and wereo 6 Marked out of 8.00 Question 6 (8 marks total) Mistral and Santa Anna Inc, both Canadian private companies, formed a joint venture on January 1, Year 1, called Chinook Inc. Mistral and Santa Anna each hold a 50% in the venture and share equally in any profits or losses arising from the venture. During Year 1, Chinook purchased $24,000 of merchandise from Mistral. Mistral recorded a gross profit of $12,000 on these sales. The tax rate for these companies is 30%. On December 31, Year 1, Chinook's inventories contained 60% of the merchandise purchased from Mistral. Mistral uses the equity method to report its investment in the joint venture. Chinook earned a net profit in Year 1 of $140,000 and paid dividends of $70,000. Required: a. Compute the investment income (i.e. equity method income) from the joint venture for Mistral for Year 1. (3 marks) b. Prepare the required equity method journal entries for Year 1 for Mistral Inc. (5 marks) C