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need help getting the correct amounts Adams, Inc., acquires Clay Corporation on January 1, 2017, in exchange for $697,900 cash. Immediately after the acquisition, the
need help getting the correct amounts
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 Clay ams $ 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 Clay 213,000 (531,200) (150,000) Adams $ (586,000) $(284,000) Revenues Expenses Investmentincome Retained earnings, 1/1/18 Dividends declared Common stock Current assets Investment in Clay Equipment Liabilities 424,850 Not given Not given 8,000 (350,000) 605, 000 362,200 Not given 719,200 (244,700) 584,300 (187,400)Step by Step Solution
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