Situation 1: Headland Cosmetics acquired 10% of the 187,000 shares of common stock of Martinez Fashion at a total cost of $13 per share on March 18, 2025. On June 30, Martinez declared and paid $68,400 cash dividends to all stockholders. On December 31, Martinez reported net income of $117,600 for the year. At December 31, the market price of Martinez Fashion was $14 per share. Situation 2: Sage, Inc. obtained significant influence over Seles Corporation by buying 40% of Seles's 27,000 outstanding shares of common stock at a total cost of $9 per share on January 1, 2025. On June 15, Seles declared and paid cash dividends of $39,200 to all stockholders. On December 31, Seles reported a net income of $84,700 for the year. Prepare all necessary journal entries in 2025 for both situations. (List all debit entries before credit entries. 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. Record journal entries in the order presented in the problem.) Account Titles and Explanation Date Situation 1: Headland Cosmetics Mar. 18, 2025 Cash June 30, 2025 Cash Dec. 31, 2025 Situation 2: Sage, Inc Jan. 1, 2025 Dividend Revenue Cash June 15, 2025 ✓ Cash Dec. 31, 2025 Debit Credit
Situation 1: Headland Cosmetics acquired 10% of the 187,000 shares of common stock of Martinez Fashion at a total cost of $13 per share on March 18, 2025. On June 30, Martinez declared and paid $68,400 cash dividends to all stockholders. On December 31, Martinez reported net income of $117,600 for the year. At December 31, the market price of Martinez Fashion was $14 per share. Situation 2: Sage, Inc. obtained significant influence over Seles Corporation by buying 40% of Seles's 27,000 outstanding shares of common stock at a total cost of $9 per share on January 1, 2025. On June 15, Seles declared and paid cash dividends of $39,200 to all stockholders. On December 31, Seles reported a net income of $84,700 for the year. Prepare all necessary journal entries in 2025 for both situations. (List all debit entries before credit entries. 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. Record journal entries in the order presented in the problem.) Account Titles and Explanation Date Situation 1: Headland Cosmetics Mar. 18, 2025 Cash June 30, 2025 Cash Dec. 31, 2025 Situation 2: Sage, Inc Jan. 1, 2025 Dividend Revenue Cash June 15, 2025 ✓ Cash Dec. 31, 2025 Debit Credit
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 9P
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Transcribed Image Text:Situation 1:
Headland Cosmetics acquired 10% of the 187,000 shares of common stock of Martinez Fashion at a total cost of $13 per share on
March 18, 2025. On June 30, Martinez declared and paid $68,400 cash dividends to all stockholders. On December 31, Martinez
reported net income of $117,600 for the year. At December 31, the market price of Martinez Fashion was $14 per share.
Situation 2:
Sage, Inc. obtained significant influence over Seles Corporation by buying 40% of Seles's 27,000 outstanding shares of common stock
at a total cost of $9 per share on January 1, 2025. On June 15, Seles declared and paid cash dividends of $39,200 to all stockholders.
On December 31, Seles reported a net income of $84,700 for the year.
Prepare all necessary journal entries in 2025 for both situations. (List all debit entries before credit entries. 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. Record journal entries in the order presented in the problem.)
Account Titles and Explanation
Date
Situation 1: Headland Cosmetics
Mar. 18, 2025
Cash
June 30, 2025
Cash
Dec. 31, 2025
Situation 2: Sage, Inc
Jan. 1, 2025
Dividend Revenue
Cash
June 15, 2025 ✓
Cash
Dec. 31, 2025
Debit
Credit
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