Southeastern College began the year with endowment investments of $1,200,000 and $700,000 of restricted cash designated by a donor for capital additions. 1. During the year an additional $950,000 donation was received for capital additions. These funds together with those contributed in the prior year were used to purchase 150 acres of land adjacent to the university. 2. An alum contributed $200,000 to the permanent endowment and pledged to provide an additional $400,000 early next year. The cash was immediately invested. 3. By terms of the endowment agreement, interest and dividends received on the investments are restricted for scholarships. Gains or losses from changes in the fair value of the investments, however, are not distributed but remain in the endowment. During the year $48,000 of interest and dividend were received on endowment investments. 4. At year-end, the fair value of the investments had increased by $8,500. Required: Prepare journal entries to record the above transactions assuming: a. Southeastern College is a public university. b. Southeastern College is a private university. Complete this question by entering your answers in the tabs below. Public Private University University Prepare journal entries to record the above transactions assuming Southeastern College is a public university. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet < 1 2 3 4 5 6 Record the donation received for capital addition. >
Southeastern College began the year with endowment investments of $1,200,000 and $700,000 of restricted cash designated by a donor for capital additions. 1. During the year an additional $950,000 donation was received for capital additions. These funds together with those contributed in the prior year were used to purchase 150 acres of land adjacent to the university. 2. An alum contributed $200,000 to the permanent endowment and pledged to provide an additional $400,000 early next year. The cash was immediately invested. 3. By terms of the endowment agreement, interest and dividends received on the investments are restricted for scholarships. Gains or losses from changes in the fair value of the investments, however, are not distributed but remain in the endowment. During the year $48,000 of interest and dividend were received on endowment investments. 4. At year-end, the fair value of the investments had increased by $8,500. Required: Prepare journal entries to record the above transactions assuming: a. Southeastern College is a public university. b. Southeastern College is a private university. Complete this question by entering your answers in the tabs below. Public Private University University Prepare journal entries to record the above transactions assuming Southeastern College is a public university. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet < 1 2 3 4 5 6 Record the donation received for capital addition. >
Chapter2: Income Tax Concepts
Section: Chapter Questions
Problem 67IIP
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Transcribed Image Text:Southeastern College began the year with endowment investments of $1,200,000 and $700,000 of restricted cash designated by a
donor for capital additions.
1. During the year an additional $950,000 donation was received for capital additions. These funds together with those contributed in
the prior year were used to purchase 150 acres of land adjacent to the university.
2. An alum contributed $200,000 to the permanent endowment and pledged to provide an additional $400,000 early next year. The
cash was immediately invested.
3. By terms of the endowment agreement, interest and dividends received on the investments are restricted for scholarships. Gains or
losses from changes in the fair value of the investments, however, are not distributed but remain in the endowment. During the year
$48,000 of interest and dividend were received on endowment investments.
4. At year-end, the fair value of the investments had increased by $8,500.
Required:
Prepare journal entries to record the above transactions assuming:
a. Southeastern College is a public university.
b. Southeastern College is a private university.
Complete this question by entering your answers in the tabs below.
Public
Private
University University
Prepare journal entries to record the above transactions assuming Southeastern College is a public university. (If no entry is required for
a transaction/event, select "No Journal Entry Required" in the first account field.)
View transaction list
Journal entry worksheet
<
1
2 3
4
5
6
Record the donation received for capital addition.
>
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