Use the Following Information to Answer Questions

question 22

Multiple Choice

Use the following information to answer Questions
Previously a local charity received a $1 million gift, the income from which was restricted to support activities for senior citizens.During the current year the endowment earned $40,000 of interest revenues, of which the charity designated $30,000 to support senior citizen activities.
-Cedar City has a permanent fund that reported current year investment earnings realized and unrealized of $80,000.The endowment principal is $800,000 and the city council has adopted a policy of considering only the inflation-adjusted rate of return to be available for transfer to the recipient fund.During the current year the Council declared the inflation-adjusted rate of return to be 8%.How much revenue would be recognized in the permanent fund?

• A)$ 0.
• B)$ 64,000.
• C)$ 80,000.
• D)Unable to determine.

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Definitions:

Duplex

A dwelling consisting of two living units with separate entrances, either side by side or on two different floors.

Lease Agreement

In regard to the lease of goods, an agreement in which one person (the lessor) agrees to transfer the right to the possession and use of property to another person (the lessee) in exchange for rental payments.

Writing

The act or process of producing texts, such as letters, documents, or creative materials, using a pen, pencil, typewriter, or computer.

Warranty Deed

A legal document in real estate transactions that guarantees the seller holds clear title to the property and has the right to sell it.