On January $1,2021,$ Cameron Inc. bought $20\%$ of the outstanding common stock of Lake Construction Company for $$240$ million cash, giving Cameron the ability to exercise

significant influence over Lake$’$s operations. At the date of acquisition of the stock, Lake's net assets had a fair value of $$600$ million. Its book value was $$500$ 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 $31,2021,$ was $$120$ million. During $2021,$ Lake declared and paid cash dividends of $$30$ million. The buildings have a remaining life of $1\mathrm{}$ years.

Required: $\mathrm{}$

$1.$ Complete the table below and prepare all appropriate journal entries related to the investment during $2021,$assuming Cameron accounts for this investment by the equity method.$\mathrm{ (}$Record the investment in Lake Construction shares,$$Record the investor's share of net income,$$Record the cash dividends,$$Record the adjustment for depreciation$) \mathrm{}$

$2.$ Determine the amounts to be reported by Cameron.a$.$ Investment in Cameron$’$s $2021$ balance sheet . Investment revenue in the income statement . Investing activities in the statement of cash flows

 

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Required 1 Calculation Required 1 GJ Required 2 Complete the table below. (Enter your answers in millions, (i.e., 10,000,000 should be entered as 10)). ($ in millions) Cost Fair Value Lake Construction's assets Book Value Lake Construction's assets Investee Net Assets Ownership Interest Net Assets Purchased Difference Attributable to: $ 240 X %= $ 0 %= $ 0 Depreciation adjustment: Investment revenue Years 1 < Required 1 Calculation Adjustment Required 1 GJ > Required 1 Calculation Required 1 GJ Required 2 Complete the table below. (Enter your answers in millions, (i.e., 10,000,000 should be entered as 10)). ($ in millions) Cost Fair Value Lake Construction's assets Book Value Lake Construction's assets Investee Net Assets Ownership Interest Net Assets Purchased Difference Attributable to: $ 240 X %= $ 0 %= $ 0 Depreciation adjustment: Investment revenue Years 1 < Required 1 Calculation Adjustment Required 1 GJ >