Professional Documents
Culture Documents
1. City and county governments are not typically classified as special purpose governments.
Answer: True
Answer: True
Answer: True
Answer: False
5. General-purpose governments are those that offer more than one type of basic
governmental service, while special-purpose entities generally provide a limited, or single,
set of programs or services.
Answer: True
Answer: True
Answer: False
Answer: True
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
Answer: True
Answer: True
11. According to GASB Statement 34, governmental activities are generally financed through
taxes, intergovernmental revenues and other nonexchange revenues.
Answer: True
12. Financial reporting for a special-purpose local government depends on whether that
government is engaged in governmental-type, business-type or fiduciary-type activities.
Answer: True
13. Special-purpose governments that are engaged in only one governmental-type activity are
permitted to combine the fund and government-wide financial statements
Answer: True
Answer: False
15. Special-purpose governments that are engaged in both governmental and business-type
activities are permitted to combine the fund and government-wide financial statements.
Answer: False
16. Special-purpose governments that are engaged in more than one governmental activity are
permitted to combine the fund and government-wide financial statements.
Answer: False
17. Special-purpose governments that are engaged in both governmental and business-type
activities are required to use the full reporting model including MD&A, government-wide
and fund-basis statements, notes to the financial statements and RSI.
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
Answer: True
18. Special-purpose governments that are engaged in more than one governmental activity are
required to use the full reporting model including MD&A, government-wide and fund-
basis statements, notes to the financial statements and RSI.
Answer: True
19. Special-purpose governmental entities that are engaged in a single business activity are
not required to prepare government-wide financial statements, but may issue only
enterprise fund statements.
Answer: True
Answer: False
21. For financial reporting purposes, governmental health care entities, public school systems,
other not-for-profit entities and public colleges and universities may be considered to be
special-purpose entities.
Answer: True
22. Public higher education institutions typically report as special-purpose entities engaged in
governmental and business-type activities or in governmental-type activities only.
Answer: False
23. Public higher education institutions that report as special-purpose entities engaged in
business-type activities only are still required to prepare a Management's Discussion and
Analysis.
Answer: True
24. Most public colleges and universities choose to report as general-purpose entities engaged
in only business-type activities.
Answer: False
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
25. Public colleges and universities are required to report as special purpose entities engaged
in both governmental- and business-type activities because they receive tax dollars and
charge user fees.
Answer: False
26. Public colleges typically report as special-purpose entities engaged only in business-type
activities.
Answer: True
27. Public colleges are never included as component units in the state CAFR.
Answer: False
28. Revenue sources for public colleges include tuition and fees and donations. All other
income is reported as unrelated business income.
Answer: False
29. No public colleges have the power to issue debt; it must be issued by the state as general
obligation debt.
Answer: False
30. GASB requirements for business-type activities of public colleges requires accrual of
interest and amortization of debt discount and premium.
Answer: True
31. GASB Statement 35 extends the provisions of GASB Statement 34 to both public and
private colleges and universities.
Answer: False
32. General state appropriations are treated as operating revenue of public colleges and
universities.
Answer: False
33. State appropriations for higher education institutions are to be reported as nonoperating
revenues in the Statement of Revenues, Expenses, and Changes in Net Position.
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
Answer: True
34. Public institutions of higher education are required to produce a Statement of Cash flows
in addition to a Statement of Net Position and a Statement of Revenues, Expenses, and
Changes in Net Position.
Answer: True
35. Tuition waived for work-study and graduate assistants is recognized as an expense when
preparing a Statement of Revenues, Expenses, and Changes in Net Position.
Answer: True
36. Tuition waived for academic and athletic scholarships decreases student fee revenue when
preparing a Statement of Revenues, Expenses, and Changes in Net Position.
Answer: True
37. Higher education institutions that report as special purpose entities engaged in business-
type activities only should report the same net asset classifications (Net investment in
capital assets, restricted, unrestricted) as are reported in the government-wide statement of
Net Position.
Answer: True
38. Revenue for reimbursement grants may be recognized before expenditures take place as
long as the grant has been awarded.
Answer: False
39. Governmental health care entities, public school systems, and museums are commonly
accounted for as special-purpose governments.
Answer: True
40. GASB Statement 39: Determining Whether Certain Organizations Are Component Units
requires most public college foundations to be reported as discretely presented component
units in the college’s financial reports.
