ADVANCED ACCOUNTING
13th Edition
ISBN: 9781260773033
Author: Hoyle
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 18, Problem 44P
To determine
Determine the given statement is true or false with a brief explanation.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
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?
Unrestricted net assets.
Temporarily restricted net assets.
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…
The College of Central North (a private school) has the following events and transactions:a. On January 1, Year 1, the board of trustees voted to restrict $1.9 million of previously unrestricted investments to construct a new football stadium at some future time.b. On April 1, Year 1, Dr. Johnson gives the school $4 million in investments that is to be held forever, but all subsequent cash income is to be used to help pay for construction (and, later, maintenance) of the football stadium.c. On December 31, Year 1, the investments in (b) generate $500,000 in cash interest revenue. In addition, the investments went up in value by $44,000.d. On January 1, Year 2, the school builds a football stadium with the restricted $2.4 million in funds. Cash is paid. The stadium has a 20-year life and no salvage value.e. On January 2, Year 2, Dr. Johnson buys a seat for the current year on the 50-yard line of the stadium for $30,000 in cash when this seat’s fair value is actually $12,000.f. On…
The College of Central North (a private school) has the following events and transactions:
On January 1, Year 1, the board of trustees voted to restrict $1.9 million of previously unrestricted investments to construct a new football stadium at some future time.
On April 1, Year 1, Dr. Johnson gives the school $4 million in investments that is to be held forever, but all subsequent cash income is to be used to help pay for construction (and, later, maintenance) of the football stadium.
On December 31, Year 1, the investments in (b) generate $500,000 in cash interest revenue. In addition, the investments went up in value by $44,000.
On January 1, Year 2, the school builds a football stadium with the restricted $2.4 million in funds. Cash is paid. The stadium has a 20-year life and no salvage value.
On January 2, Year 2, Dr. Johnson buys a seat for the current year on the 50-yard line of the stadium for $30,000 in cash when this seat’s fair value is actually $12,000.
On January 3, Year…
Chapter 18 Solutions
ADVANCED ACCOUNTING
Ch. 18 - Prob. 1QCh. 18 - Prob. 2QCh. 18 - Prob. 3QCh. 18 - What are temporarily restricted net assets?Ch. 18 - What are permanently restricted net assets?Ch. 18 - Prob. 6QCh. 18 - Prob. 7QCh. 18 - Prob. 8QCh. 18 - Prob. 9QCh. 18 - Prob. 10Q
Ch. 18 - Prob. 11QCh. 18 - Prob. 12QCh. 18 - Prob. 13QCh. 18 - Prob. 14QCh. 18 - Prob. 15QCh. 18 - When should membership dues be considered revenue...Ch. 18 - Prob. 17QCh. 18 - Prob. 18QCh. 18 - Prob. 19QCh. 18 - Prob. 20QCh. 18 - Prob. 21QCh. 18 - Prob. 1PCh. 18 - Prob. 2PCh. 18 - Prob. 3PCh. 18 - Prob. 4PCh. 18 - A donor gives Charity 1 50,000 in cash that it...Ch. 18 - Prob. 6PCh. 18 - Prob. 7PCh. 18 - Prob. 8PCh. 18 - Prob. 9PCh. 18 - Prob. 10PCh. 18 - Prob. 11PCh. 18 - Prob. 12PCh. 18 - Prob. 13PCh. 18 - Prob. 14PCh. 18 - Prob. 15PCh. 18 - Prob. 16PCh. 18 - Prob. 17PCh. 18 - Prob. 18PCh. 18 - Prob. 19PCh. 18 - Prob. 20PCh. 18 - Prob. 21PCh. 18 - Prob. 22PCh. 18 - Prob. 23PCh. 18 - Prob. 24PCh. 18 - Prob. 25PCh. 18 - Prob. 26PCh. 18 - Prob. 27PCh. 18 - Prob. 28PCh. 18 - Prob. 29PCh. 18 - Prob. 30PCh. 18 - Prob. 31PCh. 18 - Prob. 32PCh. 18 - Prob. 33PCh. 18 - Prob. 34PCh. 18 - Prob. 35PCh. 18 - Prob. 36PCh. 18 - Prob. 37PCh. 18 - Prob. 38PCh. 18 - Prob. 39PCh. 18 - A private not-for-profit entity is working to...Ch. 18 - Prob. 41PCh. 18 - The University of Danville is a private...Ch. 18 - Prob. 43PCh. 18 - Prob. 44PCh. 18 - Prob. 45PCh. 18 - Prob. 46PCh. 18 - Prob. 47PCh. 18 - Prob. 48PCh. 18 - Prob. 49PCh. 18 - At the beginning of Year 1, the entity above...Ch. 18 - Prob. 51PCh. 18 - Prob. 52PCh. 18 - Prob. 53PCh. 18 - Prob. 54PCh. 18 - Prob. 1DYSCh. 18 - Prob. 2DYSCh. 18 - Prob. 3DYSCh. 18 - Prob. 4DYSCh. 18 - Prob. 5DYSCh. 18 - Prob. 6DYS
Knowledge Booster
Similar questions
