The University of Danville is a private not-for-profit university that starts th

Question

The University of Danville is a private not-for-profit university that starts the current year with $700,000 in net assets: $400.000 unrestricted, $200,000 temporarily restricted, and $100,000 permanently restricted. The following transactions occur during the year a·Charged students $1.2 million in tuition. b. Received a donation of investments that had cost the owner $100,000 but was worth $300,000 at the time of the gift. According to the gift's terms, the university must hold the investments forever but can spend the dividends for any purpose. Any changes in the value of these securnities must be held forever and cannot be spent c. Received a cash donation of $700,000 that must be used to acquire laboratory equipment d. Gave scholarships in the amount of $100,000 to students e. Paid salary expenses of $310,000 in cash. t Learned that a tenured faculty member is contributing his services in teaching for this year and will not accept his $80,000 salary g. Spent $200.000 of the money in (c) on laboratory equipment (no time restriction is assumed on this equipment) h. Learned that at the end of the year the investments in (b) are worth $330,000 i. Received dividends of $9,000 cash on the investments in (b) Computed depreciation expense for the period of $32000 k. The schools board of trustees decides to set aside $100,000 of previously unrestricted cash for the future purchase of ibrary L Received an uncondtional promise of $10,000, which the school fully expects to collect in thrce years although its present value is only $7000. The school assumes that the money cannot be used until the school receives it m. Received an art object as a gift that is worth $70,000 and that qualifies as a work of art. The school prefers not to record this gift n. Paid utilities and other general expenses of $212.000 o. Received free services from alumni who come to campus each week and put booksjon the sheives in the sbrary Over the course of the year, the school would have paid $103,000 to have this work done Prev 2 of 20 Next > 8 commandopl

Explanation / Answer

a) Preparing Journal Entries for each of the trasactions:

b) Determining the end-of-year balances of Unrestricted Net Assets, Temporarily restricted net assets and permanently restricted net assets by completing the following statements of activities:

University of Danville

Statement of Activities

Event General Journal Debit Credit a. Tuition Receivable $1,200,000 Tuition Revenue $1,200,000 b. Investments $300,000 Contributions - Permanently Restricted $300,000 c. Cash $700,000 Contributions - Temporarily Restricted $700,000 d. Scholarships - Financial Aid $100,000 Tuition Receivable $100,000 e. Salary Expenses $310,000 Cash $310,000 f. Salary Expense $80,000 Contributed Service Revenues - Unrestricted Net Assets $80,000 g. Equipment $200,000 Cash $200,000 Temporarily Restricted Assets - Reclassification $200,000 Unrestricted Net Assets - Reclassification $200,000 h. Investments $30,000 Unrealized Gain on Investments - Permanently Restricted Assets $30,000 i. Cash $9,000 Dividend Revenue - Unrestricted Net Assets $9,000 j. Depreciation Expense $32,000 Accumulated Depreciation $32,000 k. Cash - Internally Restricted $100,000 Cash $100,000 l. Pledge Receivable $7,000 Contribution - Temporarily Restricted Assets $7,000 m. No entry because of choice made by officials n. Utilities and Other Expenses $212,000 Cash $212,000 o. No entry - does not require a specialized skill

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