Adams, Inc., acquires Clay Corporation on January 1, 2020, in exchange for $514,400 cash. Immediately after the acquisition, the two companies have the following account balances. Clays equipment (with a five-year remaining life) is actually worth $463,800. Credit balances are indicated by parentheses.

AdamsClayCurrent assets$372,000$250,000Investment in Clay514,4000Equipment700,800396,000Liabilities(229,000)(209,000)Common stock(350,000)(150,000)Retained earnings, 1/1/20(1,008,200)(287,000)

In 2020, Clay earns a net income of $78,900 and declaresand pays a $5,000 cash dividend. In 2020, Adams reports netincome from its own operations (exclusive of any income from Clay) of $126,000 and declares no dividends. At the end of 2021, selected account balances for the two companies are as follows:

AdamsClayRevenues$(550,000)$(340,000)Expenses398,750255,000Investment incomeNot given0Retained earnings, 1/1/21Not given(360,900)Dividends declared08,000Common stock(350,000)(150,000)Current assets717,000298,600Investment in ClayNot given0Equipment606,300449,100Liabilities(172,300)(159,200)

What are the December 31, 2021, Investment Income and Investment in Clay account balances assuming Adams uses the:

• Equity method.
• Initial value method.

What is the amount of Consolidated Expenses in its December 31, 2021, consolidated income statement under each of the following methods?

What is the amount of Consolidated Equipment in its December 31, 2021, consolidated balance sheet under each of the following methods?

What is Adamss January 1, 2021, Retained Earnings account balance assuming Adams accounts for its investment in Clay using the:

• Equity value method.
• Initial value method.

What worksheet adjustment to Adamss January 1, 2021, Retained Earnings account balance is required if Adams accounts for its investment in Clay using the initial value method?

Prepare the worksheet entry to eliminate Clays stockholders equity.

What is consolidated net income for 2021?