Equity method entries. Vogel Company is a subsidiary of Joyce Company. Joyce Company accounts for its investment

Question:

Equity method 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 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% 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 acquisition cost over the carrying value of the net assets acquired to an internally developed patent that has a 10-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 S16, 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.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...