Accounting for contributions: Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received. To indicate: The recording of receipt of unconditional cash contribution by private universities.

Question

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Answer 1

Explanation of Solution

The above stated transaction will not be recorded because the contribution is not received in cash. The contribution received will be displayed to the public and therefore, it will not be recorded by the private university.

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Answer 2

Explanation of Solution

The above stated transaction will not be recorded because the contribution is not received in cash. The contribution received will be displayed to the public and therefore, it will not be recorded by the private university.

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Answer 3

Explanation of Solution

The above stated transaction will not be recorded because the contribution is not received in cash. The contribution received will be displayed to the public and therefore, it will not be recorded by the private university.

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Answer 4

Explanation of Solution

Expert Solution

Answer to Problem 1E

No entry

Explanation of Solution

The above stated transaction will not be recorded because the contribution is not received in cash. The contribution received will be displayed to the public and therefore, it will not be recorded by the private university.

Answer 6

Chapter 19, Problem 1E

1.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

To indicate: The recording of receipt of unconditional cash contribution by private universities.

1.

Expert Solution

Answer to Problem 1E

The unconditional cash contribution is recorded as Credit contribution unrestricted.

Explanation of Solution

The above-stated transaction will be recorded as credit contribution because revenues are recognized in the year in which it is received. The contribution will be considered unrestricted because there is no restriction on its usage.

Answer 7

Chapter 19, Problem 1E

1.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

To indicate: The recording of receipt of unconditional cash contribution by private universities.

Answer 8

1.

Expert Solution

Answer to Problem 1E

The unconditional cash contribution is recorded as Credit contribution unrestricted.

Answer 9

1.

Expert Solution

Answer 10

1.

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

The above-stated transaction will be recorded as credit contribution because revenues are recognized in the year in which it is received. The contribution will be considered unrestricted because there is no restriction on its usage.

Answer 13

2.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

To indicate:The recording of receipt of cash to be used for a specific purpose by private universities.

2.

Expert Solution

Answer to Problem 1E

Receipt of cash to be used for a specific purpose is recorded as Credit contribution temporarily restricted.

Explanation of Solution

The above-stated transaction will be recorded as credit contribution because revenues are recognized in the year in which it is received. The contribution will be considered as restricted because the contribution can be used for a specific purpose only. The restriction will be released once the condition of the donor will be met.

Answer 14

2.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

To indicate:The recording of receipt of cash to be used for a specific purpose by private universities.

Answer 15

2.

Expert Solution

Answer to Problem 1E

Receipt of cash to be used for a specific purpose is recorded as Credit contribution temporarily restricted.

Answer 16

2.

Expert Solution

Answer 17

2.

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

The above-stated transaction will be recorded as credit contribution because revenues are recognized in the year in which it is received. The contribution will be considered as restricted because the contribution can be used for a specific purpose only. The restriction will be released once the condition of the donor will be met.

Answer 20

3.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

To indicate:The recordingof receipt of an unconditional promise to give by private universities

3.

Expert Solution

Answer to Problem 1E

The unconditional cash contribution is recorded as Credit contribution unrestricted.

Explanation of Solution

The above-stated transaction will be recorded as credit contribution because revenues are recognized in the year in which it is received. The contribution will be considered as unrestricted because there is no restriction imposed by the donor on its usage.It will be recorded by debiting contributions receivable account and credit revenue unrestricted contribution.

Answer 21

3.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

To indicate:The recordingof receipt of an unconditional promise to give by private universities

Answer 22

3.

Expert Solution

Answer to Problem 1E

The unconditional cash contribution is recorded as Credit contribution unrestricted.

Answer 23

3.

Expert Solution

Answer 24

3.

Expert Solution

Answer 25

Expert Solution

Answer 26

Explanation of Solution

The above-stated transaction will be recorded as credit contribution because revenues are recognized in the year in which it is received. The contribution will be considered as unrestricted because there is no restriction imposed by the donor on its usage.It will be recorded by debiting contributions receivable account and credit revenue unrestricted contribution.

