A parent acquires all of the stock of a subsidiary for $50 million in cash. The fair value of the subsidiarys identifiable net assets is $55 million. On its own books, the parent reports

Select one:

a. its investment at a balance of $55 million, with a contra asset allowance of $5 million.

b. its investment at a balance of $50 million.

c. a gain of $5 million in income.

d. a gain of $5 million in other comprehensive income.