Presented below are two independent situations 1 Lorfeld Inc acquired 10 of the 500,000 shares of common stock of Northbrook Corporation at a total cost of $11 per share on June 17, 2014 On September 3, Northbrook declared and paid a $160,000 dividend On December 31, Northbrook reported net income ...

1 June 17 Stock Investments 550000 Cash 550000 Sept 3 C ...

Presented below are two independent situations: 1. Lorfeld Inc. acquired 10% of the 500,000 shares of common

Question:

Presented below are two independent situations:
1. Lorfeld Inc. acquired 10% of the 500,000 shares of of Northbrook at a total cost of $11 per share on June 17, 2014. On September 3, Northbrook declared and paid a $160,000 On December 31, Northbrook reported net income of $550,000 for the year.
2. Saa obtained significant influence over McCarthy Company by buying 30% of McCarthy's 100,000 outstanding shares of at a cost of $18 per share on January 1, 2014. On May 15, McCarthy declared and paid a cash of $150,000. On December 31, McCarthy reported net income of $270,000 for the year.
Prepare all necessary journal entries for 2014 for (a) McCarthy and (b) Saa.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...