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. Clay's equipment (with a five-year remaining life) is actually worth $463,800. Credit balances are indicated by parentheses. Current assets Investment in Clay Equipment Liabilities Common stock Retained earnings, 1/1/20 $ Adams 372,000 514,400 700,800 (229,000) (350,000) (1,008, 200) Clay $ 250,000 396,000 (209,000) (150,000) (287,000) In 2020, Clay earns a net income of $78,900 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 $126,000 and declares no dividends. At the end of 2021, selected account balances for the two companies are as follows: Revenues Expenses Investment income Retained earnings, 1/1/21 Dividends declared. Common stock Current assets Investment in Clay Equipment Liabilities Adams (550,000) 398,750 Not given Not given 0 ( 356,000 ) 717,000 Not given 606,300 (172,300) clay $ (340,000) 255,000 0 (360,900) 8,000 (150,000) 298,600 0 449,100 (159,200) Complete this question by entering your answers in the tabs below. Req 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: Investment Investment in Income Clay Equity method Initial value method Req B to D > Complete this question by entering your answers in the tabs below. Req A Req B to D Req E and F Equity method Initial value method Partial equity method. 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. b. Consolidated c. Consolidated Expense Equipment < Req A d. Retained Earnings Req E and F > 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 Record entry Accounts Clear entry < Req B to D Debit Credit view consolidation entries Req 6 > A Consolidation Worksheet Entries < 1 2 Prepare entry S to eliminate stockholders' equity accounts of subsidiary. Note: Enter debits before credits. Date December 31, 2021 Record entry Accounts Clear entry < Req B to D Debit Credit view consolidation entries Req G > Complete this question by entering your answers in the tabs below. Req A Req B to D Req E and F What is consolidated net income for 2021? Consolidated net income Req G < Req E and F