40 : QuantitativeTechniquesforBusiness

Bob and Sally are married, file a joint tax return, report AGIof $115,000, and have two children. Del is beginning her freshmanyear at State College during Fall 2016, and Owen is beginning hissenior year at Southwest University during Fall 2016. Owencompleted his junior year during the Spring semester of 2015 (i.e.,he took a “leave of absence” during the 2015-2016 school year).Both Del and Owen are claimed as dependents on their parents’ taxreturn.

Del’s qualifying tuition expenses and fees total $5,000 for theFall semester, while Owen’s qualifying tuition expenses were $6,100for the Fall 2016 semester. Del’s room and board costs were $3,200for the Fall semester. Owen did not incur room and board costs, ashe lived with his aunt and uncle during the year.

​Full payment is made for the tuition and related expenses forboth children at the beginning of each semester. In addition to thechildren’s college expenses, Bob also spent $3,000 on professionaleducation seminars during the year in order to maintain his licenseas a practicing dentist. Bob attended the seminars during July andAugust 2016. Compute the available education tax credits for Boband Sally for 2016.

According to the AICPA, a certified public accountant (CPA) intoday's environment must not only have a high level of technicalcompetence and a sense of commitment to service, but must also havegood communications and analytical skills, and the ability to workwell with people. Employers are looking for individuals who havethe ability to analyze and evaluate complex business problems andthe interpersonal skills and maturity to make decisions in aclient- and customer-service environment.

To obtain the required body of knowledge and to develop theskills and abilities needed to be successful CPAs, students shouldcomplete 150 semester hours of education. Many states/jurisdictionsnow require or will require 150 semester hours of education forobtaining the CPA certification. Colleges and universities in thesestates/jurisdictions determine the curriculum for pre-licensureeducation of CPAs; it typically features a good balance ofaccounting, business, and general education.

Do you think you have the required skills to become anAccountant? Do you know your “accounting” professional strengthsand weaknesses? How can you improve your professional weaknesses asa future accountant?

Eastern University had the following transactions at the beginning of its academic year:

Student tuition and fees were billed in the amount of $7,050,000. Of that amount, $4,550,000 was collected in cash.

Pell Grants in the amount of $2,005,000 were received by the university.

The Pell Grants were applied to student accounts.

Student scholarships, for which no services were required, amounted to $490,000. These were applied to student tuition bills at the beginning of each semester.

Required:
Prepare journal entries to record the above transactions assuming:
a. Eastern University is a public university.
b. Eastern University is a private university.