Question

Problem 2- Governmental University Journal Entries Selected transactions of Shelbyville State University are listed below. The university reports as a special purpose government engaged in only business-type activities. All amounts are in thousands of dollars Transactions 1. Tuition and fees assessed total $4,500; 70% is collected immediately; scholarships allowances are granted for $120, and $45 is expected to prove uncollectible 2. Revenues collected from sales and services of the university bookstore, an auxiliary enterprise, were $275. 3. Salaies and wages paid, $1,500; $62 of this was for employees of the university bookstore 4. Tuition remissions were granted in the amount of $35 for employees. Copyright2013 Pearson Education, Inc. 5. Mortgage payments totaled $520; $290 of this was for interest. 6. Restricted contributions for the Master of Accountancy (MAcc) program were received, $250 7. Expenditures for the MAcc program were incurred and paid, $230. 8. Equipment was purchased from unrestricted resources, $34. Requirement: Prepare the necessary journal entries to record these transactions.

Answer 1

In the books of Shelbyville State University
Journal Entries
		Amount in Thounsands
Sl no	Description of Accounts	Debit ($ )	Credit ($)
1	Cash (4,500 x 70%)	3150
	Accounts Receivable	1230
	Revenue Deduction - Scholarship Allowances	120
	Revenues – Tuition and Fees		4455
	Allowance for Uncollectible Accounts		45
	(Entry recorded for Collection of tution fees, scholarship Allowance and Provision of Uncollectible Accounts is also provided in the books)
2	Cash	275
	Revenues – Auxiliary Enterprises		275
	(Collection of Revenue from Sale and Services of university book stores)
3	Expenses – Educational and General	1438
	Expenses – Auxiliary Enterprises	62
	Cash		1500
	(Salaries for Employees of University and Book stores recorded.)
4	Expenses – Educational and General	35
	Accounts Receivable		35
	(Tution Remissions to employees is being recored)
5	Mortgage Payable	230
	Expenses – Educational and General	290
	Cash		520
	(Mortgage Payable alongwith Interest recorded)
6	Cash Restricted for the MAcc Program	250
	Revenue – Private Gifts		250
	(Restricted contribution for Macc programme is received)
7	Expenses – Educational and General	230
	Cash Restricted for the MAcc Program		230
	(Expenditure for Macc programme is being incurred
8	Equipment	34
	Cash		34
	(Equipment purchased )