- 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…arrow_forwardDuring the year, Private College received the following: An unrestricted $10,000 pledge to be paid the following year. A $70,000 cash gift restricted for scholarships. A notice from a recent graduate that the college is named as a beneficiary of $25,000 in that graduate's will. What amount of contribution revenue should Private College report in its statement of activities? A.) $10,000 B.) $70,000 C.) $105,000 D.) $80,000arrow_forwardSoutheastern College began the year with endowment investments of $1,530,000 and $900,000 of restricted cash designated by a donor for capital additions. 1. During the year an additional $532,000 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 $400,000 to the permanent endowment and pledged to provide an additional $620,000 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 $70,000 of interest and dividend were received on endowment investments. 4. At year-end, the fair value of the investments had increased by $10,100. Required: Prepare journal entries to record the above…arrow_forward
- Southeastern College began the year with endowment investments of $1,430,000 and $850,000 of restricted cash designated by a donor for capital additions. 1. During the year an additional $522,000 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 $350,000 to the permanent endowment and pledged to provide an additional $570,000 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 $65,000 of interest and dividend were received on endowment investments. 4. At year-end, the fair value of the investments had increased by $9,100. Required: Prepare journal entries to record the above…arrow_forwardPalestine College, a not-for-profit institution, engaged in the following transactions during its fiscal year ending June 30, 2018. Prepare appropriate journal entries, indicating the net asset category affected (with donor restrictions or without donor restrictions). 1. The college collected student tuition $8 million as follows: $1,500,000 was applicable to the Summer Semester, which ran from June 1 to August 30, and the rest was applicable to the coming Fall Semester (September-December). 2. Using funds restricted for this purpose, the college purchased $300,000 of equipment for their movie theater. The college charged depreciation of $30,000. 3. The annual alumni campaign yielded $2,800,000 in pledges. The college estimated that 2 percent would be uncollectible. During the year the college collected $2,400,000 on the pledges.arrow_forward! Required information Problem 18-45 (Static) (LO 18-1, 18-2, 18-4, 18-5, 18-8) [The following information applies to the questions displayed below.] For a number of years, a private not-for-profit entity has been preparing financial statements that do not necessarily conform to U.S. generally accepted accounting principles. At the end of the most recent year (Year 2), those financial statements show total assets of $900,000, total liabilities of $100,000, net assets without donor restriction of $400,000, and net assets with donor restrictions of $400,000. This last category is composed of $300,000 in net assets with purpose restrictions and $100,000 in net assets that must be permanently held. At the end of Year 1, financial statements show total assets of $700,000, total liabilities of $60,000, net assets without donor restriction of $340,000, and net assets with donor restrictions of $300,000. This last category is composed of $220,000 in net assets with purpose restrictions and…arrow_forward
- Record the following annuity and life income activities of Private University:1. On July 1, 2010, R. W. Fields, emeritus professor of accounting, moved out of the state. Fields donated to the university common stock with a cost basis of $30,000 and a fair value of $90,000. Fields is to receive an annuity of $6,000 each year for life; at death, the securities are to be sold and the remaining cash balance is to be transferred to the student loan fund. At a 10% annual rate and a life expectancy of 12 years, the present value of the annuity payments is $34,068.2. The stock paid $3,400 in dividends each 12-month period.3. The annuities payable account is adjusted to present value. At year-end, a payment of $6,000 is made to Professor Fields.4. The annuities payable account is adjusted to present value. A second