On January 1, 2011, Pride Co. purchased 90 percent of the outstanding voting shares of Star Inc. for $540,000 cash. The acquisition-date fair value of the noncontrolling interest was $60,000. At January 1, 2011, Stars net assets had a total carrying amount of $420,000. Equipment (8-year remaining life) was undervalued on Stars financial records by $80,000. Any remaining excess fair value over book value was attributed to a customer list developed by Star (4-year remaining life), but not recorded on its books. Star recorded income of $70,000 in 2011 and $80,000 in 2012. Each year since the acquisition, Star has paid a $20,000 dividend. At January 1, 2013, Prides retained earnings show a $250,000 balance.

Selected account balances for the two companies from their separate operations were as follows:

Pride

Star

2013 Revenues

$498,000

$285,000

2013 Expenses

$350,000

$195,000

Assuming that Pride, in its internal records, accounts for its investment in Star using the equity method, what is Prides share of consolidated retained earnings at January 1, 2013?

a.$250,000.

b.$286,000.

c.$315,000.

d.$360,000.