E12-8. Presented below are two independentsituations.

1.Gambino Cosmetics acquired 10% ofthe 200,000 shares of common stock of Nevins Fashion at a total cost of $13 pershare on March 18, 2015. On June 30, Nevins declared and paid a $60,000dividend. On December 31, Nevins reported net income of $122,000 for the year.At December 31, the market price of Nevins Fashion was $15 per share. The stockis classied as available-for-sale.

2.Kanza, Inc., obtained signicantinuence over Rogan Corporation by buying 40% of Rogans 30,000 outstandingshares of common stock at a total cost of $9 per share on January 1, 2015. OnJune 15, Rogan declared and paid a cash dividend of $30,000. On December 31,Rogan reported a net income of $80,000 for the year.

Instructions

Prepare all the necessaryjournal entries for 2015 for (a) Gambino Cosmetics and (b) Kanza, Inc.