Golden Path, a Labor Union, Had the Following Receipts and Expenses

question 22

Multiple Choice

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 amounts should be reported under the classifications of temporarily and permanently restricted net assets?

• A) $0 and $110,000 respectively.
• B) $110,000 and $0 respectively.
• C) $60,000 and $50,000 respectively.
• D) $50,000 and $60,000 respectively.

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Definitions:

Bond Indenture

A legal document specifying the terms and conditions under which a bond has been issued, including the interest rate, maturity date, and covenants.

Fiscal Year

A one-year period used for financial reporting and budgeting that does not necessarily coincide with the calendar year, varying between organizations.

Times Interest Earned

A ratio measuring a company's ability to meet its interest payments based on its operating income, indicating financial health and creditworthiness.

Tax Rate

The percentage at which an individual or corporation is taxed.