ACC Question2

 Presented below are two independent situations.Situation 1Hatcher Cosmetics acquired 10% of the 206,400 shares of common stock of Ramirez Fashion at a total cost of $14 per share on March 18, 2012. On June 30, Ramirez declared and paid a $84,100 cash dividend. On December 31, Ramirez reported net income of $125,200 for the year. At December 31, the market price of Ramirez Fashion was $15 per share. The securities are classified as available-for-sale.Situation 2Holmes, Inc. obtained significant influence over Nadal Corporation by buying 26% of Nadal’s 32,900 outstanding shares of common stock at a total cost of $11 per share on January 1, 2012. On June 15, Nadal declared and paid a cash dividend of $41,100. On December 31, Nadal reported a net income of $86,100 for the year.Prepare all necessary journal entries in 2012 for both situations.

(Credit account titles are automatically indented when amount is entered. Do not indent manually.)

DateAccount Titles and ExplanationDebitCreditHatcher CosmeticsMarch 18, 2012 [removed][removed][removed]  [removed][removed][removed]June 30, 2012 [removed][removed][removed]  [removed][removed][removed]Dec. 31, 2012 [removed][removed][removed]  [removed][removed][removed]Holmes Inc.Jan. 1, 2012 [removed][removed][removed]  [removed][removed][removed]June 15, 2012 [removed][removed][removed]  [removed][removed][removed]Dec. 31, 2012 [removed][removed][removed]  [removed][removed][removed]    

List Of Accounts 

   Bonds PayableCall OptionCashCost of Goods SoldDebt InvestmentsDividend ReceivableDividend RevenueEquity InvestmentsFair Value AdjustmentFutures ContractGain on Sale of InvestmentsInterest ExpenseInterest ReceivableInterest RevenueInventoryInvestmentsLoss on ImpairmentLoss on InvestmentsLoss on Settlement of Call OptionLoss on Settlement of Put OptionMemo EntryNo EntryNotes PayablePut OptionRetained EarningsRevenue from InvestmentSales RevenueSwap ContractUnrealized Holding Gain or Loss – EquityUnrealized Holding Gain or Loss – Income