Pender Corp. paid $285,000 for a 30% interest in Saltspring Limited on January 1, Year 6 . During Year 6 , Saltspring paid dividends of $110,000 and reported profit as follows: Pender's profit for Year 6 is calculated on $990,000 in sales, expenses of $110,000, income tax expense of $352,000, and its investment income from Saltspring. Both companies have an income tax rate of 40%. Required: (a) Assume that Pender reports its investment using the equity method. (i) Prepare all journal entries necessary to account for Pender's investment for Year 6 . (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account fleld.) (iii) Prepare an income statement for Pender for Year 6 . (Negative amounts and deductibles should be indicated by a minus sign. Omit $ sign in your response.) (b) Assume that Pender uses the cost method. (i) Prepare all journal entries necessary to account for Pender's investment for Year 6 . (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account fleld.) Journal entry worksheet (ii) Determine the correct balance in Pender's investment account at December 31 , Year 6. Balance in Pender's investment account \$ (iii) Prepare an income statement for Pender for Year 6 . (Negative amounts and deductibles should be indicated by a minus sign. Omit $ sign in your response.) c-1) Compute return on investment under the cost method and return on investment under the equity nethod. (Round your answers to 2 decimal place.) (c-2) Which reporting method would Pender want to use if its bias is to report the highest possible return or investment to users of its financial statements? Cost method Equity method