Problem 18-45 (Static) (LO 18-1, 18-2, 18-4, 18-5, 18-8) (The following information applies to the questions displayed below.) For a number of years, a private not-for-profit entity has been preparing financial statements that do not necessarily conform to U.S. generally accepted accounting principles. At the end of the most recent year (Year 2), those financial statements show total assets of $900,000, total liabilities of $100,000, net assets without donor restriction of $400,000, and net assets with donor restrictions of $400,000. This last category is composed of $300,000 in net assets with purpose restrictions and $100,000 in net assets that must be permanently held. At the end of Year 1, financial statements show total assets of $700,000, total liabilities of $60,000, net assets without donor restriction of $340,000, and net assets with donor restrictions of $300,000. This last category is composed of $220,000 in net assets with purpose restrictions and $80,000 in net assets that must be permanently held. Total expenses for Year 2 were $500,000 and reported under net assets without donor restrictions. Each part that follows should be viewed as an independent situation. Problem 18-45 Part One Assume that this entity is a private college that charged its students $560,000 for tuition in Year 2 but then provided $140,000 in financial aid. The $600,000 was reported as revenue. The $140,000 was reported as ar expense. Both of these amounts were included in the net assets without donor restrictions. Required: a. What is the appropriate amount that should be reported as net assets without donor restrictions at the end of Year 2? Net assets without donor restrictions to be reported b. What is the appropriate amount that should be reported as expenses for Year 2? Expenses to be reportad
Problem 18-45 (Static) (LO 18-1, 18-2, 18-4, 18-5, 18-8) (The following information applies to the questions displayed below.) For a number of years, a private not-for-profit entity has been preparing financial statements that do not necessarily conform to U.S. generally accepted accounting principles. At the end of the most recent year (Year 2), those financial statements show total assets of $900,000, total liabilities of $100,000, net assets without donor restriction of $400,000, and net assets with donor restrictions of $400,000. This last category is composed of $300,000 in net assets with purpose restrictions and $100,000 in net assets that must be permanently held. At the end of Year 1, financial statements show total assets of $700,000, total liabilities of $60,000, net assets without donor restriction of $340,000, and net assets with donor restrictions of $300,000. This last category is composed of $220,000 in net assets with purpose restrictions and $80,000 in net assets that must be permanently held. Total expenses for Year 2 were $500,000 and reported under net assets without donor restrictions. Each part that follows should be viewed as an independent situation. Problem 18-45 Part One Assume that this entity is a private college that charged its students $560,000 for tuition in Year 2 but then provided $140,000 in financial aid. The $600,000 was reported as revenue. The $140,000 was reported as ar expense. Both of these amounts were included in the net assets without donor restrictions. Required: a. What is the appropriate amount that should be reported as net assets without donor restrictions at the end of Year 2? Net assets without donor restrictions to be reported b. What is the appropriate amount that should be reported as expenses for Year 2? Expenses to be reportad
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 18-45 (Static) (LO 18-1, 18-2, 18-4, 18-5, 18-8)
(The following information applies to the questions displayed below.)
For a number of years, a private not-for-profit entity has been preparing financial statements
that do not necessarily conform to U.S. generally accepted accounting principles. At the end
of the most recent year (Year 2), those financial statements show total assets of $900,000.
total liabilities of $100,000, net assets without donor restriction of $400,000, and net assets
with donor restrictions of $400,000. This last category is composed of $300,000 in net
assets with purpose restrictions and $100,000 in net assets that must be permanently held.
At the end of Year 1, financial statements show total assets of $700,000, total liabilities of
$60,000, net assets without donor restriction of $340,000, and net assets with donor
restrictions of $300,000. This last category is composed of $220,000 in net assets with.
purpose restrictions and $80,000 in net assets that must be permanently held. Total
expenses for Year 2 were $500,000 and reported under net assets without donor
restrictions. Each part that follows should be viewed as an independent situation.
Problem 18-45 Part One
Assume that this entity is a private college that charged its students $560,000 for tuition in Year 2 but then
provided $140,000 in financial aid. The $600,000 was reported as revenue. The $140,000 was reported as ar
expense. Both of these amounts were included in the net assets without donor restrictions.
Required:
a. What is the appropriate amount that should be reported as net assets without donor restrictions at the end
of Year 2?
Net assets without donor restrictions to be reported
b. What is the appropriate amount that should be reported as expenses for Year 2?
Expenses to be reported
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