FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The following are two independent situations.
Situation 1
Sandhill Cosmetics acquired 10% of the 196,000 shares of common stock of Martinez Fashion at a total cost of $12 per share on March 18, 2020. On June 30, Martinez declared and paid $69,400 cash dividend to all stockholders. On December 31, Martinez reported net income of $116,600 for the year. At December 31, the market price of Martinez Fashion was $13 per share.
Situation 2
Teal, Inc. obtained significant influence over Seles Corporation by buying 30% of Seles’s 31,000 outstanding shares of common stock at a total cost of $8 per share on January 1, 2020. On June 15, Seles declared and paid cash dividends of $38,400 to all stockholders. On December 31, Seles reported a net income of $92,500 for the year.
Prepare all necessary
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