Reference no: EM132053310

Question - On January 1, 2013, Cameron Inc. bought 10% of the outstanding common stock of Lake Construction Company for $160 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 $260 million. During 2013, Lake declared and paid cash dividends of $40 million. The buildings have a remaining life of 5 years.

Required:

1. Complete the table below and 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.