CASE TYPE I: Prepare an allocation schedule, compute income and the investment balance 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): Book Value Fair Value Cash $ 400 $ 400 Accounts receivable-net 700 700 Inventories (sold in 2011) 1,000 1,200 Other current assets 200 200 Land 900 Buildings-net (10-year remaining life) 1,700 1,500 2,000 Equipment-net (7-year remaining life) 1,200 500 Total assets $5,900 $6,700 Accounts payable $ 800 $ 800 Other current liabilities 200 200 Bonds payable (due January 1, 2016) 1,000 1,100 Capital stock, $10 par 3,000 Retained earnings 900 Total equities $5,900 Tremor Corporation reported net income of $1,200,000 for 2011 and paid dividends of $600,000. REQUIRED Prepare a schedule to allocate the investment fair values/book value differentials relating to Quake's investment in Tremor Calculate Quake's income from Tremor for 2011. Determine the balance of Quake's Investment in Tremor account at December 31, 2011