Ceres Corporation is considering making a significant long-term investment in Pisces Ltd., a young and very promising company. Pisces has 200,000 shares authorized and 90,000 shares issued. Ceres intends to make an investment to reach significant influence.

On January 1, 2016, Pisces issues shares to Ceres Corporation as follows:

Shares issued 51,000

Cash paid to Pisces 2,040,000

Additional information:

• On November 1, 2016, Pisces declares and pays a total cash dividend of $180,000.
• Pisces reports $225,000 net income for 2016. Its stock price on December 31, 2016 is $38.
• On November 1, 2017, Pisces declares and pays a total cash dividend of $270,000.
• Pisces reports $360,000 net income for 2017. Its stock price on December 31, 2017 is $44.
• On March 31, 2018, Ceres is approached by an investment fund which offers to buy all their Pisces shares for $55 per share. Pisces net income for the first quarter of 2018 is $73,000. Ceres accepts the offer and sells the shares on that day.

Required:

Assuming Ceres uses the equity method to account for this investment with significant influence:

a)

Calculate the percentage of ownership Ceres has in Pisces Ltd.

b)

Prepare the journal entries in Ceres's books for the 2016 calendar year.

c)

Prepare the journal entries in Ceres's books for the 2017 calendar year.

d)

Prepare the journal entries in Ceres's books for the 2018 calendar year.