Exercise 17-12

The following are two independent situations.

Situation 1

Nash Cosmetics acquired 10% of the218,000shares of common stock of Martinez Fashion at a total cost of $13per share on March 18, 2017. On June 30, Martinez declared and paid $71,300cash dividend to all stockholders. On December 31, Martinez reported net income of $118,000for the year. At December 31, the market price of Martinez Fashion was $14per share.

Situation 2

Crane, Inc. obtained significant influence over Seles Corporation by buying30% of Seles's32,300outstanding shares of common stock at a total cost of $8per share on January 1, 2017. On June 15, Seles declared and paid cash dividends of $35,200. On December 31, Seles reported a net income of $82,000for the year.

Prepare a journal entries in 2017 for both situations.(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

List of accounts to use in this exercise:

Exercise 17-12

Accumulated Other Comprehensive Loss

Allowance for Loss on Debt Investment

Bonds Payable

Cash

Call Option

Common Stock

Cost of Goods Sold

Debt Investments

Dividend Revenue

Dividend Receivable

Equity Investments

Fair Value Adjustment

Futures Contract

Gain on Sale of Investments

Gain on Settlement of Call Option

Gain on Settlement of Put Option

Interest Expense

Interest Receivable

Interest Revenue

Inventory

Investment Income

Loss on Impairment

Loss on Sale of Investments

Loss on Settlement of Call Option

Loss on Settlement of Put Option

No Entry

Notes Payable

Paid-in Capital in Excess of Par - Common Stock

Put Option

Recovery of Loss from Impairment

Retained Earnings

Sales Revenue

Swap Contract

Unrealized Holding Gain or Loss - Equity

Unrealized Holding Gain or Loss - Income