Ethan Allen University Is a Private University Following FASB Standards

question 25

Essay

Ethan Allen University is a private university following FASB standards for reporting. The following transactions took place during the year ended June 30, 2009.
(1) EAU had received $520,000 in tuition in June 2009 for the summer session that runs from June 16 to August 14, 2008 and had deferred $ 390,000 (75%) at June 30, 2008.
(2) EAU received in cash tuition of $2,890,000; unrestricted contributions of $320,000; contributions permanently restricted by donor agreement for the endowment of $ 700,000, unrestricted interest income on endowments of $250,000; and auxiliary enterprise revenue of $2,500,000.
(3) Contributions for student scholarships were received in the amount of $340,000. $290,000 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 $580,000 in tuition in mid June 2009 for the summer session ending in mid August 2009.
(6) At year-end, endowment investments were determined to have a fair value of $54,000 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, 2009, assuming the June 30, 200810 balances in net assets are: $2,050,000 unrestricted, $830,000 temporarily restricted and $4,000,000 permanently restricted.

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Definitions:

Insulin Shock

A severe hypoglycemic event caused by an excess of insulin in the body, leading to low blood sugar levels, confusion, and potentially loss of consciousness.

Hyperglycemia

A condition characterized by an excessive concentration of glucose in the blood.

Diabetes Insipidus

A disorder characterized by an imbalance of fluid in the body, leading to intense thirst and the excretion of large amounts of urine.

Diabetes Mellitus

A chronic condition characterized by high blood sugar levels due to the body's inability to produce or effectively use insulin.