Question
Situation 1 Flint Cosmetics acquired 10% of the 210,000 shares of common stock of Martinez Fashion at a total cost of $13 per share on
Situation 1 Flint Cosmetics acquired 10% of the 210,000 shares of common stock of Martinez Fashion at a total cost of $13 per share on March 18, 2017. On June 30, Martinez declared and paid $75,800 cash dividend to all stockholders. On December 31, Martinez reported net income of $129,200 for the year. At December 31, the market price of Martinez Fashion was $14 per share. Situation 2 Buffalo, Inc. obtained significant influence over Seles Corporation by buying 30% of Seless 28,400 outstanding shares of common stock at a total cost of $9 per share on January 1, 2017. On June 15, Seles declared and paid cash dividends of $33,900. On December 31, Seles reported a net income of $81,900 for the year.
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
Date Account Titles and Explanation Debit Credit Situation 1: Flint Cosmetics Situation 2: Buffalo, IncStep by Step Solution
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