Adams, Inc., acquires Clay Corporation on January 1,2017, In exchange for $550,400 cash.Immediately after the acqulstion,the two companies have the following account balances. Clay's equipment (with a five-year remaining balances are indicated by parentheses. life) is actually worth $537600. Credit Current assets Investment in Clay Equipment Liabilities Common stock Retained earnings, 1/1/17 $ 480,000 550,400 713,600 236,000 462,000 (261,000) (232,000) (350,000) 150,000) (1,133,000) (3,000) In 2017, Clay earns a net income of $50,400 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 $201,000 and declares no dividends. At the end of 2018, selected account balances for the two companies are as follows: $ (508,000) 368,300 Not given Not given (360, 000) 270,000 Revenues Expenses Investment income Retained earnings, 1/1/18 Dividends declared Common stock Current assets Investment in Clay Equipment Liabilities (361,400) 8,000 (350,000) ,00 (150,000) 304,100 784,000 Not given 602,100 515,100 (196, B00) (175,300) what are the December 31, 2018, Investment Income and . Equity method. Initial value method. b. How does the parent's internal investment accounting method choice affect the amount reported for expenses in its December 31, c. How does the parent's internal investment accounting method choice affect the amount reported for equipment in its December 31 d. What is Adams's January 1, 2018, Retained Earnings account balance assuming Adams accounts for its investment in Clay using the: 2018, consolidated income statement? 2018, consolidated balance sheet? . Equity value method. . Initial value method. e. What worksheet adjustment to Adams's January 1, 2018, 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 2018? Adams, Inc., acquires Clay Corporation on January 1,2017, In exchange for $550,400 cash.Immediately after the acqulstion,the two companies have the following account balances. Clay's equipment (with a five-year remaining balances are indicated by parentheses. life) is actually worth $537600. Credit Current assets Investment in Clay Equipment Liabilities Common stock Retained earnings, 1/1/17 $ 480,000 550,400 713,600 236,000 462,000 (261,000) (232,000) (350,000) 150,000) (1,133,000) (3,000) In 2017, Clay earns a net income of $50,400 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 $201,000 and declares no dividends. At the end of 2018, selected account balances for the two companies are as follows: $ (508,000) 368,300 Not given Not given (360, 000) 270,000 Revenues Expenses Investment income Retained earnings, 1/1/18 Dividends declared Common stock Current assets Investment in Clay Equipment Liabilities (361,400) 8,000 (350,000) ,00 (150,000) 304,100 784,000 Not given 602,100 515,100 (196, B00) (175,300) what are the December 31, 2018, Investment Income and . Equity method. Initial value method. b. How does the parent's internal investment accounting method choice affect the amount reported for expenses in its December 31, c. How does the parent's internal investment accounting method choice affect the amount reported for equipment in its December 31 d. What is Adams's January 1, 2018, Retained Earnings account balance assuming Adams accounts for its investment in Clay using the: 2018, consolidated income statement? 2018, consolidated balance sheet? . Equity value method. . Initial value method. e. What worksheet adjustment to Adams's January 1, 2018, 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 2018