payment was made a year later.5. A month later, Professor Fields died, eliminating the liability for future annuity payments.6. The common stock was sold for $97,000. The cash…arrow_forwardThis topic is about government grants. Choose the letter of correct answer. On Sept. 1, 2021, Entity A, a private university, receives P 1,000,000 cash as government grant conditioned on acquisition of computers to be used in Entity's A I.T. Department. Entity A acquires the computer on Nov. 1, 2021 at which date the computers are available for their intended use. Entity A recognize depreciation on a monthly basis. When should Entity A starts recognizing income from the government grant? a. September 1, 2021 b. November 1, 2021 c. November 30, 2021 d. December 31, 2021 Entity A received land with fair value of P 200,000 from the government conditioned with the construction of a building on the lot. Entity A started immediately the construction and it was completed on Dec. 31, 2021 for a total cost of P 1,000,000. The building has an estimated useful life of 10 years with no residual value. How much is income from the government grant in 2021 and 2022?…arrow_forward2 Southeastern College began the year with endowment investments of $1,450,000 and $860,000 of restricted cash designated by a donor for capital additions. During the year, an additional $524,000 ddonation 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. An alum contributed $360,000 to the permanent endowment and pledged to provide an additional $580,000 early next year. The cash was immediately invested. 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, $66,000 of interest and dividends were received on endowment investments. At year-end, the fair value of the investments had increased by $9,300. Required: Prepare journal entries to record the above…arrow_forward
- Catherine College, a private not-for-profit college, received the following contributions during 2017: I. P5,000,000 from alumni for construction of a new wing on the science building to be constructed in 2018. II. P 1,000,000 from a donor who stipulated that the contribution be invested indefinitely and that the earnings be used for scholarships. As of December 31, 2017, earnings from Investments amounted to P50,000. Page 13 For the year ended December 31, 2017, what amount of these contributions should be reported as temporarily restricted revenues on the statement of activities? P 50,000 b. P 5,050,000 c. P5,000,000 d. P6,050,000 a.arrow_forwardThe governing board of a private not-for-profit entity votes to set $400,000 in cash aside in an investment fund so that this money and future interest will be available in five years, when a new building is scheduled for construction. Which of the following is not true? Multiple Choice The investments are reported on the statement of financial position as net assets without donor restrictions. The acquisition of the investments is not reported on the statement of activities. Board-designated funds will appear in the net asset section of the statement of financial position as net assets with donor restrictions. Income earned by these investments appears on the statement of activities under net assets without donor restrictions.arrow_forwardIrrespective of how capital assets are acquired, they are recorded differently in governmental funds than in businesses. In a recent year, Ives Township acquired six police cars at a total cost of $200,000. The vehicles are expected to have a useful life of four years. Prepare the journal entries that the township would make in its general fund in the year of acquisition for each of the following assumptions: It paid for the cars in cash at the time of acquisition. It leased the cars and agreed to make, starting in the year of acquisition, four equal payments of $63,095, an amount that represents the annuity required to liquidate a loan of $200,000 at 10 percent interest. The lease would satisfy the criteria necessary to be accounted for as a capital lease. It issued $200,000 in installment notes to the car dealer, agreeing to repay them in four annual payments of $63,095, starting in the year of acquisition. 2. Comment on how any “off the balance sheet” assets or obligations…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education