The following data concerning Procter Company and its 100%-owned subsidiary, Sanford Company. The balance sheets of Procter Company and Sanford Company at December 31, 19x4, are as follows:

Assets Procter Co Sanford Co

Cash $2 100 000 $ 350 000

Inventory 1 400 000 350 000

Long term assets (net) 17 500 000 2 800 000

Investment in Sanford Co 2 800 000 0

Total 23 800 000 3 500 000

Equities

Liabilities $ 7 000 000 $ 1 400 000

Common stock 8 400 000 1 400 000

Retained Earnings 8 400 000 700 000

Total 23 800 000 3 500 000

It should be assumed to be independent of every other question. Where appropriate, the excess of acquisition price over book value should be amortized over 20 years.

Procter Company acquired the capital stock of Sanford Company on January 1, 19x4, for $2,450,000. During 19x4 Sanford Company had net income of $450,000 and paid $100,000 in dividends. The equity method of accounting is used by Procter Company to record its investment in Sanford Company. On January 1, 19x4, the long-term assets of Sanford Company had a fair market value that was $175,000 in excess of their book value. These assets are being depreciated over a 10-year life using the straightline method of depreciation. On a consolidated balance sheet prepared as of December 31, 19x4, the amount shown as "Long-Term Assets (Net)" would be

A. $20,300,000. c. $20,457,500.

B. $20,395,000. D. $20,825,000.