Answer: True
41. Public colleges may depreciate infrastructure or may use the modified approach.
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
Answer: True
42. Public colleges must report tuition income net of athletic scholarships.
Answer: True
43. Public colleges who waive fees for graduate assistants must report tuition income net of
the fees waived.
Answer: False
44. Public colleges who waive fees for graduate assistants must report tuition at the gross
amount and expense the fees waived.
Answer: True
45. Reimbursement grants allow revenue to be recognized at the time the grant is made.
Answer: False
46. According to GASB Statement 33, with respect to public colleges and universities,
pledges receivable are recognized as assets and revenues when eligibility requirements are
met.
Answer: True
47. Public colleges and universities account for revenue bonds using the accrual method to
account for interest and amortization of premiums and discounts.
Answer: True
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
Answer: A
Answer: A
50. Which of the following would not be considered a special-purpose government for
financial reporting purposes?
A) A public school system.
B) An art museum.
C) A public hospital.
D) A county board of supervisors.
Answer: D
Answer: B
52. Which of the following is not required for a special-purpose local government engaged in
only fiduciary type activities?
A) Statement of Fiduciary Net position
B) Statement of Fiduciary Cash Flows
C) Notes to the Financial Statements
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
Answer: B
53. Special-purpose governments that are engaged in both governmental and business-type
activities or in more than one governmental activity are required to include all of the
following in its financial statements except?
A) Required supplementary Information
B) Fund basis financial statements
C) Government-wide financial statements
D) None of the above, these are all required
Answer: D
54. Which of the following is not true regarding financial reporting of special-purpose
entities?
A) Special-purpose entities might be included as component units in a primary
government's financial statements.
B) Special-purpose entities that engage in a single governmental activity may prepare
statements that combine government-wide and governmental fund statements.
C) Special-purpose entities that are engaged only in fiduciary activities must prepare
a Statement of Activities and a Statement of Fiduciary Net Position.
D) None of the above – all are true.
Answer: C
Answer: A
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
Answer: C
Answer: D
58. With respect to public colleges engaged in business-type activities, which of the following
is not correct?
A) GASB requirements for business-type activities of public colleges requires accrual
account for debt, include accrual of interest and amortization of debt discount and
premium.
B) Most public college foundations are required to be reported as discretely presented
component units in the college’s financial report.
C) Only amounts that are to paid by students and third-party payers can be shown as
tuition and fee revenue net of any scholarship discounts and allowances.
D) All of the above are correct
Answer: D
59. Depending upon the circumstances, in practice public colleges and report as special
purpose entities engaged in:
A) Business-type activities only.
B) Both governmental and business-type activities.
C) Governmental activities only.
D) Any one of the above.
Answer: D
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
60. Which of the following is true with respect to public four-year higher education
institutions (public colleges)?
A) Revenue sources for public colleges include tuition and fees, state appropriations
and donations. All other income is reported as unrelated business income.
B) Many institutions have most of their restricted resources managed by related
entities, known as foundations.
C) No public colleges have the power to issue debt; it must be issued by the state as
general obligation debt.
D) Public colleges may not choose to report as special-purpose entities engaged only
in business-type activities.
Answer: B
61. Which of the following is true regarding the financial statements for special-purpose
entities?
A) Special-purpose entities that are engaged only in one governmental activity may
combine government-wide and governmental fund statements.
B) Special-purpose entities that are engaged in fiduciary activities only prepare the
statements required for fiduciary funds (Statement of Fiduciary Net Position,
Statement of Changes in Fiduciary Net Position).
C) Both of the above.
D) Neither of the above.
Answer: C
62. Special purpose governments engaged only in fiduciary-type activities are required to
prepare all of the following except:
A) Statement of Fiduciary Net Position
B) Statement of Cash Flows
C) Statement of Changes in Fiduciary Net Position
D) Management Discussion and Analysis
Answer: B
63. Which of the following is true regarding financial reporting of special-purpose entities?
A) Special purpose entities might include park districts, school districts, and public
colleges and universities.
B) Special-purpose entities, in some cases, have more limited reporting requirements
than general-purpose entities.
C) Both of the above are true.
D) Neither of the above is true.
