Question - Presented below are two independent situations.
1. Gambino Cosmetics acquired 10% of the 130,000 shares of common stock of Nevins Fashion at a total cost of $14 per share on March 18, 2017. On June 30, Nevins declared and paid a $68,000 dividend. On December 31, Nevins reported net income of $115,000 for the year. At December 31, the market price of Nevins Fashion was $16 per share. The stock is classified as available-for-sale.
2. Kanza, Inc., obtained significant influence over Rogan Corporation by buying 40% of Rogan's 35,000 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 $20,000. On December 31, Rogan reported a net income of $73,000 for the year.
Prepare all the necessary journal entries for 2017 for (a) Gambino Cosmetics and (b) Kanza, Inc.