Sayer University,a not-for-profit university,earned $750,000 from bookstore revenue and spent $250,000 for faculty research in 20X8.The $250,000 for faculty research came from a $400,000 research grant received in the previous year.What is the effect of these events on net assets without donor restrictions in 20X8?
A)Increase $500,000
B)Increase $750,000
C)Increase $1,000,000
D)Increase $1,150,000

Question

Quizplus · Accepted Answer

The bookstore revenue of $750,000 increases the net assets without donor restrictions by that amount. The faculty research expenditure of $250,000 reduces the net assets without donor restrictions by that amount. However, since the $250,000 expenditure was funded by the $400,000 research grant from the previous year, the net effect on the net assets without donor restrictions for 20X8 is an increase of $750,000.

Sayer University,a Not-For-Profit University,earned $750,000 from Bookstore Revenue and Spent