On January 2, 2021 Barley Corp purchased 40% of the voting common stock of Wheat Co, paying $ 3,000,000 Barley properly accounts for this imvrstment using the equity method. At the time of the investment, Wheat's total stockholders' equity was &5,000,000. Barley gathered the following information about Wheat's assets and liabilities whoose book values and fair values differed

Book Value Fair Value

Buildings (20-year Life) 1.000,000 $1,000,000

Equipment (5-year life) 1,000,000 2,000,000

Franchise (10-year life) 0 700,000

Any excess of cost over fair value was attributed to goodwill, which has not been impaired. Wheat Co reported net income of $400,000 for 2021, and paid dividends of 200,000 during that year.

How much goodwill is associated with this investment?

A. $500,000

B. $0

C. $100,000

D. $200,000

E. $2,000,000