Tuition Revenue Recognition in University: Examining Billing and

School: Kennesaw State University - Course: ACC 410 - Subject: Accounting

WEEK 9 - ACTIVITY: HOMEWORK CHAPTER 132 Chapter 13 Exercise 13-2. Select the best answer. 1.In June 2020, a public university bills and collects $30 million in tuition for the summer semester that runs from June 1 through July 15. In addition, in May and June it bills $200 million for the fall semester that runs from September 1 through December 15. Of this amount it collects only $80 million (expecting to collect the balance prior to September 1). In its statement of revenues and expenses for its year ending June 30, 2020 it should recognize as tuition revenue a.$20 million b.$30 million c.$100 million d.$110 million 2.In a particular year, a not-for-profit university receives $2 million in dividends and interest on an endowment, the income of which, per donor specification, must be used to provide scholarships to liberal arts students. During the year, it awards (and pays) scholarships of $1.9 million. In accord with a policy established by the university's board of trustees, it adds the $0.1 million balance to the endowment fund to offset the impact of inflation. For that year the university may recognize

WEEK 9 - ACTIVITY: HOMEWORK CHAPTER 133 a.$1.9 million of revenue without donor restrictions and $0.1 million of revenue with donor restrictions. b.$2.0 million of revenue without donor restrictions. c.$1.9 million of revenue with donor restrictions and $0.1 of revenue without donor restrictions. d.$2.0 million of revenue with donor restrictions. 3.A not-for-profit university operates its college bookstore as an auxiliary enterprise. During the year the store has revenues of $20 million and expenses of $18 million. In its statement of activities the university should report a.operating revenues of $2 million. b.operating revenues of $20 million. c.nonoperating revenues of $2 million. d.nonoperating revenues of $20 million. 4.In 2020, a government university was awarded a federal reimbursement grant of $9 million to carry out research. Of this, $6 million was intended to cover direct costs and $3 million to cover overhead. In a particular year, the university incurred $2 million in allowable direct costs and received $1.7 million from the federal government. It expected to incur the remaining costs and collect the remaining balance in 2021. For 2020 it should recognize revenues from the grant of a.$1.7 million. b.$2.0 million. c.$3.0 million. d.$9.0 million.