Exercise 16-8

Presented below are two independent situations.

(a)		Gambino Cosmetics acquired10% of the242,500shares of common stock of Nevins Fashion at a total cost of $12per share on March 18, 2017. On June 30, Nevins declared and paid a $52,600dividend. On December 31, Nevins reported net income of $112,000for the year. At December 31, the market price of Nevins Fashion was $14per share. The stock is classified as available-for-sale.
(b)		Kanza, Inc., obtained significant influence over Rogan Corporation by buying40% of Rogans32,100outstanding shares of common stock at a total cost of $5per share on January 1, 2017. On June 15, Rogan declared and paid a cash dividend of $35,600. On December 31, Rogan reported a net income of $90,000for the year.

Prepare all the necessary journal entries for 2017 for (a) Gambino Cosmetics and (b) Kanza, Inc.(Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)