xercise 12-8
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Presented below are two independent situations.
1 Gambino Cosmetics acquired 10% of the 130,000 shares of common stock of Nevins
. Fashion at a total cost of $14 per share on March 18, 2017. On June 30, Nevins declared and
paid a $68,000 dividend. On December 31, Nevins reported net income of $115,000 for the
year. At December 31, the market price of Nevins Fashion was $16 per share. The stock is
classified as available-for-sale.
2 Kanza, Inc., obtained significant influence over Rogan Corporation by buying 40% of
. Rogan’s 35,000 outstanding shares of common stock at a total cost of $9 per share on
January 1, 2017. On June 15, Rogan declared and paid a cash dividend of $20,000. On
December 31, Rogan reported a net income of $73,000 for the year.
Prepare all the necessary journal entries for 2017 for (a) Gambino Cosmetics and (b) Kanza, Inc.
(Credit account titles are automatically indented when amount is entered. Do not indent
manually. Record journal entries in the order presented in the problem. If no entry is
required, select "No entry" for the account titles and enter 0 for the amounts.)
No
. Account Titles and
Explanation Date Debit Credit (a)
182,000 Stock Investment Cash Cash 6,800 Dividend Revenu Fair Value Adjustm Unrealized Gain o (b
) 182,000 6,800 Stock Investment 126,000 Cash Cash 8,000 Stock Investment Stock Investment 126,000 8,000 29,200 Revenue fromSto 29,200
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Posted 21 Apr 2017 01:04 AM
My Price 6.00
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file 1492739090-Solutions file.docx preview (56 words )
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