Holmes inc obtained significant influence over nadal

Reference no: EM13567766

Situation 1
Hatcher Cosmetics acquired 10% of the 212,200 shares of common stock of Ramirez Fashion at a total cost of $14 per share on March 18, 2012. On June 30, Ramirez declared and paid a $77,800 cash dividend. On December 31, Ramirez reported net income of $124,900 for the year. At December 31, the market price of Ramirez Fashion was $15 per share. The securities are classified as available-for-sale.

Situation 2
Holmes, Inc. obtained significant influence over Nadal Corporation by buying 27% of Nadal's 32,100 outstanding shares of common stock at a total cost of $9 per share on January 1, 2012. On June 15, Nadal declared and paid a cash dividend of $45,300. On December 31, Nadal reported a net income of $90,400 for the year.

Prepare all necessary journal entries in 2012 for both situations. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Reference no: EM13567766

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