Betterman College, a not-for-profit institution, engaged in the following transactions during its fiscal year ending June 30, 2017.
REQUIRED:
Prepare appropriate journal entries, indicating the types of funds (by restrictiveness) in which they would be recorded.
1. The college collected $64,800,000 in student tuition. Of this amount $4,500,000 was applicable to the summer semester, which ran from June 1 to August 30, and $300,000 was applicable to the fall semester that began the following September.
2. The college received a contribution of $2,000,000 in stocks and bonds to establish an endowed chair in chemistry. Income from the chair must be used to supplement the salary of a professor of chemistry.
3. During the year, the chemistry chair endowment earned interest and dividends of $70,000, all of which was used to supplement the salary of the chair holder.
4. The market value of the investments of the chemistry chair endowment declined by $60,000.
5. Using funds restricted for this purpose, the college purchased $300,000 of equipment for intercollegiate athletics. Intercollegiate athletics is accounted for as an auxiliary enterprise. The college charged depreciation of $60,000.
6. The annual alumni campaign yielded $2,800,000 in pledges. The college estimated that 2 percent would be uncollectible. During the year the college collected $2,400,000 on the pledges.

Question

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The Answer of Betterman College, a not-for-profit institution, engaged in the following transactions during its fiscal year ending June 30, 2017.
REQUIRED:
Prepare appropriate journal entries, indicating the types of funds (by restrictiveness) in which they would be recorded.
1. The college collected $64,800,000 in student tuition. Of this amount $4,500,000 was applicable to the summer semester, which ran from June 1 to August 30, and $300,000 was applicable to the fall semester that began the following September.
2. The college received a contribution of $2,000,000 in stocks and bonds to establish an endowed chair in chemistry. Income from the chair must be used to supplement the salary of a professor of chemistry.
3. During the year, the chemistry chair endowment earned interest and dividends of $70,000, all of which was used to supplement the salary of the chair holder.
4. The market value of the investments of the chemistry chair endowment declined by $60,000.
5. Using funds restricted for this purpose, the college purchased $300,000 of equipment for intercollegiate athletics. Intercollegiate athletics is accounted for as an auxiliary enterprise. The college charged depreciation of $60,000.
6. The annual alumni campaign yielded $2,800,000 in pledges. The college estimated that 2 percent would be uncollectible. During the year the college collected $2,400,000 on the pledges.

Betterman College, a Not-For-Profit Institution, Engaged in the Following Transactions