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The balance sheet of Rybowiak’s Building Supplies on June 30, Year 12, appears nearby.
RYBOWIAK’S BUILDING SUPPLIES Balance Sheet June 30, Year 12
The following transactions occurred during the month of July. (1) Sold merchandise on account for a total selling price of $85,000. (2) Purchased merchandise inventory on account from various suppliers for$46,300. (3) Paid rent for the month of July of $11,750. (4) Paid salaries to employees during July of$20,600. (5) Collected accounts receivable of $34,150. (6) Paid accounts payable of$38,950. Information affecting adjusting entries at the end of July is as follows: (7) The firm paid the premium on a one-year insurance policy on March 1, Year 12, with coverage beginning on that date. This is the only insurance policy in force on June 30, Year 12. (8) The firm depreciates its equipment over a 10-year life. Estimated salvage value of the equipment is negligible. (9) Employees earned salaries of $1,600 during the last two days of July but were not paid. These are the only unpaid salaries at the end of July. (10) The note payable is a 90-day, 6% note issued on June 30, Year 12. (11) Merchandise inventory on hand on July 31, Year 12, totals$77,950. The cost of goods sold for July equals merchandise inventory on June 30, Year 12, plus purchases of merchandise during July minus merchandise inventory on July 31, Year 12.
c. Prepare an income statement for the month of July. Ignore income taxes.
If all quantities produced rise by percent and all prices fall by percent, which of the following best describes what occurs?
a. Real GDP rises by percent, while nominal GDP falls by percent.
b. Real GDP rises by percent, while nominal GDP is unchanged.
c. Real GDP is unchanged, while nominal GDP rises by percent.
d. Real GDP is unchanged, while nominal GDP falls by percent.