The following are two independent situations.
Situation 1
Marin Cosmetics acquired 10% of the 212,000 shares of common stockof Martinez Fashion at a total cost of $13 per share on March 18,2017. On June 30, Martinez declared and paid $76,400 cash dividendto all stockholders. On December 31, Martinez reported net incomeof $125,800 for the year. At December 31, the market price ofMartinez Fashion was $14 per share.
Situation 2
Headland, Inc. obtained significant influence over SelesCorporation by buying 40% of Seles’s 31,700 outstanding shares ofcommon stock at a total cost of $9 per share on January 1, 2017. OnJune 15, Seles declared and paid cash dividends of $33,100. OnDecember 31, Seles reported a net income of $77,900 for theyear.
Prepare all necessary journal entries in 2017 for bothsituations.(3 entries for each)
