Question

Exercise 16-08

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The following are two independent situations.

1.		Cullumber Cosmetics acquired 15% of the 239,000 shares of common stock of Nevins Fashion at a total cost of $15 per share on March 18, 2020. On June 30, Nevins declared and paid a $46,600 dividend. On December 31, Nevins reported net income of $122,000 for the year. At December 31, the market price of Nevins Fashion was $17 per share.
2.		Vaughn, Inc., obtained significant influence over Rogan Corporation by buying 35% of Rogan’s 29,300 outstanding shares of common stock at a total cost of $6 per share on January 1, 2020. On June 15, Rogan declared and paid a cash dividend of $39,300. On December 31, Rogan reported a net income of $73,500 for the year.

Prepare all the necessary journal entries for 2020 for (a) Cullumber Cosmetics and (b) Vaughn, Inc. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

	Date	Account Titles and Explanation	Debit	Credit
(a)	Jan. 1Mar. 18June 15June 30Dec. 31
	Jan. 1Mar. 18June 15June 30Dec. 31
	Jan. 1Mar. 18June 15June 30Dec. 31
(b)	Jan. 1Mar. 18June 15June 30Dec. 31
	Jan. 1Mar. 18June 15June 30Dec. 31
	Jan. 1Mar. 18June 15June 30Dec. 31
				SHOW LIST OF ACCOUNTS SHOW SOLUTION LINK TO TEXT LINK TO TEXT

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Answer 1