Golden Path,a labor union,had the following receipts and expenses for the year ended
December 31,2008:
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 31,2008,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 31,2008:
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 31,2008,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 supporting services category includes expenses related to the organization's management and general functions, such as administrative and legal expenses. The total expenses for Golden Path were $3,200,000, and the strike insurance fund would be considered a program service expense rather than a supporting service expense. Therefore, the correct amount for supporting services would be the difference between the total expenses and the program service expenses designated for the strike insurance fund:

$3,200,000 - ($11,000,000 x 12%) = $440,000.

Therefore, option C is the correct answer.

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