calculate earned revenues. Big Blue University has a fiscal year that ends on Ju

Question

calculate earned revenues. Big Blue University has a fiscal year that ends on June 30. The 2007 summer session of the university runs from June 9 through July 28. Total tuition paid by students for the summer session amounted to $112,000.00.
A. How much revenue should be reflected in the fiscal year ended June 30, 2007? Explain answer.
B. Would your answer to A. be any different if the university had a tuition refund policy that stated that no tuition would be refunded after the end of the third week of summer session classes? Explain your answer.

Explanation / Answer

A. How much revenue should be reflected in the fiscal year ended June 30, 2007? Explain answer. Total period of the session = 22 days of June and 28 days of July = 50 days Revenue earned for the period June 9 to June 30, 2007 = (112,000 / 50) x 22 = $49,280 B. Would your answer to A. be any different if the university had a tuition refund policy that stated that no tuition would be refunded after the end of the third week of summer session classes? Explain your answer. No – third week ends on 22nd day i.e. 30th June 2007. But the earnings are based on actual number of days classes held to the total number of days of the session.

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