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
Answer: C
Answer: C
65. Public colleges and universities that choose to report as special-purpose entities engaged
only in business-type activities would have which of the following financial statements?
A) Statement of Net Position, Statement of Activities.
B) Statement of Net Position, Statement of Revenues, Expenses, and Changes in Net
Position.
C) Statement of Net Position, Statement of Revenues, Expenses, and Changes in Net
Position, Statement of Cash Flows.
D) None of the above.
Answer: C
66. Which of the following is not true regarding the Statement of Revenues, Expenses and
Changes in Net Position for a public college reporting as a special purpose entity engaged
in business type activities only?
A) The accrual basis of accounting is used to measure revenues and expenses.
B) Encumbrances are recorded at the time purchase orders are issued.
C) Depreciation expense is recorded.
D) All of the above are true.
Answer: B
67. A public college had tuition and fees of $21,000,000. Scholarships, for which no services
were required, amounted to $2,500,000. Graduate assistantships, for which services were
required, amounted to $1,600,000. The amount to be reported by the public college as net
tuition and fees would be:
A) $21,000,000.
B) $19,400,000.
C) $18,500,000.
D) $16,900,000.
Answer: C
68. Which of the following would be true regarding the Statement of Net Position for a public
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
college reporting as a special purpose entity engaged in business type activities only?
A) A classified statement is required, separating current and long-term assets and
liabilities.
B) The net asset categories are: net investment in capital assets, restricted and
unrestricted.
C) Both of the above are true.
D) Neither of the above is true.
Answer: C
69. Which of the following is not true regarding the Statement of Revenues, Expenses, and
Changes in Net Position for a public college?
A) Tuition revenues are reported net of tuition waivers when those waivers require
service on the part of the recipient student.
B) Tuition fees waived by the institution in return for services provided by employees
and student assistants are shown as expenses.
C) Interest expense is accrued and bond premiums and discounts are amortized.
D) None of the above.
Answer: A
70. Which of the following is true regarding the Statement of Revenues, Expenses, and
Changes in Net Position for a public college, operating as a special-purpose entity
engaged only in business-type activities?
A) Student scholarship allowances should be reported as operating expenses as long
as no services are provided.
B) Expenses are recorded when incurred.
C) Depreciation expense is not recorded.
D) None of the above.
Answer: B
71. Which of the following is not true regarding the Statement of Revenues, Expenses, and
Changes in Net Position for a public college, operating as a special-purpose entity
engaged only in business-type activities?
A) The accrual basis of accounting is used.
B) Auxiliary enterprise activities represent revenues and expenses related to units of
the college that provide services to students on a user fee basis.
C) Infrastructure must be reported using the modified approach.
D) All of the above are true.
Answer: C
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
72. Which of the following is true regarding the Statement of Cash Flows for a public
college?
A) The direct method must be used.
B) The statement is in the same format required for state and local governmental
enterprise funds.
C) Both A and B are true.
D) Neither A nor B is true.
Answer: C
73. Which of the following is true regarding the Statement of Cash Flows for a public
college?
A) A reconciliation is required, reconciling operating income in the Statement of
Revenues, Expenses, and Changes in Net Position to the cash flows provided
(used) by operating activities.
B) Cash purchases of capital assets are reported as outflows in the capital related
financing activities section.
C) Both A and B are true.
D) Neither A nor B is true.
Answer: C
74. Which of the following is true regarding the Statement of Cash Flows for a public
college?
A) Cash received for interest is reported as an increase in cash flows from operating
activities.
B) Cash paid for interest is reported as a decrease in cash flows from either
noncapital or capital and related financing activities.
C) Both A and B are true.
D) Neither A nor B is true.
Answer: B
75. Which of the following statements is true regarding accounting and financial reporting for
public colleges and universities?
A) Public colleges and universities may choose to report in the same manner as
private colleges and universities, using FASB standards.
B) Public colleges and universities may choose to report as special-purpose entities.
C) Both A and B are true.
D) Neither A nor B is true.
Answer: B
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
76. A public college had tuition and fees for the year ended June 30, 2015 in the amount of
$45,000,000. Scholarships, for which no services were required, amounted to $4,800,000.
Graduate assistantships, for which services were required, amounted to $2,300,000. The
amount to be reported by the college for net tuition and fee revenue would be:
A) $37,900,000.
