2. Equity method investments On January 4, 2010, Newcrest Gold Co. Ltd. paid $66 million for 3 million shares of Austin Mining Company common stock. The investment represents a 30% interest in the net assets of Austin and gave Newcrest the ability to exercise significant influence over Austin's operations. Newcrest uses the equity method to record the investment. Newcrest received dividends of $1.60 per share on December 6, 2010, and Austin reported net income of $32 million for the year ended December 31, 2010. The market value of Austin's common stock at December 31, 2010, was $23 per share. The book value of Austin's net assets was $160 million and: a) The fair market value of Austin's depreciable assets, with an average remaining useful life of 8 years, exceeded their book value by $16 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. Required: 1) Prepare all appropriate journal entries related to the investment during 2010. 2) What is the carrying amount of this investment on Newcrest's balance sheet as of December 31, 2010? 3) What's the effect of this investment on Newcrest's 2010 income before taxes?