On January 1, Year 1, Purl purchased all of Scott's common stock for $360,000. On January 1, Year 1, the fair value of Scott's assets and liabilities equaled their carrying amounts of $410,000 and $160,000, respectively. The fair value of Scott's inventory was $10,000 more than its carrying amount on the acquisition date. Purl's policy is to amortize intangible assets over a 10-year period unless a definite life is ascertainable.

• During Year 1, Purl and Scott paid cash dividends of $100,000 and $30,000, respectively.

• There were no intercompany transactions, except for Purl's receipt of dividends from Scott and Purl's recording of its share of Scott's earnings.

December 31, Year 1, selected information:

	Purl	Scott
Investment in Scott (equity method)	390,000	-
Retained earnings	755,000	230,000
Scott common stock	-	60,000
Equity in earnings of Scott	60,000	-
Net Income	200,000	70,000

In the December 31, Year 1 consolidated balance sheet, total retained earnings should be:

A.$755,000

B.$795,000

C.$825,000

D.$985,000