Investment in associate(dividend payment)

Hello,

Example 1
On 1 January 20X3 Paradigm acquired 35% of the equity shares in Rainbow for $3m. Rainbow had retained earnings of $7.5m at March 20X2 and $13.5m at March 20X3. Its profits accrue evenly over the year. Rainbow paid a dividend of $2m on 1 March 20X3. Paradigm credited its dividend received to profit or loss.

What amount will be shown as “investment in associate” in the consolidated SOFP for paradigm as at 31 March 20X3?

The answer is
Cost of inv 3m + 0.35m*=3.35m

*Earning for the year 6m(13.5m-7.5m) less 2m(dividend paid)= 4m X 3/12 X 35%=0.35

My first question is if retained earning as at 31 March 20X3 are 13.5m should not it already include the deducted dividend. For example if at the beginning retained earning are $7.5m profit for the year is $8m and $2m of dividends is paid year end retained earnings should be $13.5m(7.5+8-2))

Also according to another Question (Example 2) on 1 February 20X1 Picardy acquired 35% of the equity shares of Avignon, its only associate, for $10m in cash. The post-tax profit of Avignon for the year to 30 September 20X1 was $3m. Profits accrued evenly throughout the year. Avignon made a dividend payment of $1m on 1 September 20X1.

What amount will be shown as “investment in associate” in the SOFP of Picardy as at 30 September 20X1?

The answer is
Cost of inv 10m + 0.35m*=10.35m

*($3m X 8/12)-1m))*35%=0.35m

So my second question is that in first example first dividend was deducted and than the post acquisition profit was calculated and in example 2 first post acquisition profit was calculated and than dividends deducted.

Please help which one is correct or what I am getting wrong