In June 2015,a public university bills and collects $45 million in tuition for the summer semester that runs from June 1 through July 15.In addition,in May and June it bills $300 million for the fall semester that runs from September 1 through December 15.Of this amount it collects only $120 million expecting to collect the balance prior to September 1).In its statement of revenues,expenses,and changes in net position for the fiscal year ending June 30,2015 it should recognize as tuition revenue
A)$30 million
B)$45 million
C)$150 million
D)$165 million

Question

Quizplus · Accepted Answer

The university should recognize revenue for the portion of the summer semester that falls within the fiscal year ending June 30, 2015. Since the summer semester runs from June 1 to July 15, only the revenue for June should be recognized, which is approximately half of the $45 million, equating to $22.5 million. Additionally, the fall semester revenue should not be recognized until the semester begins. Therefore, the correct amount to recognize is $22.5 million, which is closest to $30 million when considering rounding or estimation.

In June 2015,a Public University Bills and Collects $45 Million