Thompson and Tupper Inc, both Canadian private companies, formed a joint venture on January 1, 2021 called Two Tees Inc. Thompson holds a 55% interest in the venture and Tupper holds 45%. Both Thompson and Tupper must agree on all significant operating decisions. They share in the profits or losses from the venture according to their ownership stake. The following balance sheets were prepared on December 31, 2021. Thompson Tupper Current Assets $95,000 $50,000 Investment in Venture $55,000 $0 Fixed Assets $500,000 $200,000 Accumulated Depreciation -$200,000 - $25,000 Other Assets $125,000 $150,000 Total Assets $575,000 $375,000 Current Liabilities $85,000 $175.000 Long-Term Debt $50,000 $75,000 Common Shares $225,000 $100,000 Retained Earnings, Jan 1 $140,000 $0 Net Income for the year $75,000 $25,000 Liabilities and Equity $575,000 $375,000 ALE con: During 2021, Two Tees purchased $46,500 of inventory from Thompson. Thompson recorded a gross profit of $15,500 on these sales. On December 31, 2021, Two Tees' inventory contained half of the merchandise purchased from Thompson. Thompson initially recorded its Investment in Two Tees using the cost method. Thompson plans to adjust its year-end statements to account for the Two Tees joint venture using the equity method. An income tax allocation rate of 30% applies. PART A: Required: a) Compute equity method income from the joint venture for 2021. b) Prepare the journal entry(ies) to adjust Thompson's investment in Two Tees from cost to equity method accounting. b) Compute Thompson's Retained Earnings as at December 31, 2021. C) Prepare Thompson's Balance Sheet as at December 31, 2021 An income tax allocation rate of 30% applies. PARTA: Required: a) Compute equity method income from the joint venture for 2021. b) Prepare the journal entry(ies) to adjust Thompson's investment in Two Tees from cost to equity method accounting. b) Compute Thompson's Retained Earnings as at December 31, 2021. c) Prepare Thompson's Balance Sheet as at December 31, 2021. PART B: Required: Assume Thompson and Tupper formed a joint operation instead of a joint venture. Thompson has proportionate rights (55%) to all of Two Tees' assets and proportionate responsibilities (55%) for all of Two Tees' liabilities. Prepare Thompson's Balance Sheet as at December 31, 2021