Equity method and consolidation work sheet entries. Vogel Company is a subsidiary of Joyce Company. Joyce Company accounts for its investment in Vogel Company using the equity method on its single-company books.

a. Present journal entries for the following selected transactions. Record the set of entries on the books of Vogel Company separately from the set of entries on the books of Joyce Company.
(1) On January 2, Joyce Company acquired on the market, for cash, 100 percent of the common stock of Vogel Company. The outlay was \(\$ 420,000\). The total contributed capital of Vogel Company's stock outstanding was \(\$ 300,000\); the retained earnings balance was \(\$ 80,000\). Joyce attributes the excess of cost over book value acquired to an internally developed patent that has a ten-year remaining useful life on January 2.
(2) Vogel Company purchased materials for \(\$ 29,000\) from Joyce Company on account at the latter's cost.
(3) Vogel Company obtained an advance of \(\$ 6,000\) from Joyce Company. Vogel Company deposited the funds in the bank.
(4) Vogel Company paid \(\$ 16,000\) on the purchases in (2).
(5) Vogel Company repaid \(\$ 4,000\) of the loan received from Joyce Company in (3).
(6) Vogel Company declared and paid a dividend of \(\$ 20,000\) during the year.
(7) The net income of Vogel Company for the year was \(\$ 30,000\).

b. (Requires coverage of Appendix 11.1.) Prepare the necessary adjustment and elimination entries on December 31 for a consolidated balance sheet, recognizing the effects of only the previously listed transactions. Assume that the work sheet uses preclosing financial statement data.