50.1K

Verified Solution

Link Copied!

On January 1, 2018, Cameron Inc. bought 20% of the outstanding common stock of Lake Construction Company for $320 million cash At the date of acquisition of the stock, Lake's net assets had a fair value of $900 million. Their book value was $800 million. The difference was attributable to the fair value of Lake's buildings and its land exceeding book value, each accounting for one-half of the difference. Lake's net income for the year ended December 31, 2018, was $160 million. During 2018, Lake declared and paid cash dividends of $20 million. The buildings have a remaining life of 10 years Required: 1. Complete the table below and prepare all appropriate journal entries related to the investment during 2018, assuming Camerorn accounts for this investment by the equity method 2. Determine the amounts to be reported by Cameron Complete this question by entering your answers in the tabs below Required 1 Required 1 GJ Required 2 Calculation Complete the table below. (Enter your answers in millions, (i.e., 10,000,000 should be entered as 10)) Investee Net Assets Ownership Interest Net Assets Difference Purchased ($ in millions) Cost Fair Value Cameron's assets Book Value Cameron's assets Attributable to S 320 Years Adjustment Investment revenue Required 1 Calculation Required 1GJ

Answer & Explanation Solved by verified expert

See Answer