The following balance sheets are for the Denver Company and

the Colorado Company as of January 1, 19xl. The statements

are presented as they appeared immediately before the acquisition

of Colorado Company stock by the Denver Company.

January 1, 19x1

Denver Colorado

Assets Company Company

Other Current Assets $ 2,000,000 $ 100,000

Inventory 250,000 130,000

Equipment 4,000,000 2,400,000

Accumulated Depreciation

-Equipment (1,500,000) (1,600,000)

Buildings 6,000,000 4,000,000

Accumulated Depreciation

-Buildings (3,000,000) (2,500,000)

$7,750,000 $2,530,000

Equities

Current Liabilities $ 400,000 $ 75,000

Bonds Payable 3,000,000 1,500,000

Premium on Bonds 150,000

Capital Stock-

Denver ($10 par) 3,000,000

Capital Stock-

Colorado ($25 par) 500,000

Premium on Stock-

Colorado 100,000

Retained Earnings-

Denver 1,350,000

Retained Earnings-

Colorado 205,000

$7,750,000 $2,530,000

Assume that the purchase method is used and that the

Denver Company debited its investment account for the

fair market value of the stock given in exchange, and that

the market value of the Colorado Company's equipment

was $150,000 greater than the book value at date of acquisition.

The amount of Excess of Acquisition Cost over

Book Value of Acquired Subsidiary on the January 1, 19x1,

consolidated balance sheet would be

A. $205,000.

B. $195,000.

c. $45,000.

D. 0.