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Unformatted text preview: 00 million and:
a.ecember value of Lavery's depreciable Lavery's common stock at December 31, 2013, was $31 per share. On the purchase date,$80 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.
1. Prepare all appropriate journal entries related to the investment during 2013, assuming Runyan accounts for this investment by the equity method.
2. Prepare the journal entries required by Runyan, assuming that the 10 million shares represent a 10% interest in the net assets of Lavery rather than a 30% interest.
Calculation of excess cost over BV:
BV of the net assets
Excess cost over BV
Allocation of excess cost:
60,000,000 4,000,000 >2400000/6
N/A 1/4/2013 Investment in Lavery Co
12/31/2013 Investment in Lavery Co
Investment Rev 48,000,000 12/31/2013 Cash
Investment in Lavery Co 20,000,000 12/31/2013 Investment Rev
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- Spring '10