During the year, Dakota University's board of trustees established a $500,000 fund to be retained and invested for scholarship grants.The fund earned $30,000, which had not been distributed by December 31.What amount should Dakota report in a Board designated quasi endowment fund's net assets at December 31?
A)$0
B)$30,000
C)$500,000
D)$530,000

Question

Quizplus · Accepted Answer

Since the fund is an endowment, it is not expendable and therefore should be reported as a quasi-endowment fund. The original amount of the fund, $500,000, should be reported as the principal or corpus, while the earnings of $30,000 should be reported as an increase to the fund. Therefore, the net assets of the quasi-endowment fund on December 31 should be $530,000.

During the Year, Dakota University's Board of Trustees Established a $500,000