Reference no: EM132718380

The following are two independent situations.

1. Sunland Cosmetics acquired 10% of the 122,500 shares of common stock of Nevins Fashion at a total cost of $11 per share on March 18, 2020. On June 30, Nevins declared and paid a $50,100 dividend. On December 31, Nevins reported net income of $114,200 for the year. At December 31, the market price of Nevins Fashion was $13 per share.

2. Cheyenne, Inc., obtained significant influence over Rogan Corporation by buying 35% of Rogan's 31,900 outstanding shares of common stock at a total cost of $9 per share on January 1, 2020. On June 15, Rogan declared and paid a cash dividend of $22,700. On December 31, Rogan reported a net income of $74,500 for the year.

Problem 1: Make all the necessary journal entries for 2020 for (a) Sunland Cosmetics and (b) Cheyenne, Inc.