B) $40,200,000.
C) $42,700,000.
D) $45,000,000.
Answer: B
77. Which of the following groups would not be considered a component unit of a special-
purpose government, for the purposes of applying GASB Statement 39: Determining
Whether Certain Organizations Are Component Units?
A) A university foundation.
B) A hospital auxiliary.
C) A museum foundation.
D) A high school band booster club.
Answer: D
78. Which of the following is true regarding the Statement of Cash Flows for a public
college?
A) The indirect method must be used.
B) The statement is in the same format required for state and local governmental
enterprise funds.
C) Both of the above are true.
D) Neither of the above is true.
Answer: B
79. Which of the following statements is (are) true regarding public colleges and universities
choosing to report as special-purpose entities engaged in business-type activities only?
A) Endowments would be reported in the Statement of Net Position as Net Position
Restricted-Nonexpendable.
B) Capital appropriations from state governments are shown, in the Statement of
Revenues, Expenses, and Changes in Net Position, as a category separate from
revenues.
C) Both of the above.
D) Neither of the above.
Answer: C
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
80. Public colleges and universities follow __________ guidelines while private colleges and
universities follow ________ guidelines
A) GAO, FASB.
B) FASB, GAO.
C) GASB, FASB.
D) FASB, GASB.
Answer: C
81. Which of the following groups would not be considered a component unit of a special-
purpose government, for the purposes of applying GASB Statement 39: Determining
Whether Certain Organizations Are Component Units?
A) General governments.
B) Booster clubs.
C) Museums.
D) Health care entities.
Answer: B
82. According to the National Association of College and Business Officers, scholarship
discounts and allowances paid by institutional funds, assuming that no services are
provided by the recipients:
A) Are included in tuition revenue and recorded as an expense.
B) Are reported as a reduction of revenue by directly reducing the revenue account or
increasing a contra- revenue account.
C) Are not included in tuition revenue but are included as an “other source”.
D) Are reported as an adjustment to tuition revenue in the government-wide
statements.
Answer: B
83. Fees waived by the an educational institution in return for services to be provided by
students are reported:
A) As a reduction in tuition revenue by directly reducing the revenue account or
increasing a contra-revenue account.
B) As an adjustment to tuition revenue in the government-wide statements.
C) As an expense.
D) By deducting the waived fee from tuition revenue before it is recorded.
Answer: C
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
Answer: A
85. GASB requires that educational institutions who engage in business-type activities and
issue debt account for the debt by:
A) Recording the debt service as an expenditure as it becomes due.
B) Recording the interest as an expense when it is due and payable.
C) Recording the principal net of any premium or discount when the debt is issued
and expense the interest as it is paid.
D) Recording the interest expense on the accrual basis, including amortizing the
premium or discount, if applicable.
Answer: D
86. With respect to public colleges and universities, state appropriations for operating
purposes are shown as:
A) Non-operating revenue.
B) Operating revenue.
C) Non-expendable endowments.
D) None of the above.
Answer: A
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
Answer: B
Answer: B
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
90. When is this revenue reportable on the financial statements for Northern?
2015 2016
A) $ 1,200,000 0
B) $ 0 1,200,000
C) $ 600,000 600,000
D) $ 400,000 800,000
Answer: D
Answer: A
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
Answer: A
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
93. Special-purpose governments that are engaged in both governmental and business-type
activities or in more than one governmental activity are required to include which items in
its financial reporting?
Answer:
MD&A
Government-wide statements
Fund-basis financial statements
Notes to the financial statements
RSI
94. The Implementation Guide for GASB Statement No. 34 provides a distinction between
general-purpose governments and special-purpose governments. Discuss the difference
between the two.
Answer:
According to GASB Statement No. 34, “General-purpose governments are thought to be
those that offer more than one type of basic governmental services—for example, general
government, public safety, transportation, health and welfare.
95. List three examples (types) of general-purpose state or local governments and three
special-purpose local governments.
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
• Transit authorities
96. What are the required parts of the annual financial report for special-purpose local
governments engaged only in business-type activities?
Answer:
MD&A
Enterprise Fund Financial Statements including:
Statement of Net Position or Balance Sheet
Statement of Revenues, Expenses, and Changes in Net Position
Statement of Cash Flows
Notes to the financial statements
RSI other than MD&A, if applicable
97. What are the required parts of the annual financial reports for special-purpose
governments engaged only in fiduciary-type activities?
