Question

Exercise 12-8 Presented below are two independent situations. 1. Gambino Cosmetics acquired 107 of the 250,000 shares of common stock of Nevins Fashion at a total cost of $12 per share on March 18, 2017 On June 30, Nevindecared and pada $40,000 dividend. On December 31, Nevis reported net income of $122,000 for the year. At December 31, the market price of Nevins Fashion was 14 per share. The stock is classified as available for sale. Kanta, Inc., obtained significant influence over Hogan Corporation by buying 40% of Rogan's 23,000 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 $24,000. On December 31, Rogan reported a net income of $85,000 for the year 2. Prepare all the necessary Journal tries 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 fournal entries in the order presented in the problem. If no entry is required, select "No entry for the account titles and enter for the amounts.)

Answer 1

Scenraio 1

Date	Account Title	Debit	Credit
Mar-18	Available for sale Securities	3,000,000.00
	Cash		3,000,000.00
Jun-30	Cash	40,000.00
	Divident Revenue		40,000.00
Dec-31	Securities Fair Value Adjustment	500,000.00
	Unrealized Holding Gain or Loss - Equity		500,000.00

Scenraio 2

Date	Account Title	Debit	Credit
Jan-01	Investment in Seles Corp Stock	207,000.00
	Cash		207,000.00
Jun-15	Cash	9,600.00
	Investment in Seles Corp Stock		9,600.00
Dec-31	Investment in Seles Corp Stock	34,000.00
	Revenue		34,000.00