1. What are the December 31, 2018, Investment Income and Investment in Clay account balances assuming Adams uses the:

• Equity method.
• Initial value method.

1. How does the parent's internal investment accounting method choice affect the amount reported for expenses in its December 31, 2018, consolidated income statement?
2. How does the parent's internal investment accounting method choice affect the amount reported for equipment in its December 31, 2018, consolidated balance sheet?
3. What is Adams's January 1, 2018, Retained Earnings account balance assuming Adams accounts for its investment in Clay using the:

• Equity value method.
• Initial value method.

1. 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?
2. Prepare the worksheet entry to eliminate Clay's stockholders' equity.
3. What is consolidated net income for 2018?

O Adams, Inc., acquires Clay Corporation on January 1, 2017, in exchange for $732,300 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 $604,900. Credit balances are indicated by parentheses. Current assets 326,806 Investment in clay 732. 386 Equipment 781,989 526.380 Liabilities (286. 308) Comon stock (158. 380 Retained earnings, W/ 1/17 1, 218, 2861 496, 808 In 2017. Clay earns a net income of $62.700 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 $193.000 and declares no dividends. At the end of 2018, selected account balances for the two companies are as follows: Revenues (452, 808) clay Expenses Investment income 327, 708 234,309 Retained carnings, 1/1/ Not given Dividends declared Not given (553, 708) Comon stock current assets 1358, 308 ( 156. 806) Investment in clay 653, 308 342. 809 Equipment Not given Liabilities 791,908 574.908 a. What are the December 31, 2018, Investment Income and Investment in Clay account balances assuming Adams uses the Equity method. Initial value method. : How does the parent's internal investment accounting method choice affect the amount re 8, consolidated income statement? arted for expenses in its December 31, c. How does the parent's internal investment accounting method 2018, consolidated be Blee balance Sheet? In its December What is Adams's January 1. 2018. Retained Earnings ivestment in Clay using the Equity value method. Initial value method adjustment to 1. 2018. Retained Ear by using the in s January 1. 201 be method? ed if Adams accour ers in the tabs below