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ACC 410 WEEK 10 QUIZ 6

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An accountant has encountered a perplexing financial reporting issue related to the private
college for which he is preparing financial statements. The issue is not specifically addressed
by FASB Statements. To what standards would the accountant first look for guidance?

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During the current year, Luis University received a $50,000 gift from an alumna who specified
that it must be used to pay travel costs for faculty to attend health care conferences in foreign
countries. During the year the university spent $8,000 to support travel to a health care
conference in Italy. The $8,000 disbursement will cause a NET decrease in which class of net
assets?
A public university had tuition and fees for the year ended June 30, 2012, in the amount of
$27,000,000. Scholarships, for which no services were required, amounted to $2,100,000.
Graduate assistantships, for which services were required, amounted to $1,950,000. The
amount to be reported by the university as net tuition and fee revenue would be
During the year, Dakota Universitys board of trustees established a $500,000 fund to be
retained and invested for scholarship grants. The fund earned $30,000, which had not been
distributed by December 31. What amount should Dakota report in a board-designated (quasi)
endowment funds net position at December 31?
Landon College, a private college, received a $1 million donation. The donor specified that
the principal of her gift could never be used for program activities, but the earnings on the
principal must be used to provide scholarships to academically qualified students in the
business school. The $1 million gift would increase which of the following categories of net
assets?
A not-for-profit university maintained as endowment of $800,000, the income of which was
restricted for an annual conference on international relations. In a particular year, the market
value of the endowment increased by $80,000. The university held a conference on
international relations at a cost of $86,000. The university should report
A not-for-profit university operates its college book-store as an auxiliary enterprise. During
the year the store has revenues of $30 million and expenses of $27 million. In its statement of
activities the university should report
Financial statements for Smith College, a church-supported college, should be prepared
according to standards set by
Bristol Public School Foundation had available temporarily restricted gifts in excess of
$200,000. The foundation decided to invest this money temporarily until it needs the funds for
the restricted purpose. The donors had made no specific stipulations regarding investment
earnings but the foundation board had voted to use the earnings on the projects for which the
gift had originally been restricted. At year-end, the securities had a fair value of $200,500. The
appropriate way to recognize the change in fair value is

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In 2014, a public university was awarded a federal reimbursement grant of $18 million to
carry out research. Of this, $12 million was intended to cover direct costs and $6 million to cover
overhead. In a particular year, the university incurred $4 million in allowable direct costs and
received $3.4 million from the federal government. It expected to incur the remaining costs and
collect the remaining balance in 2015. For 2014 it should recognize revenues from the grant of
Declines in the stock market can affect the fiscal health of colleges and universities. Which
of the following is the least likely reason for that?
Lane College Foundation is governed by a board, some members of which are appointed by
the president of Lane College and some of which are elected by the alumni. The foundation was
created to solicit and accept donations on behalf of Lane College, a private not-for-profit
college. Lane College and its foundation are deemed to be financially interrelated. All funds
collected by the foundation must be used to support activities of Lane College. The foundation
board can select which activities of Lane College it supports. Lane Foundation received a $1
million bequest from the estate of a 1940 graduate. At the time the foundation receives the
donation, the foundation should debit Cash for $1 million and credit what account for $1 million?
Lane College Foundation is governed by a board, some members of which are appointed by
the president of Lane College and some of which are elected by the alumni. The foundation was
created to solicit and accept donations on behalf of Lane College, a private not-for-profit
college. Lane College and its foundation are deemed to be financially interrelated. All funds
collected by the foundation must be used to support activities of Lane College. The foundation
board can select which activities of Lane College it supports. Lane Foundation received a $1
million bequest from the estate of a 1940 graduate. At the time the foundation receives the
donation, Lane College should debit Asset $1 million and credit what account for $1 million?
In June 2015, a public university bills and collects $45 million in tuition for the summer
semester that runs from June 1 through July 15. In addition, in May and June it bills $300 million
for the fall semester that runs from September 1 through December 15. Of this amount it
collects only $120 million (expecting to collect the balance prior to September 1). In its
statement of revenues, expenses, and changes in net position for the fiscal year ending June
30, 2015 it should recognize as tuition revenue
During the year, Goodman College received the following:

An unrestricted $280,000 pledge to be paid the following year

A $140,000 cash gift restricted for study-abroad scholarships

A notice from a recent business school graduate that he has named the college as a
beneficiary of $60,000 in his will
What amount of contribution revenue should Goodman College report in its statement of
activities?