Assume that, on January 1, 2015, P Company acquired an 80% interest in its subsidiary, S Company. The aggregate fair value of the controlling and noncontrolling interest was $500,000 over the book value of the S Companys Stockholders Equity on the acquisition date. At the time of acquisition, S Companys retained earnings balance was $398,800. The parent uses the cost method to account for its investment in S company. The parent assigned the acquisition accounting premium (AAP) as follows:

AAP Item	Initial Fair Value	Useful Life (years)
PPE, net	$100,000	10
Customer List	150,000	10
Goodwill	250,000	Indefinite
	$500,000

P Company and S Company report the following financial statements at December 31, 2019:

Income Statement

	Parent		Subsidiary
Sales	$ 6,330,000		$735,200
Cost of goods sold	(4,520,000	)	(361,100	)
Gross Profit	1,810,000		374,100
Income (loss) from subsidiary	13,120
Operating expenses	(1,327,000	)	(185,600	)
Net income	$ 496,120		$188,500

Statement of Retained Earnings

	Parent		Subsidiary
BOY Retained Earnings	$7,558,380		$ 983,200
Net income	496,120		188,500
Dividends	(100,100	)	(16,400	)
EOY Retained Earnings	$7,954,400		$1,155,300

Balance Sheet

	Parent		Subsidiary
Assets:
Cash	$ 486,000		$ 105,600
Accounts receivable	2,029,000		425,400
Inventory	3,396,000		585,300
Equity Investment	997,600
PPE, net	6,054,700		1,494,100
	$12,963,300		$2,610,400
Liabilities and Stockholders' Equity:
Current Liabilities	$ 870,000		$ 306,900
Long-term Liabilities	1,650,000		800,000
Common Stock	598,400		70,300
APIC	1,890,500		277,900
Retained Earnings	7,954,400		1,155,300
	$12,963,300		$2,610,400

The December 31, 2019 pre-consolidation balance of the equity investment accounting equals $997,600 (i.e., 5 years subsequent to the acquisition). On this date, the equity investment balance implicitly includes:

Select one:

A. Goodwill, $250,000

B. Dividends, $13,120

C. Unamortized AAP excluding Goodwill, $135,000

D. Goodwill, $200,000