On January 4, 2018, Runyan Bakery paid $330 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 chose the fair value option to account for this investment. Runyan received dividends of $300 per share! on December 15, 2018. and Lavery reported net income of $180 million for the year ended December 31, 2018 The market value o Lavery's common stock at December 31, 2018, was $31 per share. On the purchase date, the book value of Lavery's net assets was! $830 million and a. The fair value of Lavery's depreciable assets, with an average remaining useful life of 7 years, exceeded their book value by $70 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: 1-0. Prepare all appropriate journal entries related to the investment during 2018, assuming Runyan accounts for this investment under the fair value option, and accounts for the Lavery investment in a manner similar to what it would use for securities for which there is not significant influence. 1-b. Calculate the effect of these journal entries on 2018 net income, and the amount at which the investment is carried in the December 31, 2018, balance sheet 2-. Prepare all appropriate journal entries related to the investment during 2018, assuming Runyan accounts for this investment under the fair value option, but uses equity method accounting to account for Lavery's income and dividends, and then records a fair value adjustment at the end of the year that allows it to comply with GAAP 2-b Calculate the effect of these journal entries on 2018 net income, and the amount at which the investment is carried in the December 31, 2018, balance sheet complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Req 2A Reg 2B Prepare all appropriate journal entries related to the investment during 2018, assuming Runyan accounts for this investment under the fair value option, and accounts for the Lavery investment in a manner similar to what it would use for securities for which there is not million. Record Runyan Bakery's share of Lavery's $180 million net income. ent on ber 31 Record the receipt of cash dividends of $3.00 per share on 10 million shares. ces Creo Record any necessary entry related to depreciation. The fair value of Lavery's depreciable assets, with an average remaining useful life of six years, exceeded their book value by $70 million. 5 Record any necessary adjusting entry to correctly report the investment on the balance sheet. The market value of Lavery's common stock at December 31, 2018 was Note : = journal entry has been entered Record entry Clear entry View ge Prepare dll appipildle juurlidl en les related LU U VESLlen uurly 2018, OSSUI Rury all accuUITS TUIS VUSLI fair value option, and accounts for the Lavery investment in a manner similar to what it would use for securities for which significant influence. (If no entry is required for a transaction/event, select "No journal entry required" in the first accoun your answers in millions (i.e., 10,000,000 should be entered as 10).) View transaction list View journal entry worksheet Credit No 1 Event 1 General Journal Investment in Lavery Labeling shares Cash Debit 330 1 330 No journal entry required Cash Dividend revenue No journal entry required 5 Unrealized holding gain-NI Fair value adjustment CLTL2IUUCHILLOHICUL Complete this question by entering your answers in the tabs belo Req 1A Req 1B Req 2A Req 2B Calculate the effect of these journal entries on 2018 net income, and the December 31, 2018, balance sheet. (Enter your answers in millions (.e. million Effect on net income Investment million 20. Calcule ule elect of these journal entries on 2018 net income, and the amount December 31, 2018, balance sheet. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 2B Calculate the effect of these journal entries on 2018 net income, and the amount at whi December 31, 2018, balance sheet. (Enter your answers in millions (i.e., 10,000,000 sh. million Net income Investment million