Problem 5. The statement of financial position of Washbush Private University as of end of its fiscal year, June 30, 2015, is as follows:

Washbush Private University
Statement of Financial Position
For Year Ended June 30, 2015
Assets				Liabilities and Net Assets
Cash		$257,000		Accounts payable		$40,000
Accounts receivable student tuition and fees				Deferred revenues		66,000
less allowance for doubtful accounts of $9,000		311,000		Long-term debt		100,000
				Total liabilities		$206,000
				Net assets:
State appropriations receivable		75,000		Unrestricted		$487,000
Endowment investments		50,000		Temporarily restricted		40,000
Property, plant, and equipment (net)		90,000		Permanently restricted		50,000
Total assets		$783,000		Total net assets		$577,000
				Total liabilities and net assets		$783,000

The following transactions occurred during the fiscal year ended June 30, 2016:

a. On July 7, 2015, a gift of $90,000 was received from an alumnus. The alumnus requested that one-half of the gift be used for the purchase of equipment for the university athletic department and the remainder be used for the establishment of a permanently restricted endowment. The alumnus further requested that the income generated by the endowment be used annually to award a scholarship to a qualified disadvantaged student. On July 20, 2015, the board of trustees resolved that the funds of the newly established endowment would be invested in savings certificates. On July 21, 2015, the savings certificates were purchased.

b. Revenues from student tuition and fees applicable to the year ended June 30, 2016, amounted to $1,900,000. Of this amount, $66,000 was collected in the prior year, and $1,686,000 was collected during the year ended June 30, 2016. In addition, at June 30, 2016, the university had received cash of $158,000 representing fees for the session beginning July 1, 2016.

c. During the year ended June 30, 2016, the university had collected $308,000 of the outstanding accounts receivable at the beginning of the year. The remainder was determined to be uncollectible and was written off against the allowance account. At June 30, 2016, the allowance account was adjusted to $6,000.

d. During the year, interest charges of $6,000 were earned and collected on late student fee payments.

e. During the year, the state appropriation was received. An additional unrestricted appropriation of $40,000 was made by the state, but it had not been paid to the university as of June 30, 2016.

f. A gift of $30,000 cash restricted was received from alumni of the university for economic research expenses.

g. During the year, endowment investments that cost $21,000 were sold for $24,000. This includes accrued investment income amounting to $1,900. All income was restricted for programs to enhance teaching effectiveness.

h. During the year, unrestricted operating expenses of $1,800,000 were recorded. They include the following:

Instruction		$500,000
Research		400,000
Institutional support		100,000
Student aid		100,000
Student services		200,000
Operation and maintenance of plant		500,000
Total		$1,800,000

At June 30, 2016, $60,000 of these expenses remained unpaid.

i. Temporarily restricted funds of $13,000 were spent for specified economic research described in item (f).

j. The accounts payable at June 30, 2015, were paid during the year.

k. During the year, $7,000 interest was earned and received on the savings certificates purchased in item (a).

1. In honor of its 25th anniversary, Washbush Private University conducted a fund drive. Contributions of $16,000 were received. Additional unconditional pledges of $14,000 were promised for payment in December 2016. It is anticipated that $2,000 of the pledges will be uncollectible.

Instructions

1. Prepare journal entries to record the transactions. Assume fund accounting is not used.

2. Prepare a statement of activities for the year ended June 30, 2016, using a column for each of the three net asset classifications and a total column.

3. Prepare a statement of financial position for the year ended June 30, 2016.