On January 1, 2013, Porter Company purchased an 80% interest in the common stock of Salem Company for $850,000. At that time, Salem Company had common stock of $550,000 and retained earnings of $80,000. Porter Company uses the partial equity method to record its investment in Salem Company.

Differences between the fair value and the book value of the identifiable assets of Salem Company were as follows:

Fair Value in Excess of Book Value
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, 2013. The equipment had a remaining life of five years on January 1, 2013. The inventory was sold in 2013.

Salem Company's net income and dividends declared in 2013 and 2014 were as follows:

Year 2013 Net Income of $100,000; Dividends Declared of $25,000
Year 2014 Net Income of $110,000; Dividends Declared of $35,000

Use the following financial data for 2015 for requirements C through G.

Porter Company Salem Company
Sales $1,100,000 450,000
Equity in subsidiary income 136,000 --
Total revenue 1,236,000 450,000
Cost of goods sold 900,000 200,000
Depreciation expense 40,000 30,000
Other expenses 60,000 50,000
Total cost and expense 1,000,000 280,000
Net income 236,000 170,000

1/1 Retained earnings 620,000 230,000
Net income 236,000 170,000
Dividends declared (90,000 ) (60,000 )
12/31 Retained earnings 766,000 340,000

Cash 70,000 65,000
Accounts receivable 260,000 190,000
Inventory 240,000 175,000
Investment in Salem Company 1,058,000
Land -0- 320,000
Plant and equipment 360,000 280,000
Total assets $1,988,000 $1,030,000

Accounts payable 132,000 110,000
Notes payable 90,000 30,000
Common stock 1,000,000 550,000
Retained earnings 766,000 340,000
Total liabilities and equity $1,988,000 $1,030,000

(a) Present the eliminating/adjusting entries needed on the consolidated worksheet for the year ended December 31, 2013. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)