Adams, Inc., acquires Clay Corporation on January 1, 2020, in exchange for $693,900 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 $541,800. Credit balances are indicated by parentheses. Current assets Investment in Clay. Equipment Liabilities. Common stock Retained earnings, 1/1/20 Adams Clay $ 344,000 $ 295,000 693,900 0 740,800 480,000 (216,000) (163,000) (350,000) (1,212,700) (150,000) (462,000) In 2020, Clay earns a net income of $76,800 and declares and pays a $5,000 cash dividend. In 2020, Adams reports net income from its own operations (exclusive of any income from Clay) of $182,000 and declares no dividends. At the end of 2021, selected account balances for the two companies are as follows: Revenues Expenses Adams (536,000) 388,600 Clay $ (302,000) 226,500 Investment income Not given 0 Retained earnings, 1/1/21 Not given (533,800) Dividends declared 0 8,000 Common stock Current assets (350,000) 696,000 (150,000) 359,500 Investment in Clay. Equipment Liabilities. Not given 623,800 (143,700) 0 530,100 (124,600) a. What are the December 31, 2021, Investment Income and Investment in Clay account balances assuming Adams uses the: Equity method. Initial value method. b. What is the amount of Consolidated Expenses in its December 31, 2021, consolidated income statement under each of the following methods? c. What is the amount of Consolidated Equipment in its December 31, 2021, consolidated balance sheet under each of the following methods? d. What is Adams's January 1, 2021, 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, 2021, 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 2021? Complete this question by entering your answers in the tabs below. Reg A Req B to D Req E and F Req G What are the December 31, 2021, Investment Income and Investment in Clay account balances assuming Adams uses the: Equity method Initial value method Investment Income Investment in Clay Req A Req B to D Req E and F Req G b. What is the amount of Consolidated Expenses in its December 31, 2021, consolidated income statement under each of the following methods? c. What is the amount of Consolidated Equipment in its December 31, 2021, consolidated balance sheet under each of the following methods? d. What is Adams's January 1, 2021, Retained Earnings account balance assuming Adams accounts for its investment in Clay using the: Equity value method. Initial value method. Equity method Initial value method Partial equity method b. Consolidated c. Consolidated Equipment Expense d. Retained Earnings Show less A Consolidation Worksheet Entries 1 2 Record the adjustment to retained earnings if Adams accounts for its investment in Clay under the initial value method. Note: Enter debits before credits. Date January 01, 2021 Accounts Debit Credit Record entry Clear entry view consolidation entries Consolidation Worksheet Entries < 1 2 Prepare entry S to eliminate stockholders' equity accounts of subsidiary. Note: Enter debits before credits. Date December 31, 2021 Accounts Debit Credit Record entry Clear entry Req A Req B to D Req E and F Req G What is consolidated net income for 2021? Consolidated net income view consolidation entries >