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Question: You are preparing a statement of activities


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 I
During the current year, a donor gives $400,000 cash to the school and stipulates that the money must be held forever. Any investment income earned on this money must be used to supplement faculty salaries. By the end of the current year, $31,000 has been earned and, of that amount, the school has expended $22,000 appropriately. At the end of the current year, the board of trustees also set aside $150,000 in unrestricted cash that must be held with income going to faculty salaries. What was the overall change in each of the following for the year?
a. Net assets without donor restrictions
b. Net assets with donor restrictions
Part II
At the beginning of the current year, Ms. Landis made several contributions to the school: a cash gift of $90,000 that must be spent for listening rooms for the music department, a cash gift of $50,000 that must be invested and spent in the following year, a cash gift of $70,000 that must be returned unless the football team wins 10 games in a single season (over the next three years), and a pledge of $300,000 that will be be paid early in the following year if the school manages to raise the average SAT score of its students by 10 points. What was the overall change in each of the following for the year?
a. Net assets without donor restrictions
b. Net assets with donor restrictions
Part III
Several years ago, a donor presented the school with $400,000 in cash to help fund its financial aid program. This year, the school charges students $2 million in tuition but granted $700,000 in financial aid. The donor’s gift offsets $300,000 of the financial aid. Collections to date from the students have totaled $1.1 million. What was the overall change in each of the following for the year?
a. Net assets without donor restrictions
b. Net assets with donor restrictions

2.99

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