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Calculate earned revenues LO 9-1 Big Blue University has a fiscal year that ends on June 30 . The 2022 summer session of the university runs from June 9 through July 27. Total tuition paid by students for the summer session amounted to $112,000. Required: a. How much revenue should be reflected in the fiscal year ended June 30,2022? Note: Do not round intermediate calculations. b. Would there be a change in the revenue reflected if the university had a tuition refund policy that no tuition would be refunded after the end of the third week of summer session classes?

User Chamon Roy
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Final answer:

The earned revenue for Big Blue University for the fiscal year ended June 30, 2022, should be $50,285.71, calculated from the $112,000 total tuition prorated for the 22 days of the summer session that fall within the fiscal year. A tuition refund policy not offering refunds after the third week of classes would not alter this revenue amount.

Step-by-step explanation:

To calculate the earned revenues for Big Blue University for the fiscal year ended June 30, 2022, we need to recognize the revenues that pertain to the part of the summer session that falls within this fiscal year (June 9 to June 30). Given that the total tuition paid by students for the summer session is $112,000, we need to prorate this amount for the days in June. The summer session spans from June 9 through July 27, which is a total of 49 days. To find the revenue recognized by June 30, we calculate the daily revenue ($112,000/49) and then multiply this by the number of days in June that are included in the summer session (June 9 to June 30, inclusive, is 22 days). This calculation yields $112,000/49 days * 22 days, which equals $50,285.71 (not rounded). For part b, if the university has a tuition refund policy with no refunds after the end of the third week, this does not affect the revenue recognition for the fiscal year ended June 30, 2022, because this policy would only affect refunds given, not the revenue earned during the period.

User Ngo Hung
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