Albert University, a private not-for-profit university, had the
following cash inflows during the year ended June 30, 2012:
I. $500,000 from students for tuition.
II. $300,000 from a donor who stipulated that the money be
invested indefinitely.
III. $100,000 from a donor who stipulated that the money be
spent in accordance with the wishes of Albert’s governing
board.
On Albert University’s statement of cash flows for the year ended
June 30, 2012, what amount of these cash flows should be reported
as operating activities?

(d) In accordance with FASB ASC 958, nongovernmental
not-for-profit organizations are required to report a
statement of cash flows. On this statement, cash flows are reported
using the classifications of operating, investing, and financing
activities. Cash flows related to revenues and expenses
that are unrestricted should be reported in the operating activities
section. The cash inflows from both tuition ($500,000) and
the unrestricted contribution ($100,000) are both unrestricted
and should be reported as operating activities. Restricted contributions
for long-term purposes, like the $300,000 endowment,
are reported as financing activities on the statement of cash flows.