Adams, Inc., acquires Clay Corporation on January 1, 2017, in exchange for $676,400 cash. Immediately after the acquisition, the two companies have the following account balances. Clay's equipment (with a five-year remaining life) is actually worth $519,800. Credit balances are indicated by parentheses. Investment in Clay Equipment Liabilities Common stock Retained earnings, 1/1/17 $ 422,000 317,000 676,400 697,800 (259,000) (173,000) (350,000) (150,000) 470,000 (1,187,200) (464,000) In 2017, Clay earns a net income of $78,900 and declares and pays a $5,000 cash dividend. In 2017, Adams reports net income from its own operations (exclusive of any income from Clay) of $162,000 and declares no dividends. At the end of 2018, selected account balances for the two companies are as follows: Adams Cla (546,000)$ (252,000) 395,850 189,000 Investment income Retained earnings, 1/1/18 Div Common stock Not given Not given (537,900) 8,000 (350,000) (150,000) 379,700 declared Investment in clay Equipment Liabilities 785,000 Not given 591,800 521,600 (204,700) (117,200) a. What are the December 31, 2018, Investment Income and Investment in Clay account balances assuming Adams uses the: Initial value method. b. How does the parent's internal investment accounting method choice affect the amount reported for expenses in its December 31, c. How does the parent's internal investment accounting method choice affect the amount reported for equipment in its December 31, d. What is Adams's January 1, 2018, Retained Earnings account balance assuming Adams accounts for its investment in Clay using the: 2018, consolidated Income statement? 2018, consolidated balance sheet? . Equity value method. . Initial value method. e. What worksheet adjustment to Adams's January 1. 2018. Retained Earnings account halance is