Question
In: Accounting
Following is the trial balance for Prentiss College, a privately funded college, as of January 1,...
Following is the trial balance for Prentiss College, a privately funded college, as of January 1, 2018 (in thousands):
|
Dr |
Cr |
|
|
Cash |
$900 |
|
|
Receivables |
250 |
|
|
Investments |
4,000 |
|
|
Buildings and equipment, net |
15,500 |
|
|
Accrued liabilities |
$800 |
|
|
Long-term debt |
10,000 |
|
|
Unrestricted net assets |
4,000 |
|
|
Temporarily restricted net assets |
2,000 |
|
|
Permanently restricted net assets |
_____ |
3,850 |
|
Total |
$20,650 |
$20,650 |
Events for 2018 are as follows (in thousands):
1. Tuition and fees are $7,000, of which $2,000 is waived for graduate teaching assistantships and $1,000 is covered by scholarships. $3,950 is collected in cash. All tuition and fees relate to 2018.
2. Operating expenses for salaries, utilities, research programs, etc. are $8,500, all paid in cash. Accrued liabilities of $650 were paid in cash. Depreciation on the buildings and equipment is $200.
3. An unrestricted state appropriation of $3,000 is received in cash.
4. Cash donations and gifts for equipment replacement are as follows:
|
Restricted to equipment replacement |
$500 |
|
Restricted to research projects |
300 |
5. $900 of donor-restricted cash is spent to replace equipment. $100 of donor-restricted cash is spent for research projects (included in Item 2 above).
6. $175 is spent to service the long-term debt ($100 for interest, and $75 for principal; the interest is not included in Item 2 above).
7. Investment income, received in cash, is $2,000, of which $300 is donor-restricted to research programs. Donor-restricted cash used for research programs is $250, included in Item 2 above. Investments have a fair value of $4,200 at year-end. Unrealized gains and losses are unrestricted.
Required:
a. Prepare journal entries to record the transaction. Indicate whether each entry would affect unrestricted, temporarily restricted, or permanent restricted net assets.
b. Present Prentiss College’s statement of activities for 2018.
c. Present Prentiss College’s statement of financial position as of December 31, 2018.
Solutions
Expert Solution
| Journal entries in the books of Prentiss College | ||||
| Sr No | Particulars | Dr $ | Cr $ | Indication |
| 1 | Cash & Bank A/c | 3,950 | ||
| Teaching Assistantship A/c | 2,000 | |||
| Scholarship A/c | 1,000 | Unrestricted Net Assets | ||
| Receivables A/c | 50 | |||
| To Tution Fees A/c | 7,000 | |||
| 2 | Operating expenses A/c (except research project of 100 as per instruction no. 5 and 250 as per instruction no.7) | 8,150 | ||
| To Cash & Bank A/c | 8,150 | |||
| 3 | Accrued liabilities A/c | 650 | ||
| To Cash & Bank A/c | 650 | |||
| 4 | Depreciation A/c | 200 | ||
| To Building & Equipment A/c | 200 | |||
| 5 | Cash & Bank A/c | 3,000 | Unrestricted Net Assets | |
| To Unrestricted Net Assets A/c | 3,000 | |||
| 6 | Cash & Bank A/c | 800 | ||
| To Permanently Restricted Net Assets | 500 | Permanently Restricted Net Assets | ||
| To Temporarily Restricted Net Assets | 300 | Temporarily Restricted Net Assets | ||
| 7 | Permanently Restricted Net Assets | 900 | Permanently Restricted Net Assets | |
| To Cash & Bank | 900 | |||
| 8 | Temporarily Restricted Net Assets A/c | 100 | Temporarily Restricted Net Assets | |
| To Cash & Bank A/c | 100 | |||
| 9 | Interest A/c | 100 | ||
| Long Term Debt A/c | 75 | |||
| To Cash & Bank A/c | 175 | |||
| 10 | Temporarily Restricted Net Assets A/c | 250 | Temporarily Restricted Net Assets | |
| To Cash & Bank A/c | 250 | |||
| 11 | Cash & Bank A/c | 2,000 | ||
| Income from investments | 1,700 | |||
| Temporarily Restricted Net Assets A/c | 300 | Temporarily Restricted Net Assets | ||
| 12 | Investment A/c | 200 | ||
| Investment Revaluation A/c | 200 | Unrestricted Net Assets | ||
| Statement of activities of Prentiss College for the year ending on 31 Dec 2018 | |||
| Income | Amount $ | Expenses | Amount $ |
| Tution fees | 7,000 | Teaching assistantship | 2,000 |
| Investment revaluation | 200 | Operating expenses | 8,150 |
| Income from investment | 1,700 | Depreciation | 200 |
| Interest | 100 | ||
| Deficit | 1,550 | ||
| Total | 10,450 | Total | 10,450 |
| Financial position of Prentiss College as at 31 Dec 2018 | |||
| Liabilities | Amt $ | Assets | Amt $ |
| Permanently Restricted Net Assets | 3,450 | Building & Equipment net | 15,300 |
| Temporarily Restricted Net Assets | 2,250 | Investments | 4,200 |
| Unrestricted Net Assets (after adjusting deficit) | 4,450 | Receivables | 300 |
| Long term debt | 9,925 | Cash | 425 |
| Accrued liabilities | 150 | ||
 ekkarill92 answered 2 years agoRelated SolutionsFollowing is the trial balance for Prentiss College, a privately funded college, as of January 1,...Following is the trial balance for Prentiss College, a privately
funded college, as of January 1, 2018 (in thousands):
Dr
Cr
Cash
$900
Receivables
250
Investments
4,000
Buildings and equipment, net
15,500
Accrued liabilities
$800
Long-term debt
10,000
Unrestricted net assets
4,000
Temporarily restricted net assets
2,000
Permanently restricted net assets
_____
3,850
Total
$20,650
$20,650
Events for 2018 are as follows (in thousands):
1. Tuition and fees are $7,000, of which $2,000 is waived for
graduate teaching...
3: Following is the trial balance for Passaic Community College, a privately funded college, as of...3: Following is the trial balance for Passaic Community College,
a privately funded college, as of January 1, 2018 (in
thousands):
Passaic Community
Dr
Cr
Cash
$900
Receivables
250
Investments
4,000
Buildings and equipment, net
15,500
Accrued liabilities
$800
Long-term debt
10,000
Unrestricted net assets
4,000
Temporarily restricted net assets
2,000
Permanently restricted net assets
_____
3,850
Total
$20,650
$20,650
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Account Title
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Credit
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Accounts Receivable
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