Question

In: Accounting

Beatty College, a not-for-profit college, engaged in the following transactions during its fiscal year ending June...

Beatty College, a not-for-profit college, engaged in the following transactions during its fiscal year ending June 30, 2015. Requirements: Prepare appropriate journal entries, indicating the types of funds (by restrictiveness) in which they would be recorded. Transactions: 1. In May 2015 Beatty College collected $100,000,000 in student tuition. Of this amount $10,000,000 was applicable to the summer semester, which ran from June1 to August 30, 2015, and $1,000,000 was applicable to the fall semester that began September, 2015. 2. Beatty College received a contribution of $1,000,000 in stocks and bonds to establish an endowed chair in accounting. Income from the chair endowment must be used to supplement the salary of a professor accounting. 3. During 2015, the accounting chair endowment earned interest and dividends of $50,000 all of which was used to supplement the salary of the chair of the accounting department. (Note: a. record the investment earnings and b. record cash paid for the chair’s salary.) Use the same $50,000 for both entries. 4. The fair value of the investment of the accounting chair endowment declined by $80,000. 5. Using funds restricted for this purpose, the college purchased $150,000 of equipment for the college athletics department. 6. Beatty College recorded depreciation of $30,000. 7. The annual alumni campaign yielded $1,800,000 in pledges. The college estimated that 2% would be uncollectible. During the year, Beatty college collected $1,500,000 on the pledges.

Solutions

Expert Solution

1)a) May 2015    Cash/ Bank A/c ............Dr     $100,000,000

                        To Tution fees A/c                                       $100,000,000

(Being tution fees received.)

b) Tution Fees A/c ........Dr $ 1,500,000

    To Prepaid Income A/c                   $ 1,500,000

(Being Tution fees of next month ie Aug 15 and sept semester 2015 received in advance)

2) Stock and Bonds A/C .......Dr $ 1,000,000

To Chair Endowment A/c                            $ 1,000,000

(Being contribution received in form of shares and bonds to establish an endowed chair)

3)a) Cash/ Bank A/c .....Dr             $ 50,000

To Interest /Dividend A/c                          $ 50,000

(Being income from shares and bonds)

    b) Salary A/c .......Dr      $ 50,000

        To Cash/ Bank a/c                                       $ 50,000

(Being salary paid out of interest and dividend income received)

4) Chair Endowment unrealised Loss A/c ....Dr $ 80,000

    To Chair Endowment A/c                                           $ 80,000

(Being value of investment done at fair value)

5) Athletics equipment A/c...................Dr    $150,000

     To Investment Fund A/c    $ 150,000

(Being investment done in equipments for which fund was created)

6) Depreciation A/c ....................Dr      $ 30,000

    To Profit/ Loss A/c                                        $ 30,000

(BEing depreciation on FA)

7) Caah / Bank A/c ..........Dr $1,500,000

To Pledges A/c                                   $ 1,500,000

    (Being collections from Pledges)


