EXERCISE 5-4 Allocation of Cost and Workpaper Entries at Date of Acquisition LU 2 On January 1, 2020, Porter Company purchased an 80% interest in Salem Company for $260.000 On this date, Salem Company had common stock of $207,000 and retained earnings of $130.500 An examination of Salem Company's balance sheet revealed the following comparisons bet. ween book and fair values: Inventory Other current assets Equipment Land Book Value $ 30,000 50,000 300,000 200,000 Fair Value $ 35,000 55,000 350,000 200,000 Required: A. Determine the amounts that should be allocated to Salem Company's assets on the consolidated financial statements workpaper on January 1, 2020. B. Prepare the January 1, 2020, consolidated financial statements workpaper entries to elimi. nate the investment account and to allocate the difference between book value and the value implied by the purchase price