Answer:
MD&A
Fiduciary Fund Financial Statements including:
Statement of Fiduciary Net Position
Statement of Change in Fiduciary Net Position
Notes to the Financial Statements
RSI other than MD&A, if applicable
98. What are the criteria outlined in GASB Statement 39: Determining Whether Certain
Organizations Are Component Units for requiring public college foundations to be
reported as discretely presented components in the college’s financial reports?
Answer:
1. The economic resources received or held by the separate organization are entirely or
almost entirely for the direct benefit of the primary government, its component units,
or its constituents.
2. The primary government, or its component units, is entitled to, or has the ability to
otherwise access, a majority of the economic resources received or held by the
separate organization.
3. The economic resources received or held by an individual organization that the
specific primary government is entitled to or has the ability to otherwise access, are
significant to that primary government
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
99. Indicate the financial reporting rules for each of the following special-purpose entities
(which category of special-purpose entity), and indicate the financial statements that
would be required:
a. A township that assesses property for taxation, provides road maintenance, and
provides welfare assistance.
b. A fire protection district that engages in protection of property in unincorporated
areas from fires.
c. An independent tollway authority, not the component unit of any other
government.
d. An independent statewide pension plan.
e. A public college.
Answer:
a. This township would be a special-purpose government engaged in more than one
governmental activity. As such, it would be required to report all of the applicable
basic financial statements, including the government-wide and governmental fund
statements. As no mention is made of enterprise and fiduciary activities, those
fund statements would not be required.
b. This township would be a special-purpose government engaged in only one
governmental activity. As such, it would be allowed to report financial statements
that combine government-wide and governmental fund information. This would
include a governmental fund Balance Sheet/government-wide Statement of Net
Position and a governmental funds Statement of Revenues, Expenditures, and
Changes in Fund Balances/government-wide Statement of Activities.
c. This tollway authority would be considered a special-purpose government engaged
in business activities only. As such, it would prepare those statements required for
proprietary funds. These would include the Statement of Net Position, Statement
of Revenues, Expenses, and Changes in Net Position, and Statement of Cash
Flows
d. This independent pension plan would be considered a special-purpose government
engaged only in fiduciary activities. As such, the fiduciary fund statements would
be required. These would include the Statement of Fiduciary Net Position and the
Statement of Changes in Fiduciary Net Position.
e. A public college or university may report as special-purpose entities engaged in
only governmental activities, both governmental and business-type activities, or
business-type activities only. In the first two cases, the public institution will be
required to prepare the full range of government-wide and fund financial
statements that apply. (It would be very likely that if the college were engaged in
only governmental activities, that more than one governmental activity would
apply.) If the institution were considered to be a special-purpose government
engaged in business-type activities only, then the proprietary fund statements
would be required. These include the Statement of Net Position, Statement of
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
Revenues, Expenses, and Changes in Net Position, and Statement of Cash Flows.
100. What is the difference between a component unit and a special purpose local
government?
101. Answer the following related to accounting and financial reporting for public colleges
and universities:
a. What choices exist for financial reporting by public colleges and universities,
according to GASB Statement 35?
b. Indicate the contents required for a financial report for those public colleges and
universities that choose to report as special-purpose entities engaged only in
business-type activities.
Answer:
a. GASB Statement 35 indicates that public colleges and universities may choose
reporting as special-purpose entities engaged in (1) governmental and business-
type activities, (2) governmental activities only, or (3) business-type activities
only.
b. Public colleges and universities choosing to report as special-purpose entities
engaged in business-type activities only would include, in their financial reports:
(1) Management's Discussion and Analysis, (2) Statement of Net Position or
Balance Sheet, (3) Statement of Revenues, Expenses, and Changes in Net Position,
(4) Statement of Cash Flows, (5) Notes to the Financial Statements, and (6)
Required Supplementary Information Other than MD&A, when applicable. Item
(6) could include schedules for pension plans and investment trust funds and
information relating to the modified approach for infrastructure reporting.
Budgetary Schedules are not required.
