Adams, Inc., acquires Clay Corporation on January 1, 2017, in exchange for $589,400 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 $511,100. Credit balances are indicated by parentheses. Current assets Investment in Clay Equipment Liabilities Common stock Retained earnings, 1/1/17 Adams $ 422,000 589,400 761,100 (246,000) (350,000) (1,176,500) Clay $ 273,000 0 458,000 (216,000) (150,000) (365,000) In 2017, Clay earns a net income of $70,800 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 $129,000 and declares no dividends. At the end of 2018, selected account balances for the two companies are as follows: Revenues Expenses Investment income Retained earnings, 1/1/18 Dividends declared Common stock Current assets Investent in Clay Equipment Liabilities Adans $ (442,000) 320,450 Not given Not given 0 (350,000) 727,000 Not given 674,600 (195,300) clay $ (274,000) 205,500 0 (430,800) 8,000 (150,000) 318,000 0 501,800 (156,900) a. What are the December 31, 2018, Investment Income and Investment in Clay account balances assuming Adams uses the: Equity method Initial value method b. How does the parent's internal investment accounting method choice affect the amount reported for expenses in its December 31, 2018, consolidated income statement? C. How does the parent's internal investment accounting method choice affect the amount reported for equipment in its December 31, 2018, consolidated balance sheet? d. What is Adams's January 1, 2018, Retained Earnings account balance assuming Adams accounts for its investment in Clay using the: a. wnat are une vecember 31, 2016, invesunent income and investment in Ciay account balances assuming Adams uses the Equity method Initial value method. b. How does the parent's internal investment accounting method choice affect the amount reported for expenses in its December 2018, consolidated income statement? c. How does the parent's internal investment accounting method choice affect the amount reported for equipment in its December 2018, consolidated balance sheet? d. What is Adams's January 1, 2018, Retained Earnings account balance assuming Adams accounts for its investment in Clay using th Equity value method Initial value method. e. What worksheet adjustment to Adams's January 1, 2018, Retained Earnings account balance is required if Adams accounts for its investment in Clay using the initial value method? f. Prepare the worksheet entry to eliminate Clay's stockholders' equity. g. What is consolidated net income for 2018? Complete this question by entering your answers in the tabs below. ReqA ReqBtoD Req E and F ReqG What are the December 31, 2018, Investment Income and Investment in Clay account balances assuming Adams uses the: Investment Income Investment in Clay Equity method Initial value method ReQ Req B to D ReqA Reto D Req E and F Reg b. How does the parent's internal investment accounting method choice affect the amount reported for expenses in its December 31, 2018, consolidated income statement? c. How does the parent's internal investment accounting method choice affect the amount reported for equipment in its December 31, 2018, consolidated balance sheet? d. What is Adams's January 1, 2018, Retained Earnings account balance assuming Adams accounts for its investment in Clay using the: Equity value method. Initial value method Show les b. Consolidated Expense c. Consolidated Equipment d. Retained Earnings Equity method Initial value method Req Roq BtoD Roq E and F Req What is consolidated net income for 2018? Consolidated net income Help Adams, Inc., acquires Clay Corporation on January 1, 2017, in exchange for $589,400 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 $511,100. Credit balances are indicated by parentheses. Current assets Investment in Clay Equipment Liabilities Common stock Retained earnings, 1/1/17 Adams 422,000 589,400 761,100 (246,000) (350,000) (1,176,500) Clay $ 273,000 0 458,000 (216,000) (150,000) (365,000) In 2017, Clay earns a net income of $70,800 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 $129,000 and declares no dividends. At the end of 2018, selected account balances for the two companies are as follows: Revenues Expenses Investment income Retained earnings, 1/1/18 Dividends declared Common stock Current assets Investment in clay Equipment Liabilities Adams $ (442,000) 320, 450 Not given Not given 0 (350,000) 727,000 Not given 674,600 (195,300) Clay $ (274,000) 205,500 0 (430,800) 8,000 (150,000) 318,000 0 501,800 (156,900) a. What are the December 31, 2018, Investment Income and Investment in Clay account balances assuming Adams uses the: Equity method Initial value method b. How does the parent's internal investment accounting method choice affect the amount reported for expenses in its December 31, 2018, consolidated income statement? c. How does the parent's internal investment accounting method choice affect the amount reported for equipment in its December 31, 2018, consolidated balance sheet? d. What is Adams's January 1, 2018, Retained Earnings account balance assuming Adams accounts for its investment in Clay using the Help MULLLL Common stock Retained earnings, 1/1/17 1440,00 (350,000) (1,176,500) 1410 (150,000) (365,000) In 2017, Clay earns a net income of $70,800 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 $129,000 and declares no dividends. At the end of 2018, selected account balances for the two companies are as follows: Revenues Expenses Investment income Retained earnings, 1/1/18 Dividends declared Common stock Current assets Investment in Clay Equipment Liabilities Adams $ (442,000) 320, 450 Not given Not given 0 (350,000) 727,000 Not given 674,600 (195,300) Clay 5 (274,000) 205,500 0 (430,800) 8,000 (150,000) 318,000 0 501,800 (156,900) a. What are the December 31, 2018, Investment Income and Investment in Clay account balances assuming Adams uses the: Equity method Initial value method b. How does the parent's Internal investment accounting method choice affect the amount reported for expenses in its December 31, 2018, consolidated income statement? c. How does the parent's internal investment accounting method choice affect the amount reported for equipment in its December 31, 2018, consolidated balance sheet? d. What is Adams's January 1, 2018, Retained Earnings account balance assuming Adams accounts for its investment in Clay using the Equity value method Initial value method. e. What worksheet adjustment to Adams's January 1, 2018, Retained Earnings account balance is required if Adams accounts for its investment in Clay using the initial value method? f. Prepare the worksheet entry to eliminate Clay's stockholders' equity 9. What is consolidated net income for 2018? Complete this question by entering your answers in the tabs below. Req Req BtoD Req Band F Rego What are the December 31, 2018, Investment Income and Investment in Clay account balances assuming Adams whes the: Investment Income Investment in Clay Equity method Initial value method Reqs to D > Complete this question by entering your answers in the tabs below. ReqA Req BtoD Roq E and F Req b. How does the parent's internal investment accounting method choice affect the amount reported for expenses in its December 31, 2018, consolidated income statement? c. How does the parent's internal investment accounting method choice affect the amount reported for equipment in its December 31, 2018, consolidated d. What is Adams's January 1, 2018, Retained Earnings account balance assuming Adams accounts for its investment in Clay using the: Equity value method Initial value method balance sheet? Show less b. Consolidated Expense c. Consolidated Equipment d. Retained Earnings Equity method Initial value method Partial equity method ReqA Req B to D RegE and F ReqG e. What worksheet adjustment to Adams's January 1, 2018, Retained Earings account balance is required if Adams accounts for its investment in Clay using the initial 1. Prepare the worksheet entry to eliminate Clay's stockholders' equity. (If no entry is required for a transaction/event, select "No joumal entry required' in the first account field.) value method? Show less view transaction list Consolidation Worksheet Entries Record retained earnings if Adams account for its investment in Clay under the initial value method Note: Emer debits before credits Debit Credit Date Accounts January 01, 2018 Investment in Clay Retained earnings, 1/1/18 (Parent) Record entry Clear entry view consolidation entries view transaction list Consolidation Worksheet Entries