E17.12 (LO 2, 3) (Journal Entries for Fair Value and Equity Methods) The following are...
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Accounting
E17.12 (LO 2, 3) (Journal Entries for Fair Value and Equity Methods) The following are inde- pendent situations.
Situation 1: Conchita Cosmetics acquired 10% of the 200,000 shares of common stock of Martinez Fash- ion at a total cost of $13 per share on March 18, 2020. On June 30, Martinez declared and paid $75,000 cash dividends to all stockholders. On December 31, Martinez reported net income of $122,000 for the year. At December 31, the market price of Martinez Fashion was $15 per share.
Situation 2: Monica, Inc. obtained significant influence over Seles Corporation by buying 30% of Seless 30,000 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 $36,000 to all stockholders. On December 31, Seles reported a net income of $85,000 for the year.
Instructions
Prepare all necessary journal entries in 2020 for both situations.
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