Indigo Cosmetics acquired 10% of the 193,000 shares of common stock of Martinez Fashion at a total cost of $14 per share on March 18, 2020. On June 30, Martinez declared and paid $67,500 cash dividend to all stockholders. On December 31, Martinez reported net income of $118,700 for the year. At December 31, the market price of Martinez Fashion was $15 per share. Situation 2 Sweet, Inc. obtained significant influence over Seles Corporation by buying 40% of Seles's 30,700 outstanding shares of common stock at a total cost of $8 per share on January 1, 2020. On June 15, Seles declared and paid cash dividends of $38,300 to all stockholders. On December 31, Seles reported a net income of $84,200 for the year. Prepare all necessary journal entries in 2020 for both situations. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

Indigo Cosmetics acquired 10% of the 193,000 shares of common stock of Martinez Fashion at a total cost of $14 per share on March 18, 2020. On June 30, Martinez declared and paid $67,500 cash dividend to all stockholders. On December 31, Martinez reported net income of $118,700 for the year. At December 31, the market price of Martinez Fashion was $15 per share. Situation 2 Sweet, Inc. obtained significant influence over Seles Corporation by buying 40% of Seles's 30,700 outstanding shares of common stock at a total cost of $8 per share on January 1, 2020. On June 15, Seles declared and paid cash dividends of $38,300 to all stockholders. On December 31, Seles reported a net income of $84,200 for the year. Prepare all necessary journal entries in 2020 for both situations. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

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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