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just need help getting the retained earnigns and investment in clays Adams, Inc., acquires Clay Corporation on January 1, 2017, in exchange for $697,900 cash.
just need help getting the retained earnigns and investment in clays
Adams, Inc., acquires Clay Corporation on January 1, 2017, in exchange for $697,900 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 $633,200. Credit balances are indicated by parentheses Adams Clay $ 324,000 697,900 811,200 292,000 Current assets Investment in Clay Equipment Liabilities Common stock Retained earnings, 1/1/17 554,000 (296,000) (236,000) (350,000) (150,000) (1,187,100) (460,000) In 2017, Clay earns a net income of $76,200 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 $154,000 and declares no dividends. At the end of 2018, selected account balances for the two companies are as follows Adams Clay $ (586,000) 424,850 Not given Not given (284, 000) Revenues Expenses Investment income Retained earnings, 1/1/18 Dividends declared Common stock Current assets Investment in Clay Equipment Liabilities 213,000 (531,200) (150,000) 8,000 (350,000) 605,000 Not given 719,200 362,200 584,300 (244,700) (187,400) a. What are the December 31, 2018, Investment Income and Investment in Clay account balances assuming Adams uses theStep by Step Solution
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