The University of Danville is a private not-for-profit university that starts the current year with $700,000 in net assets: $400,000 without donor restrictions and $300,000 with donor restrictions. The $300,000 is composed of $200,000 with purpose restrictions and $100,000 that must be held permanently. The following transactions occurred during the year. a. Charges students $1.2 million for tuition and fees. b. Receives a donation of equity investments that had cost the owner $100,000 but are worth $300,000 currently. According to the terms of the gift, the university must hold the investments forever but can spend the dividends for any purpose. Any changes in the value of these securities must be held forever and cannot be spent. c. Receives a cash donation of $700,000 that must be spent to acquire laboratory equipment. d. Awards scholarships to students in the amount of $100,000. e. Pays salary expenses of $141,000 (teaching), $80,000 (research), $50,000 (administrative), and $40,000 (fundraising). f. Learns that a tenured faculty member is contributing his services for this year and will not accept his $80,000 salary. His time is 70 percent teaching and 30 percent research. g. Spends $200,000 of the money in (c) on laboratory equipment. The donor had made no specifications about the recording of the acquisition. The equipment is used 80 percent of the time for research and 20 percent of the time for teaching. h. Learns that the investments in (b) are worth $331,000 at the end of the year. i. Receives cash dividends of $9,000 on the investments in (b). j. Computes annual depreciation expense of $32,000 on the equipment in (g). k. The school's board of trustees votes to set aside $100,000 of previously unrestricted cash for the future purchase of library books. I. Receives an unconditional promise of $10,000 halfway through the year. The school expects to collect the money in three years. The $10,000 future payment has a present value of $7,513 based on a reasonable annual interest rate of 10 percent. m. Receives an art object as a gift. It is worth $70,000. For financial reporting, it qualifies as work of art/museum piece. The school prefers not to record such gifts unless required. n. Pays utilities and other general expenses of $75,000 (teaching), $45,000 (research), $43,000 (fundraising), and $50,000 (administrative). o. Receives free services from alumni who come to campus each week and put books on the shelves in the library. Over the course of the year, the school would have paid $103,000 to have this work done. p. Near the end of the year, the school receives a cash pledge of $40,000 to be collected in two years. It is judged to be conditional and has a present value of $31,200. Required: a. Prepare journal entries for each transaction. b. Determine the end-of-year balances for net assets without donor restrictions and net assets with donor restrictions by creating a statement of activities for the neriod The schnol has twon nrocram cervices education and recearch It alco hac two sulunortins \begin{tabular}{|c|c|c|c|c|c|} \hline No & Transaction & \multicolumn{2}{|l|}{ General Journal } & Debit & Credit \\ \hline \multirow[t]{2}{*}{1} & a. & Tuition receivable & 2 & 1,200,000 & \\ \hline & & Tuition revenues and fees (no donor restrictions) & 2 & & 1,200,000 \\ \hline \multirow[t]{2}{*}{2} & b. & Investments & 2 & 300,000 & \\ \hline & & Contribution revenue (with donor restrictions) & 2 & & 300,000 \\ \hline \multirow[t]{2}{*}{3} & c. & Cash & 2 & 700,000 & \\ \hline & & Contribution revenue (with donor restrictions) & 2 & & 700,000 \\ \hline \multirow[t]{2}{*}{4} & d. & Scholarships-financial aid & 2 & 100,000 & \\ \hline & & Tuition receivable & 2 & & 100,000 \\ \hline \multirow[t]{5}{*}{5} & e. & Salary expenses-teaching & 2 & 140,000 & \\ \hline & & Salary expenses-research & 2 & 80,000 & \\ \hline & & Salary expenses-administrative & 2 & 50,000 & \\ \hline & & Salary expenses_fundraising & 2 & 40,000 & \\ \hline & & Cash & 2 & & 310,000 \\ \hline \end{tabular} Statement of Activities For the Year Ended December 31, 20XX \begin{tabular}{|c|c|c|c|c|} \hline Exchange revenues and gains & \multicolumn{2}{|c|}{\begin{tabular}{l} Net Assets Without Donor \\ Restrictions \end{tabular}} & \multicolumn{2}{|c|}{\begin{tabular}{l} Net Assets With Donor \\ Restrictions \end{tabular}} \\ \hline Tuition & $1,200,000 & & & \\ \hline Scholarships & (100,000) & \$ 1,100,000 & & \\ \hline Unrealized gain on investments & & & & 30,000x \\ \hline Dividend revenues & & 9,000 & & \\ \hline \multicolumn{5}{|l|}{ Contribution revenue } \\ \hline Cash and other assets & & & & 1,000,000 \\ \hline Pledges & & & & 7,513 \\ \hline Interest & & & & 9,376 \\ \hline Services & & 80,000 & & \\ \hline Total revenues, gains, and contributions & & 1,189,000 & 0 & 1,046,889 \\ \hline Net assets released from restriction & & 200,000 & & (200,000) \\ \hline Totals & & 1,389,000 & 0 & 846,889 \\ \hline \multicolumn{5}{|l|}{ Operating Expenses } \\ \hline \multicolumn{5}{|l|}{ Salaries } \\ \hline Teaching & 196,000x & & & \\ \hline Research & 104,000 & & & \\ \hline Administrative & 50,000 & & & \\ \hline Fund raising & 40,000 & 390,000 & & \\ \hline \multicolumn{5}{|l|}{ Depreciation } \\ \hline Teaching & 6,400 & & & \\ \hline Research & 25,600 & 32,000 & & \\ \hline \multicolumn{5}{|l|}{ Utilities and other expenses } \\ \hline Teaching & 74,000 & & & \\ \hline Research & 45,000 & & & \\ \hline Fundraising & 43,000 & & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|} \hline Operating Expenses & & & & \\ \hline Salaries & & & & \\ \hline Teaching & 196,000 & & & \\ \hline Research & 104,000 & & & \\ \hline Administrative & 50,000 & & & \\ \hline Fund raising & 40,000 & 390,000 & & \\ \hline Depreciation & & & & \\ \hline Teaching & 6,400 & & & \\ \hline Research & 25,600 & 32,000 & & \\ \hline Utilities and other expenses & & & & \\ \hline Teaching & 74,000 & & & \\ \hline Research & 45,000 & & & \\ \hline Fundraising & 43,000 & & & \\ \hline Administrative & 50,000 & 212,000 & & \\ \hline Total expenses & & 634,000 & & \\ \hline Increase in net assets & & 755,000 & & 846,889 \\ \hline Net assets_beginning of year & & 400,000 & & 300,000 \\ \hline Net assets-end of year & & $1,155,000 & $ & $1,146,889 \\ \hline \end{tabular}