Prepare all necessary journal entries in 2017

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Reference no: EM132315785

Situation 1

People Tables acquired 15% of the 5,000,000 shares of common stock of Robot sofas at a total cost of $8.50 per share on April 1, 2017. On August 8, Robot Sofas declared and paid a $250,000 cash dividend. On December 31, Robot Sofas market price was $9.00 per share and the company reported net income of $685,000 for the year. The securities are classified as available-for-sale.

Situation 2

On January 1, 2017, Mica Company purchased 40% of Santos Corporation 500,000 outstanding shares of common stock at a total cost of $13 per share. On October 25, Santos declared and paid a cash dividend of $0.40 per share. On December 31, Santos reported a net income of $860,000 for the year and the market price of its common stock was $14 per share.

Instructions

Prepare all necessary journal entries in 2017 for both situations.

What would be all the journal entries for both of these situations?

Reference no: EM132315785

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