Qw.13. Required 1 Required 2Prepare all appropriate journal entries related to the investment during 2024, assuming Runyan accounts for this investmentby the equity method.Note: If no entry is required for a transaction/event, select "No journal entry required in the first account field. Enter youranswers in millions (i.e., 10,000,000 should be entered as 10).1No2345Required 1No1Transaction23412345Transaction123Investment in equity affiliateCash4Investment in equity affiliateInterest revenueCashRequired 2Investment in equity affiliateInterest revenueInvestment in equity affiliateNo journal entry requiredGeneral Journal< Required 1No journal entry requiredCashInvestment in equity securitiesCashGeneral JournalGain on investment (NI)Fair value adjustmentInvestment in equity securitiesX3Prepare the journal entries required by Runyan, assuming that the 10 million shares represent a 10% interest in the netassets of Lavery rather than a 30% interest.33Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter youranswers in millions (i.e., 10,000,000 should be entered as 10).< Required 1>>Required 2 >*3DebitXRequired 2 >33460✔40✔30Debit344x40Credit24334604030CreditShow less3444024Show less A" On January 4, 2024, Runyan Bakery paid $334 million for 10 million shares of Lavery Labeling Company common stock. TheInvestment represents a 30% interest in the net assets of Lavery and gave Runyan the ability to exercise significant influence overLavery's operations. Runyan received dividends of $4.00 per share on December 15, 2024, and Lavery reported net income of $200million for the year ended December 31, 2024. The market value of Lavery's common stock at December 31, 2024, was $31 per share.On the purchase date, the book value of Lavery's Identifiable net assets was $850 million and:a. The fair value of Lavery's depreciable assets, with an average remaining useful life of nine years, exceeded their book value by$90 million.b. The remainder of the excess of the cost of the investment over the book value of net assets purchased was attributable togoodwill.Required:1. Prepare all appropriate journal entries related to the investment during 2024, assuming Runyan accounts for this investment bythe equity method.2. Prepare the journal entries required by Runyan, assuming that the 10 million shares represent a 10% Interest in the net assets ofLavery rather than a 30% interest.

Equity Method refers to the bookkeeping method used for intercorporate investment transactions. This…

On January 4, 2024, Runyan Bakery paid $334 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 received dividends of $4.00 per share on December 15, 2024, and Lavery reported net Income of $200 million for the year ended December 31, 2024. The market value of Lavery's common stock at December 31, 2024, was $31 per share. On the purchase date, the book value of Lavery's Identifiable net assets was $850 million and: a. The fair value of Lavery's depreciable assets, with an average remaining useful life of nine years, exceeded their book value by $90 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: 1. Prepare all appropriate Journal entries related to the investment during 2024, assuming Runyan accounts for this investment by the equity method. 2. Prepare the journal entries required by Runyan, assuming that the 10 million shares represent a 10% Interest in the net assets of Lavery rather than a 30% interest.

On January 4, 2024, Runyan Bakery paid $334 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 received dividends of $4.00 per share on December 15, 2024, and Lavery reported net Income of $200 million for the year ended December 31, 2024. The market value of Lavery's common stock at December 31, 2024, was $31 per share. On the purchase date, the book value of Lavery's Identifiable net assets was $850 million and: a. The fair value of Lavery's depreciable assets, with an average remaining useful life of nine years, exceeded their book value by $90 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: 1. Prepare all appropriate Journal entries related to the investment during 2024, assuming Runyan accounts for this investment by the equity method. 2. Prepare the journal entries required by Runyan, assuming that the 10 million shares represent a 10% Interest in the net assets of Lavery rather than a 30% interest.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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