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fenix001 [56]
2 years ago
5

The chart gives prices and output information for the country of Utopia. Use this information to calculate real and nominal GDP

for both years. Use 2017 as the base year. 2016 2017 Price Quantity Price Quantity Ice cream $7.00 600 $3.00 400 Blue jeans $70.00 20 $20.00 90 Laptops $300.00 5 $300.00 5

Business
1 answer:
skad [1K]2 years ago
3 0

Answer: Nominal GDP 2016 = $7,100

REAL GDP 2016 = $3,700

Nominal GDP 2017 = $4,500

Real GDP 2017 = $4,500

Explanation:

To calculate the Nominal and Real GDPs we use the following formulas,

Nominal GDP = Sum of (Current Year Price x Current Year Quantity)

Real GDP = Sum of (Base Year Price x Current Year Quantity)

We make the assumption that 2017 is the base year so calculating would be,

Nominal GDP, 2016 = [(7 x 600) + (70 x 20) + (300 x 5)]

= $(4200 + 1400 + 1500)

= $7,100

Remember for this we will use 2017 as the base year so we will use 2017 prices

Real GDP, 2016 = [(3 x 600) + (20 x 20) + (300 x 5)]

= $(1800 + 400 + 1500)

= $3,700

Nominal GDP, 2017 = [(3 x 400) + (20 x 90) + (300 x 5)]

= $(1200 + 1800 + 1500)

= $4,500

Now seeing as 2017 is the base year, it's nominal and real GDPs will be the same.

Real GDP, 2017 = $[(3 x 400) + (20 x 90) + (300 x 5)]

= $(1200 + 1800 + 1500)

= $4,500

I included the details part of question so it is clearer.

If you have need any clarification do react or comment.

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On October 10, the stockholders’ equity of Sherman Systems appears as follows.
aniked [119]

Answer:

Sherman Systems

1. Journal Entries

                                                        Debit            Credit

a)  October 11:

Treasury Stock                            $68,000

Additional Paid-in Capital         $224,400

Cash                                                                     $292,400

To record purchase of 6,800 shares at $43 per share.

b) November 1:

Cash                                          $71,050

Treasury Stock                                                 $14,500

Additional Paid-in Capital                                $56,550

To record sale of 1,450 treasury shares at $49 per share.

c) November 25:

Cash                                       $203,300

Treasury Stock                                                  $53,500

Additional Paid-in Capital                                $149,800

To record sale of 5,350 treasury shares at $38 per share.

2. Revised Equity Section of Sherman Systems' Balance Sheet as at October 11:

Common stock at“$10 par value,

 90,000 shares authorized, issued, and outstanding $ 900,000

Paid-in capital in excess of par value, common stock        81,600

Treasury Stock                                                                    (68,000)

Retained earnings                                                           1,008,000

Total stockholders' equity                                            $1,921,600

Explanation:

1. Additional Paid-in Capital:

Balance on October 10       $306,000

Treasury Stock                   ($224,400)

Balance on October 11        $81,600

2. Treasury Stock is a contra account to Common Stock.  It represents the purchase of its own shares by a company.  There are two methods for accounting for treasury stock.  One is the par value method, where the adjustments for above or below par value are made in the Additional Paid-in Capital account.  The other method is the costing method, where the adjustments for above or below par value are made in the Treasury stock.

3. The equity section prepared above is limited to the October 11 transaction.  The transactions occurring on November 1 and 25 were not required by the question.

4.  The remaining shares of the treasury stock reissued on November 25 is equal to 6,800 - 1,450 = 5,350 shares.

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prisoha [69]
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Answer:

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