Southeastern 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 transactions assuming: a. Southeastern College is a public university. b. Southeastern College is a private university. Possible Journal Entries: • No Journal Entry Required Capital Assets • Endowment Investments Nonoperating-Additions to Permanent Endowment Nonoperating-Capital Grants and Gifts Nonoperating-Investment Income • Restricted Cash
Southeastern 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 transactions assuming: a. Southeastern College is a public university. b. Southeastern College is a private university. Possible Journal Entries: • No Journal Entry Required Capital Assets • Endowment Investments Nonoperating-Additions to Permanent Endowment Nonoperating-Capital Grants and Gifts Nonoperating-Investment Income • Restricted Cash
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Southeastern 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 transactions assuming:
a. Southeastern College is a public university.
b. Southeastern College is a private university.
Possible Journal Entries:
• No Journal Entry Required
• Capital Assets
● Endowment Investments
• Nonoperating-Additions to Permanent Endowment
●
Nonoperating-Capital Grants and Gifts
• Nonoperating-Investment Income
• Restricted Cash
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