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
Exercises
102. Southeastern State University has chosen to report as a public university reporting as a
special-purpose entity engaged only in business-type activities. Deferred Revenues were
reported as of July 1, 2014 in the amount of $5,000,000. Record the following
transactions related to revenue recognition for the year ended June 30, 2015. Include in
the account titles the proper revenue classification (operating revenues, nonoperating
revenues, etc.):
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
Answer:
SOUTHEASTERN STATE UNIVERSITY
GENERAL JOURNAL
YEAR ENDED JUNE 30, 2015
Debits Credits
1. Deferred Revenues 5,000,000
Operating Revenues-Student Tuition and Fees 5,000,000
2. Accounts Receivable 78,000,000
Operating Revenues-Student Tuition and Fees 78,000,000
Cash 71,000,000
Accounts Receivable 71,000,000
Operating Revenues-Student Tuition and Fees 3,300,000
Deferred Revenues 3,300,000
3. Operating Revenue Deduction-Scholarship
Allowances 2,200,000
Accounts Receivable 2,200,000
4. Scholarships and Fellowships Expense 3,500,000
Accounts Receivable 3,500,000
5. Cash 8,500,000
Operating Revenues-Auxiliary Enterprise
Revenue 8,500,000
6. Cash 35,000,000
Nonoperating Revenues-State Appropriation
for Operations 35,000,000
7. Restricted Cash 12,900,000
Capital Appropriations 12,900,000
(reported after nonoperating revenues and expenses)
8. Cash 12,720,000
Additions to Endowment Purposes 5,000,000
(reported after nonoperating revenues and expenses)
Nonoperating Revenues-Unrestricted Gifts 7,000,000
Nonoperating Revenues-Investment Income-
Unrestricted 720,000
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
103. Northwest State University had the following account balances as of June 30, 2015.
Debits are not distinguished from credits, so assume all accounts have a “normal” balance
(i.e. cash is a debit and accounts payable a credit)
Required: Prepare, in good form, a Statement of Net Position for Northwest State
University as of June 30, 2015.
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
Answer:
NORTHWEST STATE UNIVERSITY
STATEMENT OF NET POSITION
JUNE 30, 2015
Assets:
Current Assets:
Cash and Cash Equivalents $ 215,000
Short-Term Investments 900,000
Accounts Receivable, Net 435,000
Inventories 700,000
Total Current Assets 2,250,000
Noncurrent Assets:
Restricted Cash and Cash Equivalents 240,000
Long-Term Investments 1,500,000
Endowment Investments 4,200,000
Capital Assets, Net of Depreciation 7,400,000
Total Noncurrent Assets 13,340,000
Total Assets $15,590,000
Liabilities:
Current Liabilities:
Accounts Payable 535,000
Deferred Revenue 325,000
Long-Term Liabilities-Current Portion 390,000
Total Current Liabilities 1,250,000
Long-Term Liabilities:
General Obligation Bonds Payable 2,500,000
Revenue Bonds Payable 2,900,000
Total Noncurrent Liabilities 5,400,000
Total Liabilities 6,655,000
Net Position:
Net investment in capital assets 1,610,000
Restricted:
Nonexpendable 4,400,000
Expendable 1,300,000
Unrestricted 1,630,000
Total Net Position $8,940,000
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
104. Northern State University had the following account balances for the year ended and as
of June 30, 2015. Debits are not distinguished from credits, so assume all accounts have a
“normal” balance.
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Chapter 9 Accounting for Special-Purpose Entities, Including Public
Colleges and Universities
Answer:
NORTHERN STATE UNIVERSITY
STATEMENT OF REVENUES, EPXNESES, AND CHANGES IN NET POSITION
YEAR ENDED JUNE 30, 2015
Revenues:
Operating Revenues:
Student Tuition and Fees (Net of Scholarship Allowances
of $800,000) $ 7,000,000
Federal Grants and Contracts 1,350,000
State and Local Grants and Contracts 950,000
Auxiliary Enterprises 5,000,000
Total Operating Revenues 14,300,000
Expenses:
Operating Expenses:
Salaries:
Faculty 7,200,000
Exempt Staff 4,100,000
Nonexempt Wages 3,400,000
Employee Benefits 2,410,000
Scholarships and Fellowships 750,000
Depreciation 2,300,000
Other Operating Expenses 3,600,000
Total Operating Expenses 23,760,000
Operating Income(Loss) (9,460,000)
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