Ashford University Government / NON Profit Accounting Worksheet

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ashford university

Description

1. Classification of Revenues/Support and Expenses. For each of the independent transactions listed below, indicate which of the listed revenue or contribution classifications apply by choosing one or more of the letters from the listed items. Choose all that apply.

Transaction

  1. A museum gift shop sold prints of famous paintings.
  2. At the end of the year a donor agreed to contribute $400,000 to a local artists’ fund if the museum raised a matching amount in the first quarter of the upcoming year.
  3. A registered nurse volunteered 10 hours a week to a local agency for disabled persons.
  4. A donor contributed $1 million to a not-for-prof it hospital for a new clinic.
  5. An NFP art association hosted its annual art exhibition for the association's major contributors.
  6. A donor contributed securities valued at $10 million to be permanently invested. Earnings thereon are stipulated by the donor to be used for eye research.
  7. A local computer store donated computers for children's use at an NFP hands-on children's museum.
  8. A local PTA received cash contributions of $2,000 to be used for its operating activities.

Revenue and Contribution Classifications

  1. Revenue
  2. Contributions – Unrestricted
  3. Contributions – Temporarily Restricted
  4. Contribution - Permanently Restricted
  5. None of the above.

2. Recording and Reporting Transactions. INVOLVE was incorporated as a not-for-prof it voluntary health and welfare organization on January 1, 2017. During the fiscal year ended December 31, 2017, the following transactions occurred.

  • A business donated rent-free office space to the organization that would normally rent for $35,000 a year.
  • A fund drive raised $185,000 in cash and $100,000 in pledges that will be paid within one year. A state government grant of $150,000 was received for program operating costs related to public health eduction.
  • Salaries and fringe benefits paid during the year amounted to $208,560. At year-end, an additional $16,000 of salaries and fringe benefits were accrued.
  • A donor pledged $100,000 for construction of a new building payable over the following five fiscal years, commencing in 2019. The discounted value of the pledge is expected to be $94,260. Office equipment was purchased for $12,000. The useful life of the equipment is estimated to be five years. Office furniture with a fair value of $9,600 was donated by a local office supply company. The furniture has an estimated useful life of 10 years. Furniture and equipment are considered unrestricted net assets by INVOLVE.
  • Telephone expense for the year was $5,200, printing and postage expense was $12,000 for the year, utilities for the year were $8,300, and supplies expense was $4,300 for the year. At year-end, an immaterial amount of supplies remained on hand and the balance in accounts payable was $3,600.
  • Volunteers contributed $15,000 of time to help with answering the phones, mailing materials, and various other clerical activities.
  • It is estimated that 90 percent all of the pledges made for the 2018 year will be collected. Depreciation expense is recorded for the full year on the assets recorded in item 5.
  • Salaries and wages were allocated to program services and support services in the following percentages: public health education, 35 percent; community service, 30 percent; management and general, 20 percent; and fund-raising, 15 percent. All other expenses were allocated in the following percentages: public health education, 35 percent; community service, 20 percent; management and general, 25 percent; and fund- raising, 20 percent.
  • Net assets were released to reflect satisfaction of state grant requirements that the grant resources be used for program purposes.
  • All nominal accounts were closed to the appropriate net asset accounts.

Using this information

  1. Make all necessary journal entries to record these transactions. Expense transactions should be initially recorded by object classification; in entry 10 expenses will be allocated to functions.
  2. Prepare a statement of activities for the year ended December 31, 2017.
  3. Prepare a statement of financial position for the year ended December 31, 2017.
  4. Prepare a statement of cash flows for the year ended December 31, 2017.
  5. Prepare a statement of functional expenses for the year ended December 31, 2017.

3. Various Unrelated Transactions. Following are several unrelated transactions involving a university.

  • In fiscal year 2017, the university was notified by the federal government that in 2018 it would receive a $600,000 grant for wetlands research.
  • The university received a $600,000 endowment.
  • For the fiscal year, the university recorded $3,500,000 in tuition and fees revenue. Cash refunds of $325,000 were given.
  • The university provided $12,600 in tuition waivers for students with outstanding academic performance.
  • During the year, the university constructed a new street, to allow for the expansion of its student housing efforts. The cost of the street was $1,980,000.
  • The biology department spent $25,000 on wetland research.
  • At year-end, $2,670 of estimated uncollectible tuition and fees was recorded.

Using this information

  1. Prepare journal entries to record the foregoing transactions, assuming the university is a private institution.
  2. Prepare journal entries to record the foregoing transactions, assuming the university is a public institution.

4. Financial Statements - Public College. The following balances come from the trial balance of Wilson State College as of the end of the 2017 fiscal year.

