You are preparing a statement of activities for the

University
You are preparing a statement of activities for the University of Richland, a private not-for-profit
organization. The following questions should be viewed as independent of each other.Part
1During the current year, a donor gives $400,000 in cash to the school and stipulates that it
must hold this money forever. However, any investment income earned on this money must be
used for faculty salaries. During the current year, the investment earned $31,000 and, of that
amount, the school has expended $22,000 appropriately to date. As a result of these events,
what was the overall change in each of the following for the current year?(a) Unrestricted net
assets.(b) Temporarily restricted net assets.(c) Permanently restricted net assets.Part 2A donor
gives a large machine to the school on January 1 of the current year. It has a value of $200,000,
no salvage value, and a 10-year life. The donor requires that the school keep the machine and
use it for all 10 years, and the school agrees. It cannot sell or retire the machine in the interim.
As a result of these events, what was the overall change in each of the following for the current
year?(a) Unrestricted net assets.(b) Temporarily restricted net assets.(c) Operating
expenses.Part 3Several years ago, a donor gave the school $400,000 in cash to help fund its
financial aid program. This year, the school charged $2 million in tuition but granted $700,000 in
financial aid. Collections to date from the students have totaled $1.1 million. The donor’s gift
has offset $300,000 of the financial aid. As a result of these events, what was the overall
change in each of the following for the current year?(a) Unrestricted net assets.(b) Operating
expenses.(c) Temporarily restricted net assetsView Solution: You are preparing a statement of
activities for the University
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