Reference no: EM133135804

Question - Presented below are two independent situations.

1. Kingbird Cosmetics acquired 10% of the 160,000 shares of common stock of Chy Fashion at a total cost of $12 per share on March 18, 2020. On June 30, Chy declared and paid a $40,000 dividend. On December 31, Chy reported net income of $88,000 for the year. At December 31, the market price of Chy Fashion was $15 per share.

2. Blossom, Inc., obtained significant influence over Blurr Corporation by buying 25% of Blurr's 40,000 outstanding shares of common stock at a total cost of $7 per share on January 1, 2020. On June 15, Blurr declared and paid a cash dividend of $32,000. On December 31, Blurr reported a net income of $72,000 for the year.

Required - Make all the necessary journal entries for 2020 for (a) Kingbird Cosmetics and (b) Blossom, Inc.