Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2010. Demers reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Demers earns income and pays dividends as follows:

Assume the partial equity method is applied. Compute Pell's investment in Demers at December 31, 2010. Please give detailed calculation.

A.

$625,000.

B.

$574,400.

C.

$548,000.

D.

$542,400.

E.

$532,000.