Equity metiiod 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 goodwill and amortizes it over 10 years.

(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.()()() 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 3 1 for a consolidated balance sheet, recognizing the effects of only the previously listed transactions. Assume that the wori< sheet uses preclosing financial statement data.