable.
11. Depreciation recorded for the year amounted to $540,000. One-third of that amount was charged to instruction, one-third to institutional support, and one-third to auxiliary enterprises.
12. The institution sustained an uninsured fire loss of $230,000. Repairs were paid in cash and charged to the fire loss account.
13. Closing entries were prepared.
a. Record the transactions on the books of St. Ann's College. Indicate the net asset class for revenues and reclassifications.
b. Prepare, in good form, a Statement of Unrestricted Revenues, Expenses, and Other Changes in Unrestricted Net Assets for St. Ann's College for the year ended June 30, 2012.
c. Prepare, in good form, a Statement of Changes in Net Assets for St. Ann's College for the year ended June 30, 2012. The net assets at the beginning of the year amounted to $2,080,000.