These are two independent situations: 1. Angel Cosmetics acquired 12% of the 300,000 shares of common stock of Chic Fashion at a total cost of $14 per share on March 18, 2012. On June 30, Chic declared and paid a
1. Angel Cosmetics acquired 12% of the 300,000 shares of common stock of Chic Fashion at a total cost of $14 per share on March 18, 2012. On June 30, Chic declared and paid a $75,000 dividend. On December 31, Chic reported net income of $244,000 for the year. At December 31, the market price of Chic Fashion was $16 per share.
The stock is classified as available-for-sale.
2. Randell Inc. obtained significant influence over Gatos Corporation by buying 25% of Gatos’s 30,000 outstanding shares of common stock at a total cost of $11 per share on January 1, 2012. On June 15, Gatos declared and paid a cash dividend of $35,000. On December 31, Gatos reported a net income of $120,000 for the year. Instructions
Prepare all the necessary journal entries for 2012 for
(a) Angel Cosmetics and
(b) Randell Inc.
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...
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2010 1 Mar 18 Stock Investments 504000 Cash 300000 X 12 X 14 504000 June 30 Cash 9000 Dividend …View the full answer
A journal entry is an act of keeping or making records of any transactions either economic or non-economic. Transactions are listed in an accounting journal that shows a company\'s debit and credit balances. The journal entry can consist of several recordings, each of which is either a debit or a credit
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