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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?

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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?

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The permanent fund earned $80,000 of investment earnings, but only the inflation-adjusted rate of return of 8% can be transferred to the recipient fund. Therefore, the recognized revenue in the permanent fund would be $80,000 x 8% = $6,400.

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