Lee College Term Paper

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Lee College Financial Activities

Lee College is an academic non-profit organization that awards both undergraduate and graduate degree program to students across the world. Located in the United States, the financial statements of the Lee College conform to the Government Accounting Standard Board (GASB). (Lovvorn & Kieschnick, 2011). Overview of the Lee College financial activity reveals that total unrestricted revenues at the end of the 2012 fiscal year is totaled $16,230,000 while total unrestricted expenses are $17,050,000. However, $3,290,000 is total amount record for the increase in permanent restricted revenues and $650,000 is increase in temporary restricted. Temporary restricted consists of contributions totaled $1,500,000, gain on long-term investment and net assets released from restrictions. Permanent restricted revenues consist of income of endowment totaled $2,540,000 and gains on long-term investment totaled $750,000. Overall amount of permanent restricted revenues are $3,290,000.

Unrestricted revenues reveal the total revenues and total expenses, and unrestricted revenues are divided into temporary unrestricted and permanent unrestricted.

The objective of this paper is to review the financial information of Lee College. In reviewing the financial information of Lee College, the paper provides a statement of activities of Lee College using the following format:

A Statement of Unrestricted Revenues

Expenses

Other Changes in Unrestricted Net Assets

A Statement of Changes in Net Assets.

The financial highlights of the 2012 fiscal years are as follows:

Net Assets of the Lee College at the end of the 2012 Fiscal years is $7,920,000 while the net assets as at July 1, 2011 is $3,000,000 revealing $4,920,000 increase in net assets by 164% between 2011 and 2012 fiscal year as being revealed in Table 1. A statement of changes in the net assets consists of net assets and liabilities at the end of the fiscal year 2012. Statements of change in the college net assets consist of current and non-current liabilities, current and non-current assets and net assets, which are equal to Assets minus Liabilities.

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Typically, Total Assets is equal Total Liabilities plus Net Assets.

Table 1: Changes in Net Assets of Lee College

Financial Highlights

2011

2012

Changes between 2011 and 2012

% Changes

Net Assets

$3,000,000

$7,920,000

$4,920,000

Statement of Unrestricted Revenues

Lee College total revenue at the end of the fiscal year 2012 is $21,970,000 where $18,030,000 is unrestricted revenues, $650,000 is temporary restricted, and 3,290,000 are permanently restricted. Additionally, Lee College has excess of gain of $11,090,000 on long-term investment. Major source of income for the college are the combination of tuitions and fees, Sales and Services of Auxiliary Enterprises, grant revenue, contributions and unrestricted income on endowment. Typically, combination of tuition and fees and sales and services of auxiliary enterprises form more than 99% of the college total revenue. Based on the Lee College financial statement at the end of the 2012 fiscal year, it is revealed that combination of net tuitions and fees; and Sales and Services of Auxiliary Enterprises form the total of $16, 090,000 from the total revenues while the rest is $140,000 as being revealed in Table 2.

Table 2: Unrestricted Revenues

Unrestricted Revenues

Amount

Net Tuition and Fees

$11,090,000

68.6%

Contributions

$100,000

0.6%

Unrestricted Income on Endowment

$40,000

0.2%

Sales and Services of Auxiliary Enterprises

$5,000,000

30.6%

Total

$16,230,000

From the financial data in Table 2, it is revealed that Lee College financial statement is sustainable since the bulk of Lee College revenues are generated from operations and sales activities and not from endowments and contributions. To evaluate the college financial activities, the paper calculates the unrestricted revenues and total expenses for the 2012 fiscal year.

Table 2: Lee College Financial Activities for the Fiscal Year 2012

Unrestricted Revenues

Amount

Net Tuition and Fees

$11,090,000

Contributions

$100,000

Unrestricted Income on Endowment

$40,000

Sales and.....

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