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Adams, Inc., acquires Clay Corporation on January 1, 2020, in exchange for $676,400 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 $519,800. Credit balances are indicated by parentheses. Clay $ 317,000 Current assets Investment in Clay Equipment Liabilities Common stock Retained earnings, 1/1/20 Adams $ 422,000 676,400 697,800 (259,000) (350,000) (1,187,200) 470,000 (173,000) (150,000) (464,000) In 2020, Clay earns a net income of $78,900 and declares and pays a $5,000 cash dividend. In 2020, Adams reports net income from its own operations (exclusive of any income from Clay) of $162,000 and declares no dividends. At the end of 2021, selected account balances for the two companies are as follows: $ Adams (546,000) 395,850 Not given Not given Clay $ (252,000) 189,000 Revenues Expenses Investment income Retained earnings, 1/1/21 Dividends declared Common stock Current assets Investment in Clay Equipment Liabilities (537,900) 8,000 (150,000) 379,700 (350,000) 785,000 Not given 591,800 (204,700) 521,600 (117,200) a. What are the December 31, 2021, Investment Income and Investment in Clay account balances assuming Adams uses the Equity method Initial value method. b. What is the amount of Consolidated Equipment in its December 31, 2021, consolidated balance sheet under each of the following methods? c. 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? d. Prepare the worksheet entry to eliminate Clay's stockholders' equity. Complete this question by entering your answers in the tabs below. Req A Req B Req C and D A.What are the December 31, 2021, Investment Income and Investment in Clay account balances assuming Adams uses the: Investment Income Investment in Clay Equity method Initial value method