Answered: + 10 Primary income (investment income…

+ 10 Primary income (investment income earned abroad) 72 Imports of goods and services 98 Augusta investment abroad 183 Primary income (investment income pa

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The following balance of payments data is for the economy of Augusta:

Foreign investment in Augusta	174
Transfer (net)	+ 10
Primary income (investment income earned abroad)	72
Imports of goods and services	98
Augusta investment abroad	183
Primary income (investment income paid abroad)	68
Exports of goods and services	92

c) What is the balance on its capital account?
d) Is there an overall balance of payments surplus or deficit? How much?

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Please see attached image. In the question, the unilateral transfer is stated as a debit, but in the calculation for the answer, it is calculated as a credit(Gain). Why?
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