Answer 27

4.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

To indicate:The recording of an unconditional promise to give over a 5 years period by private universities.

4.

Expert Solution

Answer to Problem 1E

Unconditional cash contribution is recorded as Credit contribution unrestricted.

Explanation of Solution

The above stated transaction will be recorded as credit contribution because revenues are recognized in the year in which it is received. The contribution will be considered as unrestricted because there is no restriction imposed by the donor on its usage. It will be recorded by debiting contributions receivable account and credit revenue unrestricted contribution.

Answer 28

4.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

To indicate:The recording of an unconditional promise to give over a 5 years period by private universities.

Answer 29

4.

Expert Solution

Answer to Problem 1E

Unconditional cash contribution is recorded as Credit contribution unrestricted.

Answer 30

4.

Expert Solution

Answer 31

4.

Expert Solution

Answer 32

Expert Solution

Answer 33

Explanation of Solution

The above stated transaction will be recorded as credit contribution because revenues are recognized in the year in which it is received. The contribution will be considered as unrestricted because there is no restriction imposed by the donor on its usage. It will be recorded by debiting contributions receivable account and credit revenue unrestricted contribution.

Answer 34

5.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

To indicate:The recording of receipt of investments that are to be used to set up an endowment with earnings available for operations by private universities.

5.

Expert Solution

Answer to Problem 1E

Credit contributions − permanently restricted

Explanation of Solution

The above stated transaction will be recorded as credit contribution because revenues are recognized in the year in which it is received. The contribution is permanently restricted as there is preconditions imposed by the contributor regarding utilisation of contribution, but earnings on such contributions are free from restrictions and can be used as unrestricted.

Answer 35

5.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

To indicate:The recording of receipt of investments that are to be used to set up an endowment with earnings available for operations by private universities.

Answer 36

5.

Expert Solution

Answer to Problem 1E

Credit contributions − permanently restricted

Answer 37

5.

Expert Solution

Answer 38

5.

Expert Solution

Answer 39

Expert Solution

Answer 40

Explanation of Solution

The above stated transaction will be recorded as credit contribution because revenues are recognized in the year in which it is received. The contribution is permanently restricted as there is preconditions imposed by the contributor regarding utilisation of contribution, but earnings on such contributions are free from restrictions and can be used as unrestricted.

Answer 41

6.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

To indicate:The recording of receipt of a fixed asset with donor-specified use for an outreach program.

6.

Expert Solution

Answer to Problem 1E

Credit contributions − temporarily restricted

Explanation of Solution

The above stated transaction will be recorded as credit contributions because receipt of contribution is recorded in the year in which it is received. The transaction will be recorded as temporarily restricted because the fixed asset can be used only for specific purpose. The restriction will be released when the asset is placed over useful life of the asset.

Answer 42

6.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

To indicate:The recording of receipt of a fixed asset with donor-specified use for an outreach program.

Answer 43

6.

Expert Solution

Answer to Problem 1E

Credit contributions − temporarily restricted

Answer 44

6.

Expert Solution

Answer 45

6.

Expert Solution

Answer 46

Expert Solution

Answer 47

Explanation of Solution

The above stated transaction will be recorded as credit contributions because receipt of contribution is recorded in the year in which it is received. The transaction will be recorded as temporarily restricted because the fixed asset can be used only for specific purpose. The restriction will be released when the asset is placed over useful life of the asset.

Answer 48

7.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

To indicate: The recording of receipt of a conditional promise to give.

7.

Expert Solution

Answer to Problem 1E

No entry

Explanation of Solution

No entry will be made to record the stated transaction because the contribution is not received. It is only a promise. The entry will be recorded only when conditions will be met.

Answer 49

7.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

To indicate: The recording of receipt of a conditional promise to give.

Answer 50

7.

Expert Solution

Answer to Problem 1E

No entry

Answer 51

7.

Expert Solution

Answer 52

7.

Expert Solution

Answer 53

Expert Solution

Answer 54

Explanation of Solution

No entry will be made to record the stated transaction because the contribution is not received. It is only a promise. The entry will be recorded only when conditions will be met.

