On January $4,2024,$ Runyan Bakery paid $$344$ million for $10$ million shares of Lavery Labeling Company common stock. The investment represents a $30\%$ interest in the net assets of Lavery and gave Runyan the ability to exercise significant influence over Lavery's operations. Runyan received dividends of $$4\mathrm{.}50$ per share on December $15,2024,$ and Lavery reported net income of $$250$ million for the year ended December $31,2024.$ The market value of Lavery's common stock at December $31,2024,$ was $$32$ per share. On the purchase date, the book value of Lavery's identifiable net assets was $$900$ million and:

The fair value of Lavery's depreciable assets, with an average remaining useful life of seven years, exceeded their book value by $$70$ million.

The remainder of the excess of the cost of the investment over the book value of net assets purchased was attributable to goodwill.

Required:

Prepare all appropriate journal entries related to the investment during $2024,$ assuming Runyan accounts for this investment by the equity method.

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. Problem $12-10($Algo$)$ Investment securities and equity method investments compared $[$LO$12-5,12-6,127]$

On January $4,2024,$ Runyan Bakery paid $\backslash (\backslash$$ $344\backslash )$ million for $10$ million shares of Lavery Labeling Company common stock. The investment represents a $30\backslash \%$ interest in the net assets of Lavery and gave Runyan the ability to exercise significant influence over Lavery's operations. Runyan received dividends of $\backslash (\backslash$$ $4\mathrm{.}50\backslash )$ per share on December $15,2024,$ and Lavery reported net income of $\backslash (\backslash$$ $250\backslash )$ million for the year ended December $31,2024.$ The market value of Lavery's common stock at December $31,2024,$ was $\backslash (\backslash$$ $32\backslash )$ per share. On the purchase date, the book value of Lavery's identifiable net assets was $\backslash (\backslash$$ $900\backslash )$ million and:

a$.$ The fair value of Lavery's depreciable assets, with an average remaining useful life of seven years, exceeded their book value by $\backslash (\backslash$$ $70\backslash )$ 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 $\backslash (10\backslash \%\backslash )$ interest in the net assets of Lavery rather than a $30\backslash \%$ interest.

Complete this question by entering your answers in the tabs below.

Prepare all appropriate journal entries related to the investment during $2024,$ assuming Runyan accounts for this investment by the equity method.

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Enter your answers in millions $($i$.$e$.,\backslash (10,000,000\backslash )$ should be entered as $10).$