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.