Amber Corporation reported the following summarized balance sheet data on December 31, 20X6:

On January 1, 20X7, Purple Company purchased 100 percent of the stock of Amber Corporation for \(\$ 500,000\). Amber Corporation reported net income of \(\$ 50,000\) for \(20 \mathrm{X} 7\) and paid dividends of \(\$ 20,000\).

\section*{Required}

a. Give the journal entries recorded by Purple Company on its books during \(20 \mathrm{X} 7\) if Purple accounts for its investment in Amber using the equity method.

b. Give the eliminating entries needed on December \(31,20 \times 7\), to prepare consolidated financial statements.

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Assets $600,000 Liabilities $100,000 Common Stock 300,000 Retained Earnings 200.000 Total $600,000 Total $600,000