Presented below are two independent situations.

1. Galex Cosmetics acquired 10% of the 200.000 shares of common stock of Yen Fashion at a total cost of $13 per share on March 18, 2006. On June 30. Yen declared and paid a $60,000 dividend. On December 31. Yen reported net income of $122,000 for the year. At December 31. the market price of Yen Fashion was $15 per share. The stock is classified as available-

for-sale.

2. Smart. Inc.. obtained significant influence over Gamma Corporation by buying 25% of Gamma's 30.000 outstanding shares of common stock at a total cost of $9 per share on January 1. 2006. On June 15, Gamma declared and paid a cash dividend of $30,000. On December 31, Gamma reported a net income of $80,000 for the year.

Instructions Prepare all the necessary journal entries for 2006 for

(a) Galex Cosmetics and

(b) Smart. Inc.