*Two separate situations*

1. On April 1, 2014, Fern Company purchased 15% of Robot Corporations 5,000,000 outstanding shares of common stock at a total cost of $8.50 per share. This investment does not give Fern significant influence over Robot, so Fern properly accounts for it using the fair value method. On December 1, Robot declared and paid a $250,000 cash dividend. For the year ending December 31, 2014, Robot reported net income of $685,000, and the year-end market price of Robots common stock was $9.00 per share.

2. On January 1, 2014, Mica Company purchased 40% of Santos Corporations 500,000 outstanding shares

of common stock at a total cost of $13 per share. This investment does give Mica significant influence

over Santos, so Mica properly accounts for it using the equity method. On October 25, Santos declared

and paid a cash dividend of $0.40 per share. For the year ending December 31, 2014, Santos reported

net income of $860,000, and the year-end market price of Santos common stock was $14.00 per

share.

a. Prepare journal entries for Fern Company to record all of their transactions during 2014 related to its investment in Robot

b. Prepare journal entries for Mica Company to record their transactions during 2014 related to its investment in Santos