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The following are two independent situations. Situation 1 Wildhorse Cosmetics acquired 10% of the 185,000 shares...

The following are two independent situations. Situation 1 Wildhorse Cosmetics acquired 10% of the 185,000 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 $79,800 cash dividend to all stockholders. On December 31, Martinez reported net income of $115,000 for the year. At December 31, the market price of Martinez Fashion was $13 per share. Situation 2 Sheffield, Inc. obtained significant influence over Seles Corporation by buying 30% of Seles’s 27,300 outstanding shares of common stock at a total cost of $9 per share on January 1, 2020. On June 15, Seles declared and paid cash dividends of $39,100 to all stockholders. On December 31, Seles reported a net income of $92,200 for the year. Prepare all necessary journal entries in 2020 for both situations.

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