Answer 55

8.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

To indicate: The recording of receipt of a fixed asset with no donor restriction.

8.

Expert Solution

Answer to Problem 1E

Credit contributions − unrestricted

Explanation of Solution

The above stated transaction will be recorded as credit contributions because receipt of contribution is recorded in the year in which it is received. The transaction will be recorded as unrestricted because the fixed asset can be used freely without any restrictions.

Answer 56

8.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

To indicate: The recording of receipt of a fixed asset with no donor restriction.

Answer 57

8.

Expert Solution

Answer to Problem 1E

Credit contributions − unrestricted

Answer 58

8.

Expert Solution

Answer 59

8.

Expert Solution

Answer 60

Expert Solution

Answer 61

Explanation of Solution

The above stated transaction will be recorded as credit contributions because receipt of contribution is recorded in the year in which it is received. The transaction will be recorded as unrestricted because the fixed asset can be used freely without any restrictions.

Answer 62

9.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

To indicate:The recording of receipt offree accounting service.

9.

Expert Solution

Answer to Problem 1E

Credit contribution - Unrestricted

Explanation of Solution

The above stated transaction will be recorded as credit contributions because receipt of contribution is recorded in the year in which it is received. Receiving any contribution by way of skills are considered as unrestricted. Hence, it would be treated as an unrestricted contribution.

Answer 63

9.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

To indicate:The recording of receipt offree accounting service.

Answer 64

9.

Expert Solution

Answer to Problem 1E

Credit contribution - Unrestricted

Answer 65

9.

Expert Solution

Answer 66

9.

Expert Solution

Answer 67

Expert Solution

Answer 68

Explanation of Solution

The above stated transaction will be recorded as credit contributions because receipt of contribution is recorded in the year in which it is received. Receiving any contribution by way of skills are considered as unrestricted. Hence, it would be treated as an unrestricted contribution.

Answer 69

10.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

To indicate:The recording of receipt of time of volunteers who helped with fund raising mailings.

10.

Expert Solution

Answer to Problem 1E

No entry

Explanation of Solution

The above stated transaction is not a skilled service. It is volunteer in nature and no payment is made for it. Hence, no entry will be made for recording the stated transaction. However, a disclosure can be made in the footnotes for recording it.

Answer 70

10.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

To indicate:The recording of receipt of time of volunteers who helped with fund raising mailings.

Answer 71

10.

Expert Solution

Answer to Problem 1E

No entry

Answer 72

10.

Expert Solution

Answer 73

10.

Expert Solution

Answer 74

Expert Solution

Answer 75

Explanation of Solution

The above stated transaction is not a skilled service. It is volunteer in nature and no payment is made for it. Hence, no entry will be made for recording the stated transaction. However, a disclosure can be made in the footnotes for recording it.

Answer 76

11.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

Credit contributions can be treated as unrestricted, temporarily restricted, permanently restricted depending on the conditions applied by the contributors.

Unrestricted funds are credit contributions where no donor restrictions are applied, these funds usually used towards the operating expenses of the organization.Temporarily restricted funds have some restrictions regarding the usage of such funds. Permanently restricted contributions which are permanently restricted by explicit donor stipulations of by law.

To indicate:The recording of receipt of a cash contribution to be used next year for general operations at the discretion of management.

11.

Expert Solution

Answer to Problem 1E

Credit contributions − temporarily restricted

Explanation of Solution

The above stated transaction will be recorded as credit contributions because receipt of a cash contribution is recorded in the year in which it is received, whether it is used or not. The transaction will be recorded as temporarily restricted because the contribution has time restriction, when the time restriction will be satisfied, restriction will be released.

Answer 77

11.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

Credit contributions can be treated as unrestricted, temporarily restricted, permanently restricted depending on the conditions applied by the contributors.

Unrestricted funds are credit contributions where no donor restrictions are applied, these funds usually used towards the operating expenses of the organization.Temporarily restricted funds have some restrictions regarding the usage of such funds. Permanently restricted contributions which are permanently restricted by explicit donor stipulations of by law.

To indicate:The recording of receipt of a cash contribution to be used next year for general operations at the discretion of management.

Answer 78

11.

Expert Solution

Answer to Problem 1E

Credit contributions − temporarily restricted

Answer 79

11.

Expert Solution

Answer 80

11.

Expert Solution

Answer 81

Expert Solution

Answer 82

Explanation of Solution

The above stated transaction will be recorded as credit contributions because receipt of a cash contribution is recorded in the year in which it is received, whether it is used or not. The transaction will be recorded as temporarily restricted because the contribution has time restriction, when the time restriction will be satisfied, restriction will be released.

Answer 83

12.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

Credit contributions can be treated as unrestricted, temporarily restricted, permanently restricted depending on the conditions applied by the contributors.

Unrestricted funds are credit contributions where no donor restrictions are applied, these funds usually used towards the operating expenses of the organization.Temporarily restricted funds have some restrictions regarding the usage of such funds. Permanently restricted contributions which are permanently restricted by explicit donor stipulations of by law.

To indicate:The recording of receipt of a cash contribution to be used next year for research project.

12.

Expert Solution

Answer to Problem 1E

Credit contributions − temporarily restricted

Explanation of Solution

The above stated transaction will be recorded as credit contributions because receipt of a cash contribution is recorded in the year in which it is received, whether it is used or not. The transaction will be recorded as temporarily restricted because the contribution has time restriction, when the expenses will be incurred in the next year, restriction will be released.

Answer 84

12.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

Credit contributions can be treated as unrestricted, temporarily restricted, permanently restricted depending on the conditions applied by the contributors.

Unrestricted funds are credit contributions where no donor restrictions are applied, these funds usually used towards the operating expenses of the organization.Temporarily restricted funds have some restrictions regarding the usage of such funds. Permanently restricted contributions which are permanently restricted by explicit donor stipulations of by law.

To indicate:The recording of receipt of a cash contribution to be used next year for research project.

Answer 85

12.

Expert Solution

Answer to Problem 1E

Credit contributions − temporarily restricted

Answer 86

12.

Expert Solution

Answer 87

12.

Expert Solution

Answer 88

Expert Solution

Answer 89

Explanation of Solution

The above stated transaction will be recorded as credit contributions because receipt of a cash contribution is recorded in the year in which it is received, whether it is used or not. The transaction will be recorded as temporarily restricted because the contribution has time restriction, when the expenses will be incurred in the next year, restriction will be released.

Answer 90

13.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

Credit contributions can be treated as unrestricted, temporarily restricted, permanently restricted depending on the conditions applied by the contributors.

Unrestricted funds are credit contributions where no donor restrictions are applied, these funds usually used towards the operating expenses of the organization. Temporarily restricted funds have some restrictions regarding the usage of such funds. Permanently restricted contributions which are permanently restricted by explicit donor stipulations of by law.

To indicate:The recording of receipt of a cash as part of a government grant funding a cancer research project. A report with research results will be prepared for government funding agency.

13.

Expert Solution

Answer to Problem 1E

Credit refundable deposit

Explanation of Solution

The above stated transaction is recorded as revenue. The cash receipts will have to be refund to the government agency as receipts are collected on behalf of the government. Therefore, the stated transaction will be recorded as credit refundable deposit.

Answer 91

13.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

Credit contributions can be treated as unrestricted, temporarily restricted, permanently restricted depending on the conditions applied by the contributors.

Unrestricted funds are credit contributions where no donor restrictions are applied, these funds usually used towards the operating expenses of the organization. Temporarily restricted funds have some restrictions regarding the usage of such funds. Permanently restricted contributions which are permanently restricted by explicit donor stipulations of by law.

To indicate:The recording of receipt of a cash as part of a government grant funding a cancer research project. A report with research results will be prepared for government funding agency.

Answer 92

13.

Expert Solution

Answer to Problem 1E

Credit refundable deposit

Answer 93

13.

Expert Solution

Answer 94

13.

Expert Solution

Answer 95

Expert Solution

Answer 96

Explanation of Solution

The above stated transaction is recorded as revenue. The cash receipts will have to be refund to the government agency as receipts are collected on behalf of the government. Therefore, the stated transaction will be recorded as credit refundable deposit.

Answer 97

14.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

Credit contributions can be treated as unrestricted, temporarily restricted, permanently restricted depending on the conditions applied by the contributors.

Unrestricted funds are credit contributions where no donor restrictions are applied, these funds usually used towards the operating expenses of the organization. Temporarily restricted funds have some restrictions regarding the usage of such funds. Permanently restricted contributions which are permanently restricted by explicit donor stipulations of by law.

To indicate:The recording of receipt of a cash contribution to be used for acquisition of fixed asset.

14.

Expert Solution

Answer to Problem 1E

Credit contributions − temporarily restricted

Explanation of Solution

The above stated transaction will be recorded as credit contributions because receipt of a cash contribution is recorded in the year in which it is received, whether it is used or not. The transaction will be recorded as temporarily restricted because the contribution can be used only for the acquisition of fixed assets. The restriction will be released when the asset is placed over useful life of the asset.

Answer 98

14.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

Credit contributions can be treated as unrestricted, temporarily restricted, permanently restricted depending on the conditions applied by the contributors.

Unrestricted funds are credit contributions where no donor restrictions are applied, these funds usually used towards the operating expenses of the organization. Temporarily restricted funds have some restrictions regarding the usage of such funds. Permanently restricted contributions which are permanently restricted by explicit donor stipulations of by law.

To indicate:The recording of receipt of a cash contribution to be used for acquisition of fixed asset.

Answer 99

14.

Expert Solution

Answer to Problem 1E

Credit contributions − temporarily restricted

Answer 100

14.

Expert Solution

Answer 101

14.

Expert Solution

Answer 102

Expert Solution

Answer 103

Explanation of Solution

The above stated transaction will be recorded as credit contributions because receipt of a cash contribution is recorded in the year in which it is received, whether it is used or not. The transaction will be recorded as temporarily restricted because the contribution can be used only for the acquisition of fixed assets. The restriction will be released when the asset is placed over useful life of the asset.

Answer 104

15.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

Credit contributions can be treated as unrestricted, temporarily restricted, permanently restricted depending on the conditions applied by the contributors.

Unrestricted funds are credit contributions where no donor restrictions are applied, these funds usually used towards the operating expenses of the organization. Temporarily restricted funds have some restrictions regarding the usage of such funds. Permanently restricted contributions which are permanently restricted by explicit donor stipulations of by law.

To indicate: The recording of receipt of a permanent collection of geography maps that will be displayed to the public

15.

Expert Solution

Answer to Problem 1E

No entry

Explanation of Solution

The above stated transaction will not be recorded because the contribution is not received in cash. The contribution received will be displayed to the public and therefore, it will not be recorded by the private university.

Answer 105

15.

To determine

Concept Introduction:

Accounting for contributions:

Contributions are defined by FASB Statement No 116, as “a settlement of a liability or the cancellation of the liability, any unconditional transfer made for the cash and other assets to an entity in a voluntary nonreciprocal transfer. Private colleges and universities recognize contributions and unconditional promises to give as revenues or gains in the period received.

Credit contributions can be treated as unrestricted, temporarily restricted, permanently restricted depending on the conditions applied by the contributors.

Unrestricted funds are credit contributions where no donor restrictions are applied, these funds usually used towards the operating expenses of the organization. Temporarily restricted funds have some restrictions regarding the usage of such funds. Permanently restricted contributions which are permanently restricted by explicit donor stipulations of by law.

To indicate: The recording of receipt of a permanent collection of geography maps that will be displayed to the public

Answer 106

15.

Expert Solution

Answer to Problem 1E

No entry

Answer 107

15.

Expert Solution

Answer 108

15.

Expert Solution

Answer 109

Expert Solution

Answer 110

Explanation of Solution

The above stated transaction will not be recorded because the contribution is not received in cash. The contribution received will be displayed to the public and therefore, it will not be recorded by the private university.