Adams, Inc., acquires Clay Corporation on January 1, 2020, in exchange for $674,800 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 $638,700. Credit oalances are indicated by parentheses. n 2020, Clay earns a net income of $53,400 and declares and pays a $5,000 cash dividend. In 2020 , Adams reports net income from ts own operations (exclusive of any income from Clay) of $145,000 and declares no dividends. At the end of 2021, selected account oalances for the two companies are as follows: - 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. Adams, Inc., acquires Clay Corporation on January 1, 2020, in exchange for $674,800 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 $638,700. Credit oalances are indicated by parentheses. n 2020, Clay earns a net income of $53,400 and declares and pays a $5,000 cash dividend. In 2020 , Adams reports net income from ts own operations (exclusive of any income from Clay) of $145,000 and declares no dividends. At the end of 2021, selected account oalances for the two companies are as follows: - 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
