PROBLEM 24: "EQUITY METHOD' FOR INVESTMENT IN SHARES Objective: Registration of transactions using the "equity method El Bohio Inc, acquired 35,000 common shares of EI Molino Inc. as a long-term investment. El Bohio uses the equity method to account for this investment. EI Molino Inc. has 100,000 common shares outstanding ("outstanding"l, including the shares acquired by El Bohio. Required: Record the following journal entries: A. El Molino Inc. reported net income of $ 860,000 for the current year. B. A cash dividend of $ 2.30 per common share is payable by EI Molino Inc. during the current period. c. why the equity method is appropriate for the investment in El Bohio: The investment represents 35% of the outstanding shares. An investment in excess of 20% is presumed to represent significant control. PROBLEM 25: 'EQUITY METHOD" FOR INVESTMENT IN SHARES Loss Objective: Registration of transactions using the "equity method Required IRecord the following transactions in the general journal 1, on January 8, 2013. El Canario Inc. purchased 25% of the outstanding shares of El Coyote Inc. for $ 145,000. 2. On July 10, 2013, Coyote Inc. paid a total of 10,000 to all its shareholders. 3. Coyote reports a loss of $ 28,000 for 2013. Il Determine the balance of the investment account in El Coyote for December 31, 2012