Presented below are two independent situations. 1. Heath Cosmetics acquired 15% of the 200,000 ordinary shares of

Question:

Presented below are two independent situations.
1. Heath Cosmetics acquired 15% of the 200,000 ordinary shares of Van Fashion at a total cost of $13 per share on March 18, 2011. On June 30, Van declared and paid a $60,000 On December 31, Van reported net income of $122,000 for the year. Al December 31, the market price of Van Fashion was $15 per share. The shares are classified as available- for-sale.
2. Yoder Co. obtained significant influence over Parks by buying 30% of Parks 30,000 ordinary shares at a total cost of $9 per share on January 1, 2011. On June 15, Parks declared and paid a cash of $30,000. On December 31, Parks reported a net income of $80,000 for the year.

Instructions
Prepare all the necessary journal entries for 2011 for
(1) Heath Cosmetics
(2) Yoder Co.

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...