A parent acquires all of the stock of a subsidiary for $96,000,000 in cash. The fair value of the subsidiarys identifiable net assets is $100,800,000. On its own books, the parent:

Select one:

a. reports a gain of $4,800,000 in other comprehensive income.

b. reports a gain of $4,800,000 in income.

c. reports its investment at $100,800,000 with a contra asset allowance of $4,800,000.

d. reports its investment at $96,000,000.