Exercise 5-4 On January 1, 2015, Porter Company purchased an 80% interest in Salem Company for $259,700. On this date, Salem Company had common stock of $204,300 and retained earnings of $128,100. An examination of Salem Company's balance sheet revealed the following comparisons between book and fair values: Inventory Other current assets Equipment Land Book Value $29,600 50,600 297,400 202,400 Fair Value $34,400 54,300 346,200 202,400 Prepare the January 1, 2015, consolidated financial statements work paper entries to eliminate the investment account and to allocate the difference between book value and the value implied by the purchase price. (If no entry is required, select "No Entry for the account titles and enter for the amounts. Credit account titles are automatically indented when the amount is entered. Do not Indent manually.) Account Titles and Explanation Credit To eliminate the investment account) (To allocate the difference between book value and the value implied by the purchase price) CALCU (b) Prepare the January 1, 2015, consolidated financial statements workpaper entries to eliminate the investment account and to a and the value implied by the purchase price. (If no entry is required, select "No Entry" for the account titles and enter are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Beginning Retained Earnings-Salem Company Common Stock-Salem Company Current Assets Difference Between Implied and Book Value Equipment (net) Gain on Acquisition Inventory Investment in Salem Company Noncontrolling Interest (To allocate the difference between book value and the value implied by the purchase price)