Ravine Corporation purchased 40 percent ownership of Valley Industries for $119,200 on January 1, 20X6, when Valley had capital stock of $246,000 and retained earnings of $52,000. During the period of January 1, 20X6, through December 31, 20X9, the market value of Ravine's investment in Valley's stock increased by $10,000 each year. The following data were reported by the companies for the years 20X6 through 20X9: Operating Income, Dividends Declared Net Ravine Income, Valley Year Corporation Industries Ravine Valley $ $ 20X6 $151,000 $ 45,000 89,000 35,000 20X7 90,000 65,000 89,000 55,000 20X8 223,000 10,000 109,000 40,000 20X9 171,000 55,000 119,000 35,000 Required: a. What net income would Ravine Corporation have reported for each of the years, assuming Ravine accounts for the intercorporate investment either by carrying the investment at fair value, or by using the equity method? b-1. Give all appropriate journal entries for 20X8 that Ravine would make if it carries the investment at fair value. b-2. Give all appropriate journal entries for 20X8 that Ravine would make if it uses the equity method. Complete this question by entering your answers in the tabs below. Year Net Income Fair Value Equity Method 20X6 20X7 $ 122,000 $ 175,000 $ 169,000 $ 116,000 69 20X8 $ 249,000 $ 227,000 20X9 $ 195,000 $ 193,000 Required A Required B1 Required B2 Give all appropriate journal entries for 20X8 that Ravine would make if it carries the investment at fair value. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. No Event A 1 Cash Dividend income B 2 Dividend income General Journal Unrealized Gain on Valley stock Debit Credit Required A Required B1 Required B2 Give all appropriate journal entries for 20X8 that Ravine would make if it uses the equity method. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. No Event A 1 Cash B 2 Investment in Valley stock Investment in Valley stock Income from Valley General Journal Debit Credit