Recording Entries for Equity Investment: Equity Method On January 1, 2020, Mercedez Company purchased 600 of the 1,500 outstanding shares of Auto Supplies Inc. for $60,000. At that date, the balance sheet of Auto Supplies Inc. showed the following values. Assets not subject to depreciation $60,000 * Assets subject to depreciation 39,000 ** Liabilities 9,000 * Common stock (par $1) 75,000 Retained earnings 15,000 * Same as fair value. ** Fair value $45,000; the assets have a 10-year remaining useful life (straight-line depreciation). a. Provide the entry by Mercedez Company to record the acquisition at a cost of $60,000. Date Jan. 1, 2020 Account Name Dr. Cr. b. Assume that on December 31, 2020 (end of the accounting period), Auto Supplies Inc. reported net income of $18,000. Provide all year-end entries for Mercedez Company. Date Dec. 31, 2020 Account Name To record proportionate share of investee's net income Dec. 31, 2020 To adjust for depreciation Dr. Cr. c. In February 2021, Auto Supplies Inc. declared and paid a $2 per share cash dividend. Provide the necessary entry for Mercedez Company. Date Feb. 2021 Account Name Dr. Cr.