The Statements of Financial Position of Rocky Acre Spread Ltd

question 56

Essay

The statements of financial position of Rocky Acre Spread Ltd. include the following:
12/31/14 12/31/13
Interest Receivable €4,300 € -0-
Supplies 5,000 3,000
Salaries and Wages Payable 3,600 3,800
Unearned Service Revenue -0- 4,000
The income statement for 2014 shows the following:
Interest Revenue €14,400
Service Revenue 75,700
Supplies Expense 8,700
Salaries and Wages Expense 36,000
Instructions
Calculate the following for 2014:
1. Cash received for interest.
2. Cash paid for supplies.
3. Cash paid for salaries and wages.
4. Cash received for service revenue.

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Definitions:

Nominal Interest Rate

The percentage increase in money that borrowers pay lenders, not adjusted for inflation.

Fisher Effect

An economic theory stating that the real interest rate is independent of monetary measures, particularly the nominal interest rate and expected inflation rate.

Menu Costs

The costs to a company associated with changing prices, including the physical costs of changing price tags and the administrative costs of updating systems.

Inflation Rates

The percentage rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling, usually measured over a specific period of time.