On January 4, 2021, Runyan Bakery paid $356 million for 10 million shares of Lavery Labeling Company common stock. The Investment represents a 30% interest in the net assets of Lavery and gave Runyan the ability to exercise significant influence over Lavery's operations. Runyan chose the fair value option to account for this investment. Runyan received dividends of $2.40 per share on December 15, 2021, and Lavery reported net income of $310 million for the year ended December 31, 2021. The market value of Lavery's common stock at December 31, 2021, was $35 per share. On the purchase date, the book value of Lavery's identifiable net assets was $960 million and a. The fair value of Lavery's depreciable assets, with an average remaining useful life of four years, exceeded their book value by $80 million. b. The remainder of the excess of the cost of the investment over the book value of net assets purchased was attributable to goodwill Required: Assuming Runyan accounts for this investment under the fair value option, prepare all appropriate journal entries in a manner similar to accounting for securities for which there is not significant influence. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions. (.e., 10,000,000 should be entered es 101.)
On January 4, 2021, Runyan Bakery paid $356 million for 10 million shares of Lavery Labeling Company common stock. The Investment represents a 30% interest in the net assets of Lavery and gave Runyan the ability to exercise significant influence over Lavery's operations. Runyan chose the fair value option to account for this investment. Runyan received dividends of $2.40 per share on December 15, 2021, and Lavery reported net income of $310 million for the year ended December 31, 2021. The market value of Lavery's common stock at December 31, 2021, was $35 per share. On the purchase date, the book value of Lavery's identifiable net assets was $960 million and a. The fair value of Lavery's depreciable assets, with an average remaining useful life of four years, exceeded their book value by $80 million. b. The remainder of the excess of the cost of the investment over the book value of net assets purchased was attributable to goodwill Required: Assuming Runyan accounts for this investment under the fair value option, prepare all appropriate journal entries in a manner similar to accounting for securities for which there is not significant influence. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions. (.e., 10,000,000 should be entered es 101.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please help me with correct answer thanku

Transcribed Image Text:8
the work you have completed so far. It does not indicate com
On January 4, 2021, Runyan Bakery paid $356 million for 10 million shares of Lavery Labeling Company common stock. The
Investment represents a 30% interest in the net assets of Lavery and gave Runyan the ability to exercise significant influence over
Lavery's operations. Runyan chose the fair value option to account for this investment. Runyan received dividends of $2.40 per share
on December 15, 2021, and Lavery reported net income of $310 million for the year ended December 31, 2021. The market value of
Lavery's common stock at December 31, 2021, was $35 per share. On the purchase date, the book value of Lavery's identifiable net
assets was $960 million and
a. The fair value of Lavery's depreciable assets, with an average remaining useful life of four years, exceeded their book value by $80
million.
b. The remainder of the excess of the cost of the investment over the book value of net assets purchased was attributable to goodwill
Required:
Assuming Runyan accounts for this investment under the fair value option, prepare all appropriate journal entries in a manner similar to
accounting for securities for which there is not significant influence. (If no entry is required for a transaction/event, select "No journal
entry required in the first account field. Enter your answers in millions. (.e., 10,000,000 should be entered as 10).)

Transcribed Image Text:No
1
2
لنا
3
4
Transaction
2
3
4
Cash
Answer complete but not entirely correct.
General Journal
Investment in equity securities
Cash
Investment in equity securities
Investment revenue
Investment in equity securities
Gain on investment (unrealized, OCI)
Fair value adjustment
XX
X>
Debit
356
63 x
24
6
Credit
356
63
24
6
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