Situation 1Hatcher Cosmetics acquired 10% of the206400shares of common stock of Ramirez Fashion at a total cost of $14per share on March 18 2012. On June 30 Ramirez declared and paid a $84100cash dividend. On December 31 Ramirez reported net income of $125200for the year. At December 31 the market price of Ramirez Fashion was $15per share. The securities are classified as available-for-sale.Situation 2Holmes Inc. obtained significant influence over Nadal Corporation by buying26% of Nadals32900outstanding shares of common stock at a total cost of $11per share on January 1 2012. On June 15 Nadal declared and paid a cash dividend of $41100. On December 31 Nadal reported a net income of $86100for the year.Prepare all necessary journal entries in 2012 for both situations. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

error: Content is protected !!