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 or retire the machine in the interim. 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. Operating expenses.Part 3Several years ago, a donor gave the school $400,000 in cash to help fund its financial aid program. This year, the school charged $2 million in tuition but granted $700,000 in financial aid. Collections to date from the students have totaled $1.1 million. The donor’s gift has offset $300,000 of the financial aid. 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. Operating expenses.c. Temporarily restricted net assets.
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 1
During 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 or retire the machine in the interim.
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. Operating expenses.
Part 3
Several years ago, a donor gave the school $400,000 in cash to help fund its financial aid program.
This year, the school charged $2 million in tuition but granted $700,000 in financial aid. Collections to date from the students have totaled $1.1 million. The donor’s gift has offset $300,000 of the financial aid. 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. Operating expenses.
c. Temporarily restricted net assets.
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