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) Revenues Expenses Investment income Retained earnings, 1/1/18 Dividends declared Common stock Current assets Investment in Clay Equipment Liabilities 290,000 180,000 Not given Not given (350, 000) 8,000 262,000 420,000 (350, 000) (150,000) 580,000 Not given 520,000 (152,000) (130,000) 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) Revenues Expenses Investment income Retained earnings, 1/1/18 Dividends declared Common stock Current assets Investment in Clay Equipment Liabilities 290,000 180,000 Not given Not given (350, 000) 8,000 262,000 420,000 (350, 000) (150,000) 580,000 Not given 520,000 (152,000) (130,000)