Quake Corporation paid $1,680,000 for a 30 percent interest in Tremor Corporation's outstanding voting stock on January 1, 2011. The book values and fair values of Tremor's assets and liabilities on January 1, along with amortization data, are as follows (in thousands):

Tremor Corporation reported net income of $1,200,000 for 2011 and paid dividends of $600,000.REQUIRED1. Prepare a schedule to allocate the investment fair values/book value differentials relating to Quake's investment in Tremor.2. Calculate Quake's income from Tremor for 2011.3. Determine the balance of Quake's Investment in Tremor account at December 31,2011.

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Fair Value Book Value $ 400 $ 400 Cash Accounts receivablenet Inventories (sold in 2011) 700 1,000 700 1,200 Other current assets 200 200 Land 900 1.500 1.200 $5.900 1,700 2.000 500 $6,700 Buildings-net (10-year remaining life) Equipment-net (7-year remaining life) Total assets $ 800 200 $ 800 Accounts payable Other current liabilities Bonds payable (due January 1. 2016) Capital stock. $10 par Retained earnings Total equities 200 1,000 3.000 1,100 900 $5,900