Question

The following are two independent situations.

Situation 1
Cullumber Cosmetics acquired 10% of the 210,000 shares of common stock of Martinez Fashion at a total cost of $13 per share on March 18, 2020. On June 30, Martinez declared and paid $75,800 cash dividend to all stockholders. On December 31, Martinez reported net income of $129,200 for the year. At December 31, the market price of Martinez Fashion was $14 per share.

Situation 2
Riverbed, Inc. obtained significant influence over Seles Corporation by buying 30% of Seles’s 28,400 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 $33,900 to all stockholders. On December 31, Seles reported a net income of $81,900 for the year.

Prepare all necessary journal entries in 2020 for both situations. (Credit account titles are automatically indented when amount is entered. Do not indent manually. 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
Situation 1: Cullumber Cosmetics
choose a transaction date                                                          Jan. 1, 2020Mar. 18, 2020June 15, 2020June 30, 2020Dec. 31, 2020	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date                                                          Jan. 1, 2020Mar. 18, 2020June 15, 2020June 30, 2020Dec. 31, 2020	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date                                                          Jan. 1, 2020Mar. 18, 2020June 15, 2020June 30, 2020Dec. 31, 2020	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
Situation 2: Riverbed, Inc
choose a transaction date                                                          Jan. 1, 2020Mar. 18, 2020June 15, 2020June 30, 2020Dec. 31, 2020	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date                                                          Jan. 1, 2020Mar. 18, 2020June 15, 2020June 30, 2020Dec. 31, 2020	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date                                                          Jan. 1, 2020Mar. 18, 2020June 15, 2020June 30, 2020Dec. 31, 2020	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount

Answer 1

Situation 1 ;

Date	Account Title and Explanation	Debit	Credit
March.18.2020	Available for Sale Securities	$273,000
	Cash		$273,000
June.30.2020	Cash	$7,580
	Dividend Revenue ($75,800×10%)		$7,580
Dec.31.2020	Securities Fair Value Adjustment	$21,000
	Unrealized Holding Gain or Loss Equity ($14-$13)×$21,000		$21,000

Situation 2 :

Date	Account Title and Explanation	Debit	Credit
Jan.01.2020	Investment in Seles Corp.Stock	$76,680
	Cash ($28,400×$9×30%)		$76,680
June.15.2020	Cash ($33,900×30%)	$10,170
	Investment in Seles Corp.stock		$10,170
Dec.31.2020	Investment In Seles Corp.Stock ($81,900×30%)	$24,570
	Revenue From Investment		$24,570