Prepare all appropriate journal entries

Assignment Help Accounting Basics
Reference no: EM133031223

Question - On January 4, 2021, Runyan Bakery paid $324 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 $2.00 per share on December 15, 2021, and Lavery reported net income of $160 million for the year ended December 31, 2021. The market value of Lavery's common stock at December 31, 2021 was $31 per share. On the purchase date, the book value of Lavery's net assets was $800 million and:

a) The fair value of Lavery's depreciable assets, with an average remaining life of six years exceeded their book value by $80 million;

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

Required -

1. Prepare all appropriate journal entries related to the investment during 2022, assuming Runyan accounts for this investment as an FVTPL investment.

2. What would be the effect of this investment over the book value of net assets purchased was attributable to goodwill.

Reference no: EM133031223

Questions Cloud

Hat is the amount of monthly mortgage payment for each loan : The McDonald Group is purchasing a piece of property for $1.2 million. What is the amount of monthly mortgage payment for each loan
Describe the interest rate risk : Describe the interest rate risk that she is facing. Is it better if interest rates increase or decrease? What will be the locked in sale price
Antecedents and consequences of organisational politics : Discuss some of the most important antecedents and consequences of organisational politics.
Building successful teams in contemporary organisations : Explain the factors responsible for building successful teams in contemporary organisations. Answer this question in 300 words.
Prepare all appropriate journal entries : Prepare all appropriate journal entries related to the investment during 2022, assuming Runyan accounts for this investment as an FVTPL investment
Describe the disadvantages of the entry strategy : Describe the disadvantages of the entry strategy adopted by Woodpeckers Group Propose solution to each disadvantage. (this is managing international business)
Identify tangible and intangible resources : W.L. Gore & Associates is best known for GORE-TEX brand. The brand is known for their commitment to supporting the passions that keep people moving
Nature of the fiduciary duties owed by directors : In your own words, explain what is the nature of the fiduciary duties owed by directors towards their companies.
Compute the cost of goods purchased : Marketing, distribution, and customer-services costs 37,000. Compute (a) the cost of goods purchased and (b) the cost of goods sold

Reviews

Write a Review

Accounting Basics Questions & Answers

  A company uses a process cost accounting system its sewing

a company uses a process cost accounting system. its sewing departments beginning inventory consisted of 50000 units 14

  Create a brief outline that showcases the flow

Explain how Cedar Falls follows the Government Accounting Standards Board (GASB) Statement No. 34. Create a brief outline that showcases the flow.

  Explain why an entity might opt for an audit

You are reviewing submissions to a Parliamentary Committee that is reviewing legislation financial reporting and assurance requirements for unlisted companies.

  Vertical and horizontal analysis of financial statement

Financial statement analysis to include vertical and horizontal analysis of financial statement line items and ratios.

  Risk level equivalent to that of overall market

Your portfolio has a beta of 1.54. The portfolio consists of 16 percent U.S. Treasury bills, 34 percent stock A, and 50 percent stock B. Stock A has a risk level equivalent to that of the overall market. What is the beta of stock B?

  Consolidated balance sheet after acquisition

Based on the preceding information, what amount of total liabilities was reported in the consolidated balance sheet immediately after acquisition?

  At the time of his death in january 2013 dick owned real

at the time of his death in january 2013 dick owned real estate in the name of dick and his sister ellen as joint

  Record the disposal of the equipment on November

Record the disposal of the equipment on November 30, 2018, under each of the following independent assumptions: It was retired for no proceeds

  Physical units are 40000 total conversion costs are 197500

1. tool time inc. uses job order costing for its brand new line of homework machines. the cost incurred for production

  How would the portion that must be paid within the next year

Coltrane Company has a $5,000 note payable that is paid in $1,000 installments over five years. How would the portion that must be paid within the next year

  Application of cost principle in finding acquisition cost

Explain the application of the cost principle in determining the acquisition cost of plant assets.

  Pass the necessary entries on June

The group measures its property plants and equipment using a costs model. Pass the necessary entries on 30 June 2017 and 30 June 2018

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd