8. Sun Corporation is a 90 percent–owned subsidiary of Pam Corporation, acquired on January 1, 2016, at a price equal to book value and fair value. Pam accounts for its investment in Sun using the equity method of accounting.

The only intercompany transactions between the two affiliates in 2016 and 2017 are as follows:

2016 Pam sold inventory items that cost $400 to Sun for $500.

One-fourth of this merchandise remains unsold at December 31, 2016 2017 Pam sold inventory items that cost $600 to Sun for $750.

One-third of this merchandise remains unsold at December 31, 2017 At December 31, 2017, Pam’s Investment in Sun account:

a Will equal its underlying equity in Sun b Will be $25 greater than its underlying equity in Sun c Will be $50 less than its underlying equity in Sun d Will be $25 less than its underlying equity in Sun