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

Question:

Presented below are two independent situations.
1. Gambino Cosmetics acquired 10% of the 200,000 shares of of Nevins Fashion at a total cost of $13 per share on March 18, 2017. On June 30, Nevins declared and paid a $60,000 On December 31, Nevins reported net income of $122,000 for the year. At December 31, the market price of Nevins Fashion was $15 per share.
The stock is classified as available-for-sale.
2. Kanza, Inc., obtained significant influence over Rogan by buying 40% of Rogan’s 30,000 outstanding shares of at a total cost of $9 per share on January 1, 2017. On June 15, Rogan declared and paid a cash of $30,000. On December 31, Rogan reported a net income of $80,000 for the year.

Instructions
Prepare all the necessary journal entries for 2017 for
(a) Gambino Cosmetics and
(b) Kanza, Inc.

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