Presented below are two independent situations Situation 1 Conchita Cosmetics acquired 10 of the 200,000 shares of common stock of Martinez Fashion at a total cost of $13 per share on March 18, 2008 On June 30, Martinez declared and paid a $75,000 cash dividend On December 31, Martinez reported net...

Situation 1 Journal entries by Conchita Cosmetics To record purchase of 20000 shares of Martinez Fas ...

Presented below are two independent situations. Situation 1 Conchita Cosmetics acquired 10% of the 200,000 shares of

Question:

Presented below are two independent situations.
Situation 1
Conchita Cosmetics acquired 10% of the 200,000 shares of of Martinez Fashion at a total cost of $13 per share on March 18, 2008. On June 30, Martinez declared and paid a $75,000 cash 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. The securities are classified as available-for-sale.
Situation 2
Monica, Inc. obtained significant influence over Seles by buying 30% of Seles’s 30,000 outstanding shares of at a total cost of $9 per share on January 1, 2008. On June 15, Seles declared and paid a cash of $36,000. On December 31, Seles reported a net income of $85,000 for the year.
Instructions
Prepare all necessary journal entries in 2008 for both situations.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...