Ethan Allen University Is a Private University Following FASB Standards

question 113

Essay

Ethan Allen University is a private university following FASB standards for reporting.The following transactions took place during the year ended June 30,2012.
(1)EAU had received $600,000 in tuition in June 2012 for the summer session that runs from
June 16 to August 14,2011 and had deferred $450,000 (75%)at June 30,2011.
(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 $805,000,
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 $430,000.$360,000
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 2012 for the summer session ending in mid
August 2012.
(6)At year-end,endowment investments were determined to have a fair value of $50,000 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 30,2012,assuming the June 30,
2011 balances in net assets are:
$2,050,000 unrestricted,$830,000 temporarily restricted,and
$4,000,000 permanently restricted.

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Definitions:

Ethnic Groups

Communities or populations sharing common cultural attributes, ancestry, language, history, and often geographic origin.

Asian American

A person of Asian ancestry or descent, living in the United States, and often referring to a diverse group with varying cultural, linguistic, and religious backgrounds.

Filial Piety

A virtue of respect for one's parents and ancestors in many cultures, particularly prominent in Confucian philosophy.

Younger Generation

Refers to the group of individuals who are significantly younger in age compared to another specified group, often implying recent or innovative perspectives.