On January 1,2009, a subsidiary buys 10 percent of the outstanding shares of its parent company. Although the total book value and fair value of the parent’s net assets were $4 million, the price paid for these shares was $420,000. An intangible asset is amortized in this business combination over a 40-year period. During 2009, the parent reported of $510,000 operational income (no invest¬ ment income was included) and paid dividends of $140,000. How are these shares reported at December 31,2009?

a. The investment is recorded as $457,000 at the end of 2009 and then eliminated for consolidation purposes. LO9

b. Consolidated stockholders’ equity is reduced by $457,000.

c. The investment is recorded as $456,500 at the end of2009 and then eliminated for consolidation purposes.

d. Consolidated stockholders’ equity is reduced by $420,000.