Refer to the situation described in Exercise 12-17, but assume that Cameron bought 50% of the outstanding stock of Lake for $750 million cash, that half of the book value and fair value of Lake's individual net assets is attributable to land and the other half to buildings, that Cameron reports under IFRS, and that Cameron has elected the proportionate consolidation method to account for its investment in Lake.

Required:

1. What would be the effect on January 1, 2011, of the Lake investment on the following accounts on Cameron's consolidated balance sheet?

a. Buildings

b. Land

c. Goodwill

d. Equity method investments

2. What would be the effect on December 31, 2011, of the Lake investment on the following accounts on Cameron's consolidated balance sheet?

a. Buildings

b. Land

c. Goodwill

d. Equity method investments

3. Would the effect on Cameron's December 31, 2011, retained earnings differ between an equity method and a proportionate consolidation treatment? Explain.