Reference no: EM132809457

Problem 1: Windom College, a not-for-profit institution, engaged in the following transactions during its fiscal year ending June 30, 2020. Prepare appropriate journal entries, indicating the types of funds (by restrictiveness) in which they would be recorded.

1. The college collected $86,400,000 in student tuition. Of this amount $6,000,000 was applicable to the summer semester, which ran from June 1 to August 30, and $400,000 was applicable to the fall semester that began the following September.

2. It received a contribution of $1,000,000 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 $50,000, all of which was used to supplement the salary of the chair holder.

4. The fair value of the investments of the chemistry chair endowment declined by $80,000.

5. Using funds restricted for this purpose, the college purchased $150,000 of equipment for intercollegiate athletics. Intercollegiate athletics is accounted for as an auxiliary enterprise. The college charged depreciation of $30,000.

6. The annual alumni campaign yielded $1,800,000 in pledges. The college estimated that 2 percent would be uncollectible. During the year the college collected $1,500,000 on the pledges.