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On January 1 , 2 0 1 8 , Cameron Inc. bought 2 0 % of the outstanding common stock of Lake Construction Company for
On January Cameron Inc. bought of the outstanding common stock of Lake Construction Company for $ million cash. At the date of acquisition of the stock, Lake's net assets had a fair value of $ million. Their book value was $ million. The difference was attributable to the fair value of Lake's buildings and its land exceeding book value, each accounting for onehalf of the difference. Lake's net income for the year ended December was $ million. During Lake declared and paid cash dividends of $ million. The buildings have a remaining life of years.
Required:
Prepare all appropriate journal entries related to the investment during assuming Cameron accounts for this investment by the equity method.
Determine the amounts to be reported by Cameron:
a As an investment in Cameron's balance sheet
b As investment revenue in the income statement
c Among investing activities in the statement of cash flows
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