WILSON STATE COLLEGE
Pre-closing Trial Balance
June 30, 2017 (000s omitted)


Debits

Credits

Cash and Cash Equivalents

$3,278


Investments

$29,387


Accounts Receivable

$1,957


Allowance for Uncollectible Receivables


$137

Due from State

$79,626


Inventories

$869


Cash and Cash Equivalents--Restricted

$6,716


Investments--Restricted

$71,883


Depreciable Capital Assets

$184,620


Accumulated Depreciation


$28,850

Nondepreciable Assets

$89,481


Accounts Payable


$2,306

Accrued Liabilities


$2,039

Unearned Revenue


$13,789

Compensated Absences -Current Portion


$1,538

Bonds Payable


$92,116

Compensated Absences


$37,662

Net Position--Net Investment in Capital Assets


$158,715

Net Position--Restricted for Debt Service--Expendable


$1,157

Net Position--Restricted for Capital Projects--Expendable


$49,272

Net Position – Restricted for Endowment--Nonexpendable


$39,959

Net Position--Unrestricted


$36,559

Tuition and Fees


$30,095

Tuition and Fees Discount and Allowances

$7,565


Grants and Contracts Revenue


$18,196

Auxiliary Enterprise Sales


$14,595

Investment Income


$1,745

State Appropriations


$44,894

Capital Appropriations


$12,785

Institutional Support Expenses

$26,268


Academic Support Expenses

$58,940


Scholarships and Fellowships Expense

$7,664


Depreciation Expense

$5,580


Interest Expense

$378


Auxiliary Enterprise Expenses

$12,197


Totals

$586,409

$586,406

Information on Cash and Cash Equivalents Activity



Beginning Cash Balance

$8,067


Received Tuition and Fees (net)

$23,609


Received Grants and Contracts

$12,940


Received from Auxiliary Enterprises

$13,765


Payments to Employees

$58,220


Payments to Vendors

$21,711


Payments to Students for Scholarships and Fellowships

$7,664


Received State Appropriations

39,894


Received Capital Appropriations

20,540


Purchase of Capital Assets

20,634


Interest Paid on Debt

2,095


Interest Income

1,503


Using this information

  1. Prepare a statement of revenues, expenses, and changes in net position for the year ended June 30, 2017, in good form. See Illustrations 15­2 and 7­6; however, display expenses using functional classifications as shown in Illustration 15­6.
  2. Prepare a statement of net position as of June 30, 2017, in good form. For the period, net position restricted for capital projects increased by $3,000, and net position restricted for debt service increased by $150; all bonded debt relates to capital assets. See Illustration 15­1.
  3. Prepare a statement of cash flows for the year ended June 30, 2017. Information on changes in assets and liabilities is as follows: Accounts Receivable (net) increased by $2,551; Due from State decreased by $14,842; Inventories increased by $23; Accounts Payable and Accrued Liabilities increased by $1,962; and Unearned Revenue decreased by $1,763. See Illustration 15­3

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Explanation & Answer

Attached.

QUESTION ONE: CLASSIFICATION OF REVENUE AND EXPENSES
Transaction Number
Transaction 1
Transaction 2
Transaction 3
Transaction 4
Transaction 5
Transaction 6
Transaction 7
Transaction 8

QUESTION ONE: CLASSIFICATION OF REVENUE AND EXPENSES
Revenue and Contribution Classification
Revenue
None of the above
Contributions – Unrestricted
None of the above
Contributions – Temporarily Restricted
Contributions – Temporarily Restricted and Contribution - Permanently Restricted
Contributions – Unrestricted
Contributions – Unrestricted

QUESTION TWO: RECORDING AND REPORTING TRA
Computations
Depreciation expense for equipment
Depreciation expense = Value of asset/ useful life of the asset
Depreciation expense = 12,000/5 years
Depreciation expense
Depreciation expense for furniture
Depreciation expense = Value of asset/ useful life of the asset
Depreciation expense = 9,600/10 years
Depreciation expense
Total depreciation expense
Particulars
Salaries and benefit expense
Rent expense
Telephone expense
Printing & postage expense
Utilities
Supplies expense
Provision for uncollectable pledges
Depreciation expense
Total
JOURNAL ENTRIES
Description
Rent Expense
Contributions unrestricted
To record rent expenses paid by net assets

Cash
Contributions receivable
Contributions - unrestricted
Contributions - temporary restricted
To record cash receipt and contribution receivable

Salaries and benefits expense
Cash
Salaries and benefits payable
To record salaries and benefits expense

Contribution receivable
Contributions - temporary restricted

Discount on contributions receivable
To record contribution receivable

Equipment and furniture
Cash
Contributions - unrestricted
To record cash receipt and contribution receivable

Telephone expense
Printing and postage expense
Utilities expense
Supplies expense
Cash
Accounts payable
To record expenses partyly paid by cash and partly payable

Provision for uncollectible pledges
Allowance for uncollectible pledges - restricted
To record provision for uncollectible pledges

Depreciation expense
Allowance for depreciation
To record depreciation expense

Public health and educaton
Community service
Management and General
Fund-raising
Salaries and benefit expense
Rent expense
Telephone expense
Printing & postage expense
Utilities
Supplies expense
Provision for uncollectable pledges
Depreciation expense
To record adjusting entries

Net assets released -satisfactory of purpose restriction temporarily restricted
Net assets released -satisfactory of purpose restric...


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