On January $1,2024,$ Cameron Incorporated bought $30\%$ of the outstanding common stock of Lake Construction Company for $$600$ million cash, giving Cameron the ability to exercise significant influence over Lake$$s operations. At the date of acquisition of the stock, Lake's net assets had a fair value of $$800$ million. Its book value was $$700$ 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$$s net income for the year ended December $31,2024,$ was $$300$ million. During $2024,$ Lake declared and paid cash dividends of $$20$ million. The buildings have a remaining life of $5$ years.

Required:

Complete the table below and prepare all appropriate journal entries related to the investment during $2024,$ assuming Cameron accounts for this investment by the equity method.

Determine the amounts to be reported by Cameron.

Answer rating: 100% (QA)

2024 2024 2025 Investment in Lake Co Initial Investment Share of Lakes Inco... View the full answer