Answer:
1. a. For Beck Inc = $5
b. For Bryant Inc. = 2.5
2. For Beck Inc = $100,000
For Bryant Inc. = $150,000
Explanation:
The computation of given question is shown below:-
a. Operating leverage = Contribution ÷ Net income
For Beck Inc
= $500,000 ÷ $100,000
= $5
For Bryant Inc.
= $750,000 ÷ $300,000
= $2.5
2. Operating income = Current Earning before interest and tax × Percentage increase in profit
For computing the operating income first we need to compute the increase in profit.
Increase in profit = Operating leverage × Percentage
For Beck Inc. = $5 × 20%
= 100%
now we put into formula
= $1,00,000 × 100.00%
= $100,000
For Bryant Inc. = $2.5 × 20%
= 50%
now we put into formula
= $3,00,000 × 50%
= $150,000
Answer and Explanation:
The journal entry to record the distribution is as follows;
But before that following calculations need to be required
Capital, Henry = $45,000
Capital, Luther = $37,000
Capital, Gage = -$5,000
Now there is a deficiency in the gage capital account i.e. $5,000 should be borne by Henry and Luther in equal ratio i.e. $2,500 each
Now the henry final balance is
= $45,000 - $2,500
= $42,500
And, the luther final balance is
= $37,000 - $2,500
= $34,500
Now the journal entry is
Henry, capital $42,500
Luther, capital $34,500
To Cash $77,000
(Being distribution is recorded)
here the capital account is credited as it reduce the stockholder equity and cash is credited as it also reduced the assets
Answer:
$440 per unit
Explanation:
Units balance after July 12 sales = 100 - 70 = 30
Total units after July 23 = 30 + 120 = 150
Total cost of units balance after July 12 sales = $400 × 30 = $12,000
Total cost of July 23 purchases = 120 × $450 = $54,000
Total cost of inventories after July 23 = $12,000 + $54,000 = $66,000
Weighted average unit cost after the July 23 purchase = $66,000 ÷ 160 = $440 per unit
Answer:
C. real interest rates rise and investment spending falls
Explanation:
Due to the decrease in the money supply, keeping other things remain constant. The investment spending falls and due to the shortage of money, the real interest rate is rise so that it will become expensive for the customer to take out the loan.
Hence, it shows a direct relationship between the change in money supply and the investment spending while in respect of real interest rate it shows an inverse relationship between the change in money supply and real interest rate.
Hence, all other options are wrong except C.