Parent Company acquires 100 percent of the outstanding voting stock of Subsidiary Company in a business combination treated as a purchase. Acquisition cost exceeded the book value of Subsidiary's net assets. The excess is attributable to equipment with a remaining life of five years. Parent uses the equity method of accounting for its investment, and there have been no intercompany transactions. Consolidated retained earnings at the end of the first year following acquisition should equal
a. Parent's retained earnings.
b. Parent's retained earnings plus Subsidiary's retained earnings.
c. Parent's retained earnings minus Subsidiary's retained earnings.
d. Parent's retained earnings minus differential amortization.