Ethan Allen University Is a Private University Following FASB Standards

question 44

Essay

Ethan Allen University is a private university following FASB standards for reporting. The following transactions took place during the year ended June 30,2015.
(1)EAU had received $600,000 in tuition in June 2015 for the summer session that runs from June 16 to August 14,2014 and had deferred $ 390,000 (65%)at June 30,2014.
(2)EAU received in cash tuition of $3,320,000; unrestricted contributions of $320,000; contributions permanently restricted by donor agreement for the endowment of $ 910,000,unrestricted interest income on endowments of $250,000; and auxiliary enterprise revenue of $2,200,000.
(3)Contributions for student scholarships were received in the amount of $425,000. $380,000 was awarded to students during the year. Students receiving these scholarships are required to work 10 hours a week (institutional support).
(4)Expenses amounted to $1,400,000 for instruction,$800,000 for research,$600,000 for public service,$2,000,000 for auxiliary enterprises,$300,000 for student services,and $890,000 for institutional support. Included in these amounts is $460,000 of depreciation. All other expenses ($ 5,530,000)were paid in cash.Plant assets are classified as unrestricted.
(5)EAU received $400,000 in tuition in mid June 2015 for the summer session ending in mid-August 2015.(65% relates to the next fiscal year)
(6)At year-end,endowment investments were determined to have a fair value of $14,000 in excess of their recorded amounts. No restrictions apply to this income.
Required:
(a)Prepare journal entries to record these events including closing entries.
(b)Prepare a Statement of Unrestricted Revenues,Expenses and Other Changes in Unrestricted Net Assets.
(c)Prepare a Statement of Activities for the year ending June 30,2015,assuming the June 30,2014 balances in net assets are:
$1,020,000 unrestricted,$30,000 temporarily restricted,and $8,000,000 permanently restricted.

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