Adams, Inc., acquires Clay Corporation on January 1, 2017, in exchange for $510,000 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 $440,000. Credit balances are indicated by parentheses Adams Clay 300,000 $ 220,000 Current assets Investment in Clay Equipment Liabilities Common stock Retained earnings, 1/1/17 510,000 600,000 (200,000) (350,000) (860,000) 390,000 (160,000) (150,000) (300,000) In 2017, Clay earns a net income of $55,000 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 $125,000 and declares no dividends. At the end of 2018, selected account balances for the two companies are as follows: Adams Clay $ (400,000) (240,000) 180,000 Revenues Expenses Investment income Retained earnings, 1/1/18 Dividends declared Common stock Current assets Investment in Clay Equipment Liabilities 290,000 Not given Not given (350,000) 8,000 (350,000) 580,000 Not given 520,000 (152,000) (150,000) 262,000 420,000 (130,000)