Situation 1 Waterway Cosmetics acquired 10% of the 189,000 shares of common stock of Martinez Fashion at a total cost of $12 per share on March 18, 2020. On June 30, Martinez declared and paid $77,300 cash dividend to all stockholders. On December 31, Martinez reported net income of $122,300 for the year. At December 31, the market price of Martinez Fashion was $13 per share. Situation 2 Wildhorse, Inc. obtained significant influence over Seles Corporation by buying 30% of Seles’s 32,100 outstanding shares of common stock at a total cost of $9 per share on January 1, 2020. On June 15, Seles declared and paid cash dividends of $32,700 to all stockholders. On December 31, Seles reported a net income of $78,800 for the year. Prepare all necessary journal entries in 2020 for both situations.
Situation 1
Waterway Cosmetics acquired 10% of the 189,000 shares of common stock of Martinez Fashion at a total cost of $12 per share on March 18, 2020. On June 30, Martinez declared and paid $77,300 cash dividend to all stockholders. On December 31, Martinez reported net income of $122,300 for the year. At December 31, the market price of Martinez Fashion was $13 per share.
Situation 2
Wildhorse, Inc. obtained significant influence over Seles Corporation by buying 30% of Seles’s 32,100 outstanding shares of common stock at a total cost of $9 per share on January 1, 2020. On June 15, Seles declared and paid cash dividends of $32,700 to all stockholders. On December 31, Seles reported a net income of $78,800 for the year.
Prepare all necessary
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
