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On January 4,2024 , 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 $3 per share on December 15, 2024, and Lavery reported net income of $180 million for the year ended December 31, 2024. The market value of Lavery's common stock at December 31, 2024, was $31 per share. On the purchase date, the book value of Lavery's identifiable net assets was $830 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 $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 goodwili. Required: Required: 1-a. Prepare all appropriate journal entries related to the investment during 2024, 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 2024 net income, and the amount at which the investment is carried in the December 31, 2024, balance sheet. 2-a. Prepare all appropriate journal entries related to the investment during 2024, 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. 2b. Calculate the effect of these journal entries on 2024 net income, and the amount at which the investment is carried in the December 31, 2024, balance sheet. (Note: You should end up with the same total 2024 income effect and same carrying value on the balance sheet for requirements 1 and 2 .) 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 under the fair value option, and accounts for the Levery investment in a manner similar to what it would yise for securities for which there is not significant influence. Note: If no entry is required for a transaction/event, select "No journal entry required" in the ofst account field. Enter your answers in milions (i.e., 10,000,000 should be entered as 10). Show less a Journal entry worksheet millions (i.e., 10,000,000 should be entered as 10 ). Journal entry worksheet 4 Record the purchase of Lavery Labeling stock for $330 million. Note: Enter debits before credits. Journal entry worksheet 4 Record Runyan Bakery's share of Lavery's $180 million net income. Note: Enter debits before credits. Journal entry worksheet Record the receipt of cash dividends of $3 per share on 10 million shares. Note: Enter debits before credits. Journal entry worksheet 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, 2024 was $31 per share. Note: Enter debits before credits. n January 4, 2024, Runyan Bakery paid $330 million for 10 million shares of Lavery Labeling Company common stock. The vestment represents a 30% interest in the net assets of Lavery and gave Runyan the ability to exercise significant influence ove avery's operations. Runyan chose the fair value option to account for this investment. Runyan recelved dividends of $3 per shar ecember 15, 2024, and Lavery reported net income of $180 million for the year ended December 31, 2024. The market value of avery's common stock at December 31, 2024, was $31 per share. On the purchase date, the book value of Lavery's identifiable ssets was $830 million and: a. The fair value of Lavery's depreciable assets, with an average remaining useful life of seven years, exceeded their book val $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. equired: a. Prepare all appropriate journal entries related to the investment during 2024, assuming Runyan accounts for this investment 1 he fair value option, and accounts for the Lavery investment in a manner similar to what it would use for securities for which there ot significant influence. b. Calculate the effect of these journal entries on 2024 net income, and the amount at which the investment is carried in the ecember 31, 2024, balance sheet. 2-a. Prepare all appropriate journal entries related to the investment during 2024, assuming Runyan accounts for this investment inder the fair value option, but uses equity method accounting to account for Lavery's income and dividends, and then records a ralue adjustment at the end of the year that allows it to comply with GAAP. 2-b. Calculate the effect of these journal entries on 2024 net income, and the amount at which the investment is carried in the December 31, 2024, balance sheet. (Note: You should end up with the same total 2024 income effect and same carrying value on palance sheet for requirements 1 and 2 .) Complete this question by entering your answers in the tabs below. Calculate the effect of these journal entries on 2024 net income, and the amount at which the investment is carried in the December 31,2024 , balance sheet. Note: Enter your answers in millions (i.e., 10,000,000 should be entered as 10). balance sheet for requirements 1 and 2 .) 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 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. 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., 10,000,000 should be entered as 10). Show less A Journal entry worksheet 45 Record the purchase of Lavery Labeling stock for $330 million. Note: Enter debits before credits. Journal entry worksheet Record Runyan Bakery's share of Lavery's $180 million net income. Note: Enter debits before credits. Prepare all appropriate journal entries related to the investment during 2024, assuming Runyan accounts fo fair value option, but uses equity method accounting to account for Lavery's income and dividends, and then adjustment at the end of the year that allows it to comply with GAAP. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account fie millions (i.e., 10,000,000 should be entered as 10 ). Journal entry worksheet 1 5 > Record the receipt of cash dividends of $3 per share on 10 million shares. Note: Enter debits before credits. Prepare all appropriate journal entries related to the investment during 2024, assuming Runyan accounts for this investme fair value option, but uses equity method accounting to account for Lavery's income and dividends, and then records a fair adjustment at the end of the year that allows it to comply with GAAP. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your millions (i.e., 10,000,000 should be entered as 10 ). Journal entry worksheet 12 Record any necessary entry related to depreciation. The fair value of Lavery's depreciable assets, with an average remaining useful life of seven years, exceeded their book value by $70 million. Note: Enter debits before credits. 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 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. Note: If no entry is required for a transaction/event, select "No joumal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Show less A Journal entry worksheet 1 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 , 2024 was $31 per share. Note: Enter debits before credits. On January 4, 2024, 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 recelved dividends of $3 per share on December 15, 2024, and Lavery reported net income of $180 million for the year ended December 31, 2024. The market value of Lavery's common stock at December 31,2024 , was $31 per share. On the purchase date, the book value of Lavery's identifiable net assets was $830 million and: a. The fair value of Lavery's depreclable assets, with an average remaining useful life of seven 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-a. Prepare all appropriate journal entries related to the investment during 2024, 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 2024 net income, and the amount ot which the investment is carried in the December 31,2024 , balance sheet. 2-a. Prepare all appropriate journal entries related to the investment during 2024, suming 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 2024 net income, and the amount at which the investment is carried in the December 31, 2024, balance sheet. (Note: You should end up with the same total 2024 income effect and same carrying value on the balance sheet for requirements 1 and 2.) Complete this question by entering your answers in the tabs below. Calculate the effect of these journal entries on 2024 net income, and the amount at which the investment is carried in the December 31, 2024, bolance sheet. (Note: You should end up with the same total 2024 income effect and same carrying value on the balance sheet for requirements 1 and 2.) Value on the balance sheet for requirements 1 and 2.) Note: Enter your answers in millions (1.e., 10,000,000 should be entered as 10)
