Presented below are two independent situations.
1. Heath Cosmetics acquired 15% of the 200,000 shares of common stock of Van Fashion at a total cost of $13 per share on March 18, 2010. On June 30,Van declared and paid a $60,000 dividend. On December 31,Van reported net income of $122,000 for the year. At December 31, the market price of Van Fashion was $15 per share. The stock is classified as available for sale.
2. Yoder, Inc., obtained significant influence over Parks Corporation by buying 30% of Parks 30,000 outstanding shares of common stock at a total cost of $9 per share on January 1, 2010.
On June 15, Parks declared and paid a cash dividend of $30,000. On December 31, Parks reported a net income of $80,000 for the year.
Instructions
Prepare all the necessary journal entries for 2010 for (1) Heath Cosmetics and (2) Yoder, Inc.