On Jaruary Runyan Bakery paid $ milion for milion shares of Lavery Labeling Compsny commen stock. The
investment represents a A interest in the net assets of Lavery and gove Runyan the ability to exercise significant influence over
Lavery's operatlans. Runyan recelved diddends of $ per share on December and Lavery reported net income of $
milion far the year ended December The market value af Laverys common stock at December was $ per share
On the purchase date, the book value of Lavery's identisble net assets was $ milion and:
a The fair value of Lavery's depreciable ascets, with an average remaining useful life of four years, exceded their book value by
$ million
b The remainder of the excess of the cost of the irwestment over the book value of net assets purchased was antreutabie ts
goodwil
Required:
Prepare all approprlate joumal entries related to the investment during assuming Rumyan accounts for this investment by
the equity method
Prepare the joumal entries reguired by Runyan, assuming that the million shares represent a s interest in the net astets of
Lavery rather than a interest.
sherw less.
rather than is kigh ingertert.
Journal entry worksheet
