Golden Path,a labor union,had the following receipts and expenses for the year ended December 31,20X8:
The union's constitution provides that 12 percent of the per capita dues be designated for the strike insurance fund to be distributed for strike relief at the discretion of the union's executive board.
-Based on the information provided,in Golden Path's statement of activities for the year ended December 31,20X8,what amount should be reported under the classification of supporting services?
A)$150,000
B)$720,000
C)$440,000
D)$290,000

Question

Golden Path,a labor union,had the following receipts and expenses for the year ended December 31,20X8:
  The union's constitution provides that 12 percent of the per capita dues be designated for the strike insurance fund to be distributed for strike relief at the discretion of the union's executive board.
-Based on the information provided,in Golden Path's statement of activities for the year ended December 31,20X8,what amount should be reported under the classification of supporting services?
A)$150,000 
B)$720,000 
C)$440,000 
D)$290,000

Quizplus · Accepted Answer

The strike insurance fund is a part of the supporting services of the labor union, as it is set up to provide support to members in case of a strike. Therefore, the amount designated for the strike insurance fund (which is 12% of the per capita dues) should be reported under the classification of supporting services.

From the information provided, we do not know the total per capita dues or the number of members in the union, so the amount designated for the strike insurance fund cannot be calculated. However, we can eliminate options A, B, and D as they do not reflect the amount designated for the strike insurance fund.

Option C is the only remaining choice, and it is the best answer as it represents the only possible amount that could be reported under the classification of supporting services.

Golden Path,a Labor Union,had the Following Receipts and Expenses for the Year