Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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Chapter 18, Problem 42P
To determine
Determine the given statement is true or false with a brief explanation.
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You are preparing a statement of activities for the University of Richland, a private not-for-profit entity. The following questions should be viewed as independent of each other.Part 1During the current year, a donor gives $400,000 in cash to the school and stipulates that it must hold this money forever. However, any investment income earned on this money must be used for faculty salaries. During the current year, the investment earned $31,000 and, of that amount, the school has expended $22,000 appropriately to date. As a result of these events, what was the overall change in each of the following for the current year?a. Unrestricted net assets.b. Temporarily restricted net assets.c. Permanently restricted net assets.Part 2 A donor gives a large machine to the school on January 1 of the current year. It has a value of $200,000, no salvage value, and a 10-year life. The donor requires that the school keep the machine and use it for all 10 years, and the school agrees. It cannot sell…
The College of Central North (a private school) has the following events and transactions:a. On January 1, Year 1, the board of trustees voted to restrict $1.9 million of previously unrestricted investments to construct a new football stadium at some future time.b. On April 1, Year 1, Dr. Johnson gives the school $4 million in investments that is to be held forever, but all subsequent cash income is to be used to help pay for construction (and, later, maintenance) of the football stadium.c. On December 31, Year 1, the investments in (b) generate $500,000 in cash interest revenue. In addition, the investments went up in value by $44,000.d. On January 1, Year 2, the school builds a football stadium with the restricted $2.4 million in funds. Cash is paid. The stadium has a 20-year life and no salvage value.e. On January 2, Year 2, Dr. Johnson buys a seat for the current year on the 50-yard line of the stadium for $30,000 in cash when this seat’s fair value is actually $12,000.f. On…
The College of Central North (a private school) has the following events and transactions:
On January 1, Year 1, the board of trustees voted to restrict $1.9 million of previously unrestricted investments to construct a new football stadium at some future time.
On April 1, Year 1, Dr. Johnson gives the school $4 million in investments that is to be held forever, but all subsequent cash income is to be used to help pay for construction (and, later, maintenance) of the football stadium.
On December 31, Year 1, the investments in (b) generate $500,000 in cash interest revenue. In addition, the investments went up in value by $44,000.
On January 1, Year 2, the school builds a football stadium with the restricted $2.4 million in funds. Cash is paid. The stadium has a 20-year life and no salvage value.
On January 2, Year 2, Dr. Johnson buys a seat for the current year on the 50-yard line of the stadium for $30,000 in cash when this seat’s fair value is actually $12,000.
On January 3, Year…
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