HW #$5$

Problem $5$

Presented below are two independent situations.

Gambino Cosmetics acquired $10\%$ of the $200,000$ shares of common stock 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$ dividend. On December $31,$ Nevins reported net income of $$122,000$ for the year. On Dec. $31,$ the market price of Nevins Fashion was $$15$ per share. The stock is classified as available$-$for$-$sale.

Kanza, Inc., obtained significant influence over Rogan Corporation by buying $40\%$ of Rogan's $30,000$ outstanding shares of common stock at a total cost of $$9$ per share on January $1,2017.$ On June $15,$ Rogan declared and paid a cash dividend of $$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.