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3 years ago

14

Presented below are two independent situations: A) Sandhill Inc. acquired 10% of the 420,000 shares of common stock of Schuberge

r Corporation at a total cost of $15 per share on June 17, 2020. On September 3, Schuberger declared and paid a $120,000 dividend. On December 31, Schuberger reported net income of $520,000 for the year. B) Blue Corporation obtained significant influence over Hunsaker Company by buying 30% of Hunsaker’s 120,000 outstanding shares of common stock at a cost of $18 per share on January 1, 2020. On May 15, Hunsaker declared and paid a cash dividend of $120,000. On December 31, Hunsaker reported net income of $220,000 for the year. Prepare all necessary journal entries for 2017 for (a) Edelman and (b) Wen.

1 answer:

Vilka [71]3 years ago

7 0

Answer:

The journal entries for both corporations is prepared below

A)

Date: June 17

Accounts title and Explanations: Stock investment, dr. (420,000*$15*10%) 630,000

Accounts title and Explanations: Cash, Cr. 630,000

____________________________

Date: Sept 3.

Accounts title and Explanations: Cash, dr. (120,000*10%) 12,000

Accounts title and Explanations: Dividend revenue, Cr. 12,000

______________________________

Date: Dec 31.

Accounts title and Explanations: Stock investments, dr. (520,000*10%) 52,000

Accounts title and Explanations: Investment revenue, Cr. 52,000

____________________________

B)

Date: Jan 1

Accounts title and Explanations: Stock investment, dr. (120,000*$18*30%) 648,000

Accounts title and Explanations: Cash, Cr. 648,000

____________________________

Date: May 15

Accounts title and Explanations: Cash, dr. (120,000*30%) 36,000

Accounts title and Explanations: Dividend revenue, Cr. 36,000

______________________________

Date: Dec 31.

Accounts title and Explanations: Stock investments, dr. (220,000*30%) 66,000

Accounts title and Explanations: Investment revenue, Cr. 66,000

____________________________

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anyanavicka [17]

The question is incomplete. The complete question is :

A manufacturer believes that the cost function : $C(x) =\frac{5}{2}x^2+120 x+560$ approximates the dollar cost of producing x units of a product. The manu- facturer believes it cannot make a profit when the marginal cost goes beyond $210. What is the most units the manufacturer can produce and still make a profit? What is the total cost at this level of production?

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Given the cost function is :

$C(x) =\frac{5}{2}x^2+120 x+560$

Now, Marginal cost = $\frac{d}{dx}C(x)$

So, if the marginal cost = $ 210, then the manufacturer also makes a profit and if it goes beyond $ 210 than the manufacturer cannot make a profit.

Therefore, we have to equate : $\frac{d}{dx}C(x)= \$ 210$

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