1. On January 3, 2016, Austin Corp. purchased 25% of the voting common stock of Gainsville Co.. paying $2,500,000. Austin decided to use the equity method to account for this investment. At the time of this investment, Gainsville's stockholder's equity was $8,000,000. Austin gathered the following information about Gainsville's assets and liabilities: Book Value Fair Value Equipment (5 year life) $1,200,000 2,000,000 For all other assets and liabilities, book value and fair value were equal. During 2016, Gainsville had a net loss of $3,000,000 and paid dividends of $1,600,000. (a)What amount should Austin report as Investment income for 2016? (b) What is the balance investment account on December 31, 2016? (c) Assume that the investment did not give Austin the ability to significantly influence Gainsville. i. Compute Austin's income from its investment in Gainsville in 2016? ii. Make the necessary entries for 2016