Presented below are two independent situations.
1. Chicory Cosmetics acquired 15% of the 138,400 shares of common stock of Racine Fashion at a total cost of $11 per share on March 18, 2014. On June 30, Racine declared and paid a $53,100 dividend. On December 31, Racine reported net income of $110,620 for the year. At December 31, the market price of Racine Fashion was $13 per share. The stock is classified as non-trading.
2. Frank, Inc., obtained significant influence over Nowak Corporation by buying 30% of Nowak's 30,100 outstanding shares of common stock at a total cost of $8 per share on January 1, 2014. On June 15, Nowak declared and paid a cash dividend of $36,300. On December 31, Nowak reported a net income of $88,200 for the year.
Prepare all the necessary journal entries for 2014 for (a) Chicory Cosmetics and (b) Frank, Inc.