Porter Company purchased an 80% interest in the capital stock of Salem Company for $850,000

On January 1, 2009, Porter Company purchased an 80% interest in the capital stock of Salem Company for $850,000. The fair value of the noncontrolling interest was proportionate to the consideration paid by the controlling interest. At that time, Salem Company had capital stock of $550,000 and retained earnings of $80,000. Differences between the excess fair value over the book value of the identifiable assets of Salem Company were as follows:

Equipment $130,000
Land 65,000
Inventory 40,000

The book values of all other assets and liabilities of Salem Company were equal to their fair values on January 1, 2009. The inventory was sold in 2009 and the equipment has a 5-year remaining life as of January 1, 2009.

Required for the year ended December 31, 2011:

1. Prepare the analysis as of acquisition date including unamortized differential at 1/1/11.
2. Prepare the journal entries Porter recorded with respect to its investment in Porter for the year ended 12/31/11.
3. Calculate consolidated net income.
4. Prepare all necessary elimination entries for the year ended 2011.
5. Complete the consolidated workpapers for the year ended 12/31/11.

Use formulas in all calculations.