Related Solutions

The Eaton School District engaged in the following transactions during its fiscal year ending August 31,...
The Eaton School District engaged in the following transactions during its fiscal year ending August 31, 2018. • It established a purchasing department, which would be accounted for in a new internal service fund, to purchase supplies and distribute them to operating units. To provide working capital for the new department it transferred $1.7 million from its general fund to the internal service fund. • During the year, operating departments that are accounted for in the general fund acquired supplies...
The town of Malvern engages in the following transactions during its fiscal year ending September 30,...
The town of Malvern engages in the following transactions during its fiscal year ending September 30, 2021. All dollar amounts are in thousands. Prepare summary journal entries in its governmental funds. Base entries on generally accepted accounting principles now in effect. (1)   At the beginning of the fiscal year 2021, the town levied property taxes of $180,000. It estimated that $6,000 will be uncollectible. (2)   During fiscal year 2021, the town collected $150,000 prior to September 30, 2021. (3)   The town collected $4,000...
during the year, Pigeon City engaged in the following transactions. The city has a 12/31 fiscal...
during the year, Pigeon City engaged in the following transactions. The city has a 12/31 fiscal year end. Record the transactions listed below and indicate in which fund the entry is made. a. On February 1, 2017, the city issued bonds in the amount of $900,000. The bonds sold for 101, and the city incurred $15,000 bonds issuance costs. The proceeds will be used to purchase a warehouse, to store old paperwork and other important city documents. b. On February...
During the fiscal year ended December 31, 2017, Swanson Corporation engaged in the following transactions involving...
During the fiscal year ended December 31, 2017, Swanson Corporation engaged in the following transactions involving notes payable: Aug. 6             Borrowed $12,000 from Maple Grove Bank, signing a 45-day, 12%             note payable. Sept. 16  Purchased office equipment from Seawald Equipment.  The invoice amount was $18,000, and Seawald agreed to accept, as full payment a 10 percent, three-month note for the invoice amount. Sept. 20  Paid Maple Grove Bank the note plus accrued interest. Nov. 1  Borrowed $250,000 from Mike Swanson, a major corporate stockholder. The...
Packard Company engaged in the following transactions during Year 1, its first year of operations:
Packard Company engaged in the following transactions during Year 1, its first year of operations: (Assume all transactions are cash transactions.)1) Acquired $950 cash from the issue of common stock.2) Borrowed $420 from a bank.3) Earned $650 of revenues.4) Paid expenses of $250.5) Paid a $50 dividend.During Year 2, Packard engaged in the following transactions: (Assume all transactions are cash transactions.)1) Issued an additional $325 of common stock.2) Repaid $220 of its debt to the bank.3) Earned revenues of $750.4)...
Lexington Company engaged in the following transactions during Year 1, its first year in operation:
Lexington Company engaged in the following transactions during Year 1, its first year in operation: (Assume all transactions are cash transactions)Acquired $6,000 cash from issuing common stock.Borrowed $4,400 from a bank.Earned $6,200 of revenues.Incurred $4,800 in expenses.Paid dividends of $800.Lexington Company engaged in the following transactions during Year 2: (Assume all transactions are cash transactions)Acquired an additional $1,000 cash from the issue of common stock.Repaid $2,600 of its debt to the bank.Earned revenues, $9,000.Incurred expenses of $5,500.Paid dividends of $1,280....
The following investment transactions happened during the fiscal year ending December 31, 2018 for Dolly Company....
The following investment transactions happened during the fiscal year ending December 31, 2018 for Dolly Company. Jan 2                         Purchased 30,000 shares of common stock of Vita Company at $10 per share, plus a brokerage fee of $3,000. Dolly Company does not have a significant influence on Vita Company, and classified this investment as long-term. Feb 26                      Purchased 25,000 shares of common stock of Farie Inc. at $38 per share. Because this investment represents 25% of Farie’s total outstanding shares, it gives Dolly...
Packard Company engaged in the following transactions during Year 1, its first year of operations. (Assume...
Packard Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.) 1) Acquired $1,100 cash from the issue of common stock. 2) Borrowed $570 from a bank. 3) Earned $750 of revenues cash. 4) Paid expenses of $280. 5) Paid a $80 dividend. During Year 2, Packard engaged in the following transactions. (Assume all transactions are cash transactions.) 1) Issued an additional $475 of common stock. 2) Repaid $325 of...
Packard Company engaged in the following transactions during Year 1, its first year of operations. (Assume...
Packard Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.) 1) Acquired $1,350 cash from the issue of common stock. 2) Borrowed $820 from a bank. 3) Earned $1,000 of revenues cash. 4) Paid expenses of $330. 5) Paid a $130 dividend. During Year 2, Packard engaged in the following transactions. (Assume all transactions are cash transactions.) 1) Issued an additional $725 of common stock. 2) Repaid $500 of...
Revenue and Related Transactions. During its current fiscal year, Evanston General Hospital, a not-for-profit health care...
Revenue and Related Transactions. During its current fiscal year, Evanston General Hospital, a not-for-profit health care organization, had the following revenue-related transactions (amounts summarized for the year). Services provided to inpatients and outpatients amounted to $9,520,000, of which $550,000 was for charity care, $970,000 was paid by uninsured patients, and $8,000,000 was billed to Medicare, Medicaid, and insurance companies. Donated pharmaceutical and medical supplies valued at $340,000 were received and utilized as general expenses. Medicare, Medicaid, and third-party payors (insurance...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT