Transactions and FASB Standards
1. The New City College reported deferred revenues of $612,000 as of July 1, 2014, the first day of its fiscal year. Record the following transactions related to student tuition and fees and related scholarship allowances for New City College for the year ended June 30, 2015.
a. The deferred revenues relate to unearned revenues for the summer session, which ended in August.
b. During the fiscal year ended June 30, 2015, student tuition and fees were assessed in the amount of $12,000,000. Of that amount $9,650,000 was collected in cash. Also of that amount, $639,000 pertained to that portion of the summer session that took place after June 30.
c. Student scholarships, for which no services were required, amounted to $787,000. Students applied these scholarships to their tuition bills at the beginning of each semester.
d. Student scholarships and fellowships, for which services were required, such as graduate assistantships, amounted to $760,000. These students also applied their scholarship and fellowship awards to their tuition bills at the beginning of each semester.
2. Consider FASB standards for reporting by private not-for-profit organizations and answer the following:
a. What are the financial reports required of all not-for-profits? What additional report is required for voluntary health and welfare organizations?
b. List the three classes of net assets.
c. Outline the accounting required for property, plant, and equipment. Include accounting for plant acquired with both unrestricted and restricted revenues.
e. Outline accounting and reporting for investments.
3. Consider FASB standards for accounting for contributions and answer the following:
a. Outline revenue recognition criteria for resources restricted for (1) time and (2) purpose.
b. Describe the difference in accounting for contributions with a condition and a restriction.
c. Outline the requirements for recognizing contributed services as revenue.
d. Outline accounting for multiyear pledges.