P19-20 Net Asset ldentification for Transactions Involving a Private Not-for-Pro
ID: 2553963 • Letter: P
Question
P19-20 Net Asset ldentification for Transactions Involving a Private Not-for-Profit University LO 19-2 Buckwall University (BU), a private not-for-profit university, had the following transactions during the year ended June 30, 20X8 Assessed students $2,000,000 for tuition for the winter semester, starting in January 20X8 Received $1,000,000 from the federal government to be distributed to qualified students as loans and grants. Recognized depreciation expense of $200,000 on university buildings and equipment for the fiscal year Received $1,500,000 in alumni contributions restricted to the construction of a new library building Construction is expected to begin in September 20X8. Invested the contributions received in item 4 in equity securities that had a market value of $1,650,000 on June 30, 20X8 Received $75,000 of investment revenue from investments in a term endowment. The donor stipulated that the investment revenue be used to fund scholarships for qualified entering freshmen. Used $60,000 of the investment revenue in item 6 to fund scholarships during the year ended June 30 1. 2. 3. 4. 5. 6. 7. 8. 9. 8 8 Designated $250,000 of cash for refurbishing the steam tunnels used for heating the university during the winter Received from an alumnus a contribution of artwork with a fair value of $3,750,000. The donor has stipulated that the artwork be preserved, that it not be sold, and that it be on public view in the university museum. The university has a policy of recording donations of works of art and historical treasures 10. Acquired debt securities at a cost of $400,000 during the year that the governing board required to 0 keep intact for the next five years and to use their interest revenue for funding summer research grants to faculty of BU 11. Received during the year ended June 30, 20X8, interest revenue from the debt securities in item 10, which amounted to $18,000, of which $12,000 was used for research grantsExplanation / Answer
Unrestricted Temporarily restricted Permanently restricted Tution for winter semister $2,000,000 Federal Government Grant $1,000,000 Depriciation $200,000 Alumini contribution $1,500,000 Investment revenue $60,000 $15,000 Steam tunnels $250,000 Artwork $3,750,000 Debt Securities $400,000 Interest revenue $6,000 $12,000
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