4. On January 1, 2019, Roberts Inc. purchased 10% of the outstanding 1,000,000 common shares of Sunk for $200,000. Roberts Inc. considers this investment to be a non-strategic investment. At the

December 31, 2020-year end, the fair value of this investment was $208,000. Sunk's profit in 2020 was $100,000. Sunk paid a dividend of $.60 per common share. On January 1, 2021, Robert decided to buy an additional 25% of Sunk's 1,000,000 common shares for $500,000. This second purchase allowed Robert to significantly influence Sunk. In 2021, Sunk's profit was $140,000. Sunk paid dividends of $.50 per common share in 2021. (20 marks)

For 2020, the investment is considered to be a fair value through profit and loss investment:

Required:

1. Make journal entries for 2020 and 2021 on Roberts books with respect to the Investment in Sunk.

For 2020, the investment is considered to be a fair value through profit and loss inv.

2. Which method of Investment Accounting is Robert Inc using? Justify your response.