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Among investing activities in the statement of cash flows

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Reference no: EM13881617

1.On January 1, 2013, Cameron Inc. bought 20% of the outstanding common stock of Lake Construction Company for $300 million cash. At the date of acquisition of the stock, Lake's net assets had a fair value of $900 million. Their book value was $800 million. The difference was attributable to the fair value of Lake's buildings and its land exceeding book value, each accounting for one-half of the difference. Lake's net income for the year ended December 31, 2013, was $150 million. During 2013, Lake declared and paid cash dividends of $30 million. The buildings have a remaining life of 10 years.

Required:
1. Prepare all appropriate journal entries related to the investment during 2013, assuming Cameron accounts for this investment by the equity method.
2. Determine the amounts to be reported by Cameron:
a. As an investment in Cameron's 2013 balance sheet.
b. As investment revenue in the income statement.
c. Among investing activities in the statement of cash flows.

Reference no: EM13881617

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Among investing activities in the statement of cash flows : 1.On January 1, 2013, Cameron Inc. bought 20% of the outstanding common stock of Lake Construction Company for $300 million cash.
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